The latest US budget deficit figures were released a few days ago and if I think about them for a little while, a very alarming picture starts to form in my head. Somebody quoted me a statistic this morning that if every US household was to save 5% of its annual income and put this towards the national debt, and if the US government was to stop borrowing any money at all for the entire period, it would take a mere 400 years to pay off the accumulated debt. I remember discussing this very topic some 15 years ago but we were all of the opinion that the borrowing would ultimately wind down and the investments would pay off. No, we were wrong, the level of borrowing has only increased. The entire basis for the fiat money system is being thrown into question if the answer to every single question is to turn on the printing presses or failing that, borrow some more.
The United States is only one of many nations which has been living way beyond its means and unless something starts to change very soon, these debt binges will lead to imbalances which are impossible to rectify.
