Saturday, April 23, 2011
Americans are not serious people
The American people are about to get a lesson in math and economics. As has been chronicled by this blog we are simply spending too much money. After 50 years of telling people that they can live for free off their neighbor we are entering the end game. We are running annual deficits of of around $1.5 trillion dollars and everyone from the largest US bond fund, Pimco, to China is dumping our bonds. They are doing this because they know, as shown from polls like above, that the US voters are not serious adults who intend on meeting their debt obligations. The largest contributors to the deficit are Medicare, Medicad, SS, and defense and as can be seen from the above poll an overwhelming number of voters do not want these cut. Well the world markets and math do not care what Americans want. As the politicians are unable to cut spending the markets will deal with this through higher interest rates, a lower dollar, and eventually a default by the US. When that happens their will be none of these programs for anyone and a lower standard of living for most. But thats what people want so that is what they shall get. In the meantime the solution that the hoi polloi want is to tax the productive. Well that will not work because they are moving their assets and bodies out of reach of the tax feeders. As always this will go on until the whole thing implodes and that is why gold is over $1500 and silver is pushing $50.