The US WILL Default

If you believe that our leaders have even the slightest clue of how to solve the economy’s problems, Obama’s jobs proposal should rid you of your delusion.

This is not a matter of political affiliation nor is it an attack of Obama as a person. It’s a simple matter of basic math.

Obama wants to spend roughly $500 billion to create two million jobs (that’s the claim at least). Put another way, Obama would spend roughly $250,000 to create a single job. That’s a heck of a lot of money in an economy in which the average income is $50K or so.

That’s just the basic math. I’m not even bothering to assess the fact that the Government is already spending over $1 TRILLION per year and hasn’t created a sustainable job recovery.

So how exactly will another $500 billion change things?

Also, where is the Government going to come up with this money exactly? Didn’t we just say we needed to hike the debt ceiling by another $500 billion? Aren’t we already running Debt to GDP and Deficit numbers that are on par with Greece: a country that is guaranteed to default in the near future?

Folks, this is the hard truth: the US is broke and our leaders have no clue how to solve any of the structural issues our economy and markets are facing. They’ve spent TRILLIONS propping up the stock market but haven’t created new jobs nor have they improved Americans’ quality of life in the last two years.

In other words, we’re at the End Game for Government Intervention in the economy and marketplace. Greece has already shown us what’s coming: default and debt restructuring.

After all, there are only two ways to deal with a debt problem:

1)   Pay it off

2)   Default

The US has no chance at all of ever paying off its debts, which means some form of default and restructuring is coming our way in the future. And when this hits, it will make 2008 look like a picnic.

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Graham Summers








Posted by Phoenix Capital Research