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Title: Blog by Novelist William S. Frankl, MD

The National Debt Nightmare

Foreign governments and investors continue to increase their holdings of U.S. debt. They are lending the United States money to finance its excess of imports over exports. But with these  excessive deficits, U.S. trading partners might refuse to continue the process in the future.  Reluctance to buy or efforts to sell dollar holdings by foreign investors would result in a decline in U.S. equities, a rise in interest rates and a marked decline in the value of the dollar.

There are multiple ways to reduce the nation’s vulnerability sooner rather than later:

1. Permanent tax incentives to encourage domestic saving, which would most likely lower both the budget deficit and trade deficit.

2. Cuts in marginal tax rates along with a real slowdown in government spending  would reduce the budget deficit, increase the domestic capital stock, and increase exports.

3. A reduction in the budget deficit would decrease the vulnerability of the U.S. economy to foreign creditors.

4. Entitlement programs must be reformed to partially prefund health care and retirement spending.  This would also increase job growth and domestic investment, allowing    the U.S. economy to be more productive and competitive with the rest of the world.

Despite these moves that are obvious, necessary to prevent national bankruptcy ala Greece, and all doable, the Obama regime continues to spend, and spend, and spend, with a projected national debt of more than 20 TRILLION by the end of this decade

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