"J. Clarke" wrote:


Fine, Jim, you go on believing that the government is solvent. The next
couple of decades are going to be _real_ bad.


The next couple of decades may well be bad but
it won't have anything to do with the
govt being insolvent.

It is the private sector that borrowed way too much money.

From 1998-2008 the US private sector borrowed $25 trillion.
The total GDP for that same period was about $100 trillion.
The private sector borrowed and spent 25% of GDP for 10 years.
And what did we get from this - not much.
GDP only increased by $4 trillion. So for every $6 dollars that
the private sector borrowed there was only $1 in increased
productivity. So where did the rest of the money go? It
went into inflating financial assets ( that's what people call
capital gains).

So now we have the private markets paralyzed by enormous
private sector debt balanced against grossly over-inflated
capital assets. In other words, the recipe for a depression.

The only thing preventing the depression is the $1+ trillion
per year that the federal govt is spending more than it taxes.

When Congress tries to balance the budget the depression
will commence in full.

And during this depression the solvency of the federal govt
will not be an issue, but the solvency of millions of US
businesses and households will become a huge issue.