Fitch's, a bond rating service, downgraded the debt of Greece last week to just above "junk" status.  Greece's debt is now 113% of their GDP and getting worse.  They have instituted an austerity program and Europe is coming to their rescue with a $40 billion package, but it is not enough in Fitch's eyes.  They see lots of taxes but no plan for growth.  They continue to spend without meaningful restraint and raise taxes on businesses and individuals.  That is a recipe for recession and a shrinking economic base.  And of course, we are on our way to copying the Greek example.

Now to be fair, our debt as a percentage of GDP is 63% right now, nowhere near Greece's, and according to the Congressional Budget Office it is likely to reach 90% in 2020. Baloney.  They are basing this projection on increased revenues not causing an economic downturn when the Bush tax cuts are allowed to expire, plus they are counting new revenues from the new Medicare tax, new tax on capital gains and dividends, and the new surcharge tax on so-called wealthy individuals with incomes above $200,000.  Added to this silly projection is the assumption that Obamacare will actually cost what it is projected to, probably too low by at least double and more likely more than that! 

There is something called the Laffer Curve for those of you interested enough to do some more research, but to make it simple, the theory shows that the more you raise taxes, the more economic damage you do and the less taxes you collect.  True, it is only a theory but like evolution, it has never been proven wrong.  Every time in the past taxes have been increased, and I do mean EVERY time, the Laffer Curve has proven correct.

So the likely result of all of this is that we will tax our way into at best another terrible recession and more likely our debt will zoom past 100% of the GDP and we will be in a world of hurt.  After all, it is one thing to rescue a tiny little country, but who is going to have enough money and motivation to rescue the largest economy in history? 

Yeah, that's right, no one. 

We are on a path to destruction.  Make no mistake about it.  I close as I always do by saying, buy gold.  It is your best insurance against what is to come.