By TOM RAUM, Associated Press Writer

WASHINGTON – It's bad enough that Greece's debt problems have rattled global financial markets. In the world's largest economic and military power, there's a far more serious debt dilemma.

For the U.S., the crushing weight of its debt threatens to overwhelm everything the federal government does, even in the short-term, best-case financial scenario — a full recovery and a return to prerecession employment levels.

The government already has made so many promises to so many expanding "mandatory" programs. Just keeping these commitments, without major changes in taxing and spending, will lead to deficits that cannot be sustained.

Take Social Security, Medicare and other benefits. Add in interest payments on a national debt that now exceeds $12.3 trillion. It all will gobble up 80 percent of all federal revenues by 2020, government economists project.

That doesn't leave room for much else. What's left is the entire rest of the government, including military and homeland security spending, which has been protected and nurtured by the White House and Congress, regardless of the party in power.

The U.S. debt crisis also raises the question of how long the world's leading power can remain its largest borrower.

Moody's Investors Service recently warned that Washington's credit rating could be in jeopardy if the nation's finances didn't improve.

Despite election-year political pressure from voters for lawmakers to restrain spending, some recent votes suggests that Congress, left to its own devices, probably isn't up to the task of trimming deficits.

http://news.yahoo.com/s/ap/20100214/ap_on_bi_ge/us_deficit_crunch

Come on InvictusV

You should know better than to post somrthing that is true.

And we all know Obama inherited this mess from Bush and the only way to get out of it is to spend more money(that we will never have).
It's the LIBERAL way

So then it would be fair to say that the GOP way is to have allowed a depression worse than the first...yeah ok. I know no one who wants to run up the debt but there was no way out from the GOP's disastersous reign.

We'd all love to see your plan....don't have one? Can only obstruct and delay reforms for political reasons and corporate profits?...for shame!

Maybe if the Dems wouldn't have blocked reform of Fannie and Freddie we wouldn't be in this mess.

And you can't say we would have gone into a worse depression because no economist is sure if we would have or not. They made a hasty decison with the stimulas which what about a third of it has been spent. And as far as TARP goes most banks have paid it back so that tells me if they would have waited the banks would not have failed because they were able to pay back the "loans" some were forced to take.

But the banks were not lending to small businesses at the time, now they are. The bailouts are working and the stimulus was neccessary to avoid a depression.

Who was it that said: "You're entitled to your own opinions but not your own facts" so how about an award winning economist? Good enough? No?

World avoided great depression: expert August 10, 2009
Ads by Google
Elderly Depression CME/CE
Free Online CME /CE for MD/OthersDiagnose & Treat Virtual Patients

www.totalmeded.com

"Aggressive stimulus spending by governments helped the world avoid a second Great Depression but full economic recovery will take two years or more, Nobel Prize-winning economist Paul Krugman said on Monday.

Krugman said the worst of the global crisis was over with economic and exports growth showing signs of stabilisation.

Still, recovery was likely to be "disappointing" as government spending wasn't sustainable in the long-run and unemployment rate still lagging behind, he told a two-day world capital markets conference in Kuala Lumpur.

There isn't likely to be any "Phoenix-like" recovery such as in the 1997-98 Asian financial crisis, where the economies expanded dramatically, led by a sharp rebound in exports, he said.

"We have managed to avoid a second Great Depression ... but full recovery is at least two years and probably more," Krugman said.

Asia is likely to see a faster rebound, than the US and Europe, partly driven by the recovery in manufacturing exports, he said.

In the clearest sign yet that the recession may be ending, the US Labour Department last Friday showed the jobless rate in the world's largest economy dipped for the first time in 15 months while workers' hours and pay edged upward.

It said a net total of 247,000 jobs were lost last month, the fewest in a year and a drastic improvement from the 443,000 that vanished in June. Still, the job market remains shaky. A quarter-million lost jobs are a far cry from the employment growth needed to put the national economy on solid footing.

President Barack Obama has urged Americans to be patient and give time for his $US787 billion ($A944.1 billion) stimulus package of tax cuts and increased government spending to take hold. Most of the money will flow in 2010.

