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Tuesday, October 30, 2012

Will US Pay Off National Debt? Budget Deficit & Bob Brinker's GDP Estimate

Bob Brinker's comments "Will the US ever Pay Off Its National Debt?" 

Moneytalk with Bob Brinker Commentary for October 28, 2012 Radio Show
The following commentary is from my "Retirement Advisor" writing partner,  David Korn. 

Brinker Comment: Bob opened the broadcast discussing the new figures on gross domestic product. Bob said his projection has been for a slow-growth economy as defined by a slow rate of growth in real GDP (adjusted for inflation) and we continue to see that with the number for the third quarter coming in at 2.0%. When you couple that number with the first half of the year, you are looking at an annual rate of growth of 1.8% for the first 9 months which is the type of slow growth that Bob thinks we will see for the remainder of the year


Caller: At some point, the Federal Government will start to have to pay off the national debt. The caller said he thinks it seems like an unsustainable situation that will either be addressed by cutting spending or raising taxes. Or the government could start printing more money which could lead to inflation or hyper-inflation. How likely is it that we would see inflation or hyper-inflation and is there anything the average investor can do to hedge against this possibility?
"Witnessing the Republicans and the Democrats bicker over the U.S. debt is like watching two drunks argue over a bar bill on the Titanic."   Kirk Lindstrom
 Bob said there are essentially no cases in the history of the world where the country has paid off its national debt and we will probably never even make a serious down payment on paying off the $16 trillion national debt. We will pay the interest on the national debt as long as we can afford to do so. As far as the national deficit, that is in play and must be addressed and that is a big deal. Hopefully, Congress will get to work on the annual deficits which at the current pace is not sustainable.

EC (David Korn): Our $16 trillion dollar national debt amounts to $51,484 for every man, woman and child in our country. Check out this interesting article entitled, “Breaking down the national debt” at the following url:

Kirk's Comment:  I don't think enough attention goes to just how large the deficit is and how much borrowing occurs for every dollar spent.  I like how Bob Brinker has warned about excessive spending for years and I'm doing my part to spread the word.  Read my Seeking Alpha article:
Kirk's Comment:  Can you imagine asking anyone for a loan, home equity or a refinance of a home loan, if you knew you would never pay it back?

The above commentary is courtesy of my writing partner, David Korn
David Korn's Stock Market Commentary, Interpretation of Moneytalk (Bob Brinker Host), Financial Education, Helpful Links, Guest Editorials, and Special Alert E-Mail Service.  Copyright David Korn, L.L.C. 2012
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  1. I'm a financial news hound. I spend all week watching the financial news cable channels. On Saturday I watch football all day. On Sunday I always listen to Bob Brinker's financial radio talk show. I'v been listening to Brinker for more then 20 years. Some off my best financial decisions have come from listening to him. His basic financial advice is not long term but about where things are now and maybe the next 3 months. His suggestions are always subtle and only long term listeners could hear when he is making an important point.

    On Sunday, One of his callers asked him what would be the best way for the US to pay down the dept. His answer was, you mean the deficit don't you? The caller again said, "no I mean the debt". Brinker said that the answer is simple, no country in history has ever paid down their debt, countries only eliminate the deficit! Brinker went on to say, that the debt we have is the debt we are stuck with and it is unsustainable. This is a tax on our system and will continue to drag us down.

    Now, to the long time listener of Bob Brinker, this to me says that Brinker is saying that our time is limited before a major shake-up or collapse.

    I listen to what he says, to me his track record is higher then any other financial person I know, and my personal hair on the back of my neck is up.

  2. "His suggestions are always subtle and only long term listeners could hear when he is making an important point."

    Why can't he speak clearly so anyone taking the time to listen to his show can understand him?

    Come to think of it, why call his newsletter "Marketimer" when he's had the portfolio the same in stocks since 2003 missing the biggest bear market since the Great Depression?


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