February 04, 2010

What’s Ahead for America’s Economy in 2010?

Andy Gause is one of the most respected monetary historians and contemporary experts on the American and international banking systems. Andy publishes a newsletter called "The World of Money" and has authored two books.

Jim began this Crosstalk by mentioning that the share of the national debt by each U.S. citizen amounts to $40,000. Unfortunately, according to Andy, that’s just the bonded debt, the debt for which we already issued treasury bonds or treasury bills.

Then there’s the unfunded component which is more than double the existing number and includes Medicare, Social security and other outlying entitlement programs that are not yet funded. In fact, the 1.95 trillion increase that Congress just gave to themselves only covers that which is due and payable this year.

As Andy describes it, the federal deficit is the difference between what we bring in via tax revenue and what we pay out in any given year. So, according to the Obama budget, the U.S. has a tax income of about 1.6 trillion dollars. Approximately 900 billion alone is collected for Social Security taxes.

Balancing the 1.6 trillion dollar figure against the 3.6 trillion dollar budget means that there’s going to be a deficit of about 2 trillion that has to be made up. When you add these deficits together over a period of years, that’s the figure that makes up our total national debt.

How long can America continue to operate in a deficit/debt mode? Are there “storm clouds” we should be watching for? This is where Andy’s experience is helpful as he answers numerous questions for Crosstalk listeners including:

--What impact has currency injection had on the economy?
--Should we nationalize the Federal Reserve?
--Would everyone living within their means help or hurt the economy?
--How will the inheritance tax affect small businesses?
--Is there wisdom in investing a portion of your monetary assets in gold and silver coins?

More Information

http://www.andygause.com
http://www.usgoldcoins.com
1-800-878-2646

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