Saturday, 25 June 2011

Grecian tragedy - a sideshow to the main event

The following excerpt comes from a very good article written by Justin Webb who was the BBC's North American editor for eight years.

America's federal government debt is growing at $40,000 per second. It has reached $14 trillion, whatever that means. More comprehensible perhaps is this fact: the debt will soon match the entire GDP of the United States. Outside wartime, that has never happened before.

A combination of tax cuts and spending increases, coupled with the war on terror and the financial meltdown, has seen America's fiscal health evaporate.
Even the savings implied last week in the surge home of US troops from Afghanistan, count for little more than a drop - a splash, perhaps - in this ocean of debt.
The real issue is the future of America's domestic spending.

The projections are appalling: the non-partisan Congressional Budget Office thinks that by 2030 interest payments plus spending on pensions and health will take up all the government's tax income. Everything else, from education to war-fighting, will have to be borrowed for. Or cut out.

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