National Debt reaches $14.3 Trillion!! Financial Terror

[Guest Human]

Law I will give you credit for being as loyal to your party as I am to my party.

Minus the politics; We can get there.

 

Winning for the sake of winning is pointless. Winning for the country is NOT pointless.

 

I'm not here for winning for the sake of winning.

[Guest Shawn]

I am worried that this country is starting to come off as too protectionist. Leading economist have long feared that a pullout by China and other foreign investors would force the United States to pay higher interest rates on its debt, jeopardizing the fragile economic recovery. The unemployment rate for people over 55 is at 20%. I do know this group votes.

 

http://bulletin.aarp.org/yourmoney/work/articles/jobless_rate_for_older_workers_at_a_record.html

[Luke_Wilbur]

The TreasuryDepartment today released U.S. reserve assets data for the latest week.As indicated in this table, U.S. reserve assets totaled $129,578million as of the end of that week, compared to $130,296 million as ofthe end of the prior week.

 

Is the above equal to $130,296,000,000.00

 

That would be $130 Billion Dollars

 

 

Is that all the reserve we have?

[Guest LAW]

The dollar rose, and Treasury bonds fell, sending their yields higher, after minutes from the Federal Reserve's last meeting on monetary policy revealed several members wanted the Fed to sell assets in the near future. The dollar index (DXY 80.61, +0.23, +0.29%) , which measures the U.S. unit against a basket of six major currencies, briefly spiked to top 80.50 compared with 80.38 ahead of the minutes. Yields on benchmark 10-year Treasurys (UST10Y 3.73, +0.07, +1.86%) rose 7 basis points to 3.736%, compared with 3.728%.

 

http://www.marketwatch.com/story/dollar-yields-gain-as-fed-talks-of-asset-sales-2010-02-17

[Luke_Wilbur]

The following quotes were made on the floor of the United States Senate by Senator Jim Bunning :

 

"It seems to me people have not been listening, particularly the Senator from Illinois. He has been through two of these with the leader. He heard the arguments on both sides. Unfortunately, he has a one-side-only view of this situation. I have offered the same COBRA,flood insurance, unemployment insurance, Satellite Home Viewing Act,highway funding, SBA loans, small business provisions--I have offered to do the same thing for the same amount of time. The only difference I have, and some of my good friends from the other side of the aisle, is that I believe we should pay for it. There is a right over the last 3years of the Democratically controlled Congress. We have run up $5trillion in debt. There has to be a time to stop that." (2/25/10)

 

"Well, we have tried to work this out with the majority,particularly after the pay-go vote last week. When 100 senators are fora bill and we can't find $10 billion to pay for it, there's something the matter, seriously the matter with this body. I've said that last night. I don't want to repeat myself. I have offered several ways to pay for it. If everybody in this chamber -- and there is no senators except me here right now, but there are 100 members of this body --believes as the senator from Illinois does that this is essential and we should pass it, then we should pay for it. There are going to be other bills brought to this floor that are not going to be paid for,and I'm going to object every time they do it. I don't much agree with the Chairman of the Federal Reserve, but it was striking yesterday when he said if at the present level of debt and the present administration's budget is passed, that the debt of the United States will be unsustainable, unsustainable to me means that there is a chance of one of the rating agencies downgrading the rating on our debt. We cannot allow that to happen. Because I have got too many young grandchildren that want America to be the same America that I grew up in. And I'm worried to death that that's not going to be the case."(2/26/10)

 

Edited February 27, 2010 by Luke_Wilbur

[Guest psychodrama]

If Senator Bunning is truly worried about the deficit, he should stop using the Jim Bunning Foundation to shelter the money he makes from baseball memorabilia.

[Guest Desert Rat]

This is really steaming me. Bunning is going to cost the GOP the 2010 election.

