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U.S. Must Control Debt “Or Face Possible Panic in Financial Markets”
Posted By admin On December 16, 2009 @ 5:10 am In Money Watch | Comments Disabled
Wednesday, Dec 16th, 2009
This is a very interesting bit of news to go along with Hyperinflation Special Report by John Williams of Shadow Government Statistics  from yesterday. Similar timelines.
Via: Reuters :
The U.S. government must craft a plan next year to get its ballooning debt under control or face possible panic in financial markets, a bipartisan panel of budget experts said in a report on Monday.
Though the government should hold off on immediate tax hikes and spending cuts to avoid harming the fragile economic recovery, it will need to make such painful changes by 2012 in order to keep debt at a manageable 60 percent of GDP by 2018, according to the Peterson-Pew Commission on Budget Reform.
Without action, investors could lose confidence in the United States, driving down the dollar and forcing up interest rates, said the former lawmakers and budget officials who crafted the report. That could cause a sharp decrease in the country’s standard of living.
“We will be less free if we don’t tackle this,” said Jim Nussle, a Republican member of the commission who earlier served as a White House budget director and chairman of the budget committee in the U.S. House of Representatives.
The 34-member commission published its report as Congress was poised to raise the debt limit from its current $12.1 trillion level to allow the government to continue operating.
The national debt has more than doubled since 2001, thanks to the worst recession since the 1930s, several rounds of tax cuts and wars in Iraq and Afghanistan.
A looming wave of retirements over the coming decade is expected to make the situation worse.
The national debt currently accounts for 53 percent of GDP, up from 41 percent a year ago. That’s likely to rise to 85 percent of GDP by 2018 and 200 percent of GDP by 2038 unless dramatic changes are made, the commission said.
The commission did not issue specific prescriptions but said tax increases and spending cuts would probably be needed.
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URL to article: http://www.prisonplanet.com/u-s-must-control-debt-%e2%80%9cor-face-possible-panic-in-financial-markets%e2%80%9d.html
URLs in this post:
 cryptogon.com: http://cryptogon.com/?p=12625
 Hyperinflation Special Report by John Williams of Shadow Government Statistics: http://cryptogon.com/?p=12619
 Reuters: http://www.reuters.com/article/idUSN1419042320091214?type=marketsNews
 Image: http://www.prisonplanet.com/2009_christmas_special.htm
 European stock markets rocked by panic selling as debt crisis reignites: http://www.prisonplanet.com/european-stock-markets-rocked-by-panic-selling-as-debt-crisis-reignites.html
 The Coming Derivatives Panic That Will Destroy Global Financial Markets: http://www.prisonplanet.com/the-coming-derivatives-panic-that-will-destroy-global-financial-markets.html
 Dire CBO report projects US debt will be double GDP by 2037: http://www.prisonplanet.com/dire-cbo-report-projects-us-debt-will-be-double-gdp-by-2037.html
 Obama policies projected to add $9.7 trillion to debt by 2020: http://www.prisonplanet.com/obama-policies-projected-to-add-9-7-trillion-to-debt-by-2020.html
 The Truth About The Debt Deal: It’s Pretty Much Meaningless: http://www.prisonplanet.com/the-truth-about-the-debt-deal-its-pretty-much-meaningless.html
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