The Looming Deficit And Debt Crisis Is What We Should Be Worried About

Brace For An Avalanche of Unfunded Debt -- Mort Zuckerman, US News and World Report

The fiscal cliff isn't as scary as the looming deficit and debt crisis about to swamp the country.

All eyes have been on the clear and present danger of the fiscal cliff—understandably—but there's a sound in the mountain range that's even scarier than the cliff. It's the sound made by an avalanche, the trillions of dollars of debt that's heading our way, gathering speed and mass. For most people, it's out of earshot now, and that's the way our government prefers to play it in its financial statements. Liabilities are not set out there in accordance with the well-established norms of the private sector, where this overhang of liabilities would set off alarm bells in the markets, with boards of directors in emergency sessions.

We'll come to why that's not happening, but let's consider first why we should regard our predicaments as gravely as any private company does on the path to bankruptcy.

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My Comment: I have seen how uncontrollable debt can adversely impact a country. Argentina, Greece, Spain, Iceland, etc., .... if the U.S. government cannot control it's spending, what happened to these countries will happen to the U.S..

Update #1: Geithner Tells Congress U.S. Reaches Debt Limit -- Bloomberg

Update #2: Why you should really be worrying about the Fiscal Cliff -- Peter Foster, The Telegraph

Europe's Economic Depression Deepens

Europe Clings To Scorched-Earth Ideology As Depression Deepens -- Ambrose Evans-Pritchard, The Telegraph

Like the generals of the First World War, Europe’s leaders seem determined to send wave after wave of their youth into the barbed wire of tight money, bank deleveraging, and fiscal austerity a l’outrance.

The strategy of triple-barrelled contraction across a string of inter-linked countries has been the greatest policy debacle since the early 1930s. The outcome over the last three years has been worse than forecast at every stage, and in every key respect.

The eurozone has crashed back into double-dip recession. It will contract a further 0.3pc next year, according to a chastened European Central Bank. The ECB omitted mention of its own role in this fiasco by allowing all key measures of the money supply to stall in mid-2012, with the time-honoured consequences six months to a year later.

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My Comment: Predictions for this economic disaster have been voiced for a very long time .... but it is only in the past 3 years that the 'chickens have finally come home to roost'. And who is to blame for this mess but the electorate who always found it easier to elect into power politicians who made promises with borrowed money than the politicians who preached 'living within one's means' and to not go into debt. Sadly .... Europe's mess is going to impact everyone, and with the U.S. now following the same economic policy of more debt and higher taxation .... it is easy to predict that in the next year or two we will be finding the same economic crisis in the U.S..