Without a "redesign of government," federal spending will always outpace revenue, economist explains
If you believe gold is a necessary defensive asset against the mounting U.S. national debt, then watch this presentation by Duquesne University economist Antony Davies, titled "What can we cut to balance the budget?" His conclusion: The U.S. will never be able to balance its budget because mandatory federal spending will always outpace federal revenue.
In 2011, federal government spending -- much of it on mandatory items like social programs and interest on the debt -- significantly outweighed revenue. While the federal government spent $3.8 trillion, it collected only $2.2 trillion from various taxes, licenses, and fees.
"If we were to eliminate the entirety of government with the exception of social programs and the interest on the debt, we still wouldn't be able to balance the budget," Davies says in the Oct. 16 LearnLiberty.org video. "For the next decade, the government will face tough choices. The wrong way to deal with these choices is to weigh specific cuts, because there are no specific cuts that will solve the problem. Nothing less than a redesign of government will solve this problem, and that redesign should begin with the question: What is the proper role of government?"
Just in case today's politicians aren't up to the task of this total "redesign of government," it might behoove your portfolio to have some gold.
