Debt Economy Forgiveness Impact In Its Nigeria

Debt Economy Forgiveness Impact In Its Nigeria

Debt Economy Forgiveness Impact In Its Nigeria

Posted on: December 12, 2011 - 3:18 pm
by Admin

The current government stimulus doesn’t solve the long-term problem of using mass amounts of borrowed money that puts pressure potentially on the U.S. dollar, said economic forecaster Robert Wiedemer. “When you’re running up a $2 trillion deficit, you’re making people more and more worried about the current debt,” he told a business briefing at the National Press Club in Washington June 23. “I’m less concerned about what we spend it on than where we get it.”

Wiedemer, who co-authored “America’s Bubble Economy” in 2006, thinks that by 2013 or 2014, problems with the dollar will be felt due to double digit unemployment, double digit inflation, and double digit interest rate. His next book, “Aftershock,” focusing on the dollar, will be published in late October.

If his forecast proves correct, it will be an outgrowth of the impact the housing-stock market bubble already is having on the dollar bubble.

Impact of Borrowing on U.S. Debt, Dollar

The nation is spending but primarily borrowing now, Wiedemer said. “Borrowing is much more dangerous than printing money.” While the government stimulus can stave off problems in the short term, psychology can shift on the dollar.

Trillion dollar deficits put a spotlight on a much larger problem that tends to stay in the shadows: namely, a $10 trillion debt, Wiedmer told the Press Club briefing. “We have never even really made attempts to pay off that $10 trillion debt.”

Lack of Understanding of Difference between Nation’s Debt and Deficits

Many ignore the debt, some not really understanding the difference between the debt and deficits. Debt is the accumulated deficits, not the amount of total money owed, he noted. Deficits are the amount of debt being added each year. The concept is similar to credit card balances and the purchases made most recently that add to the balance.

During the Clinton presidency, the economy was growing and the nation was paying a little of the debt and ran a surplus for the only time in the last 30 years, Wiedemer acknowledged in response to a question at the briefing. However, much of that money was coming from a bubble in technology and the Internet that later popped, he observed. This was part of the broader stock market bubble because Nasdaq went down a lot but the Dow stayed up fairly well during the tech bubble.