The upcoming US Economy

Subject: The upcoming US Economy

No matter how I evaluate the US Economy I see big trouble ahead, and the day of reckoning coming sooner. In Aug 2009 the outgoing Social Security(SS) payments , were $6 Billion short of the SS payments paid in from working persons.Because of layoffs and rising unemployment, this shortfall will increase.

There is a significant difference between the reported budget deficit and the change in debt. The key differences are: 1) The Social Security surplus, which reduces the "off-budget" deficit often reported in the media; and 2) Non-budgeted spending, such as for the Iraq and Afghanistan wars. The debt increased by approximately $550 billion on average each year during the 2003-2007 period, but then increased over $1 trillion during FY 2008, and $1.4 Trillion in 2009.

The cumulative debt of the United States in the past 8 completed fiscal years was approximately $4.3 trillion, or about 43% of the total national debt of ~$10.0 trillion as of September 2008. Professor Lawrence Kotlikkof(Boston Univ) estimates the total US debt is $70 Trillion plus.

The Federal budget year for 2009 closed on Sept 30th with an admitted $1.4+ Trillion deficit.

In the admitted Federal Budget(which does not include off budget spending) the components are:

1. Madatory Spending: Medicare,Medicaid, SS, and others 55%

2.Defense(not including off budget spending) 12%

3. Interest 8%

That is 75% of the total admitted expenditures,leaving little room for adjustments.

Fannie Mae and Freddie Mack have in excess of 50% of all home mortgages. Many are on foreclosed and abandoned houses

that have little value. The taxpayer will bail them out.

FDIC is asking Banks to pay their insurance ahaead of time. They are running out of money and will have to be bailed out.

Pension Benefit Guarantee Corporation-PBGC is administrating pensions for 44 million. As companies go bankrupt their pensions are administered by PBGC. They are $142 Billion in arrears and it is growing.

So far the Federal Government has hidden this problem by having the Federal Reserve, simply digitize/print money and buy the government's debt. This phony money and debt is backed by nothing. The rest of the world understands this and does not want any more US Dollars. Oil is sold based upon US Dollars and the Saudis and other oil producing counties, besides hating the US, want a different form of payment.

This process of debt and printing fiat money is accelerating, driving up interest rates and inflation. The longer the US Government continues the process, the worse the ultimate currency collapse will be.