cbrahs

maybe wrong section but if ya need to move it move it.

The Consequences Of Debt

How has debt based economics served us so far?

The credit card debt of the average American household ranges from $8000 to $15,000. Total household debt including mortgage and home equity loans has hit an average of 136% of annual household income:

http://www.creditcards.com/credit-ca...stics-1276.php

http://blogs.forbes.com/moneybuilder...useholds-debt/

Approximately 80% of mortgage loans issued to subprime borrowers over the past decade were Adjustable Rate Mortgages (ARM), meaning 80% of mortgages in the U.S. have reset or are ready to reset at much higher interest rates. There were approximately 1.4 million bankruptcy filings in 2009, and 1.5 million in 2010. One in every 45 homes in America received a foreclosure filing in 2010:

http://www.marketwatch.com/story/top...est-2011-01-27

http://www.uscourts.gov/Statistics/B...tatistics.aspx

Keep in mind that in 2005, new government regulations were implemented making filing for bankruptcy much more difficult. In 2006, filings collapsed. Now, despite stringent obstacles, filings are up again over 100%.



The "official" national debt now stands at over $14 trillion, which is around 100% of U.S. GDP (with entitlement programs like social security included, this number is probably closer to 400% of GDP) . The 100% mark is often cited as the breaking point for most countries struggling to sustain liabilities. Greece's national debt stood at 108% - 113% of GDP when it collapsed into austerity. From 2004, to 2010 (a span of only six years) our national debt has doubled. To put this in perspective, it took the U.S. over 200 years to reach its first trillion dollars of debt. Now, we are looking at the accumulation of at least a trillion every year. This is unsustainable.



The much talked about debt ceiling has been raised six times in the past three years. This frequency is unprecedented. International ratings agencies are now openly suggesting an end to America's AAA credit rating:

http://www.bloomberg.com/news/2011-0...des-japan.html

A credit rating downgrade would be devastating to what little foreign interest is left in the U.S. Treasury bond investment.

On the local front, cities and states are on the verge of folding due to the evaporation of municipal bond markets. Cities depend greatly on two sources of revenue in order to continue operations; property taxes, and municipal investment. Property taxes, obviously, are disappearing as property values continue to spiral downwards. This leaves only municipals, which have also unfortunately fallen off the map:



Wall Street analyst, Meredith Witney, recently stated in an interview with 60 Minutes that she believed 50 to 100 American cities would default in the midst of a municipal crisis in 2011. She was promptly lambasted by the rest of the MSM for her prediction. In my opinion, she was rather minimalist in her estimates, especially if the Federal Reserve does not commit to another round of quantitative easing (QE3) for the states (Bernanke denies this policy would be enacted by the Fed, though, which means there is a good chance it will be).

To summarize, the U.S. is swimming in debt. Absolutely nothing has been changed for the better in terms of wealth destruction and liabilities since the credit crisis began, and the situation only looks more precarious with each passing quarter.

read more at www.oathkeepers.org

94ram

it sad to wonder, what will my generation go through? to wonder, whether or not i will be dead when im 80, and not due to health reasons?

Bark

It is kind of frustrating. I currently have no debts. No house or car payments. Its irritating when they print out more money to pay bills since it makes the money I have saved worth less.

chaikwa

I suggest we get used to it and prepare for it to get worse in the best way we can, because nothing is going to change for the better no matter how much we complain.

patdaly

Nothing to see here, move along.

Get your 4 Gs in order, FAST.

cbrahs

its going to get worse. inflation is going to consume us and its not going to be purty

cougar

I have the perfect solution but it won't work.
Why?
Greed.

Redleg

When money is worthless, a bullet might get me a loaf of bread in trade if not a deer.

cougar

See what I mean.