[Guest CBO]

In 2010, under an assumption that no legislative changes occur, CBO estimates that federal spending will total $3.5 trillion and revenues will total $2.2 trillion. The resulting deficit of about $1.3 trillion would be just $65 billion less than last year’s shortfall and more than three times the size of the deficit recorded in 2008. Total outlays are projected to increase by just $5 billion, while revenues are projected to rise by $70 billion. The deficit for this year is on track to be about as large as last year’s because an expected decline in federal aid to the financial sector will be offset by increases in other outlays, particularly spending from last year’s stimulus legislation and outlays for income support programs, health care programs, Social Security, and net interest. At the same time, revenues are projected to increase only modestly primarily because of the slow pace of economic recovery forecast by CBO and the lagged effect of the recession on tax receipts.

 

In 2011, according to CBO’s baseline projections, the deficit falls to $980 billion, or 6.5 percent of GDP, as the economy improves, certain tax provisions expire as scheduled, and spending related to the economic downturn abates. Revenues are projected to rise by about $500 billion, an increase of 23 percent, while outlays are projected to increase by $126 billion, or 4 percent.

[Guest Representative McIntyre]

If you and I opened our mail today to find a $40,000 bill from the federal government, we would rightly be appalled. However, that is the portion each American would owe today to pay off our nation’s skyrocketing federal debt. This fact alone should send alarm bells throughout the halls of Congress and down Main Street of every American town. A majority of Americans support lowering the federal debt and view our massive deficit as a national priority. It has proven to be a monumentally difficult task, though not insurmountable. We must act now if we are serious about putting our fiscal future on the path to prosperity.

 

It is often said that our children and future generations will pay for the choices we make today, but the truth is that we are incurring debt at such a rapid pace that we will all begin to pay that price sooner than expected. We will pay now as well as later. As public debt continues to grow, including borrowing from foreign nations such as China, interest costs alone are soaring into the stratosphere. According to the Center on Budget and Policy Priorities projections, based on data from the Congressional Budget Office (CBO), the public debt is already more than 60 percent of the Gross Domestic Product (GDP) – almost twice that of just ten short years ago and the highest in more than a half-century. Our economy, military strength, and opportunity for future growth are at risk if this problem is not addressed more quickly, and that is why I have already taken action to start solving this problem today.

 

In recent weeks, I joined fellow members of the fiscally conservative Blue Dog Coalition in releasing a comprehensive plan aimed at cutting spending and balancing the budget. The Blue Dog Blueprint for Fiscal Reform provides a concrete path to reducing the deficit and includes a number of proposals with bipartisan support. First of all, we must adhere to Pay-As-You-Go budget rules to ensure that the government does not spend beyond its means. This was critical to achieving a federal surplus ten years ago, and I am pleased that we have been successful in restoring this important tool to the budget process. This reform plan would also set reasonable limits on discretionary spending, identify and cut programs that are not working, establish performance-based budgeting for federal agencies, and improve transparency and accountability in government spending. Importantly, we should establish a bipartisan fiscal commission to help ensure that the tough decisions are made, and we should adopt a constitutional amendment to require Congress to balance the budget.

 

In addition to supporting the Blue Dog Blueprint, one of the first measures I co-sponsored when the 111th Congress convened earlier last year was legislation which would adopt a Balanced Budget Amendment to the U.S. Constitution. It would simply require the federal government to balance its budget, just like most states are required to do. In fact, the National Association of State Legislatures reports that 49 of 50 states have some form of balanced budget requirement, and North Carolina’s is one of the most stringent. I have also co-sponsored the Secure America’s Future Economy (SAFE) Commission Act which would set a timeline for Congress to act on the nation’s long-term financial crisis. It would establish a 16-member Commission to help address deficit spending and the implications of foreign ownership of American debt, and it would revise the budget process to give greater consideration to long-term fiscal matters. The work produced by this Commission would be an important step in the process of restoring fiscal discipline, and I am hopeful that support for this will continue to grow.

 

Over my strong objection, the federal debt ceiling was recently raised and now stands at an astonishing $14.3 trillion dollars – an increase of approximately $6,000 more for every man, woman and child in America. Even though the Pay-As-You-Go legislation, which I have supported strongly in the past, was included in this measure, I voted against it because it increased our ability to borrow even more at a time when we should be seeking ways to control the excessive spending. Putting off the hard choices to a later date is not a solution nor is it a strategy for re-building our fiscal strength. It will take serious, bipartisan reforms to put us on a path to stem the flow of red ink. Let’s join together and take action now!

