Debt

U.S. ‘Debt Held by Public’ Tops $14,000,000,000,000; Up 122% Under Obama

By Terence P. Jeffrey | August 16, 2016 | 11:48 AM EDT

(CNSNews.com) - The federal government’s “debt held by the public”—as opposed to its “intragovernmental debt”—has topped $14,000,000,000,000 for the first time in history, according to the latest numbers released by the U.S. Treasury.

As of the close business on Aug. 10, the “debt held by the public” was $13,987,862,462,404.79, according to the Treasury. By the close of business on Aug. 11, it had risen to $14,012,831,105,933.15. By close of business on Aug. 12, it had increased again, hitting $14,012,909,909,536.53.

U.S. Treasury's "debt to the penny" calculator, showing the results so far for August 2016.

When President Barack Obama was inaugurated on Jan. 20, 2009, the federal government’s debt held by the public was $6,307,310,739,681.66.

Since then, it has increased by $7,705,599,169,854.87—or 122 percent.

U.S. Treasury's "debt to the penny" calculator, showing the results for Jan. 20, 2009.

According to the latest publicly released numbers, foreign entities and the Federal Reserve own a combined $8,743,956,000,000 in U.S. government debt held by the public---giving them ownership of 62.4 percent of the total.
The other part of the federal debt—the “intragovernmental debt”--  closed the day on Aug. 12 at $5,390,094,670,446.31. That made the total federal government debt $19,403,004,579,982.84.
The U.S. government debt held by the public largely consists of marketable Treasury securities, such as bills, notes and bonds. The “intragovernmental debt” is primarily money the Treasury has borrowed and spent out of government trust funds, such as the Social Security trust funds.
A Congressional Research Service report published in February described and contrasted the debt held by the public and the intragovernmental debt as follows:

“Individuals, firms, the Federal Reserve, state and local governments, and foreign governments are eligible to purchase publicly held debt. Such debt may be acquired directly through the auction process from which most publicly held debt is initially sold or on the secondary market if the debt is deemed “marketable”, or eligible for resale.

“The total amount of publicly held debt outstanding was $13.673 trillion as of December 31, 2015. The majority of publicly held debt is marketable, and includes all Treasury Notes, Bonds, Bills, Treasury Inflation Protected Securities  (TIPS), and Floating Rate Notes (FRNs) issued by Treasury. Non-marketable debt held by the public is comprised of U.S. Savings Bonds, State and Local Government State and Local Government Securities (SLGS), and other, smaller issues. …

“Intragovernmental debt is held by components of the federal government. Intragovernmental debt issuances are almost exclusively nonmarketable, as marketable debt comprised only $0.024 trillion (0.5%) of the $5.250 trillion in total intragovernmental debt on December 31, 2015. The majority of nonmarketable intragovernmental debt was held by trust funds devoted to Social Security and military and federal worker retirement.”

As of the end of July, according to the Monthly Statement of the Public Debt, the debt held by the public had risen to approximately $13,998,220,000,000. That included approximately $13,472,060,000,000 in marketable Treasury securities. These included $8,615,474,000,000 in Treasury notes; $1,796,814,000,000 in Treasury bonds; $1,547,124,000,000 in Treasury bills; $1,180,357,000,000 in Treasury Inflation-Protected Securities; and $332,290,000,000 in Treasury Floating Rate Notes.

The average interest rate that the Treasury was paying on the marketable debt held by the public was only 2.026 percent as of the end of July, according to the Treasury.

As of the end of July 2007 it was 4.963 percent, almost two and a half times what it is now.
As of the end of this June, foreign entities owned $6,281,000,000,000 of the U.S. government debt held by the public, according to data released by the Treasury yesterday. As of Wednesday, Aug. 10, another $2,462,956,000,000 was owned by the Federal Reserve.

The combined $8,743,956,000,000 in U.S. government debt owned by foreign entities as of the end of June and the Federal Reserve as of the end of last Wednesday equals about 62.4 percent of the $14,012,909,909,536.53 in total debt held by the public as of last Friday.

Entities in China, which held $1,240,800,000,000 in U.S. Treasury securities as of the end of June, are the largest foreign owners of U.S. debt. They are followed by entities in Japan, which owned $1,147,700,000,000 as of the end of June; and entities in Ireland, which owned $270,600,000,000 as of the end of June.

California Nightmare

So if we have the highest tax rates in the country and cannot make do, the question should be asked why.  What is it about the spending that is a problem?  What is it about the tax rates that contribute to lower revenues?  What is it about the non-taxpayers in the state that contribute to the calamity?

When those questions are answered honestly, the problem will be clear and the answers self-evident, even to Moonbeam.

California Deficit Swells to $16 Billion, Governor Says

               

By Michael B. Marois - May 12, 2012 12:49 PM PT

California’s budget deficit has swelled to $16 billion after tax collections trailed projections amid the tepid economic recovery, Governor Jerry Brown said in a comment on his Twitter post.

The shortfall has widened from the $9.2 billion Brown estimated in January, after lawmakers resisted the Democrat’s call for cost cuts, the federal government blocked other reductions and April income-tax revenue missed budget forecasts by $2 billion. On May 14, he’s set to unveil a revised spending plan and to say how he would erase the gap.

Brown, 74, set out an initial budget in January with $92.6 billion in spending for fiscal 2013, which begins in July. That plan stripped more than $4 billion from health and welfare programs while relying on higher income and sales taxes. The levy increases will go before voters in November. If rejected, schools will lose $4.8 billion midway through the year.

“We are still recovering from the worst recession since the 1930s,” Brown said in a YouTube video cited on his Twitter post. “Tax receipts are coming lower than expected and the federal government and the courts have blocked us from making billions of necessary budget reductions. The result is that we are now facing a $16 billion deficit.”

Brown this week submitted more than 1.5 million signatures to place the tax measure on the ballot. It would temporarily raise the state sales tax, already the highest in the U.S., to 7.5 percent from 7.25 percent. It would also boost rates on income starting at $250,000. The 10.3 percent levy on those making $1 million or more would rise to 13.3 percent, the most of any state.

taxes

Obama's America

In Obama's America, we are all equal.  No one has too much - we are the same.

In Obama's America, our nation is equal to all others.  No one is better - we are all the same.

In Obama's America - we are not exceptional, we are the same as everyone else.


There is a chasm between the path of history and Obama's America, so one question would be - how to reconcile his America with the reality of America as a unique and exceptional land, filled with people who share and care about the world.


Drain every cent from the US.

The Obama administration has made history by presiding over the first-ever downgrade in the U.S. credit rating. President Obama has outdone all his predecessors in wrecking America’s good name. His answer to this problem: Spend even more.

If we have no money, if we are no longer outstanding in our economic future or unique - we are the same as others, struggling, fearful, doubtful ... and these economic fears will soon give sway to questions about how exceptional we are, how great we are.

Once he accomplishes this psychological game of switch and bait, in an effort to reign in the power of the US, weaken us, force us to be no better ... is to continue weakening the US economically to a point where nearly everyone will call for cuts to the military - dramatic cuts.  Cuts which will place us in line with other countries - equally as weak.

That is his plan.  The next block we see up for chopping will be a massive overhaul of the military - probably sponsored by a commission he sets up.  He would have tens of billions he could cut immediately, look good, and end the reign of the US as the most powerful country.  His Marxist perspective - that views the world through the prism of Marxist thought, has wanted to see the US weakened for decades.  It has never been possible until now.  He must be elated when he is in private.

