Obama's Mess is Your Nightmare...WAKE UP!!!!!!!!
These numbers are not exact but close enough for illustrative purposes.....
Under the Bush/Pelosi Years....America DOUBLED both Public and Private Debt.....basically under Bush/Pelosi...America and Americans borrowed and banks lent as much in eight years as the previous 220 years.
As a result of massive borrowing alone, our GDP practically doubled even though we produced less which basically made America a Ponzi like economy so long as the banks lent to the citizens and infected them with ever increasing levels of debt. If you loan $1,000,000 to a homeless person...and he were to spend it immediately, in the stores around him...the business would boom until he ran out of money.....now think about this on a national scale lending trillions to anyone with a pulse during the Bush/ Pelosi era.
With a higher GDP and significant savings accumulated over the past 200 years....we were able to service the debt. But in the last year or so of the Bush administration banks stopped lending...first to subprime....then NINJAs.....then ARMs....then Alt A....then Credit Cards.....then HELOCs....then Commercial Real Estate....Autos...Student Loans....and so on......
The economy started to slow....and by the time Obama reached office....new housing sales were down 75%, auto sales down 50% and government tax receipts were DOWN about 30% and while the legacy debt burden was increasing to the population as interest rates reset.
Basically under the years of the Bush administration....about half the jobs in America existed simply because America and Americans were borrowing and spending money they simply didn't have at a rate we had never seen before. 4/5 of all new jobs creation was in housing. Once the banks started cutting us off....the game was over and revenues started evaporating.
As millions lost their jobs due to a dramatic slowdown in lending....the expenses to government skyrocketed to cover unemployment and medicaid that were once allocated to the private sector under the Ponzi Like economy.
No Obama faces an economy will likely contract 50% as savings is depleted....many industries have already contracted that much and more.....the problem is that by cutting expenses....the economy will contract even more making a bad problem even worse.
With a 50% reduction in revenues and/or GDP....there is simply no way for most Americans and America to cover debt service and we can't print our way out of it due to an inability to raise funds at an acceptable rate of interest.
So here Obama stands with not enough revenues to pay the debts accumlated under the Bush/Pelosi years......and as more American's lose their jobs due to the inevitable slowing of the economy....the burdens on our state and national governments will only increase. If you cut expenses you make a bad problem worse as millions of jobs depend on the revenues generated by government and welfare and medicaid.
Obama is walking into the most difficult economic situation EVER faced by an American president even though his contituents are not aware of it yet. In The Great Depression, there was very little debt between the citizens and government....thus it was easy to stimulate the economy by lending to a growing industrial nation....something we have done for the past 70 years when necessary........but as our productivity was outsourced and slowed to where we could no longer service the debt, the banks stopped lending .
Under the Bush/Pelosi Ponzi Like economy...about 25% of the Ponzi Like GDP was needed to service interest.
Now that the economy is contracting...the number is growing closer to 50% of GDP while the burdens on government are exploding. For every dollar spent on interest it takes a dollar away from savings and spending on goods and services causing the economy to shrink further.
At this point, we as a nation have about $6 trillion in private savings and about $30-$40 Trillion in private debt.....NOT INCLUDING FEDERAL DEBT/ENTITLEMENTS...as our incomes decline our savings will evaporate paying down debt. After most have spent down their savings and have no access to credit, government revenues will slow so much and government expenses will simultaneously explode that the FEW REMAINING SOLVENT will need to be taxed everything they have just to keep the nation functioning.
Welcome to reality and the problem your President really faces. Does this help explain the lies coming from Wall Street in the past few years as they hurry up and drain the nation of its money before it all runs out???????
The only way to solve the problem of a nation burdened with too high of interest payments IS TO REDUCE the interest payments....borrowing/printing money will only make the problem worse.
Now prepare for change.....HUGE changes are just around the corner!!!!!!!!!!!!!!!!!!!!