America Continues Its Path To Financial Insolvency

Photo: Barack Obama's record spending has prompted warnings of a debt super cycle

U.S. Facing Debt 'Super Cycle': $13trillion Black Hole To Overtake Country's GDP 'Within Two Years' -- The Daily Mail

America's $13trillion debt is set to overtake the country's GDP within the next two years as economists warn of a 'debt super cycle.'

Forecasters predict the U.S. debt will grow to surpass gross domestic product in 2012, based on data from the International Monetary Fund.

According to Bloomberg, the world's largest economy will expand at a slower pace than the 3.2 per cent average of the past five decades.

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My Comment: One economist who has predicted this mess and one that I have been following for years is Arthur Laffer. His latest article in the Wall Street Journal is a must read.

As to what is my own take .... chronic spending and the U.S. deficit's impact on future U.S. defense budgets (and the role that the U.S. plays in the world) is being felt right now. All my friends and contacts in Russia, China, Korea, Japan, India and Pakistan, much of Europe .... they are all now seeing a seismic realignment in the balance of power. They are also seeing instability and outright aggression from minor powers, whether they come from Iran, Venezuela, North Korea ... etc... and no opposite power or alliance to stand up to them.

My prediction .... I do not see any change coming from Washington .... even if the Republicans win the House this November. Too many people have a vested interest in continuing this pathway .... even if money and economics dictate the folly of continuing down this path. The economy and unemployment will be the issue in the next few years .... and foreign affairs and defense budgets are going to take a back seat. In short .... the message that the world is receiving from the U.S. is the following .... soon .... and it will be very soon .... it will be every nation for itself as the U.S. tackles it's own economic mess.