Good news: Bailout, TARP, and Stimulus Package money are coming to your town. Bad news: By the time it gets there, it might be worthless.
Ok, maybe that is a bit of an exaggeration, but maybe not by much.
Doing a little research, I came across an interesting report. Apparently Moody's, the credit rating agency, in January 2008 said that the United States risked having its credit rating lowered if it did not curb back its spending – specifically its healthcare and social security spending.
And since then, our former Republican President helped fix this by allocating an additional $700 billion dollars into the TARP plan – and its great oversight abilities – and our fearless Democratic government has decided to spend an additional $800 billion dollars more for a stimulus package. All this while running a budget deficit. Seems that credit rating might need to stay at AAA.
Even worse, in January markets pegged the probability of a U.S. default at 6 percent over the next 10 years, compared with just 1 percent a year ago and there are some economic reports estimating that in the next 5 years, the United States has a 6% chance of defaulting on its sovereign debt. Even Senator Tom Coburn said, on January 11, 2009:
"I believe we are at the ultimate tipping point in this country. I believe if we don't make drastic changes over the next year and a half, that 2012 will see the default of the U.S. Government on its bills. I honestly believe that. There are a lot of economists who agree with me on that point."
Just take a second to think about that.
With all of this talk of spending billions for this and hundreds of millions for that, I dare ask this question: Who will give us the money today and who are we going to be obliged to repay in the future?
Well, apparently we owe a certain country over $1 trillion. China's president Wen Jiabao admits he's "definitely worried" that the United States will default on its debt. And if one of our biggest investors is worried now, is it important to question whether they will continue buying our debt 3 years from now?
Oh, and by the way, we've committed over $9 trillion so far into this financial fiasco, regardless of what our Savior says.