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Showing posts from April, 2012

Can America Be Saved?

Can America Be Saved?


No. It is too late.

Background
Let's set the stage. While most of the news reports and political talk focuses on the deficit, the real issue is the accumulated debt. About $15.5 trillion and compounding. (For a fascinating, but spooky view see: http://www.usdebtclock.org/ ). If you have a copy of Excel, there is a very handy mortgage calculator. I plugged in $16 trillion - the debt is very likely to get at least that large before anything to change it happens - and got the following: amortizing that balance like a traditional 30 year mortgage requires a monthly payment of $76.4 billion, or $917 billion per year. I guess one could argue we are paying about one-fourth of interest today. Effectively half of our spending is covered by borrowing not by tax revenue.

If we pay just the interest portion alone and don't try to reduce the principal - a major step forward from where we are - would require an annual interest payment of $640 billion. That's the go…