tag:blogger.com,1999:blog-1611450234741164782024-03-13T07:54:33.545-07:00Deficit FutureExplore and discuss the future of America in terms of deficit, entitlement issues, and the effects the baby boomers will have on the economy in their post retirement years.kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.comBlogger443125tag:blogger.com,1999:blog-161145023474116478.post-43732158262031773782010-11-14T18:00:00.000-08:002010-11-14T18:02:23.438-08:00Greenspan: High deficits could spark bond crisisFrom: <a href="http://news.yahoo.com/s/nm/20101114/bs_nm/us_usa_economy_greenspan">News.yahoo.com</a><br /><br /><blockquote>The United States must move to rein in its massive budget deficits or it faces the risk of a <a id="KonaLink0" target="undefined" class="kLink" style="" href="http://news.yahoo.com/s/nm/20101114/bs_nm/us_usa_economy_greenspan#"><span style="color: rgb(54, 99, 136) ! important; font-family: arial,helvetica,clean,sans-serif; font-weight: 400; font-size: 13px; position: static;color:#366388;" ><span class="kLink" style="color: rgb(54, 99, 136) ! important; font-family: arial,helvetica,clean,sans-serif; font-weight: 400; font-size: 13px; position: static;">bond </span><span class="kLink" style="color: rgb(54, 99, 136) ! important; font-family: arial,helvetica,clean,sans-serif; font-weight: 400; font-size: 13px; position: static;">market</span></span></a> crisis, former Federal Reserve Chairman Alan Greenspan said on Sunday. <p> "We've got to resolve this issue before it gets forced upon us," Greenspan said of the ballooning U.S. debt levels.</p> <p> He spoke as a panel, chaired by former White House chief of staff Erskine Bowles and former Senator <a id="KonaLink1" target="undefined" class="kLink" style="border-bottom-color: rgb(54, 99, 136); border-bottom-style: dotted;" href="http://news.yahoo.com/s/nm/20101114/bs_nm/us_usa_economy_greenspan#"><span style="color: rgb(54, 99, 136) ! important; font-family: arial,helvetica,clean,sans-serif; font-weight: 400; font-size: 13px; position: static;color:#366388;" ><span class="kLink" style="color: rgb(54, 99, 136) ! important; font-family: arial,helvetica,clean,sans-serif; font-weight: 400; font-size: 13px; position: static;">Alan </span><span class="kLink" style="color: rgb(54, 99, 136) ! important; font-family: arial,helvetica,clean,sans-serif; font-weight: 400; font-size: 13px; position: static;">Simpson</span></span></a>, is due to deliver a report on debt and deficits by December 1.</p> <p> A draft report made public last week offered a series of politically tough tax and spending choices that would seek to reduce the debt by $4 trillion by 2020.</p> <p> The suggestions received a lukewarm reception from some politicians and outright condemnation by others, including House of Representatives Speaker <a id="KonaLink2" target="undefined" class="kLink" style="border-bottom-color: rgb(54, 99, 136); border-bottom-style: dotted;" href="http://news.yahoo.com/s/nm/20101114/bs_nm/us_usa_economy_greenspan#"><span style="color: rgb(54, 99, 136) ! important; font-family: arial,helvetica,clean,sans-serif; font-weight: 400; font-size: 13px; position: static;color:#366388;" ><span class="kLink" style="color: rgb(54, 99, 136) ! important; font-family: arial,helvetica,clean,sans-serif; font-weight: 400; font-size: 13px; position: static;">Nancy </span><span class="kLink" style="color: rgb(54, 99, 136) ! important; font-family: arial,helvetica,clean,sans-serif; font-weight: 400; font-size: 13px; position: static;">Pelosi</span></span></a>, who pronounced the ideas "simply unacceptable."</p> <p> Greenspan, who spoke on NBC's "Meet the Press," said he believed "something equivalent" to what Bowles and Simpson recommended would eventually be approved by <a id="KonaLink3" target="undefined" class="kLink" style="" href="http://news.yahoo.com/s/nm/20101114/bs_nm/us_usa_economy_greenspan#"><span style="color: rgb(54, 99, 136) ! important; font-family: arial,helvetica,clean,sans-serif; font-weight: 400; font-size: 13px; position: static;color:#366388;" ><span class="kLink" style="color: rgb(54, 99, 136) ! important; font-family: arial,helvetica,clean,sans-serif; font-weight: 400; font-size: 13px; position: static;">Congress</span></span></a>.</p> <p> "The only question is, is it before or after a bond market crisis? Because there's no alternative," he said.</p></blockquote><p></p>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-81799708942246201942010-10-08T07:20:00.000-07:002010-10-08T07:21:21.517-07:00Congressman Phil Hare disputes existence of national debt<object width="640" height="390"><param name="movie" value="http://www.youtube.com/v/U4Fo4ZgA0M4&hl=en_US&feature=player_embedded&version=3"></param><param name="allowFullScreen" value="true"></param><param name="allowScriptAccess" value="always"></param><embed src="http://www.youtube.com/v/U4Fo4ZgA0M4&hl=en_US&feature=player_embedded&version=3" type="application/x-shockwave-flash" allowfullscreen="true" allowscriptaccess="always" width="640" height="390"></embed></object>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com1tag:blogger.com,1999:blog-161145023474116478.post-45816046347838101782010-08-28T09:56:00.001-07:002010-08-28T09:58:32.821-07:00Chairman Of Joint Chiefs Of Staff Says National Debt Is Biggest Threat To National SecurityFrom <a href="http://www.zerohedge.com/article/chairman-joint-chiefs-staff-says-national-debt-biggest-threat-national-security?