He is accomplishing what no army on earth has ever been able to do, what no war has managed ... to end the dominance of the United States on a world stage.

Bloodbath - coming soon. 

 
 
 
 
Obama

US Economy: A Path Forward?

The coming crises of governments

 

By Robert Barro

August 3, 2011 10:00 pm

The Financial Times

The global crises of financial and housing markets are now being superseded by new crises of governments. The fiscal challenges for the weaker members of the eurozone are early warnings, as are analogous problems in American state governments weighed down by unfunded pension and healthcare liabilities. Without action, this new crisis of state competence could soon become just as damaging as its recent financial predecessor.

This week’s US debt deal, along with the prospect of debate on fiscal solutions in the run-up to the 2012 elections, provides some room for optimism. But America’s fiscal problems have deep roots. The recession of 2007-09 stemmed from the unprecedented bust in the housing market, driven by reduced lending standards and propelled by congressional pressures on private lenders and the reckless expansions of Fannie Mae and Freddie Mac. It is, however, important to recognise that this mistake is now understood and will not be repeated.

In the aftermath of the debt ceiling agreement there will be calls for further stimulus for America’s economy. This would be a grave mistake. In the financial turmoil of 2008, bail-outs by the US and other governments were unfortunate, but necessary. However, the subsequent $800bn American stimulus package was largely a waste of money that sharply enlarged the fiscal hole now facing our economy.  [And this $800 billion, had it not been spent, would have forestalled any need to raise the debt ceiling for some time longer]

President Barack Obama’s administration has consistently overestimated the benefits of stimulus, by using an unrealistically high spending multiplier. According to this Keynesian logic, government expenditure is more than a free lunch. This idea, if correct, would be more brilliant than the creation of triple A paper out of garbage. In any event, the elimination of the temporary spending is now contractionary and, more importantly, the resulting expansion of public debt eventually requires higher taxes, retarding growth.

I agree that budget deficits were appropriate during the great recession and, for that reason, the kind of balanced-budget rule currently proposed by some Republicans should be avoided. However, since government spending is warranted only if it passes the usual hurdles of social rates of return, the fiscal deficit should have concentrated on tax reductions, especially those that emphasised falls in marginal tax rates, which encourage investment and growth.

Despite relief at the debt-ceiling agreement, America’s fiscal situation remains deeply problematic. Any attempt to head off a crisis of government competence must begin with serious long-term reform. Reductions in the long-term path of entitlement outlays have to be put on the table, with increases in ages of eligibility a part of any solution.

We also need sharp reductions in spending programmes initiated or expanded by Mr Obama and his extravagant predecessor, George W. Bush. Given the inevitable growth of the main entitlement programmes, especially healthcare, increases in long-term federal revenue must be part of an overall reform.

So what, specifically, can be done? An effective future tax package would begin by setting US corporate and estate tax rates permanently to zero, given these taxes are inefficient and generate little revenue. Next, it would gradually phase out major “tax-expenditure” items, such as tax preferences for home-mortgage interest, state and local income taxes, and employee fringe benefits.

The structure of marginal income-tax rates should then be lowered. Marginal rates should particularly not increase where they are already high, such as at upper incomes. The bulk of any extra revenue needed to make up the difference should then be raised via a broad-based, flat-rate expenditure tax, such as a value added tax. A rate of 10 per cent, with few exemptions, would raise about 5 per cent of gross domestic product.

Of course, such a new tax would be a two-edged sword: a highly efficient tax, but politically dangerous. To paraphrase Larry Summers from long ago, we don’t have VAT in the US because Democrats think it is regressive, and Republicans think it is a money machine. We will get VAT when Democrats realise it is a money machine, and Republicans realise it is regressive. Obviously, I worry about the money machine property, but I see no serious alternative for raising the revenue needed for an overall next-stage reform package.

The raucous debt-ceiling debate represents a good start in forging a serious long-term fiscal plan. Substantial additional progress will be needed, sadly much of which will probably have to await the outcome of the next US election. Yet progress must be made – or the impending crises of governments, signalled by possible downgrades of US debt, will make the 2008-09 recession look mild.





The writer is a professor of economics at Harvard University and a senior fellow of Stanford’s Hoover Institution

 
 
 
 
 
 
 
 
 
 
 
 
economic

Obama: His Economy

Wait, we just went through a couple weeks of 'the sky is falling' and the Republicans 'are terrorists' or worse, and in one day, very nearly everything they okayed on Tuesday, was meaningless and they will need to raise the limit again, very soon!

U.S. eats up most of debt limit in one day

$239 billion spike uses up 60% of funding OK’d on Tuesday

By Stephen Dinan

The Washington Times
Wednesday, August 3, 2011

U.S. debt shot up $239 billion on Tuesday — the largest one-day bump in history — as the government flexed the new borrowing room it earned in this week's debt-limit increase deal.

The debt subject to the statutory limit shot way past the old cap of $14.294 trillion to hit $14.532 trillion on Tuesday, according to the latest the Treasury Department figures, which are released on the next business day.

That increase puts the government already remarkably close to the new debt limit of $14.694, which means one day's new borrowing ate up 60 percent of the $400 billion in space Congress granted the president this week.

Debt numbers go up and down regularly, depending on what the Treasury Department is redeeming or issuing on any day, but have been on a steep upward trend for the past decade as spending has ballooned and revenues have fluctuated.

For the past 2½ months, though, the number essentially was frozen as the government was poised to reach the borrowing limit set by law. The Treasury Department used extraordinary means to stall, but was about to run out of room on Tuesday.

With little time to spare, Congress and the White House managed to cobble together a deal to grant new borrowing authority: an initial increase of $400 billion, coupled with future increases.

The fight was so bruising that President Obama on Wednesday took his debt team out to celebrate by buying them hamburgers at Good Stuff Eatery, a well-known burger joint on Capitol Hill. The White House said it was a reward for their "nonstop" work over the past few months.

At a meeting of his Cabinet later in the day, the president said the debt increase gave the government some room to maneuver.

"We have now averted what could have been a disastrous blow to the economy. And we have identified on the front end over a trillion dollars in spending reductions that can be done sensibly and safely without affecting core programs," Mr. Obama said.

He also looked ahead to the committee the debt deal creates and charges with finding an additional $1.5 trillion in deficit reduction by the end of the year.

"It's going to be challenging work, and I'm encouraging Congress to take it with the utmost seriousness," Mr. Obama said.

The deal called for caps on future spending and granted the president the power to win an initial $400 billion debt increase, with another $500 billion coming later if Congress doesn't manage to block it. Yet another increase is contingent on the committee's recommendations.

Former GOP Sen. Alan Simpson, who co-chaired the deficit commission that Mr. Obama formed last year, called the spending limits in the bill "a baby step of the first order."

"Disappointing would be half a world. Until they get to the point where they can change the 'B' in billion to a 'T' in trillion, we are not going to get anywhere," he told Bloomberg Television.

The previous one-day record debt increase was $186 billion, set on June 30, 2009.

Government debt subject to the statutory limit is broken down into two categories: debt held by the public, and intragovernmental loans such as money borrowed from the Social Security Trust Fund and used to cover other basic government expenses.

According to the latest figures, the debt held by the public stood on Tuesday at $9.908 trillion, and the intragovernmental debt was $4.673 trillion. A slight portion of that debt is excluded from the legal limit.