[Guest Fedup]

Ron Paul, Jim Rogers, Gerald Celente and Peter Schiff are forecasting the end of the Recession... The beginning of the 2nd Great Depression!

 

Here are the reasons why...

 

* We're about to see the Largest Bulk, of the "option arm-risky Loans" written by banks, Re-adjust from a Fixed-- "Teaser-rate" to a Variable rate. Home owners will go from a 4.25-4.5% interest rate, to 8-10% (Libor rates). People will No longer be able to afford their mortgage payments! Foreclosures Will Skyrocket!.. Banks will Not have equity (payments) coming in...They're going to Fail!

 

* The Banking system is Under water; according to the FDIC, the number of "at risk" banks, have grown to Record Highs!... Every week 2-7 Banks Fail! .... Banking Holiday??

 

* Unemployment is rising; many prominent economist believe Real unemployment is closer to 16%...CAP & Trade and NAFTA are....Killing our Economy along with Any possible recovery.

 

* Housing is being artificially kept from crashing by Banks, whom are holding onto foreclosed properties. Banks are Only releasing a small amount of inventory.. They don't want to Flood the regional market with excess inventory.. Hence; Crashing Prices even further! Nevertheless, foreclosures are rising ...They will have to release inventory at one point!

 

* The FEDS continue to bailout banks by Buying "Toxic" Mortgage Backed Security, for both residential & commercial loans...The next shoe to drop.

[Guest Larry]

The vast majority say it’s simply too late to avoid a major bond market crash and interest rate explosion. They’re predicting that foreigners will soon stop buying U.S. debt ... that America’s credit rating will be slashed ... that investors will dump Treasuries en masse ... and even that China, India and OPEC could refuse to accept U.S. dollars in payment for trade.

[Guest LAW]

Remarks by the President in Meeting with Bipartisan Leaders of Congress

 

One that was prominent was the issue of how we deal with debt and deficits. And there were actually some very constructive conversations around the table about ways that we could start making significant progress, not necessarily even waiting for the Financial Commission on some steps. For example, I’ve already called for a three-year freeze on discretionary spending. There was a good conversation among the leadership in terms of how we adhere to that number. And there were some other creative suggestions both from Republican and Democrats about further progress that we could make on that front.

[Guest LAW]

Chairman Ben S. Bernanke

Economic and financial conditions and the federal budget

Before the Committee on the Budget, U.S. House of Representatives, Washington, D.C.

June 9, 2010

 

Chairman Spratt, Ranking Member Ryan, and other members of the Committee, I am pleased to have this opportunity to offer my views on current economic and financial conditions and on issues pertaining to the federal budget.

 

The Economic Outlook

 

The recovery in economic activity that began in the second half of last year has continued at a moderate pace so far this year. Moreover, the economy--supported by stimulative monetary policy and the concerted efforts of policymakers to stabilize the financial system--appears to be on track to continue to expand through this year and next. The latest economic projections of Federal Reserve Governors and Reserve Bank presidents, which were made near the end of April, anticipate that real gross domestic product (GDP) will grow in the neighborhood of 3-1/2 percent over the course of 2010 as a whole and at a somewhat faster pace next year. This pace of growth, were it to be realized, would probably be associated with only a slow reduction in the unemployment rate over time. In this environment, inflation is likely to remain subdued.

 

Although the support to economic growth from fiscal policy is likely to diminish in the coming year, the incoming data suggest that gains in private final demand will sustain the recovery in economic activity. Real consumer spending has risen at an annual rate of nearly 3-1/2 percent so far this year, with particular strength in the highly cyclical category of durable goods. Consumer spending is likely to increase at a moderate pace going forward, supported by a gradual pickup in employment and income, greater consumer confidence, and some improvement in credit conditions.

 

In the business sector, real outlays for equipment and software posted another solid gain in the first quarter, and the increases were more broadly based than in late 2009; the available indicators point to continued strength in the second quarter. Looking forward, investment in new equipment and software is expected to be supported by healthy corporate balance sheets, relatively low costs of financing of new projects, increased confidence in the durability of the recovery, and the need of many businesses to replace aging equipment and expand capacity as sales prospects brighten. More generally, U.S. manufacturing output, which has benefited from strong export demand, rose at an annual rate of 9 percent over the first four months of the year.

