Double Dip may be the least of our problems
by Clifford F. Thies
On Tuesday, August 2nd, the President signed the bill raising the federal government's debt ceiling by $2.4 trillion. The President got one of the things he wanted, namely, an increase in the debt ceiling sufficient to last through the election, or did he?
The federal government is hemorrhaging debt, currently at the rate of about $200 billion per month. At this rate, the increase in the debt ceiling would be sufficient to get the federal government through the next election. But, there are several downside risks.
The first and most obvious risk is a double-dip recession. The leading indicators and other signals foretell continued slow growth, "slowth" as I call it, below the assumption of a pick-up in the economy worked into the forecasts of the government. Private-sector forecasts are being revised down. Continued slowth or even a double-dip recession will result in an increased rate in the hemorrhaging of debt.
by Clifford F. Thies
On Tuesday, August 2nd, the President signed the bill raising the federal government's debt ceiling by $2.4 trillion. The President got one of the things he wanted, namely, an increase in the debt ceiling sufficient to last through the election, or did he?
The federal government is hemorrhaging debt, currently at the rate of about $200 billion per month. At this rate, the increase in the debt ceiling would be sufficient to get the federal government through the next election. But, there are several downside risks.
The first and most obvious risk is a double-dip recession. The leading indicators and other signals foretell continued slow growth, "slowth" as I call it, below the assumption of a pick-up in the economy worked into the forecasts of the government. Private-sector forecasts are being revised down. Continued slowth or even a double-dip recession will result in an increased rate in the hemorrhaging of debt.
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