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In a recent interview on CNS news, Paul Ryan, the ranking republican on the House Budget Committee speaks about the fiscal path the U.S. government is on and the inevitable results it is due to yield, should a dramatic change in economic spending not happen.

Ryan affirms that all actuaries at the federal government, that is everyone who’s keeping tabs, are predicting that the U.S. government is headed for bankruptcy. The country has grown at an unsustainable pace and it is now more than ever harder to pay the bills. In order to fulfill the commitments and promises for entitlements like social security benefits, medicare and medicaid that the U.S. government has made, which are only the basics, it would take roughly 53 trillion dollars invested at significantly high treasure rates just to pay for these entitlements. If this is not making you nervous, read the paragraph again.

That’s about half a million dollars per household. What’s the solution to this? The congressional budget office, predicts that in order to have these 53 trillion dollars handy the current tax rate for low income families would have to go up to 25%, while the medium bracket income would need to jump to 66%, and the high bracket to 88%. Obviously this is not a realistic plan that can be implemented at anytime for it would simply destroy the economy and trigger another depression.

Keep in mind that this figure of 53 million dollars is only addressing the three major entitlement listed above, these responsibilities currently consume about 60% of the total fiscal budget. This figure does not take into account the need to maintain the national armed forces.

The U.S. has always run under the legacy that each generation confronts the problems of today so that future generations would be better off, safer and wealthier. Unless there are dramatic adjustments to the current spending and necessary changes are made to the entitlement programs so they more realistically reflect today’s economy, there is no doubt that future generations will have inferior living standards, in which we will have massive tax burdens and individual income deficits.

Congressman Ryan further explains that should the government begin to implement the unproposed solution of taxing at higher rates to pay for these programs, the rate of bankruptcies across the country would begin to increase. Further changes to bankruptcy laws can also be expected, while the entire economy would stagnate and surpass Europe in levels of unemployment.

In 10 years time the worse is still to come as the number of baby boomers are increasing every year, the reality will be that these entitlement programs will simply run dry.

In spite of all these facts, it is now harder than ever to get everyone in government to agree that this is a situation that needs immediate attention. It appears that no one really wants to hear it and no one really seems to know what to do about it. Congressman Ryan and his staff however, have proposed a plan, a road map to reform our current spending and taxing that is believed to have accurate and factual data that can restore solvency on a long term basis. The plan was introduced for legislation as (H.R. 6110).

News networks across the country have given considerable attention to the unprecedented number of bankruptcy filings throughout the nation. Once sprawling communities like Orange County California have some of the largest numbers of bankruptcy filings per capita. The real estate market in this area as in many parts of the country has come to a complete stop. No new development is taking place and the local economic outlook in Southern California as a whole is not improving mostly due to the price per gallon of gasoline, which is one of the highest in the country.

Souther California is one of the hardest hit regions in the country for personal bankruptcy filings, this is highly credited to the over valuation of real estate property during 2001 through 2005 and the sub-prime loans that funded the majority of these properties. The number of people filing for personal bankruptcy, compared to last year are up 90% for LA county, 125% for Riverside county and a staggering 150% for Orange County.

The state of Colorado has seen a rise of 35% since last year, and again it is home owners with high interest mortgage loans that make up over 60% of the bankruptcy cases.

Things are due to get worse according to economic experts, who predict no relief will be seen until two to three years from now. Because gas prices are gradually increasing each day, the cost of commodities and other consumer products have kept up with the price, adding further strain on the already heavily burdened communities of consumers across the country.

Overall the entire country is currently seeing a rise of 50% since last year. It is expected that by the end of 2008, we will see a total number of over one million personal bankruptcy cases which will continue throughout 2009.

Our economy is susceptible to many different factors, including external factors like the overall world economy. A contributor to the price of oil is none other than China. The country has emerged economically demanding more gas, food and quality of life. The once low waged workers are currently climbing the ladders economically and this new demand is now plugged to the main line of distribution for commodities like oil, wheat, and sugar.

It doesn’t matter how much money exists in any one region, it is the demand for these goods that drives up inflation.

So the economic state of the US, which is already affected by the real estate melt down, can expect to see higher prices for commodities and further escapes from debts through bankruptcy filings. Again no solid plan is in place to overcome this, any plan brought forth by the political parties are nothing more than pandering attempts.

