2013 Budget Reveals the Catastrophic Collapse of our Entire Economic System
Armstrongeconomics.com
October 10, 2012
The President’s 2013 Budget is out and it should be stated that there is no forecasting ability incorporated in this report. The projections are based on the assumption that what is in motion stays in motion. So the increase in interest expenditures that they freely show here will exceed all nondefense spending in the next decade, is based upon the idea that interest rates will remain the same. There is no anticipation that the economy would decline an tax revenues with it the higher the tax rates rise. Virtually every assumption is effectively just false. There are already plans to raise the age limit on the entitlements. The government employee pension funds are way out of control.
The statement of the President shows how they accept no blame for anything and shift it to somehow the crisis is the offspring of the fact that the rich made more money. How this has anything to do with failed government spending or the fact that if you eliminate ALL government spending except interest and entitlements, you cannot balance the budget. His solution will be to raise taxes by 50%. However, by the time we reach 2020, that same solution will be needed again and we will have completely destroyed the economy for there will be no private wealth left for anyone to argue over. The President’s statement makes it very clear:
“We now face a make-or-break moment for the middle class and those trying to reachg it. After decades of eroding middle-class security as those at the very top saw their incomes rise as never before and after a historic recession that plunged our economy into a crisis from which we are still fighting to recover, it is time to construct an economy that is built to last.”
This demonstrates that there is ABSOLUTELY no solution to the Sovereign Debt Crisis. They just plan on continued borrowing and project the National Debt will reach $26 trillion by then end of the next 10 year period. There is no accountability. There is no plan other than blame anyone with money as the reason the politicians have failed. This statement makes it crystal clear that there is no acceptance of responsibility and the only thing they intend is to raise taxes and secretly reduce entitlements, but there is no practical solution that is long-term nor is there any realization that there has to be a debt default on those very entitlements just as we see in Greece whose bonds are now with the lowest rating a presumed to be junk. The amount of wealth destruction on the horizon is off the charts. We are looking at massive STAGFLATION, rising costs (including taxes) and declining economic growth.
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