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29&utm_content=Netvibes">zerohedge.com</a>:<br /><br />Not China, not Russia, not North Korea, not Iran, not terrorists...<strong>According to Admiral Mike Mullen, the Chairman of the Joint Chiefs of Staff, the "single biggest threat" to American national security is the US national debt</strong>, which is either $8.85 trillion (public debt), $13.4 trillion (total national debt), $20 trillion (total debt including GSE debt), or $124 trillion (total debt including unfunded obligations), depending on one's definition of the word "<a target="_blank" href="http://www.usdebtclock.org/">debt</a>." And as Zero Hedge has long been warning, the imminent increase in interest rates (sooner or later), will eventually put the country in an untenable funding position. "Tax payers will be paying around $600 billion in interest on the national debt by 2012, the chairman told students and local leaders in Detroit." The Chairman (the real one, not his pale imitation over at Marriner Eccles) politely forgot to add that the successful rolling of nearly <a target="_blank" href="https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=10082600.pdf">$600 billion in debt per month</a> is likely an even greater threat to national security.kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-67820753134281222542010-03-09T21:22:00.000-08:002010-03-09T21:23:57.573-08:00Obama Policies Will Increase National Debt by $9.7 TrillionFrom <a href="http://www.opposingviews.com/i/obama-policies-will-increase-national-debt-by-9-7-trillion">Opposingviews.com</a><br /><br /><blockquote>“President Obama’s policies would add more than $9.7 trillion to the national debt over the next decade, congressional budget analysts said Friday. . .The 10-year outlook by the nonpartisan Congressional Budget Office is somewhat gloomier than White House projections, which found that Obama’s policies would add $8.5 trillion to the debt by 2020.”</blockquote>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-29368286851441228092010-02-28T16:25:00.001-08:002010-02-28T16:26:42.763-08:00Obama Administration Using Accounting Gimmicks That Would Make Enron ‘Blush'From <a href="http://www.cnsnews.com/news/article/61925">Cnsnews.com</a><br /><br /><blockquote>Rep. Jeb Hensarling (R-Texas) says the Obama administration is using an accounting “gimmick” in its budget by not including the debt owed by mortgage firms Fannie Mae and Freddie Mac.<br /><br />“The accounting gimmicks that are used today would make an Enron and WorldCom accountant blush,” Hensarling told reporters. “The American people know that under the policies of this administration—under the policies of this Congress—we are drowning in a sea of red ink.”<br /><br />Hensarling, a member of the House Financial Services Committee, joined a group of House Republicans Tuesday in announcing the introduction of a bill that would require President Obama’s Office of Management and Budget to include the liabilities of Fannie and Freddie in the national debt calculation. </blockquote>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-21516111067870789722010-02-28T16:24:00.000-08:002010-02-28T16:25:06.658-08:00Clinton Says U.S. Deficit, Debt a National Security ConcernFrom <a href="http://www.businessweek.com/news/2010-02-26/clinton-says-u-s-deficit-debt-a-national-security-concern.html">Businessweek.com</a><br /><br /><blockquote>The record U.S. budget deficit and debt should be viewed as a growing national security concern, U.S. Secretary of State Hillary Clinton told lawmakers yesterday. <p class="indent"> “We have to address this deficit and the debt of the U.S. as a matter of national security, not only as a matter of economics,” Clinton said in testimony to the House Appropriations Subcommittee on State, Foreign Operations and related programs. The panel was reviewing the U.S. foreign affairs budget for fiscal year 2011.</p></blockquote><p class="indent"></p>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-35486803610179392092010-02-28T16:22:00.000-08:002010-02-28T16:23:52.144-08:00Budget Deficit Panel Is A Smoke Screen To Secretly Raise TaxesFrom<a href="http://www.americasnewsonline.com/budget-deficit-panel-is-a-smoke-screen-to-secretly-raise-taxes-902/"> Americasnewsonline.com</a><br /><blockquote>President Obama used an Executive Order to create the Budget Deficit Panel, when it could not pass the Senate. Its appointees supposedly represent both Democrats, Republicans and Independents. Its name describes its duties. What can be done to alleviate a growing budget, that can lead to debt that will cripple the nation.