Wednesday, October 5, 2011

$200 Trillion In Sovereign Debt

Countries around the world have accumulated $200 Trillion of Sovereign Debt.   This amounts to 350% of the total Gross Domestic Product produced by all countries in the world.   Politicians, Kings and dictators have been borrowing money to support their social welfare programs, corruption, government employees, military and wars for years, so much so that many countries now have to borrow money just to pay the interest on their debt, while the principal just continues to grow year after year.   To put this in perspective, the US National Debt will grow to 16.7 trillion, under Obama, in the next few years with no plan is sight to stop the deficit spending and pay it off.

European countries have very high taxes and strangling regulations that have retarded economic growth making it necessary to borrow money to support their Socialist societies.   We see the end result in countries like Portugal, Italy, Ireland Greece and Spain, the so called PIIGS countries of Europe, that are all near default.   The European Union and the EURO hangs in the balance.   The real question is, are the Germans willing to cover the debts of all these countries.   If the Germans do step in, you can bet that all of these countries will lose their sovereignty to the Germany and deservedly so.   These countries and many others around the world that have spent themselves into bankruptcy and have proven that they cannot govern themselves.

The day of reckoning is coming.   Credit will begin to dry up for most of these debtor countries and/or investors will demands such high interest rates to borrow money that more loans will be impossible to sustain.   There will be widespread defaults, which is the reason the price of gold has gone up substantially.   Investors are fleeing to gold because various currencies will be worthless. 

Politicians have borrowed money for years to spend on guns and butter to win elections.  Obviously raising taxes, Obama's Socialist Scheme, is not the answer.   If it was, why on earth would Europe and Japan, with among the highest taxes in the world, also be in so much debt.   The fact is that the more money we give our elected representatives, the more money they will spend.   No raising taxes is not the answer.   In democracies, we must limit the power of our elected representatives to both tax and spend and particularly to deficit spend.   This is the reason why a Balanced Budget Constitutional Amendment to the US Constitution is so critical. 

We are on the road to financial Armageddon.  The world cannot sustain the levels of sovereign debt that exists today.   There is no way the productive people of the world can pay off all this debt.  Something has got to give.  WE THE PEOPLE all over the world must stand up and say NO MORE.   Yes, there will be riots in the streets as people on the dole lose their benefits and we scale back both the size of government and the compensation and benefits of government employees.   It has to happen.  

In the United States, we must take back our country for the sake of our children and grandchildren.   We must act to prevent the bankruptcy of the United States.   We can do it.   We must do it to preserve our freedom, our nation and way of life.  While there may be chaos in other countries, we cannot allow it to happen in America.  WE THE PEOPLE must take back some of the powers we gave our elected representatives because they have proven that they cannot be trusted to protect the interests of the American people.   The future of our nation is in our hands.   

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