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Marino on Money: April 21

READ MORE: Marino on Money: April 21
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This week, Marino on Money addresses the question of how our government manages its money. Q: Who do we borrow from? A: The majority of the money our government borrows is from foreign investors, or foreign central banks. We do this because our economy does not generate enough tax revenue to pay all of our bills. Our government needs to borrow money, just like we would borrow money. Our government runs a deficit. The Congressional budget office expects the deficit to be roughly $1 trillion dollars this year. Meaning, our government will spend $1 trillion more than we make in 2009. They also estimate we'll spend $9.3 trillion more than we make in the next 10 years. Scary. So, how do we borrow all of this money? Investors, like foreign central banks will loan money to us for a period of time. We pay them interest, and eventually we must pay back the principal. The national debt is now over $11 trillion. We are paying interest on it, and eventually, we need to pay it back. We borrowed the money for a specific period of time. We will need to repay it. How are we going to do that? There are a couple of possibilities. We will look at those tomorrow. Ross Marino will be answering questions on our 5 o'clock news every Tuesday, Wednesday and Thursday. If you have a question, visit our Marino on Money page.

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Default?

Hyperinflation? 90% tax rates? Total anarchy and the total economic collapse of the United States? Within the next forty years, the annual cost of servicing the national debt (that's interest only, people) will exceed all the tax revenues collected on an annual basis. Just a very few years later, the annual combined cost of Social Security, Medicare, and Medicaid will ALSO exceed the annual tax revenue. Meanwhile, Washington continues to spend like drunken sailors. God help our grandchildren....