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A Tale of Two Economies: U.S. versus China - page 3
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It shouldn't even be necessary to show people such a graph, since this should be patently obvious to anyone with a grasp of simple arithmetic. Perhaps this point will be still clearer when we compare this mountain of debt to the grossly inadequate Gross Domestic Product (“GDP”) of the U.S.
As pointed out by Chris Martenson, in his own fantastic presentation, “The Crash Course”, roughly $2 TRILLION per year of supposed U.S. GDP is statistical “padding”. It is “deemed GDP”, where there are no dollars changing hands and no visible wealth being generated.
Strip away that padding from the dramatic reduction in GDP caused by the Greater Depression, and we are left with a measly, $11 trillion/year in GDP. Please note that GDP is not the profits of an economy, merely an indication of economic activity.
Given that most U.S. debt is held by individuals and cooperations, and with long-term interest rates rapidly rising, just to service this insane mountain of debt will require something in excess of $3 TRILLION/year. This is more than 25% of annual GDP!
Obviously when more than ¼ of all economic activity is dedicated to simply paying interest on debt, then it is equally obvious that borrowing additional vast sums of money will simply make this ratio much worse. If this were not true, then no one would ever need to declare bankruptcy, they could just keep borrowing more and more and more – until eventually they “solved” their problem.
Is there anyone who still believes the Wall Street Liars, their servants in government, or the media-parrots, when they repeatedly assure one and all that increasing this debt far faster than at any time in history will “solve” the U.S.'s current economic nightmare?
The arithmetic cannot be contradicted. The “plan” of the Obama regime (and the Bush regime before that) is simply a guarantee of bankruptcy for the U.S. - with most likely a destructive episode of hyperinflation before the final, debt-implosion.
What must be pointed out here is that the U.S. is currently so leveraged with debt that it is most likely already too late to try to rescue the U.S. economy through reducing debt. Former U.S. Comptroller, David Walker has already outlined the horrific changes to U.S. spending and taxation which would be required (over many decades) just to eliminate the deficit (with the total debt still growing all this time).
The problem with even Walker's grim projections is that he uses the phony, “statistics” of the U.S. government in making those projections. Plug in real numbers, and the situation is unequivocal: the U.S. is 100% certain to default on its national debt, in a debt-implosion which will be very similar to that of the Soviet Union.
All that remains to be decided is how much worse the U.S. government will make that implosion – by piling countless trillions of additional debt on top of this unsustainable mountain.


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