</blockquote>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-65078002118298475252010-02-28T16:20:00.000-08:002010-02-28T16:22:38.411-08:00Fix the deficit first, Bernanke tells U.S. politiciansFrom <a href="http://www.theglobeandmail.com/report-on-business/fix-the-deficit-first-bernanke-tells-us-politicians/article1480580/">Theglobeandmail.com</a><p></p><blockquote><p>Over the course of almost four hours of testimony at the House financial committee yesterday, Mr. Bernanke was asked more about the country's record deficit and debt than any other subject, putting him in the middle of a debate that Democratic <a itxtdid="8597008" target="_blank" href="http://www.theglobeandmail.com/report-on-business/fix-the-deficit-first-bernanke-tells-us-politicians/article1480580/#" style="font-weight: normal ! important; font-size: 100% ! important; text-decoration: none ! important; border-bottom: 1px solid rgb(0, 31, 94) ! important; padding-bottom: 0px ! important; color: rgb(0, 31, 94) ! important; background-color: transparent ! important; background-image: none; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt;" classname="iAs" class="iAs">President Barack <nobr style="font-weight: normal; font-size: 100%; color: rgb(0, 31, 94);" id="itxt_nobr_1_0">Obama<img style="display: inline ! important; height: 10px; width: 10px; position: relative; top: 1px; left: 1px; padding: 0pt; margin: 0pt; float: none; border: 0pt none;" name="itxt-icon-0" src="http://images.intellitxt.com/ast/adTypes/mag-glass_10x10.gif" /></nobr></a> and his Republican opponents in Congress appear eager to have but unwilling to resolve.</p> <p>Mr. Bernanke stepped gingerly around queries that reflected the challenges of a country struggling to escape recession, yet were often political traps rigged to manipulate Mr. Bernanke into embarrassing one side or the other.</p> <p>Seeking neutral ground, the Fed chief said it was "very, very important" that the administration and Congress come up with a credible plan to deal with the $1.6-trillion (U.S.) deficit. He stressed that the effort would pay immediate dividends by easing the minds of the investors who finance the government's operations.</p></blockquote><p></p>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-1146065085562353002010-02-28T16:02:00.000-08:002010-02-28T16:19:45.903-08:00Protecting Yourself from the Giant New DeficitFrom <a href="http://online.wsj.com/article/SB10001424052748704041504575045513213694120.html?mod=WSJ_PersonalFinance_PF2">Wsj.com</a><br /><blockquote><br />For every dollar in debt that Americans have paid off since they started cleansing their balance sheets in mid-2008, the U.S. government has borrowed more than $7. All the hard work by consumers to replenish their piggy banks may be for naught if big government budget deficits play havoc with the economy.<br /><br />The Obama administration projected that the federal debt could double over the next decade, prompting Moody's Investors Service to warn that the pristine AAA credit rating of the U.S. "could come under downward pressure." <p>Investors need to account for the burgeoning federal budget deficit as they save for retirement, college tuition or homes. Uncle Sam's borrowing binge could set off a surge in inflation and push down the dollar, both of which would erode the value of savings. It could also push interest rates higher, hammering the value of the more than $1 trillion in Treasury bonds owned by households directly or through mutual funds. Income taxes, already set to rise, might have to climb further to help close the government's budget gap. </p></blockquote><p></p>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-22363323626207206222010-02-24T19:41:00.001-08:002010-02-24T19:42:48.560-08:00Voters Are Worried and Angry About DeficitFrom <a href="http://www.foxnews.com/politics/2010/02/04/fox-news-poll-voters-worried-angry-deficit/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%253A+foxnews%252Fpolitics+%2528Text+-+Politics%2529">Foxnews.com</a><br /><br /><p></p><blockquote><p>The poll shows that 54 percent of voters say the deficit makes them feel worried, while 32 percent say they feel angry. Few -- 8 percent -- are okay with the new estimates that have the federal deficit growing to over $1.5 trillion dollars.</p> <p>Furthermore, more voters -- 47 percent -- think President Obama's federal spending freeze proposal is just a gimmick that won't really help, while 37 percent, or almost four in 10, think it's an important step in reducing the deficit.</p></blockquote><p></p>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-29271249930614545902010-02-01T13:33:00.001-08:002010-02-01T13:35:09.556-08:00Obama’s State of the Union Address Dampens Hope for a Real Budget ActionFrom <a href="http://blog.heritage.org/2010/01/29/obama%E2%80%99s-state-of-the-union-address-dampens-hope-for-a-real-budget-action/">Heritage.org</a><br /><br /><blockquote>The key question is whether the President’s freeze represents a first small step towards real fiscal responsibility or an attempt to divert nervous taxpayers’ attention away from larger spending increases elsewhere. The President’s continued support for a trillion-dollar health care expansion as well as yet another expensive stimulus bill suggests the latter.<br /><br /><br /></blockquote>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-48636964419521101092010-01-31T20:40:00.000-08:002010-01-31T20:50:02.848-08:00Deficits and debts in plain EnglishFrom <a href="http://www.axcessnews.com/index.php/articles/show/id/19367">Axcessnews.com</a><br /><br /><p><strong></strong></p><blockquote><p><strong>National deficit</strong></p> <p>2010 Estimate: $1.4 trillion - CBO</p> <p><strong>What it is:</strong></p> <p>The deficit is the yearlong difference between "what the United States Government takes in from taxes and other revenues" and what the government spends. - U.S. Department of the Treasury.</p> <p><strong>What that means:</strong></p> <p>The projected deficit is the highest the U.S. has ever had, meaning the government has either been collecting less money, spending more, or both.</p> <p>"The high deficits are an outrage" Chris Edwards, an economist at the libertarian CATO Institute in D.C., said. "They are unethical."</p> <p>Others say the increased spending was necessary.</p> <p>"It's clearly too much, but that has to be put in the obvious context of the recession," said Andrew Yarrow, vice president and director of Public Agenda's D.C. office. The group generally opposes higher deficits.</p> <p>"Most would agree that the government had to do something," he said.</p> <p>Michael Linden, associate director for tax and budget policy at the Center for American Progress, said, "The current deficit is not a concern. It is very high, but that's mostly a function of the emergency spending that had to happen."</p> <p>CAP is a progressive group founded by former Clinton administration officials.</p> <p>The deficit isn't just caused by spending, Linden said. The government has collected considerably less tax revenue this year because people were making less and because the government wanted to stimulate the economy by letting people keep more of their own money, he said.</p> <p><strong>Public debt</strong></p> <p>2009 Calculation: $7.6 trillion - CBO</p> <p><strong>What that means:</strong></p> <p>The public debt consists of all the deficits of previous years added together. It is all the debt owed by government branches. - U.S. Department of the Treasury.</p> <p>Public debt is often confused with national debt, an estimate that includes the money different branches of government owe to one another and is therefore considerably higher than public debt. It's the national debt the Senate voted to raise this week.</p> <p><strong>What that means:</strong></p> <p>For most of national history, the U.S. didn't have a public debt.</p> <p>"Other than during the Civil War and the World Wars, the U.S. largely balanced its budget until the late 1960s," Yarrow said.</p> <p>U.S. public debt has been building up for the last half century.</p> <p>"It's really the spending that's out of control," Edwards said. Wars over the past couple decades, domestic spending and tax cuts during the Bush years and recent stimulus plans have been expensive, he said. "Both parties are to blame."</p> <p>Not all say the high debt is a problem.</p> <p>"Right now the debt is at a manageable level," Linden said.</p> <p>"It really can't get too much higher" without some risks coming into play, he said.</p> <p>Lowering debt would mean making some sacrifices.</p> <p>"In many ways, Americans have really wanted to have it all," Yarrow said.</p> <p>"They've wanted to have more spending, but they've wanted to pay less in taxes, and that just doesn't add up," he said. "The government has played along with them."</p> <p><strong>Long-term effects of the public debt and deficits</strong></p> <p>The public debt "doesn't have any effect in the near term," Linden said. "It's a high public debt, but it's not too much of a burden. The problem is if it continues to rise."</p> <p>But Yarrow cautioned, "If we do nothing, entitlement programs," including Medicare and Social Security, "will compose all of the budget."</p> <p>The debt will hit younger workers the hardest, Edwards said.</p> <p>"There's a huge threat of enormous tax increases for young workers in the future," he said. "The increasing power of the elderly lobby will put pressure on politicians to raise taxes on young workers."</p> <p>Many countries, waiting on the U.S. to pay back loans, are starting to question the value of holding U.S. debt, Yarrow said.</p> <p>If these countries were to pull money out of U.S. markets, they could cause "severe panics in financial markets," he said.</p> <p>This debt may be a problem for future generations.</p> <p>"Money borrowed by the federal government must be paid back by future generations with interest," Rep. Mike Pence, R-Ind., said in a press release this week.</p> <p>"There are a lot of ways this can hit individuals down the road," Yarrow said. "And not too far down the road."