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Saturday, September 5, 2009
In the attached Cato Institute podcast James Dorn warns that the U.S. is on track under the Obama administration for a $9 trillion debt over the next ten years. This is $2 trillion higher than originally expected. The options for reducing this enormous debt are
Mr. Dorn states that the recent monetization of the U.S. debt by the Federal Reserve Bank is a dangerous and desperate strategy that can lead to inflation and drain the future value of the U.S. dollar.
These deficit figures are staggering especially in light of the slowdown of U.S. economic growth to pay back the interest and principal on this debt. The Obama stimulus bill foreshadows no economic growth, a deficit destined Obama health care plan and approx. $100 trillion in promised social security and Medicare payments are also contributing to this most serious issue facing the U.S.
What does this mean for the U.S. economy, our ability to payback the principal and interest on this debt given the U.S. economic slowdown, the faith in U.S. economic growth by our lenders in the private and public sectors and the future generations financial burdens? Listen to Mr. Dorn's 7 minute summary for the facts.
Let's all hope Mr. Obama also starts listening to some intelligent advice.James Dorn is Cato Institute's vice president for academic affairs, editor of the Cato Journal and Director of Cato's annual monetary conference. His research interests include trade and human rights, economic reform in China, and the future of money. From 1984 to 1990, Mr. Dorn served on the White House Commission on Presidential Scholars.