02/18/10 Baltimore, Maryland – We have deficits and debts on the brain today. The federal deficit for the first four months of fiscal 2010 just clocked in at $430.7 billion. That’s 8.8% higher than the year-ago figure.
We remember that when the annual deficit hit a record high $430 billion under the second Bush administration, we thought the world was going to end and we’d have to “buy guns, ammo, dry goods, go into hiding, cling to God and wait for the country and the rest of world to collapse.”
The national debt now stands at $12.4 trillion. When we finished our final edit of I.O.U.S.A. back in August of 2008, we forecast it would reach $10 trillion and were called gloom and doomers for the effort.
The president’s solution? An executive order this morning establishing a National Commission on Fiscal Responsibility and Reform. This 18-member “debt commission” (10 Democrats, 8 Republicans) has two main tasks…
- Cutting the deficit to 3% of GDP by 2015 (it’s currently running over 10%)
- Fixing the problems with the Big 3 entitlement programs of Social Security, Medicare and Medicaid.
We applaud the goals, modest as they are. But we hold out little hope a blue-ribbon panel will actually solve anything. Looking back on the 9/11 Commission, it seems its major accomplishments were a best-selling book and a host of new security irritations at the airport.
No wonder the Harvard historian Niall Ferguson sees the crisis currently afflicting Greece and the other PIIGS nations eventually playing out in the United States. “The idiosyncrasies of the Eurozone should not distract us from the general nature of the fiscal crisis that is now afflicting most Western economies. Call it the fractal geometry of debt: The problem is essentially the same from Iceland to Ireland to Britain to the US. It just comes in widely differing sizes.
“What we in the Western world are about to learn is that there is no such thing as a Keynesian free lunch.”
Addison Wiggin
Addison Wiggin is the executive publisher of Agora Financial, LLC, a fiercely independent economic forecasting and financial research firm. He’s the creator and editorial director of Agora Financial’s daily 5 Min. Forecast and editorial director of The Daily Reckoning. Wiggin is the founder of Agora Entertainment, executive producer and co-writer of I.O.U.S.A., which was nominated for the Grand Jury Prize at the 2008 Sundance Film Festival, the 2009 Critics Choice Award for Best Documentary Feature, and was also shortlisted for a 2009 Academy Award. He is the author of the companion book of the film I.O.U.S.A.and his second edition of The Demise of the Dollar… and Why it’s Even Better for Your Investments was just fully revised and updated. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. He also co-authored international bestsellers Financial Reckoning Day and Empire of Debt with Bill Bonner.
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Very truthful article Mr. Wiggin, extremely so. Unfortunately, very few are listening, yet, they will……when it’s too late.
This country has been and is continuing to be pillaged.
But, hey, let’s all tune into American idol and pretend it is all Okie Dokie………idiocy.
After reading a blog entry by Anthony Painter, I’m given to wonder with him:
If the rise in debt contains spending on education, future economic performance, healthcare, conservation of and alternative energy, environmental improvement and social progress, isn’t it possible that consequent change will result in the debt moving back down?