Is America Going Broke? (Macleans Article)

I haven't read the article yet, it just arrived this morning, but it looks interesting.

What do you think??

From Macleans:

David Walker can see the future, and it scares the hell out of him.

That wouldn't be terribly unusual if he were one of the thousands of lobbyists, legislators and activists crawling all over Washington on any given day, pontificating about the urgency of their pet issues. There is a thriving industry here built on pushing policy prescriptions for every ailment, real or imagined. But Walker isn't a lobbyist or an activist, he's an accountant. His title is comptroller general of the United States, which makes him the head auditor for the most important and powerful government in the world. And he's desperately trying to get a message out to anyone who'll listen: the United States of America's public finances are a shambles. They're getting rapidly worse. And if something major isn't done soon to solve the country's intractable budget problems, the world will face an economic shakeup unlike anything ever seen before. <snip>

http://tinyurl.com/3zv3s

and we could drown in a sea of red while the rest of the world goes merrily along. The world is also noticing that we are invading only countries that have something to do with oil. The US wants control of all the oil and the entire rest of the world doesn't like that idea. And the oil supply will start falling sooner than later.

What a crappy way to run a country.

"History provides some harrowing examples of what happens when an economy collapses under the weight of unsustainable debt. One of the most chilling is Argentina in 2001. When the International Monetary Fund cut off its support for the country's escalating debt, the effect was catastrophic: the value of the national currency plunged, decimating the savings of millions. The resulting surge in inflation and sudden slowdown in consumer spending put thousands of businesses into bankruptcy within weeks. That, in turn, put further millions out of work and pushed one of South America's biggest economies into a punishing recession.

"As unfathomable as it may seem, most economists think something like that could happen in the United States. "If foreign investors look at the long-run outlook for the federal budget and decide there is going to be a crash, you get a financial panic," Bivens explains. "Interest rates spike. That causes a huge recession. You'll have the dollar falling fast, so maybe inflation is sparked at the same time." And if interest rates spike, that would squeeze millions of U.S. consumers who have taken out loans against the rising value of their homes in recent years. A sudden hit to the real estate market would further constrain consumers' wallets, leading to a cycle of lower spending, and deeper recession, Bivens says."

<snip>

"Walker stresses the need to make "tough decisions," and none will be tougher than tackling the runaway costs of providing health-care coverage for the elderly and the poor. Health spending in the U.S. is projected to jump 63 per cent by 2010, and to continue rising even faster after that. Most analysts agree that, at some point, the government must find a way to clamp down on those costs, yet any cuts in coverage are sure to raise an outcry from the swelling ranks of senior citizens -- a highly influential voting bloc."

</snip>

I think Bush is tackling them by dismantling the safety net entirely. Look at the bankruptcy bill, the tort reform bill, the Social Security "reform" and you begin to get a picture of how Bush plans to tackle the problem of elderly, sick seniors.