 

At the same time, significant restraints on the pace of the recovery remain. In the housing market, sales and construction have been temporarily boosted lately by the homebuyer tax credit. But looking through these temporary movements, underlying housing activity appears to have firmed only a little since mid-2009, with activity being weighed down, in part, by a large inventory of distressed or vacant existing houses and by the difficulties of many builders in obtaining credit. Spending on nonresidential buildings also is being held back by high vacancy rates, low property prices, and strained credit conditions. Meanwhile, pressures on state and local budgets, though tempered somewhat by ongoing federal support, have led these governments to make further cuts in employment and construction spending.

 

As you know, the labor market was hit particularly hard by the recession, but we have begun to see some modest improvement recently in employment, hours of work, and labor income. Payroll employment rose by 431,000 in May, but that figure importantly reflected an increase of 411,000 in hiring for the decennial census. Private payroll employment has risen an average of 140,000 per month for the past three months, and expectations of both businesses and households about hiring prospects have improved since the beginning of the year. In all likelihood, however, a significant amount of time will be required to restore the nearly 8-1/2 million jobs that were lost over 2008 and 2009.

 

On the inflation front, recent data continue to show a subdued rate of increase in consumer prices. For the three months ended in April, the price index for personal consumption expenditures rose at an annual rate of just 1/2 percent, as energy prices declined and the index excluding food and energy rose at an annual rate of about 1 percent. Over the past two years, overall consumer prices have fluctuated in response to large swings in energy and food prices. But aside from these volatile components, a moderation in inflation has been clear and broadly based over this period. To date, long-run inflation expectations have been stable, with most survey-based measures remaining within the narrow ranges that have prevailed for the past few years. Measures based on nominal and indexed Treasury yields have decreased somewhat of late, but at least part of these declines reflect market responses to changes in the financial situation in Europe, to which I now turn.

 

Developments in Europe

 

Since late last year, market concerns have mounted over the ability of Greece and a number of other euro-area countries to manage their sizable budget deficits and high levels of public debt. By early May, financial strains had increased significantly as investors focused on several interrelated issues, including whether the fiscally stronger euro-area governments would provide financial support to the weakest members, the extent to which euro-area growth would be slowed by efforts at fiscal consolidation, and the extent of exposure of major European financial institutions to vulnerable countries.

 

U.S. financial markets have been roiled in recent weeks by these developments, which have triggered a reduction in demand for risky assets: Broad equity market indexes have declined, and implied volatility has risen considerably. Treasury yields have fallen as much as 50 basis points since late April, primarily as a result of safe-haven flows that boosted the demand for Treasury securities. Corporate spreads have widened over the same period, and some issuance of corporate bonds has been postponed, especially by speculative-grade issuers.

 

In response to these concerns, European leaders have put in place a number of strong measures. Countries under stress have committed to address their fiscal problems. A major assistance package has been established jointly by the European Union (EU) and the International Monetary Fund (IMF) for Greece. To backstop near-term financing needs of its members more generally, the EU has established a European Financial Stabilization Mechanism with up to 500 billion euros in funding, which could be used in tandem with significant bilateral support from the IMF. EU leaders are also discussing proposals to tighten surveillance of members' fiscal performance and improve the design of the EU's fiscal support mechanisms.

 

In addition, to address strains in European financial markets, the European Central Bank (ECB) has begun purchasing debt securities in markets that it sees as malfunctioning, and has resumed auctions of three- and six-month loans of euros in unlimited quantities to borrowers with appropriate collateral. To help ease strains in U.S. dollar funding markets, the Federal Reserve has reestablished temporary U.S. dollar liquidity swap lines with the ECB and other major central banks. To date, drawings under these swap lines remain quite limited and far below their peaks reached at the height of the financial crisis in late 2008, but they are nevertheless providing an important backstop for the functioning of dollar funding markets. More generally, our ongoing international cooperation sends an important signal to global financial markets that we will take the actions necessary to ensure stability and continued economic recovery.

 

The actions taken by European leaders represent a firm commitment to resolve the prevailing stresses and restore market confidence and stability. If markets continue to stabilize, then the effects of the crisis on economic growth in the United States seem likely to be modest. Although the recent fall in equity prices and weaker economic prospects in Europe will leave some imprint on the U.S. economy, offsetting factors include declines in interest rates on Treasury bonds and home mortgages as well as lower prices for oil and some other globally traded commodities. The Federal Reserve will remain highly attentive to developments abroad and to their potential effects on the U.S. economy.

 

Fiscal Sustainability

 

Ongoing developments in Europe point to the importance of maintaining sound government finances. In many ways, the United States enjoys a uniquely favored position. Our economy is large, diversified, and flexible; our financial markets are deep and liquid; and, as I have mentioned, in the midst of financial turmoil, global investors have viewed Treasury securities as a safe haven. Nevertheless, history makes clear that failure to achieve fiscal sustainability will, over time, sap the nation's economic vitality, reduce our living standards, and greatly increase the risk of economic and financial instability.

Our nation's fiscal position has deteriorated appreciably since the onset of the financial crisis and the recession. The exceptional increase in the deficit has in large part reflected the effects of the weak economy on tax revenues and spending, along with the necessary policy actions taken to ease the recession and steady financial markets. As the economy and financial markets continue to recover, and as the actions taken to provide economic stimulus and promote financial stability are phased out, the budget deficit should narrow over the next few years.

 

Even after economic and financial conditions have returned to normal, however, in the absence of further policy actions, the federal budget appears to be on an unsustainable path. A variety of projections that extrapolate current policies and make plausible assumptions about the future evolution of the economy show a structural budget gap that is both large relative to the size of the economy and increasing over time.

 

Among the primary forces putting upward pressure on the deficit is the aging of the U.S. population, as the number of persons expected to be working and paying taxes into various programs is rising more slowly than the number of persons projected to receive benefits. Notably, this year about 5 individuals are between the ages of 20 and 64 for each person aged 65 or older. By the time most of the baby boomers have retired in 2030, this ratio is projected to have declined to around 3. In addition, government expenditures on health care for both retirees and non-retirees have continued to rise rapidly as increases in the costs of care have exceeded increases in incomes. To avoid sharp, disruptive shifts in spending programs and tax policies in the future, and to retain the confidence of the public and the markets, we should be planning now how we will meet these looming budgetary challenges.

 

Achieving long-term fiscal sustainability will be difficult. But unless we as a nation make a strong commitment to fiscal responsibility, in the longer run, we will have neither financial stability nor healthy economic growth.

[Guest Buy Gold]

It will be interesting to see how the IMF plans to finance 5 trillion dollars of debt in the next three years. Buy gold.

[Guest Uncommon Wisdom]

The Pentagon budget for 2010 is $693 billion — more than all other discretionary spending programs combined. America spends 44% of the entire world's military budget. Surely, some other countries can pick up the spending for their own defense.

[Guest greenzen]

Empty Store Shelves Coming to America

 

[Guest Ron]

The Treasury Department today released U.S. reserve assets data for the latest week. As indicated in this table, U.S. reserve assets totaled $128,951 million as of the end of that week, compared to $129,137 million as of the end of the prior week.

 

Stay tuned.

[Guest Mitch]

Tax Cuts will increase our debt.

 

White House economist Austan Goolsbee defends the administration's position on expiring Bush-era tax cuts and why President Barack Obama wants higher-income people to pay more. (Sept. 15)

 

[Guest Fedup]

Consumers buying foreign made goods is going to run up our debt.

The government buying foreign made goods is going to run up our debt.

 

It surprises me that no one has figured this out yet.

 

A surplus of exports over imports equals more tax revenues for the government and the value of the dollar goes up.

[Guest Cato]

Just wait until our interest payment on our debt is bigger than our National Defense budget. What will we do.

[Guest ALWAYSRED]

Congressman Jeb Hensarling (TX-05), the second ranking Republican on the House Budget Committee and a member of the National Commission on Fiscal Responsibility and Reform, released the following statement in response to the Treasury Department’s release of the final budget totals for Fiscal Year 2010:“As the federal government officially closes the books on another fiscal year, let’s hope this coming year is better for taxpayers than the one we just finished,” said Congressman Hensarling.

 

The federal government’s fiscal year begins on October 1 and runs through September 30. According to the Treasury Department, FY2010’s deficit was $1.294 trillion and the federal government spent $3.456 trillion. This means that almost 40 cents out of every dollar was borrowed.

 

“For only the second time in American history – the previous year being the first – the federal government ran a $1 trillion-plus deficit. However, the deficit is merely a symptom; the disease is out of control federal spending. Over the past two years, Congressional Democrats have embarked upon an unprecedented spending spree in an attempt to spend, borrow, and bailout our way to economic prosperity. In fact, since President Obama took office, non-defense discretionary spending has increased by 84%, and grown to nearly 25% of the economy – well above the post-World War II historic average of 20%.

 

First, there was the $1.2 trillion failed stimulus bill, then the $410 billion omnibus in 2009, then the $871 billion cap and trade bill that would impose a national energy tax, then the $445.8 billion omnibus in 2010, then the $2.6 trillion health care bill resulting in a government takeover of health care, and then finally a $26 billion bailout for states. All of this spending caused the deficit to balloon to nearly 10% as a share of the economy, a level that greatly exceeds the 3% or less level determined as sustainable by President Obama’s former Director of the Office of Management and Budget, Dr. Peter Orszag.”

 

“Out of control spending is the reason that Representatives Mike Pence, John Campbell and I authored a Spending Limit Amendment to the United States Constitution (H.J. Res. 79), which would limit federal spending to no more than 20% as a share of the economy. We must address the root cause of the problem if we hope to get our fiscal house in order, which I believe we must do. Otherwise, we will be the first generation in American history to leave the next with less freedom, less opportunity, and a lower standard of living.”

 

“Congressional Democrats owed the American people a debate on our nation’s spending priorities. However, instead of an honest debate, they deliberately chose to avoid such a debate so that the American people would not have an opportunity to examine their record. This was truly disappointing because it appears to have been a decision that was motivated by concerns about the next election, not the next generation,” concluded Congressman Hensarling.

 

 

[Guest ALWAYSRED]

Another for you.

 

Senator Judd Gregg (R-NH), ranking member of the Senate Budget Committee, today commented on proposed recommendations of the National Commission on Fiscal Responsibility and Reform, of which he is a member. The Commission’s final recommendations on how to balance the budget by 2015 and significantly improve the nation’s long-term fiscal outlook are due to Congress by December 1.

 

“The proposal that the Co-Chairmen of the Commission have put forward is an aggressive and comprehensive plan for getting federal spending, deficits and the debt under control. I look forward to reviewing it in depth and hopefully improving on it.

 

“It is critical to our nation’s future that we take action that puts the country and our children’s future back on sound financial ground. This will not be the final proposal, but it is a significant step down the path of establishing fiscal responsibility.”

[Guest Nadeam]

Washington, D.C. – Speaker Nancy Pelosi issued the following statement today on the proposal released by the Co-Chairs of the National Commission on Fiscal Responsibility and Reform:

 

“Our nation is facing two challenges: the need to create jobs and address our budget deficit. Any viable proposal from the President’s Fiscal Commission must strengthen our economy, but it must do so in a fair way, focusing on how we can effectively promote economic growth.

 

”This proposal is simply unacceptable. Any final proposal from the Commission should do what is right for our children and grandchildren’s economic security as well as for our nation’s fiscal security, and it must do what is right for our seniors, who are counting on the bedrock promises of Social Security and Medicare. And it must strengthen America's middle class families--under siege for the last decade, and unable to withstand further encroachment on their economic security.”

[Guest Randy]

Looks like the debt is going down. I wonder what changed it?

 

14,083,345,766,082.15

 

http://www.treasurydirect.gov/NP/BPDLogin?application=np

[Guest Scarecrow]

Oil prices were down, but that already has changed. We need to fight the root cause of the problem. Congress is at the mercy of big banks. We borrow money from them to give it to them.

 

http://www.youtube.com/watch?v=swkq2E8mswI