</p></blockquote><p></p>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-77988322080691990832010-01-31T20:34:00.000-08:002010-01-31T20:40:49.919-08:00Obama to Propose $3.8 Trillion BudgetFrom <a href="http://www.foxnews.com/politics/2010/01/30/report-obama-propose-trillion-budget/">Foxnews.com</a><br /><p></p><blockquote><p>Congressional aides are preparing to slog through an expected $3.8 trillion in spending to be proposed by President Obama on Monday when his fiscal year 2011 budget is delivered to Capitol Hill. </p> <p>Sources tell Fox News the proposed budget predicts the national deficit will crest at a record-breaking $1.6 trillion in the current fiscal year, then start to recede in 2011 to $1.3 trillion, then to $700 billion in 2013.</p> <p>Still, the administration's new budget to be released Monday says deficits over the next decade will average 4.5 percent of the size of the economy, a level which economists say is dangerously high if not addressed, said the congressional official.</p></blockquote>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-11836754712200991702010-01-21T08:40:00.000-08:002010-01-21T08:41:58.099-08:00Missing the TargetFrom <a href="http://online.wsj.com/article/SB10001424052748703882804574642670382608340.html?mod=googlenews_wsj">Wsj.com</a><br /><blockquote>Unlike previous recessions, the current downturn was not caused by Federal Reserve tightening and therefore couldn't be reversed by lowering interest rates. President Obama was correct to conclude that boosting economic activity required a fiscal stimulus.<br /><p>Unfortunately, despite the talented team of economists in the administration, most of the president's economic policies have done little to help the problem. And indeed, many of these policies have created even more problems than they solved.</p> <p>For starters, the president allowed congressional Democrats to design the $787 billion stimulus package. The result was an unnecessarily large increase in the national debt for a very modest rise in gross domestic product, with too much emphasis on redistributing income and preserving public-sector jobs and not enough on raising economic activity. Only about one-fourth of the nearly $800 billion will be used for government spending that adds directly to GDP. In contrast, the funds given to households will be largely saved or used to pay down existing debts. And the dollars that went to state governments relieved pressure to use their "rainy day" funds or levy temporary tax increases.</p></blockquote>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-23482998662231761432010-01-21T08:39:00.000-08:002010-01-21T08:40:33.701-08:00The Global Debt BombFrom <a href="http://www.forbes.com/forbes/2010/0208/debt-recession-worldwide-finances-global-debt-bomb.html">Forbes.com</a><br /><blockquote>Whether or not you believe the spending spree was morally justified, you have to be concerned about the prospect of a dismal, debt-burdened fiscal future. More debt weighs heavily on GDP, says Carmen Reinhart, a University of Maryland economist. The coauthor, with Harvard professor Kenneth Rogoff, of <i>This Time It's Different: Eight Centuries of Financial Folly</i> (Princeton, 2009), Reinhart has found that a 90% ratio of government debt to GDP is a tipping point in economic growth. Beyond that, developed economies have growth rates two percentage points lower, on average, than economies that have not yet crossed the line. (The danger point is lower in emerging markets.) "It's not a linear process," she says. "You increase it over and beyond a high threshold, and boom!" The U.S. government-debt-to-GDP ratio is 84%.</blockquote>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-7525621855068831992010-01-21T08:37:00.000-08:002010-01-21T08:39:14.069-08:00Senate discussing a raise in national debt ceiling to above $14 trillionFrom <a href="http://voices.washingtonpost.com/44/2010/01/senate-discussing-a-raise-in-n.html?wprss=44">Washingtonpost.com</a><br /><br /><blockquote>The Senate opened debate Wednesday on a plan to <a href="http://www.washingtonpost.com/wp-dyn/content/article/2010/01/19/AR2010011903310.html">raise the nation's debt limit</a> by $1.9 trillion, a move that Democrats hope will see the Treasury through this fall's congressional elections.<br /><br />The record increase would raise the Treasury's legal ceiling for borrowing to $14.3 trillion -- about the size of the nation's overall economy.<br /><br />Treasury expects to exceed the current debt limit of $12.4 trillion as soon as next month. Much of that borrowing is between government agencies; borrowing from foreign governments and other private investors stands at about $7.8 trillion, or around 54 percent of the nation's gross domestic product, a level that has been rising rapidly in the aftermath of the deepest recession in a generation.</blockquote>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-87776813525503972632010-01-18T09:17:00.000-08:002010-01-18T09:19:17.713-08:00U.S. debt to reach $50 trillion by 2030From <a href="http://www.wnd.com/index.php?fa=PAGE.view&pageId=118239">Wnd.com</a><p></p><blockquote><p>Fred Bergsten, former assistant secretary of international affairs for the Treasury, sounded the alarm that dollar deficits may not be funded for long by foreign nations, including China, in the <a href="http://www.foreignaffairs.com/articles/65446/c-fred-bergsten/the-dollar-and-the-deficits">Nov./Dec. 2009 issue</a> of the Council on Foreign Relations "Foreign Affairs" magazine. </p><p>By 2030, Bergsten anticipates the net foreign debt of the United States will exceed $50 trillion, or 140 percent of gross domestic product.<br /></p><p>He predicted that by 2030, the United States will be paying $2.5 trillion a year to the rest of the world, equal to the nation's current total spending on <a id="KonaLink1" target="undefined" class="kLink" style="text-decoration: underline ! important; position: static;" href="http://www.wnd.com/index.php?fa=PAGE.view&pageId=118239#"><span style="color: blue ! important; font-family: "Times New Roman",Georgia,Serif; font-weight: 400; font-size: 17px; position: static;color:blue;" ><span class="kLink" style="border-bottom: 1px solid blue; color: blue ! important; font-family: "Times New Roman",Georgia,Serif; font-weight: 400; font-size: 17px; position: static; background-color: transparent;">health </span><span class="kLink" style="border-bottom: 1px solid blue; color: blue ! important; font-family: "Times New Roman",Georgia,Serif; font-weight: 400; font-size: 17px; position: static; background-color: transparent;">care</span></span><span style="position: relative;" class="preLoadWrap" id="preLoadWrap1"><div style="position: absolute; z-index: 4000; top: -32px; left: -18px; display: none;" id="preLoadLayer1"><img style="border: medium none ; width: 22px; height: 22px;" src="http://kona.kontera.com/javascript/lib/imgs/grey_loader.gif" class="preloadImg" /></div></span></a>, just to pay the interest on U.S. debt. </p><p>Bergsten warns the U.S. debt crisis is so severe that the Obama <a id="KonaLink2" target="undefined" class="kLink" style="text-decoration: underline ! important; position: static;" href="http://www.wnd.com/index.php?fa=PAGE.view&pageId=118239#"><span style="color: blue ! important; font-family: "Times New Roman",Georgia,Serif; font-weight: 400; font-size: 17px; position: static;color:blue;" ><span class="kLink" style="color: blue ! important; font-family: "Times New Roman",Georgia,Serif; font-weight: 400; font-size: 17px; position: static;">administration</span></span></a> must both reduce federal budget deficits and embrace a declining dollar, or face a collapse of the U.S. economy. </p><p>"These projections suggest that the United States' annual current account deficit will thus climb to almost $6 trillion by 2030, more than seven times its previous high," he wrote. "Such a sum would account for more than 15 percent of GDP, or two and a half times the peak rate of 2006, and would be at least triple the accepted international norm for sustainable current account deficits, which is four or, at most, five percent of GDP." </p><p>He continued, "It has long been known that large external deficits pose substantial risks to the U.S. economy because foreign <a id="KonaLink3" target="undefined" class="kLink" style="text-decoration: underline ! important; position: static;" href="http://www.wnd.com/index.php?fa=PAGE.view&pageId=118239#"><span style="color: blue ! important; font-family: "Times New Roman",Georgia,Serif; font-weight: 400; font-size: 17px; position: static;color:blue;" ><span class="kLink" style="color: blue ! important; font-family: "Times New Roman",Georgia,Serif; font-weight: 400; font-size: 17px; position: static;">investors</span></span></a> might at some point refuse to finance these deficits on terms compatible with U.S. prosperity. </p><p>"Any sudden stop in lending to the United States would drive the dollar down, push inflation and interest rates up, and perhaps bring on a hard landing for the United States – and the world economy at large." </p></blockquote><p></p>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-66215016057089964472010-01-18T09:15:00.000-08:002010-01-18T09:16:28.819-08:00In just two days this week, the Treasury issued $61 billion in new debtFrom <a href="http://news.goldseek.com/BullionVault/1263580200.php">Goldseek.com</a><p style="margin: 0in 0in 0pt;" class="MsoNormal"><span style="font-family: Verdana; font-size: 10pt;" lang="EN-GB"><span style="font-family:Arial, Verdana, Helvetica, sans-serif;font-size:85%;"><br /></span></span></p> <p style="margin: 0in 0in 0pt;" class="MsoNormal"><span style="font-family: Verdana; font-size: 10pt;" lang="EN-GB"><span style="font-family:Arial, Verdana, Helvetica, sans-serif;font-size:85%;"></span></span></p><blockquote><p style="margin: 0in 0in 0pt;" class="MsoNormal"><span style="font-family: Verdana; font-size: 10pt;" lang="EN-GB"><span style="font-family:Arial, Verdana, Helvetica, sans-serif;font-size:85%;">In just two days this week, the Treasury issued $61 billion in new debt – twice as much money as <a href="http://in.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idINTOE60408420100105">Japanese households</a> put into their domestic equity funds during all of 2009, itself a 50% jump from 2008.