Quote:
Originally Posted by dadof18x'er
Nmap, if there are changes of power in congress this fall will they be able
to effect any of this or are we fairly hosed with no chance of help?
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No chance at all. Much of the current activity is funded through new government debt. It is not fueled by real activity.
If we quit adding to the debt, we will face a substantial decline in economic activity, along with unemployment. People will suffer.
If we add to the debt in order to defer the pain, then whenever the crunch comes it will be worse.
Here's our problem - our economic activity includes government spending. Since 2002, we've been adding half-a-trillion or more annually.
LINK
Now notice our GDP (
LINK )
We started out with annual new debt at 5% of GDP. Now, we're getting up to 10% (actually, more than that) each year.
So....if we quit stacking up debt, we lose 10% of our annual economic activity.
Here's the formula: GDP = C + I + G
C is consumption. I is gross investment. G is government spending.
We face a difficult choice. Pain today. Or more pain tomorrow.
But there will be pain in our future. Congress and the White House can choose to stop adding to the problem - but they cannot plot a course that will avoid deep recession or worse.