Debt Supernova Gets Worse

Debt Supernova

I list below posts I have written on this blog about the US debt situation.  As pessimistic as I have been, apparently the debt situation for the nation is appreciably worse than even I thought.  Hattip to Ed Morrissey at Hot Air.  Tax revenues to the IRS are down 44% from where they were last year.  Previous debt projections, as Ed Morrissey points out, were based on the assumption that the loss to GDP this year would be -1.2%.  With GDP contracting at -6% during the first quarter on an annual basis, the economy will have to show a lot of growth for the remainder of the year for the target of a -1.2% GDP contraction to be reached.  I very much doubt if the GDP contraction will be much better than -2.5% and could easily be far worse.

In the meantime, hattip to Instapundit, the Chinese are concerned about the Federal Reserve purchasing US Treasury bonds.  No doubt that is one item on the table for discussion as Treasury Secretary Geithner attempts to convince the Chinese to continue buying US debt.  Well I hope the Chinese will continue purchasing our debt, because long term Treasury bond sales seem to be sending out danger signals.  A selling spree in Treasury bonds yesterday is another indicator of instability in the sale of US debt.

I think we are entering a perfect storm of exploding debt and an increasing inability to borrow on good terms.  The economic day of reckoning approaches and I fear, if present trends continue, that Americans will face the devastating economic impact of eventual debt repudiation.

1.   TAX REVOLT!!!

2.    Chutzpah

3.    National Debt Road Trip

4.     Bye Bye Triple A Rating?

5.    Debt Supernova

6.    So Obvious, Even The New York Times Notices

7.    Debt Sun

8.    Spirit of ‘09

9.    Red Ink

10.  Of Tea and Taxes

11.   Democrat Economy

12.  Uncle Sam Borrower

13.  Pension Wipeout

14.  National Bankruptcy

15.  Money Meets Rathole

Advertisements

10 Responses to Debt Supernova Gets Worse

  1. Phillip says:

    So, does it still make sense to invest in the stock market?

  2. Donald R. McClarey says:

    Phillip with stories such as this: http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Furor-grows-over-partisan-car-dealer-closings-46261447.html, I do not think any investment is safe these days, other than perhaps in gold and other precious commodities. This type of political meddling for obvious partisan goals should send the shiver down the spine of anyone who wants to invest.

  3. Phillip says:

    I’ve read about this. It would be interesting to see follow up on how true it turns out to be.

  4. Art Deco says:

    We have had a decline in real income of about 3% in the last year. It does not seem credible that that would induce a drop in revenues of a third. I suspect the story is misreported or incompletely reported.

  5. Donald R. McClarey says:

    Art Deco here is a link to the article on which the stories are based.

    http://www.aier.org/research/commentaries/1488-tax-revenue-plummets

  6. Art Deco says:

    If you look at the graph, you see that monthly collections are a fairly noisy statistic.

  7. […] except through the terrible remedies of hyper-inflation or debt repudiation?  As I have often stated on this blog the debt that we are amassing is fiscal lunacy and our economy will soon smash into a brick wall […]

  8. […] has had a positive impact on the job situation, Obama has a real problem on his hands.   He is in the process of bankrupting the nation without even short term benefit. Possibly related posts: (automatically generated)The Budget Battle […]

  9. […] for repeal of the Bankrupt the Nation Act of 2009, otherwise known as the stimulus bill, before the Debt Supernova damages the country for generations.  The closer we get to 2010 the more amenable Blue Dog […]

%d bloggers like this: