Doug Ross posts a chilling report that reveals just how fast Obama and Democrats in Congress are bankrupting the U.S. Treasury:
In one of their "special reports", Sprot Asset Management offers a horrific assessment of this year's Democrat spending frenzy.
In fiscal 2009, the United States must find buyers for almost three times the debt that was issued last year...
...Given the current state of the economy, it seems frighteningly apparent that a threefold increase in debt purchases by the account holders listed above is a mathematical impossibility. There is simply not enough money in the present economy to support a tripling bond issue in the normal course of business...
...‘Foreign and International Holders’... accounts for the largest source of external capital for US debt purchases and represents a very important group to float the deficit. ...Thus far, they have only purchased $465 billion to March 2009, which is halfway through US fiscal year - and well behind the pace needed to triple last year’s purchases... In fact, April Treasury data revealed that ‘Foreign and International Holders’ were net sellers of US debt from March to April 2009. This is not surprising given the public comments from officials in China, Japan, Russia and Brazil concerning the level of debt issuance by the United States and its potential impact on the US dollar.
...[In summary,] traditional buyers of US debt will be unable to increase their debt purchases this year, so we must question how the United States is going to cover this colossal shortfall... It may not surprise you to learn that the largest percentage owner of US debt is the United States Government itself. Perhaps this doesn’t make immediate sense to some readers, but it is a fact. The debt holdings are held in accounts for the various trust funds the US manages for its future obligations - the largest of which are set aside for Social Security and Medicare... Put simply, there are no real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury, that, when redeemed, will have to be financed by raising taxes, increasing borrowing or reducing expenditures. For all intents and purposes, Social Security and Medicare receipts are essentially considered to be another source of government tax revenue that can be spent each year...
...Obviously this is a very troubling development for the US, and unfortunately it is likely to get worse. This year’s Social Security fund is only expected to balance, which is bad news for the government. Along with Social Security, Medicare is one of the trust funds that should be posting surpluses right now in anticipation of the massive future commitments the retiring Baby Boomers will require. As it stands, Medicare is in an operating deficit in 2009...
...We won’t speculate on what would happen to the Social Security program if new buyers for US debt disappeared, but we should all bear in mind that in that scenario the special-issue ‘IOU’s’ in the “Intragovernmental Holdings” account would be rendered worthless, and the US Government’s social ‘safety net’ would vanish......The Federal Reserve’s policy of Quantitative Easing is failing. The US budget is ludicrous, spending is out of control, spending promises are out of control, the world knows it - and we know it. For all the pundits who see the economy improving over the next year, we invite you to explain to us how this debt crisis will resolve itself without significant turmoil. We’ve tabulated the numbers above - and they do not lie.
. . . And the shadow of national bankruptcy looms while President Training Wheels pretends that the falling piano isn't about to land on all of us.
Democrats have taken the public giveaway train pretty much to the end of the tracks. Spending has become so bloated that there isn't enough money left to beg, borrow or steal. What lies ahead is the great train wreck.
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