Looking at the year 2010 on the chart you can see a huge chasm between spending and revenue. Keep in mind that like most countries the US has two sets of books, so the situation is much more dire than the illustration. Let’s go with what the graph states for now and look past 2010 where we see the fantasy of increased revenue. Revenues will not increase, and when the economy has its next leg down there is a high likelihood of further decreases in revenue.
The above chart is a graphic image of the problem with the government forecasts. Spending increases dramatically and there is the underlying assumption that revenues will increase as well. This projection does not take into account the fact that we are in a depressionary cycle which is ready to have another leg down.
An already weak economy will become even weaker. This means less tax revenue, which flies in the face of government forecasts which call for an increase in revenue. As the chasm increases in size between spending and revenue, faith in the US dollar will evaporate. This will lead to a significant devaluation of the dollar, or an outright collapse.
Many developed countries face similar problems today and this is one of the major pillars of this secular bull market in gold. Make sure you have gold as your insurance policy. This means owning physical bullion, not paper promises.
Eric King
KingWorldNews.com
The Fed, Debt and Systemic Collapse of the US
Higher Taxes Guarantees A Depression
4 comments:
Spending needs to increase to prevent a depression - if we don't get people back to work, where will the revenues come from? We can look at the Irish example; an austerity mentality in the face of deep recession makes things worse. Now is NOT the time to decrease spending. Re-establish the inheritance tax. Surcharge on incomes over a million. Defense cuts. These would help. But spending cuts now is insane. Read Krugman.
I don't think anyone is advocating austerity. What they are addressing is the method in which the revenues are being generated and Krugman being a shill for the status quo system does not address that. We don't need to continue to print money. We need to readdress how government works and build accountability into the system.
What we need to do is get control of the banking system, hedge funds, and the derivative market, which is the black hole where all of this money is going.
We need to see a Tobin tax placed on electronic Intrabank and Corporate Financial Transactions. This can generate trillions of dollars,
Remember the thousand point drop that took place a month ago? That was all generated by computer trading by the large financial institutions such as Goldman-Sachs and JP Morgan-Chase.
The revenue generated by the Tobin type Financial tax needs to go towards infrastructure. Below is a link to what I said about all of this over 3 months ago. We need to create jobs, not keep paying endless unemployment checks.
How can the United States avoid Bankruptcy?
Where's Krugman been? At every turn, he has been late to the party on all of this. If he weren't the buddy of New York politicos and banksters, he'd be out in the unemployment lines also.
The above post was deleted, because of the abusive language of a lowlife troll who continually is the only person that contributes to this blog in such a manner.
I apologize to those who had to read the one sentence attack where this person apparently doesn't have the IQ to do anything other attack me with no intellectual futhering of the discussion.
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