Az Business Magazine – So off base I had to Respond
Here’s an article posted by the above magazine that I found so off base, I just had to respond:
http://aznow.biz/finance/current-economic-crisis#comment-1802
My Response:
I’m sorry, but your argument is not factually accurate nor does it hold water.
The U.S. owe over $4.6 Trillion to foreign countries. While a much larger portion of their debt is internal in the form of unfunded liabilities, so what? That’s actually even worse. Foreign creditors are the least of their worries. Do you honestly think any President would put Chinese creditors ahead of U.S. Citizens? No! So the fact that they are indebted to themselves means major cuts across the board. They continue to inflate away their debts by printing money which erodes the standard of living for all Americans. And who can bail out the U.S.? No one! They’re not Greece with the IMF in wait to issue a Eurobond and buy them more time. When they reach the breaking point, it’s game over! Lights out.
The U.S. have certainly enjoyed their status as the world reserve currency. But recently, foreign investors have significantly cut U.S. debt holdings. China and Russia lead the pack in this regard. Sure, many of the world’s largest investors still flock to the U.S. dollar as a “safe haven” in times of crisis, but for how much longer? Confidence can erode quickly. If that happens and there’s fewer buyers of Treasuries, rates will have to re-adjust upwards. The only thing keeping the U.S. economy on life support right now is artificially low interest rates. Even a rise of 2 percent would wipe out many Americans and businesses at this delicate juncture.
U.S. Congress haven’t been able to come up with any substantial budget cuts. Government continues to grow at an alarming rate. Their debt super committee ended in deadlock. If they continue spending and raising their debt ceiling, they will eventually completely collapse. They’re already spending twice what they collect in revenues each year and the gap keeps on growing.
The U.S. gold reserves have never been independently audited and no one knows for sure just how much physical gold they still actually hold. Even so, their debts are so great that even the stated value of all of their gold reserves doesn’t come anywhere close to paying it all off.
The U.S. federal government is considered the biggest landlord in the world owning or controlling billions of dollars of commercial land and properties which they’ll have to sell off to foreign countries when they really start to get desperate. This still won’t come anywhere close to significantly paying down their debts though.
The U.S. used to lead in innovation and freedom for business. Now they lead in bureaucratic red tape and crony capitalism. Bail outs for “too big” to fail institutions at the expense of the middle class. Privatized profits with socialized losses for big finance. The EPA are out of control, as are all of the state and federal laws and taxes squeezing small business and innovation at every level. Case in Point, how long does it take to get a potentially life saving drug approved through the FDA these days?
The U.S. might have been charitable, but donating borrowed money is unsustainable.
Obama just put the final nail in the coffin on the Keystone Pipeline, killing the project entirely. Canada is now partnering with China to build another pipeline to ship oil to them. This will hurt Americans dearly as they fall even more at the mercy of the middle east nations for their oil dependence while China enjoys cheaper oil.
