Wednesday, May 23, 2012

Using the young as a shield for hitting the deficit spending wall – the bill will come due for the young. Government spending prioritizes old American

Via Survival

The level of government spending is mind boggling but has taken a backseat to the issues being experienced over in Europe. We are running trillion dollar deficits as if this was somehow customary in our history. For each dollar spent we are seeing less of a result in the real economy. Part of the issue with the stimulus funding mechanism is that it disproportionately favors the financial industry. The rhetoric being pushed out ignores the two-tier system in the US where older Americans have safety nets while the young are battling the fierce tiger of hungry capitalism. Money knows no boundaries and has no national ties. Just look at Facebook co-founder Eduardo Saverin renouncing his US citizenship in line with the IPO and his big payday. The 2012 elections should be centered on the health and future of our economy. Do we still feel that a middle class is central to the prosperity of the nation? The fact that so much money is being spent with so little results is troubling on many fronts.

Increase in debt and GDP

The increase in government debt has not necessarily coincided with a proportionate increase in GDP:

government debt spending per gdp

Source: TrimTabs

A chart like the above would resemble a world war yet that is not our current situation. The massive spending is yielding weak results for the amount that is being funneled into the system. The Federal Reserve has done an excellent job bailing out its member banks by shifting toxic assets onto their own balance sheet:

No comments:

Post a Comment