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Wednesday, December 22, 2010

US Budget Crisis Ahead

My post today on Military spending gave me a response from a friend in email.

The 2010 deficit is projected to be about 1.2 trillion dollars, according to Wikipedia.

Further, below is a projection of how in 2015, at current spending rates, each working US person will have a debt load of 1.2 million dollars for current US debt and future debt obligations. That is a little mis-leading, as it assumes the US will pay off what it has promised in the future.

Excluding future broken promises, by 2015 each working person will be servicing the interest rate of $200,000 of government debt. Assuming the government can borrow at 5% interest in 2015, which I believe will not be possible, but lets assume it, then each person in the US will need to pay 10,000 just to pay the interest on the 200K. Then extra money must be spent for military, education, social security etc.

As you can see, it just won't happen. This is the crux of my current fixation. The transition from our current trajectory to what is actually possible to sustain will be dramatic unless action is taken.

Anyway, 2015 projected debt clock below if we do nothing to improve matters.

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