 
 
 

 

 
 
 
 
 
 
 
 
 
 
debt

Of Race and Obama: Who Woulda Thunk

Posted on July 15, 2011



Dem Congresswoman Brings Obama's Race Into Debt Ceiling Fight



Rep. Sheila Jackson Lee (D-Texas) used the race card this afternoon to assess blame in the debt ceiling fight. Jackson Lee, a black Congresswoman, believes the disagreement over raising the debt ceiling is because of President Obama's race.

"I am particularly sensitive to the fact that only this president, only this president, only this one has received the kind attacks and disagreements and inability to work. Only this one," Jackson Lee said on the House floor this afternoon.

"Read between the lines."

"What is different about this president that should put him in a position that he should not receive the same kind of respectful treatment of when it is necessary to raise the debt limit in order to pay our bills, something required by both statute and the 14th amendment?"



I would remind Ms Lee that while Bush was president you had Democratic congressmen and women who said the most vicious and hateful comments – more than ever said about Obama – than I have ever heard in my life (which is not remembering too many presidents but it does go back 3-4). The personal and hateful attacks on Bush – on very nearly every issue possible Ms. Lee. And, you participated in these vile and personal attacks! It was not a matter of attacking Bush on policy – you attacked him personally. Now, you will mention that no one questioned Bush’s birth certificate. True, but some did question McCain’s eligibility to be president based upon his birthplace. In fact, as I recall, many from the liberal side of the political spectrum (and from the right). Work with the president – in 206 when Democrats took over Congress, they failed to work with Bush on anything, and they only compromised because with Bush ready to veto and the Republican minority able to prevent an over-ride of such a veto, Democrats were forced to actually consider what Bush had to say. Now, things are quite different and you come out calling it racially driven. It is unfortunate for the citizens of the 18th district that their representative was animated by fear and hate, not by service to district, state, and nation. It is a sad realization that any congressional representative has the intellectual failing to not comprehend the difference between reality and fantasy, between truth-telling and fabrication, between consistency and inconsistency in ones actions and principles. The people of Texas are the biggest losers Ms. Lee, and I am terribly saddened by what your continued presence means for all Americans.





 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
race

US Debt - Over $50 trillion and rising.

Much worse than this, but at least someone is beginning to pay attention to the 'more real' numbers.

Our debt has risen over $5 trillion in the last two years.  It is unsustainable.  And the printing presses keep rolling.



U.S. funding for future promises lags by trillions





By Dennis Cauchon, USA TODAY
June 7, 2011



The federal government's financial condition deteriorated rapidly last year, far beyond the $1.5 trillion in new debt taken on to finance the budget deficit, a USA TODAY analysis shows.

The government added $5.3 trillion in new financial obligations in 2010, largely for retirement programs such as Medicare and Social Security. That brings to a record $61.6 trillion the total of financial promises not paid for.

This gap between spending commitments and revenue last year equals more than one-third of the nation's gross domestic product.

Medicare alone took on $1.8 trillion in new liabilities, more than the record deficit prompting heated debate between Congress and the White House over lifting the debt ceiling.

Social Security added $1.4 trillion in obligations, partly reflecting longer life expectancies. Federal and military retirement programs added more to the financial hole, too.

Corporations would be required to count these new liabilities when they are taken on — and report a big loss to shareholders. Unlike businesses, however, Congress postpones recording spending commitments until it writes a check.

The $61.6 trillion in unfunded obligations amounts to $534,000 per household. That's more than five times what Americans have

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
debt

Lies my Reopresentative told me: Dems and Reps - we will cut the budget (is it meaningful for you yet)

Deficit for Fiscal 2007 Slides.

By topeditor
October 5, 2007, 6:32 PM ET.



It’s all in the surge – the revenue surge, that is.

The Congressional Budget Office estimated Friday that the U.S. federal budget deficit for fiscal year 2007, which ended Sunday, was about $161 billion, or 1.2% of gross domestic product. That’s down from the $248 billion shortfall recorded in fiscal 2006, which translated into 1.9% of GDP. The Treasury Department will report the official tally later this month.

Much of the improvement in the nation’s fiscal outlook in the last year has come from continued rapid growth in federal revenue. CBO estimates that 18.8% of GDP in fiscal 2007, up from 18.4% 2006 and 16.3% in 2004 and 18.4% in 2000. Outlays came to an estimated 20% of GDP, about equal to the average over the previous five years.

While annual federal spending grew 2.8% in fiscal 2007 over fiscal 2006, year to year, revenue grew 6.7%. Individual income-tax receipts are estimated to be 11.3% higher than last year, and corporate income tax receipts are estimated to be 5% higher. Revenue growth has cooled substantially from the 11.8% fiscal year-to-year increase from 2005 to 2006. Spending growth also slowed.

Federal expenditures were up in fiscal 2006 due to Gulf-coast hurricane recovery efforts. They were driven down in fiscal 2007 by legislation enacted in 2006 cutting student loan subsidies and auctioning off a portion of the broadcast spectrum, proceeds from which are recorded as negative expenditures not as revenues.

“While somewhat lower than estimates issued at the beginning of the year, the 2007 deficit announced today by the Congressional Budget Office is no cause for celebration,” said House Budget Committee Chairman John Spratt (D., S.C.)

CBO has estimated that if the U.S. maintains a military presence in Iraq and if Congress doesn’t allow the tax cuts enacted in President George W. Bush’s first term to expire, then recent improvements in the deficit will be reversed, pushing it up to to roughly $300 billion by 2012.



*****************************************


And as bad as that was, and we were told everyday by Democrats how bad it was ....


... it just got worse.



******************************************


U.S. sets $223B deficit record


Dwarfs Hill’s cutting goals




By Stephen Dinan
The Washington Times
11:46 a.m., Monday, March 7, 2011


The federal government posted its largest monthly deficit in history in February, a $223 billion shortfall that put a sharp point on the current fight on Capitol Hill about how deeply to cut this year's spending.

That one-month figure, which came in a preliminary report from the Congressional Budget Office, dwarfs even the most robust cuts being talked about on the Hill, and underscores just how much work lawmakers have to do to get the government's finances in balance again.

The Senate plans to vote Tuesday on competing proposals to cut spending, but Democrats have rejected GOP-backed cuts of more than $50 billion, and Republicans have ruled out Democrats' cuts of less than $10 billion, meaning neither plan will draw the 60 votes needed to overcome a filibuster and pass.

"We've all done the math and we all know how these votes will turn out: Neither proposal will pass, which means neither will reach the president's desk as written. We'll go back to square one and back to the negotiating table," said Senate Majority Leader Harry Reid, Nevada Democrat.

The two sides are facing a March 18 deadline, which is when the current stopgap funding bill expires. Without a new spending agreement by then, the government would shut down.

The House two weeks ago passed a bill that would cut $57 billion more from 2010 spending levels, including major reductions in a number of domestic programs.

Over the weekend, a top Senate Democrat said his party can accept no more than $6 billion in domestic cuts, and pointed to the proposal his colleagues introduced Friday that trims from several areas.

But a new set of numbers from the CBO indicates that Senate Democrats' proposal actually totals only $4.7 billion when measured as reductions compared with the previous year's spending.

So far, budget negotiations have not produced much visible progress.

President Obama designated Vice President Joseph R. Biden Jr. as his point man in the conversations, and Mr. Biden convened a meeting with congressional leaders last Thursday at the Capitol. But Mr. Biden is traveling in Europe this week on a long-planned trip to meet with foreign leaders

Was it a secret meeting?  Off the record, off the books, in quiet and dark places, or one that was actually transparent?


White House press secretary Jay Carney hinted that Mr. Biden could still participate by phone, but declined to say whether anyone else was taking the lead in the talks in his absence.

"I'm not going to specify, simply to say that a variety of staff members, senior staff members, have been in conversations with folks on the Hill about this," the spokesman said.

Republicans argue that Congress needs to tackle not only short-term spending, but long-term growth in the costs of Social Security and Medicare as well.

"Something must be done, and now is the time to do it. Republicans are ready and willing. Where is the president?" said Senate Minority Leader Mitch McConnell, Kentucky Republican. "Suddenly, at the moment when we can actually do something about all this, he's silent."

According to the CBO, the government has notched a $642 billion deficit for the first five months of fiscal 2011, which is slightly less than last year's pace. Income tax revenues are rising faster than spending, which accounts for the marginally improved picture.

But interest on the debt continues to grow, reaching $101 billion through the end of February — a 12.5 percent increase over 2010.

The nonpartisan CBO's February deficit number is preliminary. The Treasury Department will issue the final number later this week.

February is traditionally a bad month for federal finances. The previous two records were $220.9 billion, posted exactly a year ago, and $193.9 billion in February 2009.















 
 
 
 
 
 
 
 
 
 
 
 
 
deficit

Obama and the Tax Ceiling

One wistful commentator on the question of raising the debt ceiling stated rather forcefull that the Republicans were holding the American people hostage, another implied that as a result of opposing the increase in the debt ceiling Republicans were yet again messing up the government.

Not too long ago, back when he had just been elected a US Senator - Obama was opposed to hiking the ceiling, noting: “The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America's debt limit.”










 
 
 
 
 
 
 
 
democrats and debts

Capital One: We Should All Get Rid of It

A M A Z I N G.






Debtor strikes back at credit card company

By Sam Wood
Fri, Dec. 10, 2010
Philadelphia Inquirier


Patrice Perry's dispute with Capital One had been escalating. Someone called her family and her coworkers, trying to get her to pay. She hired an attorney, but the credit card company kept sending bills.

And then, the big blow.

"Please send your payment of $286,651,237 in the enclosed envelope," read the statement dated August 2009.

What's in your wallet, indeed.

Perry, a hotel clerk, reacted with shock and panic, according to a lawsuit filed Wednesday in Common Pleas Court.

"Essentially, the company told my client that if you don't do what we say, we're going to terrorize you economically," said Perry's attorney, Craig Kimmel. "It's certainly not a laughing matter when a creditor threatens to sue."

Capital One, based in Salt Lake City, did not respond Friday to several calls and e-mails requesting comment.

The fuss began in May 2009 when the credit card company, known for its commercials featuring Vikings and Visigoths, sent Perry a letter seeking $3,845 to pay off $4,807 on her account.

Perry's former lawyer sent the company a letter instructing it to direct all correspondence to him, the suit states. But Perry said Capital One persisted. Employees began calling her at home, calling her friends, calling her family, according to the suit.

In July 2009, Perry received a letter seeking $3,579 on an account of $4,695. The next month, another letter arrived, demanding $4,820.

Then on Aug. 25, 2009, the nine-figure bill showed up in her mailbox: "You have not paid this amount as we agreed," according to the bill. It threatened to destroy her credit history if the amount was not paid off immediately.

Kimmel said the $286 million figure was no random mistake.

The suit claims Capital One used "terroristic debt collection methods" that violated state debt collection laws and used unfair or deceptive acts or practices to create confusion and misunderstanding.

"We are seeking the very amount of money they say she owes as actual damages," Kimmel said. "So, we want $286 million. I'm as serious as they were when they sent that letter."

Kimmel said credit card companies too often think they are immune from cardholders they've put under the gun. He said he hoped the suit sent a warning to Capital One.

"Maybe some of those problems will get addressed," Kimmel said. "I'm just trying to get it to the attention of those who would consider this outrageous."

Perry, he said, has not received any more letters from Capital One.

"Maybe now they believe that silence is better," he said.





 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
credit cards

Morgan Stanley Says Government Defaults Inevitable


By Matthew Brown
Aug 25, 2010
Bloomberg.com


Investors face defaults on government bonds given the burden of aging populations and the difficulty of increasing tax revenue, according to a Morgan Stanley executive director.

“Governments will impose a loss on some of their stakeholders,” Arnaud Mares in the firm’s London office wrote in a research report today. “The question is not whether they will renege on their promises, but rather upon which of their promises they will renege, and what form this default will take.” The sovereign-debt crisis is global “and it is not over,” he wrote.

Rather than miss principal and interest payments, governments may choose a “soft” default in which they pay back debts with devalued currencies resulting from faster inflation or force creditors to take lower returns, Mares said in an interview.

Borrowing costs for so-called peripheral euro-region nations from Greece to Ireland surged today, resuming their ascent on concern that governments won’t be able to cut their budget deficits. Standard & Poor’s lowered Ireland’s credit rating yesterday on the rising cost of supporting nationalized banks.

Population trends may be a better predictor of the ability to meet obligations rather than debt as a percentage of gross domestic product, which doesn’t reflect governments’ available revenue and is “backward-looking,” Mares wrote.

While the U.S. government’s debt is 53 percent of GDP, one of the lowest ratios among developed nations, its debt as a percentage of revenue is 358 percent, one of the highest, the report said. Italy has one of the highest debt-to-GDP ratios, at 116 percent, yet has a debt-to-revenue ratio of 188, Mares said.

Double Dip

“Outright sovereign default in large advanced economies remains an extremely unlikely outcome, in our view,” the report said. “But current yields and break-even inflation rates provide very little protection against the credible threat of financial oppression in any form it might take.”

Mares, who didn’t identify which nations may default, once worked at the U.K.’s Debt Management Office and is a former senior vice-president at credit-rating company Moody’s Investors Service.

“Note that a double-dip recession would not invalidate this conclusion,” Mares’ report said. “It would cause yet further damage to the governments’ power to tax, pushing them further in negative equity and therefore increasing the risks that debt holders suffer a larger loss eventually.”

Investor concern that the U.S. may fall back into recession has grown in recent weeks as data missed economists’ estimates. A Citigroup Inc. index of U.S. economic data surprises fell to minus 59 last week, the least since January 2009.

Credit-Default Swaps

A report from the Commerce Department today showed U.S. durable goods orders increased 0.3 percent, compared with the 3 percent median estimate of 75 economists surveyed by Bloomberg News, figures showed today in Washington. The number of unemployment claims unexpectedly shot up by 12,000 to 500,000 in the week ended Aug 14, Labor Department figures showed Aug. 19.

Yields on German and U.S. benchmark securities sank today as investors sought the safest assets. U.S. two-year Treasury yields, at a four-month high 1.18 percent on April 5, fell to a record low 0.4542 percent yesterday.

Greek Debt Yields

The yield on Greek debt rose to more than 900 basis points above that of Germany today, the most since the European Union and International Monetary Fund created a 750 billion-euro ($948 billion) bailout package in May. Greece’s so-called yield spread over German debt was at 932 basis points as of 2:18 p.m. in London, short of the 973 basis-point record set on May 7. The Irish-German yield spread rose to a record 347 basis points, from 318 points yesterday.

Credit-default swaps that insure Irish government bonds against non-payment for five years rose 21 basis points to 331 today, the most since March 2009, according to data provider CMA. Greek swaps jumped to 921.5, the most since June, from 896.

“The conflict that opposes bondholders to other government stakeholders is more intense than ever, and their interests are no longer sufficiently well-aligned with those of influential political constituencies,” such as elderly voters and their claims on pensions and health insurance, Mares wrote.

 
 
 
 
 
 
 
 
 
 
 
economy

Obama and Our Debt Problem

U.S.'s $13 Trillion Debt Poised to Overtake GDP: Chart of Day





By Garfield Reynolds and Wes Goodman - Jun 4, 2010

President Barack Obama is poised to increase the U.S. debt to a level that exceeds the value of the nation’s annual economic output, a step toward what Bill Gross called a “debt super cycle.”

The CHART OF THE DAY tracks U.S. gross domestic product and the government’s total debt, which rose past $13 trillion for the first time this month. The amount owed will surpass GDP in 2012, based on forecasts by the International Monetary Fund. The lower panel shows U.S. annual GDP growth as tracked by the IMF, which projects the world’s largest economy to expand at a slower pace than the 3.2 percent average during the past five decades.

“Over the long term, interest rates on government debt will likely have to rise to attract investors,” said Hiroki Shimazu, a market economist in Tokyo at Nikko Cordial Securities Inc., a unit of Japan’s third-largest publicly traded bank. “That will be a big burden on the government and the people.”

Gross, who runs the world’s largest mutual fund at Pacific Investment Management Co. in Newport Beach, California, said in his June outlook report that “the debt super cycle trend” suggests U.S. economic growth won’t be enough to support the borrowings “if real interest rates were ever to go up instead of down.”

Dan Fuss, who manages the Loomis Sayles Bond Fund, which beat 94 percent of competitors the past year, said last week that he sold all of his Treasury bonds because of prospects interest rates will rise as the U.S. borrows unprecedented amounts. Obama is borrowing record amounts to fund spending programs to help the economy recover from its longest recession since the 1930s.

“The incremental borrower of funds in the U.S. capital markets is rapidly becoming the U.S. Treasury,” Boston-based Fuss said. “Do you really want to buy the debt of the biggest issuer?”

************************************
 
I want to cry.
 
 
 
 
 
 
 
 
 
 
 
 
 
debt

Spain in the Whirly Pool with Greece, which one gets sucked under first

Spain downgraded, Europe debt crisis widens






Juergen Baetz, Associated Press Writer
Wednesday April 28, 2010, 12:39 pm EDT



BERLIN (AP) -- Europe's debt crisis mushroomed Wednesday as Spain saw its credit rating lowered, just as Germany sought to reassure nervous investors that Greece would not be allowed to go under, saying Berlin's share of a key aid package could be approved in the next few days.

Stock and bond markets had begun to regain their composure after stinging downgrades of Greece and Portugal the day before, when Standard & Poors delivered more bad news by cutting Spain's rating to AA from AA+ amid concerns about the country's growth prospects following the collapse of a construction bubble.

"We now believe that the Spanish economy's shift away from credit-fuelled economic growth is likely to result in a more protracted period of sluggish activity than we previously assumed," Standard & Poor's credit analyst Marko Mrsnik said.

Spain is considered the key to whether Europe's debt crisis can be resolved -- its economy is much larger than that of Greece and Portugal and -- many in the markets postulate -- may be just too big to bail out if it gets into serious trouble.

Though its overall debt burden is fairly modest at around 53 percent of national income, the country is running a high budget deficit and has done less than others to get a handle on its public finances.

"Given its lack of competitiveness and the grim outlook for domestic demand the government will need to announce further fiscal measures if it is to make serious inroads into the deficit," said Ben May, European economist at Capital Economics. "Today's announcement may increase the pressure on it to do this sooner rather than later."

The announcement came after a day of market drops and turmoil following the downgrades of Greece -- to junk status -- and Portugal. Markets had been looking for a clear word from Germany that it would contribute its part of a Greek bailout package.

The clock is ticking -- Greece has to pay off some euro8.5 billion worth of debts by May 19, but cannot raise the money in the markets given current sky-high borrowing costs.

That means it needs its 15 partners in the eurozone and the International Monetary Fund to cough up the money promised earlier this month but Germany has been playing hardball about releasing its euro8.4 billion share of the euro45 billion package largely because of domestic opposition.

Germany's finance minister Wolfgang Schaeuble said Wednesday that Europe's biggest economy could have its contribution approved by parliament by the end of next week -- that's the first solid timeline from Berlin aimed at easing the uncertainty that Greece might not get the money in time.

Schaeuble said that if talks with Greece and the IMF are concluded by this weekend, Germany's support measures could be brought to lawmakers Monday and fast-tracked to be approved by May 7, next Friday.

"The stability of the euro is at stake. And we're determined to defend this stability as a whole," Schaeuble said following talks with IMF chief Dominique Strauss-Kahn and European Central Bank President Jean-Claude Trichet.

Chancellor Angela Merkel stressed that Germany was still insisting Greece commit to cutbacks. German assistance for Greece is unpopular with the German public and Merkel faces key regional elections May 9.

"Germany will make its contribution but Greece has to make its contribution," she said.

Strauss-Kahn would not confirm reports that he had told German lawmakers Greece may need between euro100 and euro120 billion over the next three years, saying he would not comment on any figures as long as negotiations in Athens are still under way.

Speaking during a cabinet meeting Wednesday, Greek Prime Minister George Papandreou said that every EU member must "prevent the fire that intensified through the international crisis from spreading to the entire European and global economy."

Papandreou insisted Greece was determined to bring its economy into order.

"We will show that we do not run away. In difficult times we can perform -- and we are performing -- miracles," he said, adding that "our government is determined to correct a course that has been followed for decades in a very short time."

In the meantime, stocks sagged and markets sold off Greek bonds with a vengeance. Investors appeared to anticipate Athens would eventually have to default or restructure its debt payments at some point even if the bailout gets it past May 19, when it has debt coming due.

A key indicator of risk -- the interest rate gap, or spread between Greek 10-year bonds and the benchmark German equivalent -- narrowed Wednesday afternoon to 5.9 percentage points after hitting an astonishing 9.63 percentage points, a massive jump from around 6.4 percentage points on Tuesday. The bigger the spread, the greater the fear Greece will default.

Authorities in Athens halted short-selling of stocks for two months, helping the exchange finally climb after a five-day losing streak. The ban will remain in force until June 28.

It closed up 0.63 percent at 1,707.35.

In Lisbon, Portugal's Prime Minister Jose Socrates and the leader of the main opposition party agreed on measures to help steer the country out of a financial crisis that threatens to engulf the euro zone's poorest member. The pair held emergency talks Wednesday as the Lisbon stock market recorded steep losses for a second straight day.

Socrates said, after the meeting, that the government and opposition would work together.

"We are ready to do whatever it takes to meet our budget targets," he said.

Still, the specter of the contagion spreading was prevalent.

"There is a very serious risk of contagion, it's something like post-Lehman period. Everybody is panicking and there is a lot of fear in the market," Nicholas Skourias, chief investment officer at Pegasus Securities in Athens told AP Television News. He was referring to the 2008 collapse of U.S. investment bank Lehman Brothers, which sped up the world financial crisis.

"I think that today we will have a lot of pressure as well because there is this fear of contagion."

 
 
 
 
 
 
 
 
Spain

The Debt and the Deficit: Obama and His Commission

Drowning in debt and in traffic.  I am hoping the answer to one will remedy the other!



Drowning in Debt: What the Nation's Budget Woes Mean for You



Economists Predict Cutbacks, Tax Increases That 'Aren't Even Imaginable'

By DEVIN DWYER
WASHINGTON, Feb. 17, 2010—
ABC News




American political and economic leaders have sounded the alarm for years about the red ink rising in reports on the federal government's fiscal health.

But now the problem of mounting national debt is worse than it ever has been before with -- potentially dire consequences for taxpayers, according to a report by the nonpartisan Peterson-Pew Commission on Budget Reform.

"It keeps me awake at night, looking at all that red ink," said President Obama in Nashua, N.H., on Feb. 2. "Most of it is structural and we inherited it. The only way that we are going to fix it is if both parties come together and start making some tough decisions about our long-term priorities."

Obama will sign an executive order tomorrow that establishes a bipartisan National Commission on Fiscal Responsibility and Reform to make recommendations on how to reduce the country's debt.

Over the past year alone, the amount the U.S. government owes its lenders has grown to more than half the country's entire economic output, or gross domestic product.

Even more alarming, experts say, is that those figures will climb to an unprecedented 200 percent of GDP by 2038 without a dramatic shift in course.

"Within 12 years&the largest item in the federal budget will be interest payments on the national debt," said former U.S. Comptroller General David Walker. "[They are] payments for which we get nothing."

Economic forecasters say future generations of Americans could have a substantially lower standard of living than their predecessors' for the first time in the country's history if the debt is not brought under control.

Government debt, which fuels the risk of inflation, could make everyday Americans' savings worth less. Higher interest rates would make it harder for consumers and businesses to borrow. Wages would remain stagnant and fewer jobs would be created. The government's ability to cut taxes or provide a safety net would also be weakened, economists say.

While much attention has been focused on the government's deficit-spending surge during the recession, many economists agree short-term budget overruns -- as ominous as they may seem -- are not particularly problematic.

"What threatens the ship are large, known and growing structural deficits," said Walker, a problem that few politicians seem eager and readily able to fix.

In a recent ABC News poll, 87 percent of Americans said they are concerned about the federal budget deficit and national debt, and most strongly disapprove of how their political leaders are handling the situation.

But public dissatisfaction has not proven enough to compel members of Congress or current and previous Administrations to set aside their partisan differences to achieve a balanced budget.

Most Republicans don't want to raise taxes; most Democrats don't want to cut spending. The result is a stalemate on how to put America back in the black.

Partisan Gridlock Stalling 'Drastic Changes' Needed

Politicians "don't have a way to say 'no'" to their constituents, said Doug Holtz-Eakin, a conservative economist and former director of the Congressional Budget Office, who says unrestrained government spending is the crux of the problem.

John Podesta, former Clinton White House chief of staff and president of the liberal Center for American Progress, says lawmakers need to raise more tax revenue as part of the solution to fund "investments" for the future.

Ultimately, analysts say, solving the debt problem will likely require both tax hikes and spending cuts, along with broader structural reforms of the way government operates.

"Habitually spending more money than you make is irresponsible," said Walker. "Irresponsibly spending someone else's money when they're too young to vote or not born yet is immoral."

Future generations of Americans will largely foot the bill for the present financial predicament, economists say.

The United States currently owes over $12 trillion to its debtors that's more than fifteen $787-billion economic stimulus packages worth of cash. Divided out, each American bears a $40,000 share of the country's tab.

"The American people today are not remotely prepared for the changes that are necessary," said former Congressional Budget Office director Rudolph Penner.

He says Americans who have been accustomed to buying on credit and living beyond their means at home may soon face a painful reality as the government tightens its belt further.

"They aren't hearing about the drastic changes needed, and they certainly didn't hear about it in the President's budget," Penner said.

President Obama's $3.8 trillion budget request for 2011 represents an increase in government spending by more than $100 billion over last year, yet projects slight decrease in the budget deficit over the year before to $1.267 trillion.

While deficit spending is widely regarded as a necessary evil during times of recession to revive and stimulate the economy, the President has acknowledged it's time to rein in that practice.

Obama has touted as "steps forward" both a proposed freeze on some discretionary spending in fiscal year 2011 and the creation of a bipartisan fiscal commission to make recommendations for long-term deficit reduction.

"The president has taken a very bold act," said White House economic adviser Christine Romer on "Good Morning America" today. "He has said we want a non-security dscretionary spending freeze that is pretty unpopular with his own party, but he thought it was important to make one of those tough choices."

Federal Deficit: 'Paygo' as Solution?

On Saturday, the president also signed into law new "pay-as-you-go" rules, which require lawmakers to match each spending increase with a spending decrease or a new source of revenue.

So-called "paygo" was largely credited with helping to balance the federal budget and lead to surpluses in the 1990s.

"The American people are tired of politicians who talk the talk but don't walk the walk when it comes to fiscal responsibility. It's easy to get up in front of the cameras and rant against exploding deficits. What's hard is actually getting deficits under control. But that's what we must do," Obama said Saturday.

Then why, Mr. Obama have you not used the line item veto on the hundreds of lines of pork in the bills you have signed.  Why have you suddenly decided it is important?


Still, economists say that while Obama's plans may help curb deficit-spending in the near future, they don't do enough to solve the structural problems and skyrocketing expenditures of massive government entitlement programs like Medicare and Medicaid.

"The basic outline [of Obama's plan] is appropriate, but we reach out for the 'magic aspirin' in the form of a [budget] commission" and I'm just not sure if that will work, said Robert Reischauer, former director of the Congressional Budget Office and president of the Urban Institute, a nonpartisan economic research center.

The National Commission on Fiscal Responsibility, to be co-chaired by former Clinton White House chief of staff Erskine Bowles and former Senate Republican Whip Alan Simpson, will try to issue its plan by December -- after the midterm elections.

For now, the presidential commission may be the best politically-gridlocked Washington can do until lawmakers from both parties demostrate a more vigorous willingness to tackle an ever-ominous fiscal problem.

I am left wondering - is the author unable to separate fact from fiction, or at some level, does he begin to actually believe the hype given by Obama and Biden.  this 'commission' cannot do anything.  It is powerless.  It is impotent.  It is a means to an end - and that end is providing breathing space where no one is attacking him (Obama).  At the end - this 'commission' will stronly urge vetos, cutbacks, slashing some programs, perhaps even erasing some of the debt government owes itself, and of course, some new taxes.  Obama can come forward, tell us he doesn't want to do it but we have to - the commission said so - raise taxes and make massive cuts in programs.  The 'commission' will naturally have Democrats on it, and a token Republican or two, perhaps even a well known Republican who calls for unity - either people like Buffett, a few Democratic Senators, a few impressive economic types, and a Republican who tends to support liberal causes and or a Republican who is overwhelmed by the credentials and will concur because to do otherwise when the Sage of Omaha talks would be, at best, foolish.

Then the taxes begin and keep going and go up and up ...  The cuts will follow - in military spending, closing bases, dry-docking ships, and taxing the middle-class.  Of course it will have a cute name and he will tell us it will not hit the middle-class hard, but it will.  When 10% pay over 65% of the taxes, and 30% or more pay 0, you can't very well tax the poor any more than you are.  So who gets hit - the middle.  I wouldn't even be surprised if we find user-taxes being imposed - drive 1 mile and pay a few cents, drive 20 miles and pay more.  Few options are left after we have spent so much. 

Yet here is another though - get rid of all 535 members of Congress, their staffs, their pensions ... and save over $4.6 billion.  Yes it is a one time saving, but we can find other wasteful spending.

My hope is, these new taxes drive out all the people who fill up the freeways and clog the streets ... if so, I will try to manage. 





 
 
 
 
 
obam

Obama and His Debt

Quietly.  No press.  No public outcry.

