I was reading today’s Sunday Oregonian and the Julie Tripp business column: Grim and greatly exaggerated. One statistic jumped out at me.
“FEAR NO. 1: Government spending and the federal deficit are out of control and will ruin the economy, throw the country into recession and bring back runaway inflation.
WORST CASE: It’s true that the $1.9 trillion national debt — $67,000 for every U.S. citizen — is towering.”
Wrong Julie! The federal is towering but it is not $1.9 Trillion. It is
that computes to $26,347.74. per US Citizen and it is increasing at $2.32 Billion per day. Where is that money coming from? Why foreigners. We need to import that amount of money every day to keep all the dishes spinning. And about those foreigners, Julie says:
“LIKELY OUTCOME: A tough call, but if the will develops to cut the national deficit and to save more, the United States could dodge this bullet. Eventually, the lower dollar will make the price of imports too high and U.S. consumption of Asian goods will drop. Exports from the United States would cost less with a weak dollar.
WHAT TO DO: Diversify into international stocks, bonds and funds. Keep your domestic bonds short. Save more of your dough. And when you do spend, buy American.”
There is no “will” to lower the deficit. We would need to cut the deficit by at least $250 Billion just to keep the deficit from increasing, that’s the amount of interest on our debt each year. How low does the dollar have to go to make the price of imports “too High”. One of those imports is oil. $56 per barrel hasn’t changed our behavior much. Imagine the political fireworks if gasoline was $5.00 per barrel! And “Buy American”! When Walmart doubles as China’s retail outlet, how are we to “Buy American”. Try buying American Oil. Try buying only American cars. Try buying American TV’s, Computers, Furniture, Fabrics, Nike’s for crying out loud. Julie, getting two financial analysts to give you pap for your readers is doing us a dis-service. When CFP’s traditionally recommend 5-10% of assets in Gold, where is that advice for your readers? By the way, when I posted this, the national debt was: $7,782,633,474,857
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