Warren Buffet: America Has Hit The Panic Button

Warren Buffet a highly influential American has finally hit the panic button, saying that we are going to be crushed under a mountain of debt taking into consideration the amount of debt the country is piling up.

warren_buffett.giLast year, Warren Buffett says, we were justified in using any means necessary to stave off another Great Depression. Now that the economy is beginning to recover, however, we need to curtail our out-of-control spending, or we’ll destroy the value of the dollar and many Americans’ life savings.

Here are some not-so-fun facts from Buffett’s editorial today in the New York Times:

* Congress is now spending 185% of what it takes in
* Our deficit is a post WWII record of 13% of GDP
* Our debt is growing by 1% a month
* We are borrowing $1.8 trillion a year

$1.8 trillion, that’s a lot of money. Even if the Chinese lend us $400 billion a year and Americans save a remarkable $500 billion and lend it to the government, we’ll still need another $900 billion.

Which brings us to the million Dollar question “where’s it going to come from?” Most likely the printing press. And, ultimately, that will destroy the value of the dollar.

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61 Responses

  1. Frank Linn says:

    J.M. … So it’s okay for Obama to quadruple (that means multiply by 4X) the deficit in 6 months because Bush started it? Why do you think the Repubs lost the last election? Overspending! (amongst other things) when I hear someone, such as yourself, use that lame-ass excuse, it reminds me of a 4 year old caught doing something wrong and blaming his friend, “But Georgie did it first!”
    Obama has increased the deficit more in 6 months than all previous presidents combined. Lay off the kool-aid.

  2. Keith T. Syverson says:

    Our political attitude towards the rest of the world will be restrained by our inability to buy off obedience. This will have dramatic effects not even imagined by the most paranoid and cynical.

  3. Ron says:

    These responses are characterised by sentiment; past mistakes, impugned motives, future guesses or wishes. Let’s just accept Buffett’s forward-looking premise (debt service issue) on its merit, since it seems financially incontrovertible. Then the question is: How do we get the Congress to eventually show fiscal restraint? This is where the dialogue should be focused. My take is that the special-interest groups (unions, lobbies, coalitions) that feed the spending beast must be soon supplanted by the will of what remains of the productive populace, lest we all become de facto wards of the state. In the age of instant information and communication, we have got to be able to engineer a more direct representation of the people.

  4. kenyantykoon says:

    i wonder if it will happen as he says. even if he is the richest man in the world and america’s most loved investor,i dont think that he has the power to predict the future. but because of his track record, i think that he should be listened to

    .-= kenyantykoon´s last blog ..PLEASE DO NOT INVEST IN MUTUAL FUNDS!! =-.

  5. Suze 100 says:

    This guy may know a thing or 2 about what he is talking about..

  6. Patrick says:

    Gotta laugh at the “Corey’s” of the world who spew laughable tripe such as this,

    “Warren Buffet, you are wrong about this and you have unfortunately been watching too much Fox News. Perhaps you should be going back to 11th grade economics class, which is coincidentally where I get my information.”

    Of course Corey is gillionaire and made all his money by not exploiting the poor or the environment, creating waste and giving full value to the customer without keeping one penny for himself, right?

    Go back to Moveon.Org or turn CNN back on so you can enjoy the show where we blame everyone on the boogey man and Fox news…

  7. Kevin says:

    Re; Maria’s Comment:

    You can not “get rid of Wall Street.” Americans are free to invest their money in risky ventures if they want to. If you really want to save America’s fortunes and liberty, what you get rid of is the FEDERAL RESERVE!

    That is an illegal institution, and it’s authorization back in 1913 is the biggest scam in civilization’s history, and it continues to this day.

  8. Steve Wimer says:

    We need to stop providing free military protection for the world. What do we get out of it? Debt! That doesn’t work! We need to tax countries where we have a military presence.

  9. andrew says:

    Ruggy – depression – solved by WWII. Essentially, government spending money they dont have, to fund and proctect people’s jobs. Essentially this is what they are doing with their safety net of the big corperations and other spending initiatives. Its basic Keynes Economics.
    Only question is, is once the economy begins to regrow its legs (as in re-create jobs), the gov and fed should act swiftly and with conviction to raise interest rates and cut spending. In my opinion, investment should be for entreprenuraial activities, create new and better jobs. This speculative bubble that happens every 10 or so years has never been efficiently combated. In my opinion, capital gains tax needs to be raised to a level where investment costs the investor real money. This borrowing to invest with little or no consiquence is the real problem. An indivdual might be able to walk away from his obligations with little consiquence but for a nation its unthinkable. Unless you fancy living in a nation crippled for years by its debt like Argentina.

  1. August 22, 2009

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