I remember a Monday in March 2006 when Bush signed the extension of the debt limit to $9 trillion.  It was, as I recall, his forth request to increase the debt limit, with a total of something like a third the debt, or $3 trillion in debt increases.

In fact, at the time, Senate Democrats (for that matter all Democrats) used that debt increase as an opportunity to highlight the Bush administration's record on deficits. 


Quietly.  No press, and no Senate Democrats using the opportunity to highlight Mr. Obama's record on deficits ... the debt limit was just increased to $14.3 trillion.  The debt at the moment is $12.3 trillion and Obama is expecting another $2 trillion (that is why you raise it the amount you do, assuming that when it hits that limit, you raise it again.).
 
It was $10,627,000,000,000 (rounded up) on the day and hour Obama walked into the White House.  It is today over $12,350,000,000,000.  Nearly 2 trillion more than when he took office and he just signed an increase to $14,300,000,000,000.  When that limit is reached, he will have increased the debt more than $3.5 trillion dollars. 
 
That $3.5 trillion increase will have taken a whopping 20 months or less to accrue.
 
Silent.  No press and no Democrats filling the airwaves with vitriol.  The hissing and spewing was too much.  At least with the Retardicans, no one takes them too seriously and they are for the most part, ignored.
 
 
 
 
President Obama Signs Law Raising Public Debt Limit from $12.4 Trillion to $14.3 Trillion


February 12, 2010
ABC News




MoreBehind closed doors and with no cameras present, President Obama signed into law Friday afternoon the bill raising the public debt limit from $12.394 trillion to $14.294 trillion.

The current national debt is $12.3 trillion. Check out the National Debt Clock, which tells you your share of that -- roughly $40,000 per citizen, $113,000 per taxpayer.

The bill also establishes a statutory Pay-As-You-Go procedure requiring that new non-emergency legislation affecting tax revenue or mandatory spending not increase the Federal deficit – in other words, that any new spending or tax cuts be paid for with new taxes or spending cuts.


 
 
 
 
 
 
 
 
 
 
debt

Paying Attention: Stop Spending, NOT Spend more.

A Greek crisis is coming to America




By Niall Ferguson
Financial Times
February 10 2010 20:15


It began in Athens. It is spreading to Lisbon and Madrid. But it would be a grave mistake to assume that the sovereign debt crisis that is unfolding will remain confined to the weaker eurozone economies. For this is more than just a Mediterranean problem with a farmyard acronym. It is a fiscal crisis of the western world. Its ramifications are far more profound than most investors currently appreciate.

There is of course a distinctive feature to the eurozone crisis. Because of the way the European Monetary Union was designed, there is in fact no mechanism for a bail-out of the Greek government by the European Union, other member states or the European Central Bank (articles 123 and 125 of the Lisbon treaty). True, Article 122 may be invoked by the European Council to assist a member state that is “seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control”, but at this point nobody wants to pretend that Greece’s yawning deficit was an act of God. Nor is there a way for Greece to devalue its currency, as it would have done in the pre-EMU days of the drachma. There is not even a mechanism for Greece to leave the eurozone.

That leaves just three possibilities: one of the most excruciating fiscal squeezes in modern European history – reducing the deficit from 13 per cent to 3 per cent of gross domestic product within just three years; outright default on all or part of the Greek government’s debt; or (most likely, as signalled by German officials on Wednesday) some kind of bail-out led by Berlin. Because none of these options is very appealing, and because any decision about Greece will have implications for Portugal, Spain and possibly others, it may take much horse-trading before one can be reached.

Yet the idiosyncrasies of the eurozone should not distract us from the general nature of the fiscal crisis that is now afflicting most western economies. Call it the fractal geometry of debt: the problem is essentially the same from Iceland to Ireland to Britain to the US. It just comes in widely differing sizes.

What we in the western world are about to learn is that there is no such thing as a Keynesian free lunch. Deficits did not “save” us half so much as monetary policy – zero interest rates plus quantitative easing – did. First, the impact of government spending (the hallowed “multiplier”) has been much less than the proponents of stimulus hoped. Second, there is a good deal of “leakage” from open economies in a globalised world. Last, crucially, explosions of public debt incur bills that fall due much sooner than we expect

For the world’s biggest economy, the US, the day of reckoning still seems reassuringly remote. The worse things get in the eurozone, the more the US dollar rallies as nervous investors park their cash in the “safe haven” of American government debt. This effect may persist for some months, just as the dollar and Treasuries rallied in the depths of the banking panic in late 2008.

Yet even a casual look at the fiscal position of the federal government (not to mention the states) makes a nonsense of the phrase “safe haven”. US government debt is a safe haven the way Pearl Harbor was a safe haven in 1941.

Even according to the White House’s new budget projections, the gross federal debt in public hands will exceed 100 per cent of GDP in just two years’ time. This year, like last year, the federal deficit will be around 10 per cent of GDP. The long-run projections of the Congressional Budget Office suggest that the US will never again run a balanced budget. That’s right, never.

The International Monetary Fund recently published estimates of the fiscal adjustments developed economies would need to make to restore fiscal stability over the decade ahead. Worst were Japan and the UK (a fiscal tightening of 13 per cent of GDP). Then came Ireland, Spain and Greece (9 per cent). And in sixth place? Step forward America, which would need to tighten fiscal policy by 8.8 per cent of GDP to satisfy the IMF.

Explosions of public debt hurt economies in the following way, as numerous empirical studies have shown. By raising fears of default and/or currency depreciation ahead of actual inflation, they push up real interest rates. Higher real rates, in turn, act as drag on growth, especially when the private sector is also heavily indebted – as is the case in most western economies, not least the US.

Although the US household savings rate has risen since the Great Recession began, it has not risen enough to absorb a trillion dollars of net Treasury issuance a year. Only two things have thus far stood between the US and higher bond yields: purchases of Treasuries (and mortgage-backed securities, which many sellers essentially swapped for Treasuries) by the Federal Reserve and reserve accumulation by the Chinese monetary authorities.

But now the Fed is phasing out such purchases and is expected to wind up quantitative easing. Meanwhile, the Chinese have sharply reduced their purchases of Treasuries from around 47 per cent of new issuance in 2006 to 20 per cent in 2008 to an estimated 5 per cent last year. Small wonder Morgan Stanley assumes that 10-year yields will rise from around 3.5 per cent to 5.5 per cent this year. On a gross federal debt fast approaching $1,500bn, that implies up to $300bn of extra interest payments – and you get up there pretty quickly with the average maturity of the debt now below 50 months.

The Obama administration’s new budget blithely assumes real GDP growth of 3.6 per cent over the next five years, with inflation averaging 1.4 per cent. But with rising real rates, growth might well be lower. Under those circumstances, interest payments could soar as a share of federal revenue – from a tenth to a fifth to a quarter.

Last week Moody’s Investors Service warned that the triple A credit rating of the US should not be taken for granted. That warning recalls Larry Summers’ killer question (posed before he returned to government): “How long can the world’s biggest borrower remain the world’s biggest power?”

On reflection, it is appropriate that the fiscal crisis of the west has begun in Greece, the birthplace of western civilization. Soon it will cross the channel to Britain. But the key question is when that crisis will reach the last bastion of western power, on the other side of the Atlantic.






 
 
 
 
debt

Just the details

Of course there are extenuating circumstances.  Of course liberals will blame all the increases on Bush.  Of course.  But, the facts are still the facts, and while you can diminish the severity of any one increase, or pass the responsibility to someone else, it is as valid as any claim made by liberals against Bush, or more.


