Expected $2 trillion by year end
A direct quote from me “If the US was a company our Board of Directors, Management and employees would be fired, the business bankrupt and a lot of people would go to jail”
I just brushed me teeth and tongue this morning because I had just choked on my own vomit. The US has many milestones that have impacted our nation and the world very positively. Now we are seeing the negative side of our leader’s actions and management. Try to comprehend what a $2 trillion deficit will do to the national debt. Yes $2 trillion more. This doesn’t include the minting of currency and other debt we are taking on but simply our national profit and loss. Imagine if the US was really a company!
Well the best way to gain perspective and a proxy for where we are fiscally is to see the US as a business. We are a capitalist nation after all.
First our government promises tax cuts. OK? This means that revenue will be reduced. In order to make up for voluntary revenue reduction the company executives decide to raise money to offset this. Did you hear that! Voluntary reduction of revenue and issuing debt to pay for it. Well fire management right there because that is so twisted and backward that anyone proposing that in the business world would be banished from the company and may never get a job again. Certainly wouldn’t deserve one.
Now as revenue is reduced the company itself is having a negative $2 trillion year. So reduce revenue, borrow money to stay afloat and take a bankrupt balance sheet and pile on more debt. Then comes the hammer. The shareholders – you and me – have to have full disclose of the liabilities that don’t get reported to us because they are like Enron off balance sheet transactions. This amounts to $111 trillion, and growing massively, of unfunded liabilities. These contingent liabilities have to be reported to show the health of the company and was one of the biggest reasons for Sarbanes Oxley laws. Now take a snap shot of that. Bankrupt correct. You better believe it.
So like AIG we allow our executives to take wild trips and parties and in this case spend billions on projects that directly benefit their job security. When completely bankrupt our management and board of directors use shareholder money and borrow to spend it for their benefit. Well people just went to jail for that – Enron, WorldCom, Adelphi etc... Worse while that is happening the managers decide to raid the company ESOP or 401k to pay for their projects. Yes, take money from federal programs like Social Security, Medicaid, Medicare and others and give them IOUs because they took the money. Madoff looks like a walk in the park because many people are getting rich from this and the investors – again you and me – will have our investment in those programs wiped out. Yes our retirement and more.
What is the worst thing is that Americans (shareholders) have no choice in the matter. We hired this management team to run a tight ship and do a turnaround of the largest company in the world and we got shafted AGAIN. Like GM shareholders that “SACRAFICED” we too have worthless stock in a mismanaged, bankrupt enterprise that even Geithner thinks is still a good investment. Didn’t he get laughed at by a bunch of Chinese people for uttering the Full Faith of The US Government is solid as a rock. Would you personally invest your money in the American Company? Think of it that way and I am sure you will wake up and realize why the rest of the world has lost confidence in the investment worthiness of our company.
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