All Posts Tagged With: "U.S. debt"

Markets – free markets – are meant to be unstable. They are meant to crack-up from time to time. And thank God they do. Otherwise, we’d be stuck forever with zombie industries and dead end investments.

The US economy entered a period of debt destruction – a Great Correction, we called it. The question then was how long the Great Correction would last…which depended on what it was correcting.

Australian government debt (Federal) crossed the $200 billion barrier last year. In a few short years, then, the government has gone from a modest $20 billion surplus to a $200 billion debt. That debt is still small as percentage of GDP compared to the US, Japan, and the UK. But it’s a lot larger than it was a few years ago…and once these things get rolling, they have a way of building momentum.

“Adjusting for slippage” is the latest government fashion…and it is expensive. “Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year,” Bloomberg News reports, “with most facing a rise in borrowing costs.”

Even before debt became such a big problem, real growth had already begun to disappear from the developed world. There has been none in Japan for the last 20 years…and almost no real growth in the US private sector for the last 10 years. In Europe, grosso modo, the story is similar.

The Financial Times led off its series on ‘Capitalism in Crisis’ with a wandering piece that attempted to outline the problem. Unfortunately, the FT writers don’t seem to understand what capitalism is, let alone what is wrong with it. They say they are “rethinking capitalism.” But it doesn’t appear that they ever thought about it the first time.

The situation is simple. The feds are spending too much. Every half- wit and democrat can see that they can’t go on like this.

But they couldn’t agree on how to cut back. So, they ducked. They put the matter to a “super-committee.”

And the US hits another milestone on the road to Hell. This, from Stephen Dinan at The Washington Times:

The Treasury Department said Wednesday that the federal debt has climbed to a record $15 trillion — a staggering figure that caps a precipitous decade-long rise.