U.S. government finances from April 9, 2011

Today most citizens were gratified to learn of the agreement between the U.S. Democrats and the Republicans for a budget to get us through the rest of the current fiscal year.  However, $38 billion this year and $500 billion in additional cuts over the next decade is not enough, considering the incredible amount of debt that we have as a nation, which will soon be over $14 trillion and which will be much higher than double that figure in one-decade from now.

Therefore, unless both houses of Congress and the President of the United States, right now, get serious about making substantial cuts in all of our future budgets, then we will have to consider if our current spendthrift ways will end in a hyper-inflationary or a deflationary depression and financial collapse.

Most Americans understand that it would not be in the best interests of the U.S. Federal Reserve and all U.S. banks to have hyper-inflation, as that would destroy their own assets; however, the U.S. Fed is merely reacting to the increasing governmental debt placed on us by our politicians.

As the U.S. House of Representatives originates all financial and monetary appropriation bills [voted on by the House, the Senate and vetoed or signed by the President of the United States], and it is the job of Congress to oversee the U.S. Federal Reserve, the most likely long-term outcome is hyper-inflation, not deflation.

The U.S. Federal Reserve is supposed to be independent, but, in reality, it reports to the U.S. Congress.

On the other hand, either way, a hyper-inflationary or a deflationary depression will mean the end of business as usual, and a forced new way of doing business, which some call "financially responsible behavior" that will permeate the affairs of all private citizens, businesses, organizations, bureaucrats and politicians in the United States of America, soon.

In the not so distant future, out of dire necessity this new "financially responsible behavior" will be demanded by all Americans.

Though it will look like the end of the United States, in reality, it will just be a new beginning, which will make us much stronger, wiser and more cautious, again.

We are just one of a long line of nations and civilizations that will have had to re-learn these lessons of history, which play over and over, again, throughout time and probably always will.

In the end, human nature is always the same:  we learn from lessons, then we prosper from those lessons, the generations that lived through those lessons die-out, and then we go through the painful process of re-learning all of those lessons, again.