<o:p></o:p></span></span></p> <p style="margin: 0in 0in 0pt;" class="MsoNormal"><span style="font-family: Verdana; font-size: 10pt;" lang="EN-GB"><o:p><span style="font-family:Arial, Verdana, Helvetica, sans-serif;font-size:85%;"> </span></o:p></span></p> <p style="margin: 0in 0in 0pt;" class="MsoNormal"><span style="font-family: Verdana; font-size: 10pt;" lang="EN-GB"><span style="font-family:Arial, Verdana, Helvetica, sans-serif;font-size:85%;">Yet one "<a href="http://www.ft.com/cms/s/0/c2588658-00ac-11df-ae8d-00144feabdc0.html">big bidder</a>" still opted to lend the federal government one fifth of that sum, according to bond analysts speaking to the <i style="">Financial Times</i> at least. And overall, the government's creditors offered to lend <st1:state st="on"><st1:place st="on">Washington</st1:place></st1:state> three times the money it sought.<o:p></o:p></span></span></p> <p style="margin: 0in 0in 0pt;" class="MsoNormal"><span style="font-family: Verdana; font-size: 10pt;" lang="EN-GB"><o:p><span style="font-family:Arial, Verdana, Helvetica, sans-serif;font-size:85%;"> </span></o:p></span></p> <span style="font-family: Verdana; font-size: 10pt;" lang="EN-GB"><span style="font-family:Arial, Verdana, Helvetica, sans-serif;font-size:85%;">Now, if the Treasury didn't need that $61,000,000,000 to cover 6.3 days of <a href="http://www.whitehouse.gov/omb/assets/fy2010_new_era/A_New_Era_of_Responsibility2.pdf">spending</a>, the money raised in new bonds between Tuesday and Wednesday this week could cover 12 days of interest due on the outstanding debt, already running above <a href="http://www.usdebtclock.org/">$12.3 trillion</a> and outweighing the market value of <a href="http://www.world-exchanges.org/statistics">every company listed</a> on the New York Stock Exchange.</span></span></blockquote><span style="font-family: Verdana; font-size: 10pt;" lang="EN-GB"><span style="font-family:Arial, Verdana, Helvetica, sans-serif;font-size:85%;"></span></span>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-48384523811171571442010-01-15T15:22:00.001-08:002010-01-15T15:22:34.038-08:00<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://static.seekingalpha.com/uploads/2010/1/11/saupload_job_growth_smalll.png"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 228px; height: 404px;" src="http://static.seekingalpha.com/uploads/2010/1/11/saupload_job_growth_smalll.png" alt="" border="0" /></a>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-65148231365285548152010-01-15T15:19:00.000-08:002010-01-15T15:21:22.235-08:00High U.S. debt means slower growth, history suggests<p>From <a href="http://www.kansascity.com/444/story/1675905.html">Kansascity.com</a><br /></p><p></p><blockquote><p>A new report that reviewed 200 years of economic data from 44 nations has reached an ominous conclusion for the world's largest economy: Almost without exception, countries that are as highly indebted as the United States is today grow at sub-par rates.</p><p>The report, "Growth in a Time of Debt," was written by two respected academic researchers who recently published a thick book on eight centuries of economic crises.</p></blockquote><p></p>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-91177447584654334062010-01-15T15:17:00.000-08:002010-01-15T15:19:38.847-08:00There's never been an example when the end result of socialism was not inflationFrom <a href="http://www.marketoracle.co.uk/Article16521.html">Marketoracle.co.uk</a><br /><br /><blockquote>HR: First, I'm not assuming that reversing this momentum is impossible; I'm just saying it's unlikely, and historically once you start building momentum of spending money and paying people to join government programs and get all kinds of gifts from Santa Claus in Washington, it is unlikely to be reversed. As a financial advisor, my job is to help my constituents make money, and my constituents are not on Wall Street or Pennsylvania Avenue. They're on Main Street. And so my job is to help them figure out what to do with their money in these difficult times. Because I am an optimist, I am convinced that no matter how bad things look, some opportunities are out there somewhere. There's a silver lining in all these clouds.<br /> <br />I know I can't tell the government what to do, even if we changed the administration in the next elections. But in the meantime I can help people know what to do with their resources so that they will suffer the least damage or even prosper and make a lot of money from the environment around us by becoming mavericks. A maverick is a bovine that's left the herd and is probably lonely out there by himself for a while, but the herd will be turned to hamburger, and the maverick will make big money if he knows what to do.<br /> <br />TGR: Let's talk a little bit about knowing what to do and some of your advice. In How to Prosper in the Age of Obamanomics, your recently published book, you are pretty enthusiastic for gold as a hedge against the devaluing U.S. dollar.