For more than a day now, Drudge's main headline has been substantially the same as the headline on this story.
Let me tell you what that really means.
If the government took 100% of all our paychecks and pensions for the full year, that would not make an appreciable dent in our national debt.
If the government took 100% of our paychecks and pensions for the full year and 100% of corporate revenues (not income or profit, but revenues) for the entire year, that might be a fair percentage, but still not that close to all of the sum.
But that would still leave untouched obligations like future social payments (for which we have no revenues, because we are going further in debt every year and paying more and more interest), and Fannie/Freddie bailouts, federal pensions, and possible bailouts of local and state pensions.
The debt that we are paying interest on now is equal to the entire economic output of our country for one full year. That includes all interest or earnings paid on mutual and hedge funds, derivatives and swaps nationwide for a full year. All freight charged in the US. All our exports. All the money that pays for all our imports. Any. Economic. Activity. For one year, our debt equals. We have not plumbed the depths of our drunkenness with the national credit card.
That's just to deliver government for the past 5 years since the debt really mushroomed, mostly in the past 3 years. Not much for the sum we are paying. Just government, with some social benefits and a lot of bailouts.
Nothing in the debt secures us an asset that we can redeem for cash - as you might if you got upside down on your house - you still have the underlying value of the house to redeem a significant portion of that debt, even if you have to default or go bankrupt.
Not so with our national debt.
It's a cash debt that must be redeemed in full in cash, with no asset(s) to sell to pay part of it; and interest must be paid in the meantime.
Remember when governments ran surpluses? And had a little (or a lot) of extra cash around from year to year to meet emergencies like, say, Katrina?
Folks, we are really out of money. The $100 billion in cuts being discussed this week are not even 10% of this single year's deficit alone. We should cut $1.6 trillion from the budget this year -- right now. And cut $1.6 trillion consistently from the automatic programmed budget increases for the next 10 years. Otherwise, we are just going deeper into debt at the same rate as the last 3 years.
We are going to see a crash much, much harder than that of the 30s. Food and fuel prices are already skyrocketing as Obama promised. The bottom will be very, very hard, rocky and rough.
International bodies and other countries have become more and more vocal about denominating reserves in nearly anything but the dollar. Can you imagine why? They are prudent in seeking that economic shelter from the coming storm.
We must fully repudiate deficit spending now, or we will be forced to repudiate domestic and international fiduciary obligations that will make us true international pariahs, and put us into a deep, deep depression. And we do not want to pay that price.
Honestly, we should be out in the streets right now as they just were in Egypt.
$100 billion in cuts? Give me a break. It should be $1.6 trillion. This year; not over the next 10 years. Now.