Lawrence Kotlikoff wrote in the St. Louis Review,
(and I'm paraphrasing a bit). "The U.S. government is bankrupt, insofar as
it will be unable to pay its creditors". He also went on to suggest that the U.S.
should immediately close its Social Security programs, use a voucher system for
Medicare to reduce costs, and replace corporate, payroll and estate taxes with
a single federal sales tax. All of this was published in an article in 2006,
well before the financial melt-down had even begun!

After reading his article, I started digging.
Three years after this article was written, here's what we have. The financial
situation in the United States is not sustainable. The projected deficit to
2018 is NINE TRILLION DOLLARS!
In order to cover that debt load, foreign bond investments need to
increase 10 fold and taxes need to increase by over 60%
just to balance the 2010 budget. That isn't going to happen.
At current levels of spending, the United States government
is increasing liabilities at almost 4 times the rate of revenue.
The numbers are ridiculously huge and no corporation,
company or government can sustain that for long.
Here's another item that is just surreal.

The FDIC's Deposit Insurance Fund had over $10 Billion
at the end of June. It spent so much covering bank failures,
it's now broke. What does this mean? It means there is no money
to cover almost $5 trillion in deposits and over $320 billion in FDIC-guaranteed
debt that banks and other lenders have issued. They can't cover it. Period!
The money they collected was never held in a segregated account.
It went into general revenues-to fund everything else!
Now, the FDIC is telling the financial institutions to pre-pay
their assessment for the next 3 years to float them. In other words,
they're borrowing money from the the banks they are insuring!
Are you still with me here? This is scary.
This is not just the U.S. that's doing this. Most countries in the G20
are blindly strolling down the same path.
I didn't write this post to be alarmist, but I'm
not about to stick my head in the sand either.
I'm going to prepare; not quite sure how yet, but I'm working on it.
I know, this is not my normal post-entertaining, and funny, interspersed
with cartoons. This is cause for some serious reflection.
Where are we going? I don't know.
It's not too difficult to connect the dots.
If I were a betting man, I would say, we haven't
seen the worst of it. There's another wave coming.

And it's going to be a Tsunami!
I've been holding off posting this for three weeks now-
I sincerely hope I'm wrong.