the federal government's dirty little secret

Nedanstående far situationen vad gäller USAs prekära finansiella situation INNAN Obama. Nu skall då denne nye president ta på sig spenderbyxorna och sätta igång vad som av många karakteriseras som a new "New Deal", ev ytterligare stöd och bailouts av finans marknadens aktörer och företag.

Lot's of focus right now on the US subprime debacle and possible bail out plan. Clear is that the initial proposed $700 billion won't suffice and that instead we're talking about something in between 2-5 trillion us dollars when the dust finally has settled. Serious for sure but then this is not all there is of what is to become President Buchs legacy. Here are some additional items: "The war in Irak is costing $720 million a day or $500,000 a minute, according to the group's analysis of the work of Nobel Prize-winning economist Joseph E. Stiglitz and Harvard public finance lecturer Linda J. Bilmes. "

http://www.washingtonpost.com/wp-dyn/content/article/2007/09/21/AR2007092102074.html

Even more serious is then the fact that as per 1st of January 2008 and coming next 20 years some 78 million (almost 40% of Americas entire work force) Americans will be entitled to social security as well as medicare. This in itself a financial Tsunami about to hit the American economy. Rather than taking care of this issue during his two terms President Bush managed to make things a lot worce as he some 4 years ago in fact signed "The prescription Drug Bill". This bill then increased future spending for medicare by some 40%! Talk about making a bad situation worce.

Bottom line - it ain't just possible future bailouts that may be an issue going forward. Taking care of all of the above requires either of higher taxes, less govermental spending and or monetizing debt (printing more money to pay of debt). The latter is in every case what politicians prefer as it will require both political leadership as well as immence courage to both significantelly increase taxes as well as reduce govermental spending to the extent needed. Given weaker economic future outlook possibly already a recession expect these decefits only to increas as less govermental earnings from taxes will prevail during periods of shrinking economic activity. Making a difficult already big defecit situation even more challenging going forward.

The downside however is that it also with monetizing debt there are draw backs. These in fact spells less purchuasing power and increased (but hidden) tax on the working people. Those dependent on e.g. fixed income and those entitled to pension, medicare and social security will possibly be hit the most as it will reduce an already small income to an even lesser one.

US Government Immorality Will Lead to Bankruptcy The Comptroller General of the United States proclaims that our current standard of living is unsustainable unless drastic action is taken. He warns that funding shortfalls for the Medicare program is five times worse than Social Security, and it will take $8 TRILLION to pay for what is promised today to beneficiaries, of which we have ZERO! This unrealistic "promise" is fiscally irresponsible and is mortgaging the futures of our children and grandchildren. Watch as the federal government's dirty little secret is revealed! '
http://www.youtube.com/watch?v=OS2fI2p9iVs

This video was created by the U.S. Government Accountability Office (GA0) and can be accessed at:
http://www.gao.gov/newcomers.vid.html

America's Financial Future (Part 1)
http://www.youtube.com/watch?v=KIgrxpp97OQ&NR=1
America's Financial Future (Part 2)
http://www.youtube.com/watch?v=DXr_Ga_n0pY&NR=1