The White House Office of Management and Budget indicated that the president will have to struggle to meet his vow of cutting the deficit in half in 2013 -- a promise that earlier budget projections suggested he could accomplish with ease.
News. WASHINGTON (AP) -- In a chilling forecast, the White House is predicting a 10-year federal deficit of $9 trillion -- more than the sum of all previous deficits since America's founding. And it says by the next decade's end the national debt will equal three-quarters of the entire U.S. economy.
My view. No one really understands the implications. If they did we would not be in this mess. Deficits represent a transfer of wealth from the people of a country to the owners of the deficits -- the bondholders.
We will be taxed to make the payments flow smoothly from the US Treasury to the bondholders. Yes, our standard of living will be greatly reduced in order to pay the interest on the debt.
The real issue is not inflation, lower dollar, rising commodities. The real issue is our standard of living. It will continue to erode as the bill we have to pay to the bondholders relentlessly rises.
To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.
I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.
George Dagnino, PhD
Editor, since 1977
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