Oprah, Along With the US Citizens - The US Government Too Needs the Debt Diet!
To the rescue of Americans in debt, Oprah started the famous 'Debt Diet'.
But what about the US government? The Bush Regime has landed the American economy in troubled waters.
Billions of dollars spent on the maintaining the military forces in Iraq and Afghanistan for about 7 years, faulty and absolutely illogical economic policies, a taxing system favoring the wealthy and the capitalists, the welfare schemes, etc, etc, have bought the US economy in a state of total crisis.
The US economy sustains on debt.
Statistics show that one in 4 Americans worry about their debts and every second American (aged between 25 and 40) is in debt.
Be it them or the US government itself, they're drowning in debt.
Interestingly, the US government is as compulsive a spender as the US citizen.
After the $ 800 bailout for US Gross Debt for the fiscal year 2008 is estimated to be around $ 11.
3 trillion i.
e.
about 82% of the American GDP.
At the current rate, the national debt is increasing by nearly 4 billion dollars every day and by 2040 the US debt would be $40 trillion more than the GDP.
As of February 2008, the national debt was around $30,400 per person of the US population or $60,100 per head of the U.
S.
working population, which due to the recession, would have grown steeply.
The debt based policies made by the American economist and the former chairman of The Federal Reserve of US, Alan Greenspan, are one of the reasons for the current condition of the US economy.
His policies favored the laissez faire capitalism i.
e.
no government interference with trade, free market principles, hence no regulation.
It was his incapability to look beyond the short-term benefits that the US economy with did not have a sound base for growth.
The reason for the exemplary surge of the US stock markets, the US economy and the stable dollar thrived on the principle of creating debt.
Americans are famous for their crazy spending habits.
The introduction of credit cards and loans at lower rates boosted their irrelevant spending habits.
Living on the policy of 'buy now, pay later' could have taken them just so far into the kind of debt the objectivists wanted.
For repaying the current debt, they took more loans (which were made available to them by the same objectivists) and sunk further into higher debt (principal amount of the previous debt + the new, higher interest).
For example if I take a loan of $100, which amounts to $120 after the 20% interest added and I'm not able to pay it, I'll take another loan of $ 120 to pay the previous loan.
The new loan would then amount to $144.
The question here is that if I cannot re-pay $ 120, how in the world will I be able to pay back $144??!! This is exactly how the sub-prime mortgage crisis took place in the real estate sector.
There were Sub prime lending institutions set up to provide the Americans money to repay the previous debt and 'cleverly extract more money' out of their pockets.
But for how long can an economy sustain without the any logical back-up for the money lended? Where was this dollar going to come from? And that's how the bubble burst and the major lending institutions declared themselves bankrupt.
The American economy has no firm base.
The kind of theories applied to it (such as free market capitalist, objectivist) could have only further gravened the damage caused if the bubble wouldn't have burst.
The only hope for the US is if president elect Barack Obama changes the absolutely absurd system on which his country functions and put the America Government on the much needed 'Debt Diet'.
But what about the US government? The Bush Regime has landed the American economy in troubled waters.
Billions of dollars spent on the maintaining the military forces in Iraq and Afghanistan for about 7 years, faulty and absolutely illogical economic policies, a taxing system favoring the wealthy and the capitalists, the welfare schemes, etc, etc, have bought the US economy in a state of total crisis.
The US economy sustains on debt.
Statistics show that one in 4 Americans worry about their debts and every second American (aged between 25 and 40) is in debt.
Be it them or the US government itself, they're drowning in debt.
Interestingly, the US government is as compulsive a spender as the US citizen.
After the $ 800 bailout for US Gross Debt for the fiscal year 2008 is estimated to be around $ 11.
3 trillion i.
e.
about 82% of the American GDP.
At the current rate, the national debt is increasing by nearly 4 billion dollars every day and by 2040 the US debt would be $40 trillion more than the GDP.
As of February 2008, the national debt was around $30,400 per person of the US population or $60,100 per head of the U.
S.
working population, which due to the recession, would have grown steeply.
The debt based policies made by the American economist and the former chairman of The Federal Reserve of US, Alan Greenspan, are one of the reasons for the current condition of the US economy.
His policies favored the laissez faire capitalism i.
e.
no government interference with trade, free market principles, hence no regulation.
It was his incapability to look beyond the short-term benefits that the US economy with did not have a sound base for growth.
The reason for the exemplary surge of the US stock markets, the US economy and the stable dollar thrived on the principle of creating debt.
Americans are famous for their crazy spending habits.
The introduction of credit cards and loans at lower rates boosted their irrelevant spending habits.
Living on the policy of 'buy now, pay later' could have taken them just so far into the kind of debt the objectivists wanted.
For repaying the current debt, they took more loans (which were made available to them by the same objectivists) and sunk further into higher debt (principal amount of the previous debt + the new, higher interest).
For example if I take a loan of $100, which amounts to $120 after the 20% interest added and I'm not able to pay it, I'll take another loan of $ 120 to pay the previous loan.
The new loan would then amount to $144.
The question here is that if I cannot re-pay $ 120, how in the world will I be able to pay back $144??!! This is exactly how the sub-prime mortgage crisis took place in the real estate sector.
There were Sub prime lending institutions set up to provide the Americans money to repay the previous debt and 'cleverly extract more money' out of their pockets.
But for how long can an economy sustain without the any logical back-up for the money lended? Where was this dollar going to come from? And that's how the bubble burst and the major lending institutions declared themselves bankrupt.
The American economy has no firm base.
The kind of theories applied to it (such as free market capitalist, objectivist) could have only further gravened the damage caused if the bubble wouldn't have burst.
The only hope for the US is if president elect Barack Obama changes the absolutely absurd system on which his country functions and put the America Government on the much needed 'Debt Diet'.
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