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U.S. Indebtedness is Rising by over $1 Trillion a Year

By       Message Kevin Anthony Stoda       (Page 1 of 2 pages)     Permalink

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U.S. Indebtedness is Rising by over $1 Trillion a Year By Kevin Stoda

According to research discussed in the Economist's Voice, the "fiscal gap, which is the true measure of indebtedness, is rising by over $1 trillion per year just due to the accumulation of interest"- in the U.S.

Laurence Kotlicoff is the author of the article "The Emperors Dangerous Clothes"-. He states that future federal expenditures are running $70,000,000,000,000 above anticipated receipts. The worrisome part of this deficit is that most of the total U.S. fiscal deficit increase each year has to do with household spending and it is often America's elderly who are often forced to create this deficit.

In short, Kotlicoff and other fiscal financial researchers note that even thought the federal deficit is not under control, the more worrying factor has been the decrease in American household savings during the most recent decades.

A lot of Americans note that it is more than obvious by now that American's are (1) not saving as well as Japan and other countries are. Moreover, they are (2) not saving as well as their grandfather's generations did.

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However, it is too seldom asked, "How did we get to be this way?"- This is where generational research in economics and finances are so important.


For example, far too much blame is put on the shoulders of America's consumer, i.e. the over-spending habits of the average American household consumer. At the same time, too little blame has been placed on the lack of federal and state incentives to save and invest in the long-term. This has adversely affected the health of one's individual, local, state, and regional economies.

One federal orientation that has taken away from local savings and investment has been the focus on creating larger banks and bank networks across America, i.e. banks which don't have nearly the concern for the local economy than, let us say, credit unions would have. This has been a result of the deregulation of many sectors of the economy and finance in recent decades.

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Instead, the U.S. federal focus has been in support of national banking and national consolidation, in order that the U.S. can compete with other global economies, who have enormous banks. (Recall when Japan had 9 of the 10 largest banks on the planet back in the 1980s and 1990s.)

Another shortsighted orientation has been America's over dependence on so-called free market economic and financial development over the years. Throwing Keynesian economics out the window in the late 1970s all over America was not necessarily the way to proceed for the next few decades. This lack of focus on the commonweal of a society rather than focusing on those who can lift other sup has been short-sighted. It also led many to falsely believe that trickle-down rebates and tax credits for the wealthiest individual was the only way for the M1 and M2 supplies to be manipulated effectively to lift us all forward out of the 1970s stagnation.

Meanwhile, various political economic developments in free trade, the rise of China and the tiger economies, and the joining of Eastern Europe in the global economy have also led to an increase in cheaper manufactured goods everywhere. This deflation in prices of certain goods allowed American consumers to remain relatively quiet over the last 4 decades""even as the average wage earner since 1968 has annually taken home less""and-less money each.

Under this open-market-at-all-cost approach, the U.S. has become more & more dependent on cheap imports to maintain a semblance of the status-quo for American families over 4 decades""even though actual savings opportunities have decreased substantially. In short, keeping up with the Joneses in 1960 to 1979 period was a lot cheaper than it has become in the most recent quarter of a century.


On the other hand, it is also true that Uncle Sam has had to come in and bail out America's seniors increasingly in recent years""enabling some of the elderly to keep part of their savings and investments, which would have been lost due to ill-health. The Medicare and Medicaid Benefits are just part of the big picture. States, NGOs, and other charities have stepped in to assist, too.

Likewise, because the federal government has intervened in the health sector so often, the health sector is not as efficient as it could be. In this way, the U.S. health care system""although more beneficial than the military industrial complex which siphons off billions of dollars of each day""is not nearly as efficient as it could be.

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Moreover, "Can the current dangerous trend""possibly leading to the bankruptcy of the U.S. financial sector some day--be turned around?"-

This is an extremely important question, but Kotlicoff reports the major sticking point for America's messed up financial sector often has to do with properly analyzing the American accounting and financing system, so that we could improve how the economy operates through increased awareness and knowledge for all planners, political economists, and everyone interested in long and short term societal and economic development.


As shown by the Enron, WorldCom and housing & loan scandals and catastrophes in recent years, there are currently too many non-standard or smoke-screen ways of accounting and manipulating numbers. This is why Kotlicoff entitles his article, targeting economists, "The Emperors Dangerous Clothes"-.

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KEVIN STODA-has been blessed to have either traveled in or worked in nearly 100 countries on five continents over the past two and a half decades.--He sees himself as a peace educator and have been-- a promoter of good economic and social development--making-him an enemy of my homelands humongous DEFENSE SPENDING and its focus on using weapons to try and solve global (more...)

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