America Is <s>Too Big To Fail</s> Broke → Washingtons Blog
America Is <s>Too Big To Fail</s> Broke - Washingtons Blog

Wednesday, September 17, 2008

America Is Too Big To Fail Broke

America is spending so much money it doesn't have that even the mainstream press is starting to question the dogma that the U.S. is too big to fail. For example:

  • And in July - long before the bailout of AIG and the hundreds of billions in additional comittments by the government- the San Francisco Chronicle wrote:
    "As the Bush administration proposes backstopping mortgage giants Fannie Mae and Freddie Mac with a $300 billion line of credit and Congress contemplates another economic stimulus, the question is who will bail out the government?

    'People seem to think the government has money,' said former U.S. Comptroller General David Walker. 'The government doesn't have any money.'

    A rare consensus has developed across the political spectrum that the government's own fiscal affairs are precarious, with an astonishing $53 trillion in long-term liabilities, according to the Government Accountability Office."

Of course, those in the know have been saying this for some time. For example, the author of the Forbes article said the same thing years ago to the Saint Louis Federal Reserve, but the media ignored it. And Treasury and the Office of Management and Budget published a report in 2006 stating that the U.S. cannot grow our way out of the government's liabilities, that the liabilities are quickly growing, and that failing to take drastic and immediate action would lead to very bad consequences. Of course, Congress, the White House the Fed and everyone else did the exact opposite of what was recommended.

2 comments:

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