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What’s Coming: A “Fiscal Meat Grinder,” A “Fiscal Cliff” And A Potential “Major Market Meltdown”!
The International Monetary Fund, the U.S. Congressional Budget Office, the National Association of<img class=”alignright size-thumbnail wp-image-42823″ title=”fiscal cliff” src=”http://www.munknee.com/wp-content/uploads/2012/08/fiscal-cliff-150×150.jpg” alt=”" width=”150″ height=”150″ /> Manufacturers and many other authorities are now warning that with the largest tax increase in U.S. history — plus the largest government spending cuts our nation has ever seen – one of the deadliest financial crises in U.S. history is set to strike the U.S. economy beginning this coming New Year’s Day. Barring a miracle in Washington…..
- America will fall “head first into the fiscal meat grinder (JP Morgan),
- cause America to plunge off of the “fiscal cliff” (Bernanke) and possibly
- suffer a “major market meltdown” (former Obama Treasury official Steven Rattner)
- tearing hundreds of billions of dollars out of the hands of U.S. consumers and companies,
- destroying thousands of businesses and
- vaporizing millions more jobs in every sector of the economy
- bursting Wall Street’s stock market bubble,
- gutting the life savings of millions of Americans.
So says Martin Weiss (www.moneyandmarkets.com) in edited excerpts from his original article.*
Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) and www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.
Weiss goes on to say, in part:
If you think this presidential election is routine or if you believe this political season is a time for investing as usual you’d better wake up and smell the coffee because a well-known, but rarely debated, financial monster is about emerge from the sidelines and explode into the forefront of the race for the White House. I’m talking about the most dangerous and destructive flood of fiscal red ink in the history of mankind -America’s gargantuan federal deficits.
In the current election cycle, even after adjusting for inflation and measuring it in proportion to the nation’s GDP, this monster is massive – MANY times larger than during prior presidential elections. It is:
- nearly THREE times bigger than it was just four years ago when Barack Obama defeated John McCain.
- over SIX times worse than it was in 1996, when Bill Clinton defeated Bob Dole, and
-
almost TEN times larger than in 1964 when Lyndon Johnson beat Barry Goldwater.
There’s no way a monster this big can be covered up or buried in a presidential election campaign. In fact, it’s already pervading virtually every debate. Every time they talk about
- Medicare reform,
- Social Security,
- personal tax returns or
- extended unemployment benefits,
it all ties back to the deficit – a deficit which has been a record $1 trillion or more for THREE consecutive years, with no end in sight - DESPITE some improvements in the economy since 2009. If the economy sinks back into deep recession, tax revenues will shrink and the deficit could DOUBLE in size.
For the first time in modern history Washington’s debt load has crossed a dangerous threshold of more than 100% of GDP!
Each year that Washington runs a deficit, it must borrow more money to finance the gap so, with each year of red ink, the government’s pile of debts gets bigger and bigger. Until now, the official tally of U.S. government debts was at least SMALLER than the size of the U.S. economy but this year, U.S. government debt is growing LARGER than the entire U.S. economy. This is a critical threshold for any country — and we are in the process of crossing it right now! The sorry facts are very straightforward:
- The U.S. economy is expected to clock in at around $15.6 trillion in GDP. Meanwhile …
- The government’s debt load (excluding Medicare, Social Security, etc.) is going to be $16.3 trillion.
The above means that:
- even if we gathered up all the income of every citizen, resident or company in the U.S for the ENTIRE year, and
- even if we could use EVERY penny of that income to pay back the U.S. government’s creditors,
we would still be left with a pile of unpaid debts!
Washington will owe about $1.05 in debt for every dollar of products and services produced by every local government, company or individual in the USA! These facts should be setting off major alarm bells around the world. They mean that:
- The United States of America is at an historic threshold, beyond which global investors are prone to panic and start dumping U.S. debts.
- The United States is passing the point of no return, beyond which any new government initiative to “end the crisis” will probably just make it worse…
[All this is] a political landmine because the deficit and debt monster are nonpartisan! They were created by both Democrats and Republicans. They can wreak havoc on any presidential campaign or president, regardless of party affiliation and, most importantly, ANY so-called solution — whether proposed by Democrats or Republicans — is likely to backfire.
