But here’s the real problem, our federal debt:
In 2005 constant dollars, the Federal debt was just under two trillion dollars. Today it is more than seven times that size: $14.57 trillion. And most of it is short-term borrowing — meaning, we’ll have to re-fi more than half of our debt in the next twelve months. The average maturity is just three years. But one thing is for sure: We need to find someone willing to re-fi more than seven trillion dollars in US debts at current rates, or we’re going to blow a hole in the budget the likes of which Obama/Reid/Pelosi never even dreamed of.
Right now, it costs us about $200 billion a year to service our debt payments on those 14 trillions. When Obamaflation takes hold, and the Fed is forced to raise rates and tighten the money supply, our debt service will, over the course of two-five years, quintuple to about a trillion dollars.
A trillion dollars a year, every year, just to service the debt. That’s more than a third of one of Obama’s overstuffed budgets. That’s the size of a Reagan budget in toto. Just to service the debt.
That’s bigger than Defense. That’s bigger than Social Security. That’s bigger than Medicare/Medicaid, combined.
So, other than going into hock to Visa & MasterCard for a decade or longer, what choices do we have? Only two: Default or inflate.
A default would force Washington to live within its means, as burned creditors put away their checkbooks for good. Inflation would wipe out the debt — and your savings along with it. I’ll give you three guesses as to which outcome Washington is more likely to pursue, and the first two don’t count.
Jeffrey Lord thinks five dollar gas and five dollar bread will ruin Obama’s election chances. I’m worried that five billion dollar gas and breadlines will ruin this country.