Cut Now

It is better to cut a lot now. If we don't, we will have to make Draconian cuts later. As is mentioned in this video, the market will force the cuts eventually.

If Greece had gotten its' financial house in order 3 years ago, the cost would have been much less–both for the creditors and the people of Greece.  The United States is in the same situation. 

Voters need to be told the truth. We are headed for a big crisis, but we are blind to it. This is an example of the meme I have been pushing here of “templates.” We all have ways we look at the world. If we are not careful, these ways of looking at the world make us blind to the obvious.

It does not matter that people need their social security checks; it does not matter that we need a national defense that is bigger than the rest of the world combined; it does not matter that Aunt Haddie needs a new hip. We cannot afford it. It is that simple. 

Right now we are borrowing 43% of every dollar the federal government spends. Sooner or later the market will refuse to buy new bonds. At that point either the government cuts everything about 50%, or prints lots of money. This will involve a lot more printing than is realized as not only will the deficit be monetized, but all the deficits of the last 50 years will be monetized as the debt matures gradually over the next few years. No one will ever loan money to the United States–not for a generation. 

It is that serious. 

Get out of debt. Consider downsizing your living arraignments. Drive that car for a few years longer. Get Ready. We have 3 to 7 years.