Macroeconomic Factors Make Collapse Almost Inevitable

Recent projections put the fiscal year 2009 deficit at almost $2 trillion dollars (HBM made this projection 4 months ago). The federal government is now borrowing almost 50 cents for every dollar spent. But a greater threat lurks within these incomprehensible levels of red ink. The structural deficit continues to rise as well. The structural deficit is caused primarily by unfunded liabilities such as social security, Medicare, interest payments on the national debt, pensions, statutory obligations, and minimal funding for general services and national defense. Because of its non-discretionary nature, most of the structural deficit is immune to simple budgetary cost-cutting measures.

The entrenched structural deficit is the main reason why the Congressional Budget Office (CBO) projects that the deficit will rise later in this decade, after dropping in 2010–2015 (HBM projects this drop is unlikely, too!). Structural deficit spending will eventually drive the U.S. economy into insolvency and collapse. Congress and the President are showing themselves incapable of making the tough political choices necessary to deal with the structural deficit. At $12 trillion and counting in total national debt, the time is not too far off for insolvency. Home Business Magazine is one of only a small number of print publications that is speaking the truth about the looming economic depression. HBM

Previously published in the August 2009 issue of HOME BUSINESS® Magazine, an international publication for the growing and dynamic home-based market. Available on newsstands, in bookstores and chain stores, and via subscriptions ($15.00 for 1 year, six issues). Visit www.homebusinessmag.com

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