Flirting with the Great Depression 2.0

It will take a minimum of a decade to meet the USA’s present need to reduce spending and reduce the burden of its borrowed debt Flirting with the Great Depression 2.0

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By Alan Caruba  Saturday, August 6, 2011 POLITICO Breaking News: August 5, 2011 “Credit rating agency S&P has downgraded U.S. debt from AAA, the first debt downgrade in U.S. history, the Associated Press reported.” When a nation’s debt equals its entire annual gross domestic product, it is bankrupt. It can still produce goods and services, but it will likely encounter fewer customers worldwide as they too are drawn deeper into their own debt crises. When it must borrow billions daily just to meet its obligations to other nations and individuals who have purchased its treasury notes, it is has reached a point of “moral hazard” that threatens the wealth of every single citizen. When it raises its “debt ceiling” to $14.58 trillion, the amount its Congress permits, and one day later its Treasury Department announces that its debt reached 100% of its GDP, it is in serious financial difficulty. Not since 1947 when the U.S. was recovering from the cost of World War II have we reached this point.