Warren Speaks Out

Finance guru Warren Buffett was recently quoted as saying: "we were justified in using any means necessary (last year) 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."



Pretty sobering words from a key player in the world finance sector. He also noted these key points in an editorial 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

To illustrate these figures, Buffett elaborates on the last one:

$1.8 trillion is 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. So, where's it going to come from? Most
likely the printing press. And, ultimately, Buffett says, that will destroy the
value of the dollar.

I thought this editorial was very illustrative and painted a clear problem the citizens of the US will face if government spending is not reigned in in light of last year's crisis.