<br /> <br />HR: Will Rogers said, "Invest in inflation; it's the only thing that's going up." As we move into an inflationary socialist environment, bear in mind that there's never been an example when the end result of socialism was not inflation. I remember being in Russia during the Gorbachev years, when using price controls to try to stamp out inflation merely created shortages. We were on a bus going to a museum, and all of a sudden we had to stop because people were blocking the road, rushing across the street. A rumor was out that a store had some goods, and everybody was carrying an empty gunny sack. They didn't know what they might find, but they wanted it. They knew that they could use it or trade it or sell it.</blockquote>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-7969677724458692262010-01-07T08:49:00.000-08:002010-01-07T08:52:18.379-08:00National Debt Could Bring Social Collapse<span>From <a href="http://thebulletin.us/articles/2010/01/05/commentary/op-eds/doc4b42f62b96552406715314.txt">Thebulletin.us</a><br /><br /></span><blockquote><span>“What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom.” – Adam Smith, “The Wealth Of Nations,” 1776.<br /><br /></span><span>So – who pays for it all? Who provides the blank check? The producers, who else? Money does not grow on trees, despite what our “leaders” seem to think – if they think at all. And don’t kid yourself about how it’s only the “rich” who will pay for this: there simply aren’t enough rich people in this country to fund a $14 trillion bill.<br /><br />With a current population of 308 million, the national debt now exceeds $40,000 per capita; when the debt ceiling gets raised again in the next couple of months, that figure will jump to over $45,000 for every man, woman and child in America.<br /><br />This, I submit, is an absolute looting spree, happening right before our eyes – and, as such, it constitutes the hugest heist in all of human history. It is nothing less than an irrational, amoral, legalized, politically-motivated plundering of the productive assets of the United States, with no thought or reason given to the consequences, of which there can only be one: total, terminal economic dissolution and disintegration.<br /><br />And what can we expect from such a collapse? Social catastrophe, martial law and the final destruction of the American Republic. What did Rome get when she fell, devastated by taxes and control? The barbarians and the Dark Ages. What did Germany’s Weimar Republic get when she was shattered by hyperinflation? Adolph Hitler and the Nazis.</span></blockquote>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-15808227768515037092010-01-07T08:44:00.000-08:002010-01-07T08:46:03.769-08:00Promise to Trim Deficit Is Growing Harder to KeepFrom <a href="http://www.nytimes.com/2010/01/06/us/politics/06budget.html">Nytimes.com</a><br /><br /><a href="http://topics.nytimes.com/top/reference/timestopics/people/o/barack_obama/index.html?inline=nyt-per" title="More articles about Barack Obama."></a><blockquote><a href="http://topics.nytimes.com/top/reference/timestopics/people/o/barack_obama/index.html?inline=nyt-per" title="More articles about Barack Obama.">President Obama</a> is making final decisions on his budget for next year and is still promising to outline a path to substantially lower federal deficits. But on nearly every front, that goal has gotten harder since his first budget a year ago.<br /><p>A deeper <a href="http://topics.nytimes.com/top/reference/timestopics/subjects/r/recession_and_depression/index.html?inline=nyt-classifier" title="More articles about the recession.">recession</a> and slower recovery than the administration initially forecast have increased the tab for economic stimulus measures beyond the original $787 billion package, adding hundreds of billions of dollars for programs like unemployment relief and tax credits for homebuyers.</p><p>The savings Mr. Obama once projected from winding down the war in Iraq are being eroded by a bigger buildup in Afghanistan than he had initially contemplated. Congress has rejected or ignored his proposals to raise revenues by changing tax rules for multinational corporations and capping deductions by wealthy individuals; for Mr. Obama to reprise those proposals could raise questions about the credibility of the numbers in his budget. </p></blockquote><p></p>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-21849751398890204872010-01-07T07:55:00.001-08:002010-01-07T07:56:20.395-08:00<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://media.eyeblast.org/newsbusters/static/2010/01/entitlements_graph.jpg"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 379px; height: 325px;" src="http://media.eyeblast.org/newsbusters/static/2010/01/entitlements_graph.jpg" alt="" border="0" /></a>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0tag:blogger.com,1999:blog-161145023474116478.post-36590055684177659492010-01-04T11:25:00.000-08:002010-01-04T11:26:51.105-08:00U.S. Nears the PrecipiceFrom <a href="http://online.wsj.com/article/SB126255761275914079.html?mod=googlenews_wsj">Online.wsj.com</a><br /><br /><blockquote>Economists have long fretted about how an aging population and growing health-care costs will cause the U.S. budget deficit and public debt to balloon -- an outcome that could wreak financial havoc by undermining confidence in the U.S. dollar.</blockquote>kiehackerhttp://www.blogger.com/profile/15404788416371230167noreply@blogger.com0