Can You Borrow Your Way Out of Debt?

Writing in WolrdNetDaily, Jerome R. Corsi exposed the fact that federal debt obligations of the United States is $65.5 trillion, a figure that exceeds the gross domestic product of the world.

The real 2008 federal budget deficit was $5.1 trillion, not the $455 billion previously reported by the Congressional Budget Office, according to the "2008 Financial Report of the United States Government" as released by the U.S. Department of Treasury.

Further, using GAAP (generally accepted accounting practices), there is no way to ever pay this debt off.

Economist John Williams, who publishes the Internet website Shadow Government Statistics, told WND, "The Congressional Budget Office estimated the fiscal year 2009 budget deficit as being $1.2 trillion on a cash basis and that was before taking into consideration the full costs of the war in Iraq and Afghanistan, before the cost of the Obama nearly $800 billion economic stimulus plan, or the cost of the second $350 billion in TARP funds, as well as all current bailouts being contemplated by the U.S. Treasury and Federal Reserve," he said.

"The federal government's deficit is hemorrhaging at a pace which threatens the viability of the financial system," Williams added. "The popularly reported 2009 [deficit] will clearly exceed $2 trillion on a cash basis and that full amount has to be funded by Treasury borrowing.

"It's not likely this will happen without the Federal Reserve acting as lender of last resort for the Treasury by buying Treasury debt and monetizing the debt," he said.

"Monetizing the debt" is a term used to signify that the Federal Reserve will be required simply to print cash to meet the Treasury debt obligations, acting in this capacity only because the Treasury cannot sell the huge of amount debt elsewhere.

"Truthfully," Williams pointed out, "there is no Social Security 'lock-box.' There are no funds held in reserve today for Social Security and Medicare obligations that are earned each year. It's only a matter of time until the public realizes that the government is truly bankrupt and no taxes are being held in reserve to pay in the future the Social Security and Medicare benefits taxpayers are earning today."

"The federal government is bankrupt," Williams told WND. "In a post-Enron world, if the federal government were a corporation such as General Motors, the president and senior Treasury officers would be in federal penitentiary."

Anybody that's been over their head in debt can tell you, "You cannot borrow your way out of debt." It won't happen. You'll just go further into debt and end up filing bankruptcy. Many of those that have experienced this will also tell you that they wish they would have wakened up to their dire situation earlier and not thrown good money after bad. They would have bit the bullet earlier and done what needed to be done to get out of debt.

Given the Obama administrations $800 billion deficit-spending economic stimulus plan, it's clear the government is not doing what needs to be done. The United States government is truly bankrupt and there's probably nothing any of us can do about it.

What we can do is take care of our own financial house. For example, you can get out of debt and start putting aside some real money in the form of silver and gold.