12,365,000,000,000. As of 2/4/10 at 9:20 am (rounded to nearest billion).



5,706,174,969,873.86 The day Bush took office, the debt was …

10,628,881,485,510.23. The last day of Bush’s second term.

The increase was nearly $5 trillion dollars over eight years, with a huge bailout plan at the end of his administration so as to not throw it on Obama the first day.

10,626,877,048,913.08. The day Obama took office, the debt was.


12,360,943,989,345.48. On February 2, 2010.


That is an increase of 1,734,066,940,432.40 in 378 days.

Congress will vote to increase the debt limit to 14.3 trillion this month.


That would be an increase from January 20, 2009 of $3,673,122,951,087.00 in less than 390 days.


Bush took office with a debt at $5,706,174,969,873.86. Approximately 390 days later, the debt was at $6,003,453,016,583.85. An increase of $297,178,046,710.00.

Of course the wars dramatically increased these numbers.  And if we look at the next 2 years of the Bush administration, we would see a dramatic increase.  Then again, we will see a meteoric rise in the US debt, very shortly.




 
 
 
 
 
debt

USA: Down the drain ...........

It would be difficult to find a better way to undermine our country and utterly destroy the system we have today, than what is currently happening.  It is difficult to figure out who is worse.



Damn the deficit: Full speed ahead on health care




By: Michael Barone
Senior Political Analyst
November 25, 2009



Double-digit. That hyphenated adjective has been used most often recently to describe October's 10.2 percent unemployment rate. But it can also be used to describe the federal budget deficit as a percentage of the gross domestic product. That precise number is not yet known, but it may turn out to have a more dire effect on our national life than October's unemployment rate.

In the fiscal year just ended, federal spending was nearly 25 percent of GDP while federal revenues slipped below 15 percent because of the financial crisis and recession. We have not seen a budget deficit of this magnitude since World War II, which surely was a greater challenge than recent economic troubles.

Apologists for the Obama administration argue that some 2009 spending, like that on financial bailouts, is nonrecurring. True, but as the Congressional Budget Office has reported, the trajectory of administration spending and revenue is pushing the annual deficit toward $1,000,000,000,000 -- that's $1 trillion -- for the next decade.

Congressional Democrats' health care bills threaten to add to that. The bill currently before the Senate is advertised as costing less than $1 trillion. But significant spending doesn't kick in till 2014 and over the ensuing 10 years adds up to $1.8 trillion, nearly double that.

Thanks to current low interest rates, servicing the debt costs the government only $200 billion this year. But the White House estimates that debt service will exceed $700 billion in 2019. "In a few years," the Economist editorializes, "the AAA rating of Treasury bonds, the world's most important security, could be in jeopardy."

It's not only Republicans who decry this prospect. Examining the Democrats' health care proposals, William Galston, domestic policy adviser in the Clinton White House, writes, "We're already facing an unsustainable fiscal future."

Looking further ahead, Scott Winship notes in the Progressive Policy Institute's progressivefix.com blog that federal spending is on course to exceed 40 percent of GDP because of scheduled spending on entitlements -- Social Security, Medicare, Medicaid -- within the lifetime of today's children.

Yet the congressional Democrats who are pressing to expand federal health care spending do not seem much fazed by the prospect that, as Winship writes, "the level of taxation it would require to meet projected spending needs is far higher than anything the country has ever seen-slash-tolerated."

That suggests that, at least for some Democrats, huge looming budget deficits are not a bug but a feature.Just as Ronald Reagan hoped that cutting taxes would force politicians to cut spending, these Democrats hope that increasing spending will force politicians to increase taxes to levels common in Western Europe. Never mind that those economies have proved more sluggish and less creative than ours over the long haul.

The instrument they may have in mind is the value added tax, which operates as an invisible sales tax on goods and services. Back in May, Budget Director Peter Orszag's spokesman mentioned the VAT as a "credible idea" that he did not want to rule out. In June, House Ways and Means Chairman Charles Rangel suggested a VAT as "a point of discussion."

In September, John Podesta, head of the Obama transition team, spoke of how a VAT would "create a balance" with other economies, and White House adviser Paul Volcker cited a carbon tax and a VAT as ways to raise lots of revenue. In October, Speaker Nancy Pelosi said, "Somewhere along the way, a value added tax plays into this."

These statements are noteworthy, because American politicians are ordinarily skittish about saying we should imitate Europe's high-tax and high-spending policies. These policies seem more unpopular than ever 10 months into the Obama presidency. Pollster Scott Rasmussen reports that 53 percent of voters worry that the federal government will do too much in response to economic problems, while only 37 percent worry it will do too little.

That mirrors voters' current opposition to Democratic health care bills. Democratic leaders nonetheless want to jam one through before their current majorities are eroded, as they seem likely to be, in the 2010 elections. This is politically risky, but makes sense if your goal is to expand government.

So the battle over health care is not just about health care. It's about whether government will permanently gobble up more of the private-sector economy and slow it down in the process.

 
 
 
 
 
 
 
 
obama

ABCs for Beginners

The simplest answer or deconstruction of a question is often the least corrupted.


Bush added about $5 trillion to our debt in the course of 8 years.

While this amount is not exactly accurate given the GDP in 2000 versus 2008, the actual decrease in spending on most programs, and the nearly $1 trillion Bush spent in the intial bailout.

Mr. Obama has increased the national debt about $2 trillion since he took office.








debt

Obama and the Deficit

Just so we are clear - Bush raised the debt something to the tune of nearly $5 trillion dollars.  Bailing out Fanny and Freddie, and two wars over an eight years period for one, and five years for the other ... and liberals couldn't contain the venom and spit when they mentioned these small details ... Mr. Obama has a deficit of over $1.4 trillion and it is all within the first 8 or so months of his administration.  Within a years time, he would spend $3 or 4 trillion, and within two years, nearly $7 trillion.  Yet the liberals are all as quiet as church mice.

You want to rack of a trillion on wars, I can justify it - but racking up $7 trillion on spending that hasn't done anything as yet and would not do anything that in large part would not happen even without the stimulus, eventually.

A waste.  Lies, hypocrisy and really foolish people believing that this man has a bloody clue.






Record-High Deficit May Dash Big Plans



$1.4 Trillion in Red Ink Means Less to Spend On Obama's Ambitious Jobs, Stimulus Policies


By Lori Montgomery and Neil Irwin
Washington Post Staff Writers
Saturday, October 17, 2009


The federal budget deficit soared to a record $1.4 trillion in the fiscal year that ended in September, a chasm of red ink unequaled in the postwar era that threatens to complicate the most ambitious goals of the Obama administration, including plans for fresh spending to create jobs and spur economic recovery.

Still, the figure represents a significant improvement over the darkest deficit projections, which had been as much as $400 billion higher earlier this year, when the economy was wallowing in recession. Since then, the outlook has brightened and a government bailout has successfully stabilized the nation's troubled financial sector. In a report released Friday, Treasury Department officials said the government had spent $132 billion less than expected in August, due primarily to a drop in anticipated spending on the banking bailout.

At about 10 percent of the overall economy, the gap between federal spending and tax collections is the largest on record since the end of World War II, and bigger in nominal terms than the past four years of deficits combined. Next year is unlikely to be much better, budget analysts say. And Obama's current policies would drive the budget gap into the trillion-dollar range for much of the next decade.


[To read the rest of the article, click on the title link.]



 
 
 
 
 
 
 
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