How come it took him this long to realize this, as soon as the fed started printing free monopoly money this was a given fact that debt was going to be a huge problem, its obvious what the fed is doing is only making matters worse, yet the stupid talking analysts and dumb foolish bulls believe this is the best thing to happen, it will only be a problem moving forward. I am sure not many understand this. This is not a quick fix, throwing massive amounts of worthless dollars at an already downward spiraling economy is not the way to go about and fix the problem. Buffett Says Federal Debt Poses Risks to Economy (Update1) By Shamim Adam Aug. 19 (Bloomberg) -- The U.S. must address the massive amounts of âmonetary medicineâ that have been pumped into the financial system and now pose threats to the worldâs largest economy and its currency, billionaire Warren Buffett said. The âgusher of federal moneyâ has rescued the financial system and the U.S. economy is now on a slow path to recovery, Buffett wrote in a New York Times commentary yesterday. While he applauds measures adopted by the Federal Reserve and officials from the Bush and Obama administrations, Buffett says the U.S. is fiscally in âuncharted territory.â The government is trying to spark business and consumer spending through a $787 billion stimulus plan spanning tax cuts and infrastructure projects, while the Treasury and the Fed have spent billions more on separate programs to rescue financial institutions and resuscitate the banking system. The U.S. budget deficit is forecast to reach a record $1.841 trillion in the year that ends Sept. 30. âEnormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects,â Buffett, 78, said. âFor now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself.â The âgreenback emissionsâ will swell the deficit to 13 percent of gross domestic product this fiscal year, while net debt will increase to 56 percent of GDP, Buffett said. Record Deficit The U.S. budget deficit reached a record for the first 10 months of the fiscal year and broke a monthly high for July. The excess of expenditure over revenue for July climbed to $180.7 billion compared with a $102.8 billion gap in July 2008 as the government spent more than in any month in U.S. history, the Treasury said Aug. 12. Officials must still do âwhatever it takesâ to get the U.S. economy back on its growth momentum, Buffett wrote. âOnce recovery is gained, however, Congress must end the rise in the debt-to-GDP ratio and keep our growth in obligations in line with our growth in resources,â Buffett said. âWith government expenditures now running 185 percent of receipts, truly major changes in both taxes and outlays will be required. A revived economy canât come close to bridging that sort of gap.â Dollar Index Pacific Investment Management Co., which runs the worldâs biggest bond fund, said in an Emerging Markets Watch report that the dollar will weaken as the swelling U.S. deficit erodes its status as a reserve currency. The Dollar Index, which tracks the greenback against a basket of currencies, has fallen 12 percent from this yearâs high in March. âUnchecked greenback emissions will certainly cause the purchasing power of currency to melt,â Buffett said. âThe dollarâs destiny lies with Congress.â Buffett is the chairman and chief executive officer of Omaha, Nebraska-based Berkshire Hathaway Inc. Buffett built Berkshire into a $155 billion enterprise over four decades with dozens of acquisitions, buying companies that sell ice cream, lease private jets and operate power plants. Berkshire has been buying securities issued by governments outside the U.S. The company held about $11.1 billion in foreign government bonds in its insurance units as of June 30, compared with $9.6 billion three months earlier, Berkshire said in a regulatory filing on Aug. 7. The value of holdings in U.S. Treasuries and so-called government sponsored enterprises slipped 5.3 percent in the three months ended June 30 to about $2.5 billion.