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Tag Archives: GDP
The Lesson of Rome: Fiddling Leads to Disaster
In our special November Bulletin last year, we were skeptical to the extreme that President Obama, or either of the Congressional political parties, would give more than a casual look at the [then pending] December 1st recommendations of the National Commission on Fiscal Responsibility and Reform (commonly called the Commission on Debt and Deficits). Created by Mr. Obama in early 2010, the commission was composed of 18 current and former members of Congress and it was given a narrow mandate: Develop a plan for the US to balance its annual budgets (before interest payments) by 2015. The commission accomplished its … Continue reading
Deficits Create BIG Implications for US Dollar
“If we didn’t have the US dollar as the de facto reserve currency of the world, we’d be Greece. We are broke, bankrupt. REALLY bankrupt.” James Baker III, former US Treasury Secretary and Secretary of State, 4/10/11 The foregoing comment made to Fareed Zakaria on CNN and, hence, heard literally round the world, speaks for itself. As brash as this statement is, Jim Baker was a soft-spoken superstar in both the Reagan and elder-Bush administrations. His appraisal of the current situation reflects his powerful knack for sizing up, clarifying and condensing the complexities of government, while avoiding partisan filters, a … Continue reading
Posted in White Papers
Tagged Budget Deficits, GDP, Reserve Currency, US Dollar, US Treasury
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Debtor-Nations Club
In 1985, the US flipped from its long-held status as a creditor-nation to that of a net debtor. In March 2010, the Congressional Budget Office (CBO) published its annual 10-year costing-out of the President’s proposed budget. [The CBO’s denominator for budget numbers is % of GDP (which avoids the need to separately forecast and measure the impact of future inflation).] Some facts: 1. Annual budget US deficits are large: almost 10% of GDP last year; it will be over 10% this year [Greece’s deficit was about 11% of GDP last year] and, even 5 years hence, the US forecast shows … Continue reading