Save what you can and invest in hard assets, paper assets will be worthless soon.

Across the US home prices have come crashing down, making them affordable again, for anybody looking to buy a home that is. Prices continue falling gradually each month and in the turmoil some people see opportunity knocking, but is this going to cause a new surge in demand? Absolutely not. This is quickly turning into an investor’s market and while this may bring relief to cities and lenders across the US for unloading this surplus of homes, it won’t necessarily bring good to all.

Other financial sectors have been affected by the real estate crash and because the signs are too obvious that we’re in a down fall, for the most part consumers are keeping cautious about overspending.

This pessimistic attitude, which is not at all unjustified, can create a problem for the Fed as it has in the past. When the majority of the population views the economy as a sliding trend to disaster, the feeling can spread quickly across the nation like nerve cells. This forces rate cuts and more attempts to revive the economy by printing billions more of our already devalued green backs.

The federal government’s answer to stimulate the economy by sending out tax rebate checks is one that will prove negative. This is an attempt to raise the spirit and enthusiasm of consumers and get us all back in the habit of spending, but without a solid outlook of an economic turn around, there’s very little chance of this actually working its intent. The stimulus checks will be held on to or used to pay off debt and not much else.

Much of this negative attitude is based on the high prices of energy products like gas and electricity. Gasoline in particular has reached an unseen level and shows no signs of moderating by anyone’s efforts. This takes a major toll in the level of confidence that is expected to be induced by this petty plan of tax rebates.

There are several other metrics in between the real estate market crash and the rising price of oil and energy products that are in full force at debasing this economy. It’s not too far fetched to say that we could be reaching depression like levels of recession. The real estate market is in a sump that it can’t be dug out of for many years to come. The rising prices of fuel and the other ailing elements within this faulty economy are steering us all into this state and no agreeable plans to rescue the economy are yet available.

Stimulus checks? let’s get real.

This footage is a few months old, but it has such a great message about the future of the economy that I felt it needed to be viewed again. Our economy is in serious trouble and my goal for the next few months is to dig out every bit of footage where politicians are willing to speak up and bring to the table their own opinions on where they believe the economy is and where it is going. This is the best source of information when our own politicians are willing to express their thoughts openly about these issues.

One of the issues that’s mentioned in this video is our currency. The Dollars has been on its longest steady decline in decades and it shows no signs of stopping. Our currency is based on nothing, and it is losing the trust it once portrayed so well. There are a lot of fallacies in the handling of our money, starting with a common belief and false confidence that our currency is backed by gold. This is simply not true.

Our national debt is not repayable, that check will bounce. This is the message I get from listening to Congressman Ron Paul and it is very unsettling to think about it because it is always growing, yet we continue to print money that’s already completely debased.

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I read a news report recently which I found somewhat shocking, but not that much. It’s a report from knoxnews.com, a small local news site from Knoxville Tennessee. Where the wife of a high ranking deputy sheriff in Loudon county was found guilty of identity theft. The article says that despite a previous conviction, the woman escaped a prison sentence.

Her sentence basically came to three years of supervised probation, a $1,000 dollar fine and 40 hours of community service. Even though her husband was not involved and knew nothing about the activities of his wife as concluded by an investigation, he was demoted because of his wife’s case.

The thief and the victim were actually friends in this case. The thief used the victim’s bank account to pay bills and other personal expenses. Yet the victim pleaded with authorities to stop them from prosecuting her friend, but because identity theft is a felony, charges were made and court procedures started.

Perhaps it would surprise most everyone that a friend would do this to a friend, but there really is no boundary when it comes to identity theft, it can come at you from any angle. I’m a little more surprised at the demotion of the deputy who was not involved in these actions and I imagine that to be a decision of the local sheriff’s office rather than the court. The fact that the case involves the wife of a high ranking deputy sheriff makes it hard to believe that the deputy did not know about this until too late.

In the short time that I’ve been blogging about bankruptcy and related subjects such as credit, credit repair and identity theft, I’ve discovered a lot of different facts about all these subjects and while reading news and posts from other blogs and it never really ceases to amaze me how wide open our personal information is and how easily it can be taken even by people we know and trust. Read the original article here.

Of the many ways this can happen, in this case it was a bank account number that was taken. Often times it’s a social security number that can be used to apply for credit under your name, and of course there’s always the potential danger of providing information via the internet.