S&P Issues Negative Outlook On U.S. Because of National Debt

The S&P has staked out new ground in issuing a negative outlook for the United States in light of its huge national debt burden and unfunded liabilities moving forward. The question is what happens now.

The total national debt is reported to be over $14 trillion. In truth, unfunded liabilities such as the Bush prescription medication plan, Medicare and Social Security will push the total debt to in excess of $100 trillion. It is a figure we can never hope to pay off as a country. For the first time ever, generations of young Americans will not live an improved level of lifestyle compared to their parents. It will be worse. Debt has simple left us flailing and the bill is coming due.

The interesting thing about all of this is the bond investors around the world have never seemed to face up to the fact the United  States is in trouble. They keep buying our bonds even though the securities pay almost no interest. United States Treasury notes have always been safe havens for investments, but one has to wonder how much longer that is going to last.

So, what happens if bond investors wake up, smell the debt and realize it stinks? The answer is fairly simple. They stop buying it and start selling it. This is actually already happening. Countries like China are no longer buying long term US debt. They are buying some short term notes, but that is it. Who is buying the debt? You are going to love this…the Federal Reserve Bank.

Yes, it is a Ponzi Scheme by any other name. The Fed prints money to buy our debt. It is akin to issuing yourself a new credit card every time your old ones hit their limits. It is an utter scam through and through. How do we get out of it?

Nobody seems to know. If you have any answer, contact the federal government!

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