U.S. Debt Just Grew by $11 Trillion - Bloomberg: Does the national debt threaten the recovery?
Heisenberg
2012/08/09 14:40:52
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BLOOMBERG.COM reports:
Republicans and Democrats spent last summer battling how best to save $2.1 trillion over the next decade. They are spending this summer battling how best to not save $2.1 trillion over the next decade.In the course of that year, the U.S. government’s fiscal gap -- the true measure of the nation’sindebtedness -- rose by $11 trillion.
The fiscal gap is the present value difference between projected future spending and revenue. It captures all government liabilities, whether they are official obligations to service Treasury bonds or unofficial commitments, such as paying for food stamps or buying drones.
Read More: http://www.bloomberg.com/news/2012-08-08/blink-u-s...
Top Opinion
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Matt 2012/08/09 14:48:47
The reason for this is that there aren't enough legitimate buyers of US Treasury debt (Bonds and Bills) to finance all the spending. So the Federal Reserve (the "Fed") steps in and buys what the few real buyers do not. They get the "money" for this by making it up out of thin air. Now the US Treasury has the new money from the Fed, which it spends into the economy.
The flood of dollars into the economy causes inflation. There are a few technicalities by which inflation is kept somewhat under control, but the real amount of inflation is higher than officially reported.
Now, since the Fed is making it look like there's high demand for Treasury debt, it doesn't have to be issued at the higher interest rate that would be needed to attract more real buyers. This one way the Fed keeps rates artificially low--so low, in fact, that it doesn't even cover the devaluation that their own money printing is causing!
Back to the point: Eventually, there will be no market for Treasury debt except the Fed itself. No one else will touch it at such low rates because inflation makes the real rate so obviously negative. At that point, inflation itself will be financing the ...
The reason for this is that there aren't enough legitimate buyers of US Treasury debt (Bonds and Bills) to finance all the spending. So the Federal Reserve (the "Fed") steps in and buys what the few real buyers do not. They get the "money" for this by making it up out of thin air. Now the US Treasury has the new money from the Fed, which it spends into the economy.
The flood of dollars into the economy causes inflation. There are a few technicalities by which inflation is kept somewhat under control, but the real amount of inflation is higher than officially reported.
Now, since the Fed is making it look like there's high demand for Treasury debt, it doesn't have to be issued at the higher interest rate that would be needed to attract more real buyers. This one way the Fed keeps rates artificially low--so low, in fact, that it doesn't even cover the devaluation that their own money printing is causing!
Back to the point: Eventually, there will be no market for Treasury debt except the Fed itself. No one else will touch it at such low rates because inflation makes the real rate so obviously negative. At that point, inflation itself will be financing the ever-increasing and unpayable debt. Interest rates will have to rise (exacerbating the debt maintenance problem), and/or some of the debt has to be officially defaulted on (a.k.a. liquidated).
If we weren't spending so fast, and compounding the debt so viciously, the Fed and government might get away with inflating their way out of it. Effectively, we'd all be paying a giant inflation tax for generations until the debt was whittled down. The loss of real money will destroy savings at a rate that will cripple the productive sector, completely destroy the middle class, and the depression will continue until the debt is payed / liquidated and the inflation stops.
But in order for even that to "work," the government has to stop spending and establish a realistic timeline. Far better simply officially to default. The bond-holders get screwed, but since they're already been swindled, there's no helping them anyway. Return to sound, unprintable money so that the government and Fed are precluded from the legalized counterfeiting that's got us into this mess. The government returns to a normal size and is forced to live within it's means. Until the next batch of criminal scum start a fiat-money central banking racket again.
Borrowing money for stimulus programs is exactly opposite of what should be done.
This is NOT about money or welfare - it is about DESTROYING American-style capitalism.
Your masters are setting you up, say it with me:
Bush still had a hand in this one. And his predecessor, and the one before that...
They all stack on each other, all the past influences through to today and nothing is going to change that.
You also have bills that congress passed without regard to the debt too. It's not just a matter of ONE coach at fault, but a whole team. And sorry... in this case, that team does include BOTH republicans and democrats. The only real way to break that rising debt is to get BOTH teams involved then, not biting and bickering for power for themselves.
Point all the fingers you want... while you got one pointed at the other guy you have three pointing right back at yourself. Try starting there instead.
The Market is part of it; there is no way that the IPO's and the margins on Wall Street are accurate...
America is Humpty Dumpty; and we're getting ready to fall ...
All those talking heads that speak of margins and analysis projections and etc.; are putting a red flag in the face of America....we are broke; we are out of money; we can never pay down the debt; let alone pay it off...
Don't believe it.....the Fed knows it too.....
It does look like it. I think both parties are not working well together. I don't think that whether Obama is "democrat" or Romney is "republican" should matter, it should matter are we voting Obama or Romney? It feels like the fight because of the dispute has caused more trouble than any president could deal with.
Indeed, cutting spending now is likely to threaten the recovery. Simple economics shows that you should increase spending to help the economy recover, and you should cut spending when the economy is strong. So the real problem over the years has been that no one will support cuts when the economy is strong.
Greece is a poor example as 90% of their problem seems to be corruption. Until that is addressed, economic measures aren't going to have any effect.
That debt chart below is utter horse manure. We were NOT debt free at the end of WWII. The national debt was a greater percentage of the GDP then than now. Right now, the US is actually one of the most stable economies in the world. We can borrow money at interest rates that range from 0.1% to actual negative numbers. That's right, there are actually people willing to pay us to hold their money.
With a good deal of the US construction industry sitting idle, the so called "conservatives" want to solve the unemployment problem by not borrowing money people will actually pay us to hold for them, and instead laying off even more workers. Instead of putting people to work, the phony conservatives want to give massive tax breaks to the "job creators" who are sitting on 2 trillion dollars right now. Maybe when we run up enough debt through revenue decreases, and these "job creators" have 5 or 10 trillion in their off-shore tax shelters, they will start huge manufacturing operations in the US and build tons of stuff to sell to a bunch of consumer...
That debt chart below is utter horse manure. We were NOT debt free at the end of WWII. The national debt was a greater percentage of the GDP then than now. Right now, the US is actually one of the most stable economies in the world. We can borrow money at interest rates that range from 0.1% to actual negative numbers. That's right, there are actually people willing to pay us to hold their money.
With a good deal of the US construction industry sitting idle, the so called "conservatives" want to solve the unemployment problem by not borrowing money people will actually pay us to hold for them, and instead laying off even more workers. Instead of putting people to work, the phony conservatives want to give massive tax breaks to the "job creators" who are sitting on 2 trillion dollars right now. Maybe when we run up enough debt through revenue decreases, and these "job creators" have 5 or 10 trillion in their off-shore tax shelters, they will start huge manufacturing operations in the US and build tons of stuff to sell to a bunch of consumers you con men have bankrupted.
Horse and sparrow theory economics has never worked. It's been tried over and over. It always fails. Feed rich plutocrats enough beluga caviar and Dom Perignon and what trickles down on the 99% is piss and manure.
These are all the programs that the new Republican House has proposed cutting.
NOTICE S.S AND MILITARY IS NOT ON THIS LIST!
* Corporation for Public Broadcasting Subsidy -- $445 million annual savings.
* Save America's Treasures Program -- $25 million annual savings.
* International Fund for Ireland -- $17 million annual savings.
* Legal Services Corporation -- $420 million annual savings.
* National Endowment for the Arts -- $167.5 million annual savings.
* National Endowment for the Humanities -- $167.5 million annual savings.
* Hope VI Program -- $250 million annual savings.
* Amtrak Subsidies -- $1.565 billion annual savings.
* Eliminate duplicating education programs -- H.R. 2274 (in last Congress), authored by Rep. McKeon, eliminates 68 at a savings of $1.3 billion annually.
* U.S. Trade Development Agency -- $55 million annual savings.
* Woodrow Wilson Center Subsidy -- $20 million annual savings.
* Cut in half funding for congressional printing and binding -- $47 million annual savings.
* John C. Stennis Center Subsidy -- $430,000 annual savings.
* Community Development Fund -- $4.5 billion annual savings.
* Heritage Area Grants and Statutory Aid -- $24 million annual savings.
* Cut Federal Travel Budget in Half -- $7.5 billion a...
These are all the programs that the new Republican House has proposed cutting.
NOTICE S.S AND MILITARY IS NOT ON THIS LIST!
* Corporation for Public Broadcasting Subsidy -- $445 million annual savings.
* Save America's Treasures Program -- $25 million annual savings.
* International Fund for Ireland -- $17 million annual savings.
* Legal Services Corporation -- $420 million annual savings.
* National Endowment for the Arts -- $167.5 million annual savings.
* National Endowment for the Humanities -- $167.5 million annual savings.
* Hope VI Program -- $250 million annual savings.
* Amtrak Subsidies -- $1.565 billion annual savings.
* Eliminate duplicating education programs -- H.R. 2274 (in last Congress), authored by Rep. McKeon, eliminates 68 at a savings of $1.3 billion annually.
* U.S. Trade Development Agency -- $55 million annual savings.
* Woodrow Wilson Center Subsidy -- $20 million annual savings.
* Cut in half funding for congressional printing and binding -- $47 million annual savings.
* John C. Stennis Center Subsidy -- $430,000 annual savings.
* Community Development Fund -- $4.5 billion annual savings.
* Heritage Area Grants and Statutory Aid -- $24 million annual savings.
* Cut Federal Travel Budget in Half -- $7.5 billion annual savings
* Trim Federal Vehicle Budget by 20% -- $600 million annual savings.
* Essential Air Service -- $150 million annual savings.
* Technology Innovation Program -- $70 million annual savings.
* Manufacturing Extension Partnership (MEP) Program -- $125 million annual savings.
* Department of Energy Grants to States for Weatherization -- $530 million annual savings.
* Beach Replenishment -- $95 million annual savings.
* New Starts Transit -- $2 billion annual savings.
* Exchange Programs for Alaska Natives, Native Hawaiians, and Their Historical Trading Partners in Massachusetts -- $9 million annual savings
* Intercity and High Speed Rail Grants -- $2.5 billion annual savings.
* Title X Family Planning -- $318 million annual savings.
* Appalachian Regional Commission -- $76 million annual savings.
* Economic Development Administration -- $293 million annual savings.
* Programs under the National and Community Services Act -- $1.15 billion annual savings.
* Applied Research at Department of Energy -- $1.27 billion annual savings.
* Freedom CAR and Fuel Partnership -- $200 million annual savings.
* Energy Star Program -- $52 million annual savings.
* Economic Assistance to Egypt -- $250 million annually.
* U.S. Agency for International Development -- $1.39 billion annual savings.
* General Assistance to District of Columbia -- $210 million annual savings.
* Subsidy for Washington Metropolitan Area Transit Authority -- $150 million annual savings.
* Presidential Campaign Fund -- $775 million savings over ten years.
* No funding for federal office space acquisition -- $864 million annual savings.
* End prohibitions on competitive sourcing of government services.
* Repeal the Davis-Bacon Act -- More than $1 billion annually.
* IRS Direct Deposit: Require the IRS to deposit fees for some services it offers (such as processing payment plans for taxpayers) to the Treasury, instead of allowing it to remain as part of its budget -- $1.8 billion savings over ten years.
* Require collection of unpaid taxes by federal employees -- $1 billion total savings. WHAT THE HELL IS THISABOUT?
* Prohibit taxpayer funded union activities by federal employees -- $1.2 billion savings over ten years.
* Sell excess federal properties the government does not make use of -- $15 billion total savings.
* Eliminate death gratuity for Members of Congress.WHAT???
* Eliminate Mohair Subsidies -- $1 million annual savings.
* Eliminate taxpayer subsidies to the United Nations Intergovernmental Panel on Climate Change -- $12.5 million annual savings WELL ISN'T THAT SPECIAL
* Eliminate Market Access Program -- $200 million annual savings.
* USDA Sugar Program -- $14 million annual savings.
* Subsidy to Organization for Economic Co-operation and Development (OECD) -- $93 million annual savings.
* Eliminate the National Organic Certification Cost-Share Program -- $56.2 million annual savings.
* Eliminate fund for Obamacare administrative costs -- $900 million savings.
* Ready to Learn TV Program -- $27 million savings.. WHY?????
* HUD Ph.D. Program.
* Deficit Reduction Check-Off Act.
* TOTAL SAVINGS: $2.5 Trillion over Ten Years
My question is, what is all this crap doing in the budget in the first place?
"President Obama’s new budget proposal calls for the repeal of billions of dollars in oil-and-gas industry tax breaks.
The proposal would nix roughly $39 billion worth of tax breaks over a decade..."
Taken from: http://thehill.com/blogs/e2-w...
That's about $4 billion a year! Surely that made your list right?
Greg P.
Not to mention he is blocking drilling for oil. Which would not only lower the cost of gas but provide jobs that would stimulate the economy. His moratorium on Gulf drilling still stands in his usual under-handed way. Publicly, he claims companies are free to drill there, but getting government permits to drill from his administration is almost impossible.
Read more: http://www.ctpost.com/news/ar...
And my next point is they receive enough money in taxes already, use what you have wisely. We the people have to budget according to what we bring in.
I'm also interested in how you justify how companies that make record profits every year need to keep their tax breaks while I don't (unless more rich people get an even bigger cut?)
Greg P.
$1.76 trillion from American taxpayers to pay for Obamacare over 10 years, nearly double the $940 billion forecast when the bill was signed into law (Congressional Budget Office). / $52 billion in new taxes on businesses as employers are forced to provide health insurance. (CBO). / $800,000 fewer U.S. jobs. (CBO). / $47 billion in new taxes on drug companies and medical device makers, costs that surely will be passed down to patients, particularly our senior citizens.
Families earning more than $250,000 a year will see more taxes, as Obamacare adds a new tax to investment income, including capital gains, dividends, rental income and royalties.
Insurance premiums are expected to increase 1.9 percent to 2.3 percent in 2014 and up to 3.7 percent by 2023 because Obamacare adds a premium tax on health insurers offering full coverage.
Greg P.