$65.5 TRILLION in U.S. Federal obligations exceed the gross domestic product of the entire world (WorldNetDaily)

As if the economic outlook isn’t concerning enough already, economist John Williams believes that in real dollars, the federal debt exceeds the entire Gross Domestic product of the entire world.     Editor

Excerpts from http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=88851

 

As the Obama administration pushes through Congress its $800 billion deficit-spending economic stimulus plan, the American public is largely unaware that the true deficit of the federal government already is measured in trillions of dollars, and in fact its $65.5 trillion in total obligations exceeds the gross domestic product of the world.

The total U.S. obligations, including Social Security and Medicare benefits to be paid in the future, effectively have placed the U.S. government in bankruptcy, even before new continuing social welfare obligation embedded in the massive spending plan are taken into account.

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“As bad as 2008 was, the $455 billion budget deficit on a cash basis and the $5.1 trillion federal budget deficit on a GAAP accounting basis does not reflect any significant money [from] the financial bailout or Troubled Asset Relief Program, or TARP, which was approved after the close of the fiscal year,” economist John Williams, who publishes the Internet website Shadow Government Statistics, told WND.

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“The federal government’s deficit is hemorrhaging at a pace which threatens the viability of the financial system,” Williams added. “The popularly reported 2009 [deficit] will clearly exceed $2 trillion on a cash basis and that full amount has to be funded by Treasury borrowing.

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“The appetite of foreign buyers to purchase continued trillions of U.S. debt has become more questionable as the world has witnessed the rapid deterioration of the U.S. fiscal condition in the current financial crisis,” Williams noted.

. . .

“Social Security and Medicare must be shown as liabilities on the federal balance sheet in the year they accrue according to GAAP accounting,” Williams argues. “To do otherwise is irresponsible, nothing more than an attempt to hide the painful truth from the American public. The public has a right to know just how bad off the federal government budget deficit situation really is, especially since the situation is rapidly spinning out of control. “

Read the full article at http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=88851

ECONOMY: Chinese government paper urges new world order for economy…

China is heavily invested in the United States, and is nervous about what has been happening on Wall Street.   Here are some excerpts from: http://www.reuters.com/article/ousiv/idUSPEK4365020080917?sp=true

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BEIJING (Reuters) – Threatened by a “financial tsunami,” the world must consider building a financial order no longer dependent on the United States, a leading Chinese state newspaper said on Wednesday.

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Its pronouncements do not necessarily directly reflect leadership views, but this commentary by a professor at Shanghai’s Tongji University suggested considerable official alarm at the strains buckling world financial markets.

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“The world urgently needs to create a diversified currency and financial system and fair and just financial order that is not dependent on the United States.”

But Vice Premier Wang Qishan, on a visit to the United States, told U.S. trade officials in a meeting on Tuesday that China and the United States needed to maintain close economic ties with global markets going through such turbulence.

“The Chinese government is well aware of the fact that the United States, which is the world’s largest developed country, and China, which is the world’s largest developing country, should have constructive and cooperative economic and trade relations,” he said.

China is a major buyer of U.S. Treasury bonds, and through its sovereign wealth fund it has taken stakes in two large U.S. financial institutions.

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Read more at http://www.reuters.com/article/ousiv/idUSPEK4365020080917?sp=true

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