U.S. bankrupt by 2019-guaranteed!!

[Rich Weese]

Now that I have your attention, I'm open for suggestions as to how we avoid the inevitable.

I've been reading and studying up on the financial problems that keep growing here in the U.S. Here is an article that has some scary #'s and conclusions. I keep telling people, we're going to run out of money if we keep spending like drunken soldiers. The social programs are unsustainable. Here is an article with projections you should get familiar with.

http://www.americanthinker.com/2010/05/americas_growing_vulnerability_1.html

I don't care who wrote it, I'm looking at the #'s. At end of 2008. the U.S. debt to GDP was at 40.2%.

" In the four years of the Obama administration, the debt will increase $5.7 trillion (equal to the entire debt incurred by the United States since its inception up to and including 2008). This will result in the country having a debt to GDP ratio of 72% by 2012, a mere two years from now."

We all heard about Greece going under. It was deadmeat if the EU didn't come in and bail their arses out. If U.S. gets to that point , who will bail us out? How close are we to that situation at the current rate of growing our debt? Well, here is the comparison of where we are, where we are headed and possible results or fixes, all in black and white.

"Without significant repeal of the Obama tax and regulatory policies and changes in the entitlement programs and overall reduction in government expenditures, the current spending proposals and impact of the trillions needed for ObamaCare, Social Security, and Medicare and interest payments will result in the debt-to-GDP ratio exceeding 100% by 2019.
Recently the bond ratings of Greece, Portugal, and Spain have been downgraded (Greece to junk bond status). Not only is the entire European Union threatened with collapse because of the excessive debt and budget deficit policies of these countries, but so is the entire world economy. In the case of Greece, the debt-to-GDP ratio is 125%, and the annual budget deficit is 13.6% of the GDP. Greece can no longer borrow money (except at excessively high interest rates) and must turn to the European Union for a bailout in order to pay debts due within the month.
By comparison, the United States, if it remains committed to the Obama agenda, will experience a debt-to-GDP ratio of 104% and an annual budget deficit of 9.7% of GDP by 2019. This nation will become the next Greece."

The above is all pulled from an article listed above. I continue to wonder where all the money is going to come from to handle all the new programs. Econ 101 talked about supply and demand,,,PERIOD. We have removed 1/3 of all wealth with RE and stocks devaluation , causing a reduction of available capital. Yet, the administration continues to spend at unprecedented speed . Does it also seem we are having more catastrophies needing more funds than ever before? Try to keep track of all the Tornados, earthquakes, floods, hurricanes etc. Almost impossible. I'm telling you, we're running out of money. Go to your bank and try to get 100K in cash. They'll most likely have to ORDER it and make you wait a few days for delivery.
Simple econ 101- U.S. is going backwards, and it ain't going to be pretty. Button down the hatches and keep your eyes open. In for a bumpier ride than ever before, imo. I hope I'm wrong, but will plan for the worst. You should also. Rich

[Rich Weese]

Drone- fantastic plans! I even voted your post up.Only 2 small tweaks.
1. I'd buy a cheap house to move into and have it free and clear, rather than a unit in a multi, unless that is also F&C.
2. I hate banks. I'd put the same amount in the bank , but buy a short term CD with it for the same amount. It'll show on your credit report as an asset. Then, go BORROW against it using it as security. I'tll still show up as an asset and the loan against it will just blend in with your other stuff on your financial statement. The small net interest you'll pay is tax deductible and worth it, because you'll have the cash back in your hands to use or have as reserve if all hell breaks out.

Charles- I do believe we'll see things we've never seen before in this country. I continue to suggest, plan for the worst and hope for the best.

"would rather look at some middle ground where I am using leverage but not overly leveraged. This can offer some protection if vacancies become a bigger issue or if expenses outpace what can be charged for rent."

Charles- I don't agree with this last paragraph. Middle ground, imo, is bad. If you are free and clear, lender can't take it back. If you are mortgaged to the hilt, lender WON'T want to take it back. If you have equity in the home, those are the ones lender will take, starting with those with the most equity.

Ali- good point. If able to do both highly leveraged and free and clear, best of both worlds , imo. Remember to keep entities separate.

I really think everyone can do something as a hedge against bad news. I probably go overboard, since I'm OCD. Just do what you can, or throw caution to the wind and hope the rainy day never comes. Rich