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As a result, he sees deepening economic trouble ahead, no matter what steps the administration, Congress or the Fed undertake. He expects little more stimulus, just another futile central bank attempt to print money (lots of it) to buy time. "These paper dollars will not create real prosperity," just an illusory, "temporary, false prosperity," but none at all for most people, hung out to dry on their own.
He also expects a sovereign debt crisis to hammer Europe and the US, saying America's plight exceeds the dire situation of PIIGS countries (Portugal, Italy, Ireland, Greece and Spain), citing the Bank of International Settlements (the central bank of central bankers) saying US debt will hit 400% of GDP, more than triple Greece's burden at 129% that plunged the country into (undeclared) bankruptcy. Indeed the worst for America is yet to come.
America Is Already Bankrupt
Boston University Economics Professor Laurence Kotlikoff explains it in his August 10 article, titled "US Is Bankrupt and We Don't Even Know It," saying:
"Let's get real. The US is bankrupt. Neither spending more nor taxing less will help the country pay its bills." What's needed, he says, is reengineering the economy by "radically simplify(ing) its tax, healthcare, retirement and financial systems...." Revitalization depends on it with unfunded liabilities topping $110 trillion and growing. Even the IMF is worried, saying "closing (America's) fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of US GDP," meaning, of course, from working households, not corporate interests or national security, the most glaring areas needing reform.
The fiscal gap represents "the difference between projected spending (including debt service) and projected revenue in all future years. (It's) the government's credit-card bill and each year's 14 percent GDP is the interest on that bill."
When it's not paid, it increases the balance owed. And each trillion the Fed prints bailing out bankers compounds it. Make them pay, not the public they robbed, starting with shutting them down, breaking them up, seizing their assets, and nationalizing them for the collective good.
Kotlikoff is scary saying "Uncle Sam's Ponzi scheme will stop, (perhaps) in a very nasty manner," citing three possibilities:
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