The chart above shows best and worse case scenarios for funding the new debt that has to be issued by government to cover the Wall Street bail out as well as spending on non-crisis budget categories. The most likely case (middle bars) shows a shortfall of $542 billion.
Before now the U.S. debt was funded by foreign purchasers, but as this pie chart shows the new US debt level swamps the rest of the world put together. We will need almost 9% of WORLD GDP to fund our growing debt. There are not enough purchasers of sovereign debt to go around when the world is deleveraging and there are competing business and consumer demands for capital. In another age of increasing sovereign debt (in Europe between 1870-82), Andrew Carnegie recognized America's unique position amongst nations: "Our great advantage which the Democracy has secured for itself in America is its comparative freedom from debt. The ratio of indebtedness to wealth is strikingly small." Will foreign investors continue to invest in dollar securities when the dollar is continually devalued? Not any more, Mr. Carnegie.
The chart above shows best and worse case scenarios for funding the new debt that has to be issued by government to cover the Wall Street bail out as well as spending on non-crisis budget categories. The most likely case (middle bars) shows a shortfall of $542 billion.
Before now the U.S. debt was funded by foreign purchasers, but as this pie chart shows the new US debt level swamps the rest of the world put together. We will need almost 9% of WORLD GDP to fund our growing debt. There are not enough purchasers of sovereign debt to go around when the world is deleveraging and there are competing business and consumer demands for capital. In another age of increasing sovereign debt (in Europe between 1870-82), Andrew Carnegie recognized America's unique position amongst nations: "Our great advantage which the Democracy has secured for itself in America is its comparative freedom from debt. The ratio of indebtedness to wealth is strikingly small." Will foreign investors continue to invest in dollar securities when the dollar is continually devalued? Not any more, Mr. Carnegie.