Rather than try to do an exhaustive interpretation here, I’ll just lay it out for you and let you read it from the source. The Daily Bell bills itself as “A Daily Compendium of Free-Market Thinking“, and while what they write about in this article is true, you may find their interpretation and spin as leaning strongly towards the idea that socialism and social services are in some sense bad things, although they recognize that drastic cuts are a recipe for social instabilities, to put it mildly.
They also say on their Contact Us page: “We’d be delighted if you want to carry the Daily Bell on your site. All we ask is that you give us credit and include a link back to the original article or interview at the Daily Bell.”
Here from The Daily Bell, is The US $200-Trillion Debt Which Cannot Be Named
The scary real U.S. government debt … Boston University economist Laurence Kotlikoff says U.S. government debt is not $13.5-trillion (U.S.), which is 60 percent of current gross domestic product, as global investors and American taxpayers think, but rather 14-fold higher: $200-trillion – 840 per cent of current GDP. “Let’s get real,” Prof. Kotlikoff says. “The U.S. is bankrupt.” Writing in the September issue of Finance and Development, a journal of the International Monetary Fund, Prof. Kotlikoff says the IMF itself has quietly confirmed that the U.S. is in terrible fiscal trouble – far worse than the Washington-based lender of last resort has previously acknowledged. “The U.S. fiscal gap is huge,” the IMF asserted in a June report. “Closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of U.S. GDP.” This sum is equal to all current U.S. federal taxes combined. The consequences of the IMF’s fiscal fix, a doubling of federal taxes in perpetuity, would be appalling – and possibly worse than appalling. – Globe and Mail (Canada)
Dominant Social Theme: What? That can’t be. Let’s not talk about it.
Free-Market Analysis: These numbers cited by Laurence Kotlikoff have been all over the Internet for a while now but have not been much reported by the mainstream press. No surprise there, but we are a bit shocked that the Globe and Mail chose to pick them up. Was it a slow news day? The story itself has been around since August.
Because the Globe and Mail has covered it, so shall we. Here is our question: Given these numbers, how can banks and institutions purchase US fixed income securities, let alone the dollar? What sense does it make? These large institutions, with fiduciary responsibility, are basically buying a bankrupt product. And it is not just the US. The entire Western world (maybe with the exception of Germany) is pretty much either flat broke or worse than broke.