Maxed Out America: Coming Sooner Than You Think
If we're lucky, the positive results of the recent 2011 budget deal might offset the negative effect of the last two factors just cited, and we still have 6-1/2 years until Maxed Out America arrives.
At least one influential entity is concerned that we may have nowhere near that much time. Last Monday, ratings agency Standard and Poor's cut its long-term outlook on U.S. sovereign debt for the first time from "stable" to "negative." The firm believes that there is a one-third chance that it will have to issue an actual downgrade of our debt in the next two years. If ratings agencies and lenders determine that we are not serious about addressing our problems, they may begin to raise rates or reduce their exposure even before we hit the Maxed Out level.
The real problem, of course, is spending, which, even after the budget deal, will have grown by over $1 trillion in four years, or about 40%, by the end of fiscal 2011. Maxed Out America cannot be avoided at currently projected spending levels.
The PJ Institute's Maxed Out America Special Report has a stern warning about the consequences of doing nothing: "Our sixteen year old kids, entering the tenth grade of high school in the fall, may face this economic impact when they graduate from college in 2017, if not sooner." Are we as a nation willing to accept that possibility?
Given the oncoming calamity, Washington's lack of serious urgency is scandalous. The Maxed Out America initiative intends to change that. Readers should ensure that their congressperson and senators understand that they, and we, are quickly running out of time.