Krugman said there was still room for the US government to increase spending to boost growth, despite concerns over its swollen budget deficit.

Krugman, who teaches at Princeton University, won the Nobel Prize in Economic Sciences last year for his analysis of how economies of scale can affect international trade patterns. He also writes columns for The New York Times.

He said there was a need to restructure the global financial system and impose tighter regulations to avoid a repeat of the economic crisis, but expressed concern that the momentum for reforms appeared to be easing.

"We do not have the political will to do that just yet ... I suspect clever people can still make a lot of money from the financial system in the next few years," he warned."

http://news.theage.com.au/breaking-news-business/world-avoided-great-depression-expert-20090810-ef8e.html

I dont think we're having a recovery

we're just moving money around


I think the REAL recovery will come from the big fad right now of moving money from the big national banks to the small local banks

I keep hearing that the financial crisis was Bush's fault. but all the macroeconoimists I read are saying that its one of the few things that cant be blamed on Bush

he actually went to Congress three times to warn of the impending crisis and Barney Frank and Chris Dodd blew him off and said that its fine. Maybe its THEIR fault?

The banks aren't lending to small businesses now. So that says the stimulas did nothing to change or "help" the banks.

there wont be a real recovery until the American PEOPLE get past this consumer credit driven economy and get off their azzes and start PRODUCING something

From the mouths of people who shide ME for looking back...and those who cannot stay on topic. This is like a daycare center for the reality challenged of the myopeon sect in this country.

I created this word...Urban Dictionary loved it..

http://www.urbandictionary.com/define.php?term=Myopeon

I think its more like a sand box with a bunch of third graders squabbling over who gets to play with the dumptrucks

and the little kids are ruining it for the other kids by dominating everything with their little childish arguments

were it me I would throw out ALL the democrats AND republicans

they are not only getting nothing done but they are dragging down the rest of the country and ruining it for the rest of us. THAT is why I'm on your azz all the time because I think all these "I hate republicans" threads are exactly what is wrong in this country (and the "I hate Obama/democrats" too)

Now isn't THIS rich.

The person who, in another thread, shouted from the rooftops about people giving " non answers " and changing the subject, does exactly that when faced with the fact that George Bush went to Congress to try to put a halt to what he and other Republicans could see coming in the banking industry.

Everyone looks back...and the Libs are particularly good at it ( the whole Blame Bush for everything argument ). But when it's pointed out that Bush tried on 3 different occasions to stop it and get changes made, the Democrats were the " Party of No " that you claim the Republicans to be.

well, it appears now that Barney Frank and Chris Dodd were making personal fortunes off the sub prime mortgage industry and had personal incentive to deflect any changes to regulation

but its more popular to chant "Blame Bush" like those Zombies in the Mummy chanitng "Imhotep"

except now its crowds of mind controlled zombies chanting "Ohhh Bahhh Mahhh

and dont get me wrong

I'm just as critical and disgusted with the Republicans

they had their chance with the Republican revolution and the Contract with America and all they did was siphon off public money to line their own pockets and spent more money on pork and stupid wasteful programs. and Bush allowed it

and the voters threw their azzes out and gave the Democrats their chance

and they are doing exactly the same thing

there wasnt a great "Democrat Mandate" like they seem to think. there was just a voter decision that things weren't working and let's give em a chance

and they are blowing it just like the republicans did

Pfft...ok, I'll stay off topic since no one can debate the topic and accept that the Baggers/Whatevers cannot back up their statements with credible references...not that the claim made is substantiated nor is it relevent to the bigger picture of "who's at fault" but if you ask most Americans know who to blame:

Latest NYT/CBS poll: Only 7% of respondents blame Obama for economy, 31% blame Bush administration

All I know is that it took Bush 6 years to run up $3 Trillion in debt and it took Obamanation 2..

9-11.. 2 wars.. tax Cuts that got us out of the dot com Bubble that burst wiping away $5 trillion of market value..

6 years... $3 trillion.. 2 Years... $3 Trillion.. Got a poll for that?