As credit and economic activity continue to contract, analysts are warning of big problems and unprecedented fiat-money creation by the Federal Reserve System in the near future.

The non-partisan U.S. Congressional Budget Office declared that the U.S. government is on an “unsustainable” path of accumulating debt in a new analysis entitled The Long-Term Budget Outlook.

After a meeting with his economic team and Federal Reserve Chairman Ben Bernanke on June 29, President Obama announced "the economy is strengthening" and "we are into recovery." The recovery mantra, however, seems to be falling on more and more deaf ears these days.

Several European nations recently announced spending cuts to bring their budgets closer to balance in the wake of the current global economic recession, especially Ireland, Greece, Portugal and Spain. But Paul Krugman, the leftist Keynesian economist of the New York Times, argues that balancing budgets will lead to a new depression:

Policeman FiremanPublic-employee labor unions have long been an unchecked tap upon the public treasury.  Sometimes these unions have an aura of moral purpose, like police and firefighters' unions. Others work in hospitals or teach in schools, positions that have historically been viewed sympathetically by many Americans. Other unions, like garbage collectors and water-line workers, could cause immediate and serious harm to the public, if they went on strike.