The new buzzword in these difficult times for the United States and world economies is “unsustainable.” Again and again economists and politicians have said that the path on which the U.S. is headed is “unsustainable,” a description with which Federal Reserve Chairman Ben Bernanke recently agreed.

Our annual budget deficits exceed a trillion dollars, the total published cumulative national debt is $14 trillion and we have tens of trillions of dollars in unfunded obligations under Social Security and Medicare. To that we can add the off the books bad mortgages of Fannie Mae and Freddie Mac of almost $300 billion. Through June 2010 the U.S. Treasury has injected $144 billion into those entities to maintain a positive net worth. Economists had long warned that this day was coming but the Democratic left in Congress led by Barney Frank assured us they were good as “gold” (check the price of an ounce of gold and see what you would rather have).
On top of this the value of the U.S. currency has plummeted and the decline of the dollar without some intervention or a fix to the system of exchange rates, we are told by some economists, cannot for too much longer be “sustained” without the dollar being replaced as the international measure of exchange by the euro, or by a basket of currencies.
The effect to our economy of losing this trade advantage would be enormous. All of that has been endlessly discussed in this election year and the American people seem to have heard and understand that alarm bells are going off all around them. Even the Federal Reserve, which is supposed to be the adult in an assemblage of fiscal juveniles, is, once again, about to go on another money printing binge in order to fund the purchase by the central bank of the government’s debt.
This strategy, which is not universally embraced, even among the governors of the Fed, is intended to keep the cost of money unrealistically low; the thought being that cheap money will stimulate the economy. Except that it hasn’t and it sets the country on an uncertain course into uncharted territory with significant risk of unintended consequences. Small wonder finance ministers throughout the developed world are warning that this practice also simply is unsustainable.
Less attention has been given to the plight of the 50 states comprising our union.
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