The current U.S. public debt is 53% of the GDP and is projected to rise to 85% by 2018 and 100% by 2022, and 200% by 2038.  The media including FOX News is chattering about how liberal President Obama is, and how he is going to burry the country in debt; but, the fact is that since the 1950’s the U.S. has steadily lost production facilities and the mirage of a service economy or high-tech jobs has disappeared now that we have fallen off the precipice into an international monetary crisis. "Jonathan Adams, research evaluation director at Thomson Reuters, said China’s “awe-inspiring” growth had put it in second place to the US – and if it continues on its trajectory it will be the largest producer of scientific knowledge by 2020"FT.com

            The politically motivated spending freeze announced by President Obama applies to less then 20% of Federal expenditures. Given that the stimulus money still has billions to be distributed, they will thaw the proposed freeze, and we should expect business as usual from the Washington fiscal liberals in both parties.

            Assuming that the spending cuts will not fix the debt, the next logical step is to expect an increase in corporate taxes that will usher in yet another round of shop closings and migration to China where the Communist government there is adopting a more free market and is a willing partner in creating manufacturing jobs. All of which make China an attractive alternative to the U.S. regulatory system, unions, and massive entitlement programs that now not only include the poor but Wall Street multimillionaires.

            Since corporate America is already being crushed by the Federal and State governments, it is not likely that enough revenue will be generated by any tax raising schemes. The next logical step is to inflate the money supply which will in effect deflate the outstanding debt. As a result Treasury bond holders should begin to divest and invest in non-dollar denominated securities.  Given the fact that brokers earn large commissions trading in domestic stock, most unsophisticated investors will no doubt continue to support a failed U.S. economy until it breaths its last breathe.

            The only real way to become solvent is to recreate a domestic production economy, but given that we have been moving toward a one world economy, it is not likely we will see a resurgence of heavy industry especially in the manufacturing of steel, cement, machine tools,  or oil exploration and refineries, and not even in high-tech research and development, which has also been usurped by China.