Just in case anyone has forgot… the United State’s government is still on the hook for $10.8 trillion in loans, guarantees, straight up gifts (detailed graphs below). And more spending is yet to come, which is worrying our creditors.
The Chinese Prmier Wen Jiabao noted some concern with the debt level and viability of the United States today. “We have made a huge amount of loans to the United States. Of course we are concerned about the safety of our assets. To be honest, I’m a little bit worried,” Wen said, according to an AP report, at a news conference following the closing of China’s annual legislative session. “I would like to call on the United States to honor its words, stay a credible nation and ensure the safety of Chinese assets.”
While recent notes of optimism from the President and from banking giants like Citigroup have given the market a little bit of confidence, the Dow and S&P have tapered off today, and along with a dire warning from British Chancellor Alistair Darling in the Wall Street Journal today, the reality check shows that there is still significant trouble. However, the trouble is not necessarily that the market is on its deathbed, rather than excessive government intervention has crippled sectors of the market like a doctor trying experimental treatment options on a patient who just came in with the common cold, but has since developed a rare infection.
And while government intervention in the banks, financial sector, insurance sector, healthcare industry, and agricultural industry has caused problems, the big issue is what’s to come. Already with a near $11 trillion deficit, the U.S. government has spent or committed $10.8 trillion in the past six months–creating the possibility for a doubled debt rate. Additionally, the President’s proposed budget plans to double the Federal deficit over the next fiscal year (which somehow is a prelude to cutting the deficit). Dollars are appearing like magic out of thin air… and disappearing into thin air just as quick.
Here is a quick recap of how much we have spent, and what $10,825,600,000,000 will get you: