Daily Digest

Daily Digest - December 14

Monday, December 14, 2009, 11:50 AM
  • Greece defies Europe as EMU crisis turns deadly serious
  • Brave New World
  • Are Americans A Broken People?
  • Financial Reform Bill Authorizes Unlimited Wall Street Bailouts By Government
  • Runaway Spending Raises Debt Ceiling To $14 Trillion
  • House OKs 5,224 Earmarks In Spending Bill Costing $3.9 Billion
  • Private Equity Firm Sues Citigroup For $2 Billion
  • Fed Can Do No More To Cut Unemployment: Greenspan
  • Does Anyone In The Senate Know What's In The Senate Health Bill? (Video)
  • Mortgages Worth More Than Half A Billion Dollars Missing
  • New Standardized Short-Sale Plan Could Help Troubled Homeowners
  • Branded A Cheat
  • The Do-It-Yourself Economy
  • UK Shows How To Destroy A World-Class Industry
  • The Consequences Of The Big Lie
  • Mexico's Drug Cartels Siphon Liquid Gold
  • Monsanto's Secret Business Practices Revealed By AP Investigation

Economy

Greece defies Europe as EMU crisis turns deadly serious (pinecarr)

Euroland's revolt has begun. Greece has become the first country on the distressed fringes of Europe's monetary union to defy Brussels and reject the Dark Age leech-cure of wage deflation.

Brave New World (Quinn, Davos)

Are Americans A Broken People? (Ben Johnson)

Can people become so broken that truths of how they are being screwed do not "set them free" but instead further demoralize them?

Yes. It is called the "abuse syndrome." How do abusive pimps, spouses, bosses, corporations, and governments stay in control? They shove lies, emotional and physical abuses, and injustices in their victims' faces, and when victims are afraid to exit from these relationships, they get weaker. So the abuser then makes their victims eat even more lies, abuses, and injustices, resulting in victims even weaker as they remain in these relationships.

Financial Reform Bill Authorizes Unlimited Wall Street Bailouts By Government (M.W.)

The sales pitch for financial-reform claims it would put a stop to "too big to fail" bailouts for banks. The reality is the opposite. The federal government would instead be granted unlimited authority to spend whatever it takes to prop up the big boys when they get in trouble. Only in the next crisis, Congress won't have to be asked for the money. The financial rescues will be funded by the secretive Federal Reserve, not the Treasury, with money the Fed itself creates.

Runaway Spending Raises Debt Ceiling To $14 Trillion (Video) (M.W.)

The amount of spending going on in Washington is staggering. So much so that it is easy to become numb to another $100 billion here or another $1 trillion there. But even if all of this spending provides a short term boost to our economy, the long term consequences will be disastrous. When will this madness stop?

House OKs 5,224 Earmarks In Spending Bill Costing $3.9 Billion (M.W.)

The House on Thursday approved a spending bill loaded with goodies for the folks back home.The measure brings total earmarks in this year's spending bills to 7,577 at a cost of about $6 billion, according to Taxpayers for Common Sense. "When are we going to say, 'Enough is enough?' " asked House Minority Leader John A. Boehner (R-Ohio), who does not seek earmarks.

Private Equity Firm Sues Citigroup For $2 Billion (M.W.)

A private equity firm that paid billions of dollars for the struggling music company EMI has filed a lawsuit against Citigroup. In a lawsuit filed Friday. Terra Firma said Citigroup falsely claimed there were other bidders for the record company, including the investment firm Cerberus Capital Management, when in reality all other suitors for the company had dropped out. As a result, Terra Firma raised its bid.

Fed Can Do No More To Cut Unemployment: Greenspan (M.W.)

The Federal Reserve has done all it can do to reduce unemployment and needs to worry more about the risk of inflation from the stimulus it poured into the economy, former Fed Chairman Alan Greenspan said on Sunday.

Does Anyone In The Senate Know What's In The Senate Health Bill? (Video) (M.W.)

That question has Senate democrats and top Washington reporters scratching their heads. Bob Schieffer and Mike Allen ask the question on "Washington Unplugged."

Mortgages Worth More Than Half A Billion Dollars Missing (M.W.)

During the lending mania, as Wall Street’s mortgage machinery hummed and the money poured in, millions of loans were bought and sold, zipping across town or around the world. Now that this giant factory is pretty much shuttered, details are emerging about how its assembly lines actually operated. And as a dispute between two European banks and Bank of America indicates, the revelations aren’t pretty.

New Standardized Short-Sale Plan Could Help Troubled Homeowners (M.W.)

The program is an attempt to streamline what has traditionally been a contentious, time-consuming process. A short sale involves a lender or investor agreeing to collect less than the balance owed on a mortgage debt out of the proceeds of a negotiated sale of the property. Often a short sale is the last alternative to foreclosure available to distressed homeowners and banks.

Branded A Cheat (M.W.)

Tiger Woods has been the best-paid athlete in the world for almost a decade, and much of that income is from endorsements; ESPN once estimated that his lifetime earnings could total as much as $6 billion dollars. The fact that a golfer’s marital troubles might affect the bottom line of a multinational is a relatively recent phenomenon, but the importance of endorsements to the sports economy really dates back to the sixties.

The Do-It-Yourself Economy (M.W.)

The “good news” is that the Great Recession is forcing companies to take advantage of the Great Inflection faster than ever, making them more innovative. The bad news is that credit markets and bank lending are still constricted, so many companies can’t fully exploit their productivity gains and spin off the new jobs we desperately need.

UK Shows How To Destroy A World-Class Industry (M.W.)

There are solutions to the looming pensions crisis, both for private and public sector schemes. But in its panic Labour has been reduced to penalizing those who did what its own reforms encouraged.

The Consequences Of The Big Lie (M.W.)

It may be politics as usual to never talk about the budget deficit in honest terms - and never talk about how revenues are cratering across the board for governments. But when you are facing a truly horrific situation and you need everyone on board to make sacrifices, politics as usual is particularly dangerous. Ireland's largest public sector union has called the situation explosive.

Mexico's Drug Cartels Siphon Liquid Gold (M.W.)

Drug traffickers employing high-tech drills, miles of rubber hose and a fleet of stolen tanker trucks have siphoned more than $1 billion worth of oil from Mexico's pipelines over the past two years, in a vast and audacious conspiracy that is bleeding the national treasury.

Monsanto's Secret Business Practices Revealed By AP Investigation (M.W.)

Confidential contracts detailing Monsanto's business practices reveal how the world's biggest seed developer is squeezing competitors, controlling smaller seed companies and protecting its dominance over the multibillion-dollar market for genetically altered crops. At issue is how much power one company can have over the foundation of the world's food supply. Monsanto increased corn seed prices last year by 25%, and soybean seeds by 28%.

20 Comments

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Re: Daily Digest - December 14

"Dec. 14 (Bloomberg) -- Congress gave final approval to a $450 billion spending bill for government agencies providing an average 12 percent budget increase for many programs amid what polls show is mounting public concern over federal deficits. "

"Global food costs jumped 7 percent in November, the most since February 2008, four months before reaching a record, according to the United Nations Food and Agriculture Organization.

Farm prices this year lagged behind copper futures that doubled and oil’s 57 percent increase. A recovery from the worst recession since World War II would spur food demand and boost costs for buyers of commodities including milk processor Dean Foods Co. while increasing the number of hungry people that the UN says now exceeds 1 billion."

"Dec. 14 (Bloomberg) -- New York Governor David Paterson said he is ordering $750 million withheld from aid payments this month to schools, local governments and health insurers to avert a cash squeeze after the Legislature in the third-most populous U.S. state didn’t cut spending as much as he wanted.

Lawmakers’ $2.77 billion plan for reduced outlays and generating additional revenue approved earlier this month isn’t enough to ease the state’s December fiscal bind or close an estimated $3.2 billion deficit for the year ending March 31, Paterson said at a news conference yesterday in New York City.

“Because of the inaction of the Legislature,” the state’s cash “may be temporarily exhausted” leaving it with insufficient resources to pay bills on time, Paterson said. He said he directed the Division of Budget to not provide certifications for payments, following through on a plan he announced Dec. 2. “I won’t let the state run out of money on my watch.”"

.................3A) Here is the latest New York news from The Associated Press

"Gov. David Paterson is ordering that 10 percent of state aid payments to schools and local governments be delayed. He says the state is $1 billion short of its obligations due Tuesday."

................3B) Paterson Delays Payments to Avoid Default

"ALBANY (wned) - Governor Paterson has ordered the state budget office to withhold nearly $750 million in scheduled payments to school districts and local governments.

"This state is projected to be insolvent by the end of the month," said Paterson during his Sunday announcement.

"Because of the certifications that we are making today, that will not happen. I will not let this state run out of money on my watch!"

"New debt will next year reach a "level not seen in the history of the Federal Republic of Germany," the government's draft 2010 budget bill said. "However: In the present situation, there's no reasonable alternative to an expansiv budget and fiscal policy. We will only be able to overcome the crisis sustainably and then return to a fiscal stabile path if we are successful in supporting the still fragile growth dynamic.""

................4A) Germany to Boost 2010 Bond Sales in ‘Worst’ Budget Since WWII

"Dec. 13 (Bloomberg) -- Germany plans to sell a record amount of debt next year as weak tax revenue coupled with rising unemployment costs create what a government official said is the bleakest budget outlook since World War II."

"At this moment, loans are a matter of life and death for the Greek economy," government vice president Theodore Pangalos told Ta Nea daily hours before a scheduled speech by Prime Minister George Papandreou on the country's gaping 300-billion-euro (442-billion-dollar) debt.

"Our debt must be stabilised before it can begin to retreat," Pangalos said, adding: "I've never seen such a situation in my 29 years in parliament."

"France's debt is projected to climb from 77.1 percent of gross domestic product this year to a record 91 percent in 2013, with the budget deficit forecast to come in above 8 percent in both 2009 and 2010."

"Japanese bond bears say the ballooning deficit will hurt returns. The nation’s debt, currently $11.8 trillion and equivalent to about 219 percent of GDP, will approach 250 percent of the economy in 2014, based on figures from the International Monetary Fund in Washington."

"Britain's gathering debt crisis is set to pass another alarming milestone this week when government borrowing smashes the £100billion mark for the first time in a single year."

"DETROIT — For the second time Detroit Public Schools Financial Manager Robert Bobb has threatened to bankrupt the school system.

Bobb wants school teachers to agree to a Termination Incentive Plan (TIP) which says each teacher must loan the district $10,000 a year from pre-tax earnings to help eliminate the schools’ deficit.

DFT President Keith Johnson says if teachers do not agree to the union-generated plan, they face a 10 percent pay cut for five years widening the wage gap between city and suburban teachers. Additionally, teachers may face bankruptcy proceedings that could make a teachers’ contract void. Many teachers have said they believe Bobb is bluffing."

"Calpers is trying to reduce its unfunded liabilities, or the difference between assets and obligations, which were $35 billion before the 24% investment loss last year. Yet many California municipalities are struggling with their own budget pressures and didn't welcome higher contributions."

"The Legislature addressed the issue primarily because of Huntington's worsening financial condition. More than 20 percent, or $8.8 million, of the city's $42 million budget is going to pension costs this year. Under the current funding method, those costs are scheduled to rise to $12.4 million a year by 2015 and not reach their ceiling until they hit approximately $21.2 million in 2023, according to an actuarial report prepared for Huntington earlier this year."

"The Governmental Accounting Standards Board called on public employers in 2004 to calculate and disclose gaps between on-hand assets and non-pension retirement benefits like health coverage that they've promised to workers.

This bid at increased transparency caused major ripples among state, county and local government employers. Federal officials estimated last year that the unfunded liabilities of these "other post-employment benefits," or OPEB, totaled between $600 billion and $1.6 trillion.".....

"It is those provisions, and the debate over whether the state alone should shoulder these costs, that has spurred at least 49 of West Virginia's 55 county school boards to vow to sue state officials.

Richard Olcott, president of the Wood County school board, said its lawyer will send Manchin the required 30-day advance notice of a lawsuit this week. Some of the remaining school boards may join in the meantime, he added.

This threatened action follows the pair of lawsuits filed earlier by each of the state's teachers' unions. Those groups oppose the insurance agency's decision to stop subsidizing retiree health premiums. Agency officials plan to start with July 2010 hires. They defend the move as one way to attack the state's liability, recently estimated at $7.8 billion."

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Re: Daily Digest - December 14

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Re: Daily Digest - December 14

Love the scare tactics for abortion on Brave New World.  How many Hawkins were aborted!  Those pesky women shouldn't have the choice (sarcasm: and I'm a woman)!  A bit of a contradiction.  At an estimated 9 billion people in 2050, something will have to give.  Either we limit population or something will limit it for us.  I prefer to limit it ourselves.

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Re: Daily Digest - December 14

Oops, double post.

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FYI: Ron Paul to co-host on CNBC Squawk Box

Yes, that subject line is not a misprint. If you have a teeeveee, the good doctor will be on CNBC tomorrow morning(Tuesday) from 8-9AM EST as a co-host. I'm a bit surprised they are going to let him on for that long...it must have been all the emails the Ron Paul supporters sent to CNBC...see, grassroots can work!

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Obama Urges Banks To Lend

Obama to banks: ease lending to businesses

And so I urged these institutions here today to go back and take a third and fourth look about how they are operating when it comes to small business and medium-sized business lending," he said.

What is all this political posturing against the banks as of late? I don't know what is worse, the assertion that the banks are on the people's side, or that the politicians are?

 

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Re: Daily Digest - December 14

Excellent: Max Keiser interviews economist Steve Keen

 

Love the cartoon Jkibbe

 

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Re: Daily Digest - December 14
Quote:

What is all this political posturing against the banks as of late? I don't know what is worse, the assertion that the banks are on the people's side, or that the politicians are?

I'm not sure what the game is. Because if the banks wanted to, they could lend, knowing that if they get in trouble, the taxpayer is there to bail them out. Is what is being said in public different from what is playing out behind the scenes? Maybe Obama is "scolding" the banks publicly knowing privately he can't do anything to get them to lend, read: the banks are insolvent.

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Re: Daily Digest - December 14

Dubai debt relief lifts world markets

Abu Dhabi's pledge of almost $11 billion to help neighbouring Dubai meet its short-term financial commitments boosted global share markets overnight.

In the United States, a takeover deal by the oil and gas company Exxon Mobil also generated some positive investor sentiment about a possible increase in merger and acquisition activity.

Exxon said it would buy the natural gas supplier, XTO Energy in an all-stock transaction valued at almost $33 billion, excluding debt.

And Citigroup's plan to repay US Government bailout funds also helped to support the market in New York.

Across the Atlantic, Abu Dhabi's financial lifeline for Dubai sparked a rally in the banking sector, pushing the British market just over 1 per cent higher.

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American debt on Australian MSM

Debt has become America's life blood

By ABC's John Shovelan

The US government's borrowing binge of the past two years, considered unavoidable to save the country's financial system, has provoked a heated debate in the Congress, and in the public, that dealing with the country's budget crisis can no longer be put off.

Decades of living beyond its means has resulted in a federal deficit this year of around 1.5 trillion dollars and a national debt of $US 12 trillion dollars.

To close the gap the US has borrowed or simply printed more money.

In the Congress, neither side has credibility with voters on the issue.

The Republicans were silent during the Bush administration when the financial cost of two wars was kept 'off the books' and huge tax cuts and an expensive medical entitlement programme introduced, also unfunded.

Republicans are now parading as budget hawks, after leaving the country's finances and economy in a deep black hole, a hole the Democrats have jumped in, to only dig deeper.

Over the weekend 60 Democrats in the Senate overcame a Republican filibuster to pass a $1.1 trillion spending measure with 5000 individual pet projects or 'ear marks' attached, at a cost of hundreds of millions of dollars.

Departmental budget increases included are way over the inflation rate with some up by 10 per cent.

Then there is $US200 billion dollars allocated for financial bailouts or TARP (Troubled Asset Relief Programme) that hasn't been needed. The Whitehouse has a proposal that it should go to banks as long as the funds are used for loans to small businesses.

Republicans with their now found voice oppose the plan. Senator John McCain says the money should be used to pay down the deficit. "It was very clear...... if not spent, (it) was supposed to go to deficit reduction."

In an address where he sketched out broad ideas to assist small business President Obama accused the other side of hypocrisy,"...budget-busting tax cuts and spending programs were approved by many of the same people who are now waxing political about fiscal responsibility... It's a sight to see."

At what is normally a very civil event, a meeting last week with Congressional leaders at the Whitehouse had a nastier tone, with the President telling Republicans they "seem to be almost rooting against recovery."

The massive expansion of government spending, its trillion dollar deficits and the scale of the national debt, along with the 'to hell with tomorrow' approach by some in the Congress is scaring many Americans.

A recent poll found 42 per cent thought cutting the deficit in half by the end of the president's first term should be the administration's top priority. It's an argument as old as the Republic itself and dates back to when the muskets were put aside at the end of the war of independence. George Washington had to scrounge money from the French and the Dutch to arm and pay his troops. Foreign debt was crucial to his success.

In 1790 the country's first treasurer Alexander Hamilton, said the $100 million owed at the end of the war was the "price of liberty" and must be repaid in full because the new nation would almost certainly need to borrow again.

But the author of the Declaration of Independence, Thomas Jefferson wanted a total ban on government borrowing.

Future generations he argued would be bonded by the debt. Jefferson lost.

This week the Congress will vote on increasing government borrowing limits so that the US doesn't default. The 'full faith and credit' of the US government that Hamilton fought to establish is at stake.

House Majority Leader, Democrat Steny Hoyer says the government needs Congressional approval to borrow $1.8 trillion more than its current limit to avoid defaulting. He says, "it is not an acceptable alternative for the US to not pay its bills." Raising the debt ceiling bails the government out and allows new debt to pay off old debt.

Every day the US borrows billions of dollars more than it receives in revenues from taxation and Government debt has almost doubled in just the past two years.

Many believe US government debt is on an unsustainable path and defaulting, while still unlikely, is no longer unimaginable.

Should Congress increase the borrowing limit it would lift the ceiling to $US14,000,000,000,000. That's 14 trillion dollars!

Debt has become the nations life blood.

Treasury Bonds, notes and securities, sold out of an office building in Washington keep the US government open for business.

It is not unusual for the Bureau of Public Debt to raise 200 billion dollars in a week.

What is just as remarkable as the ballooning debt is the faith all over the world that the US government 'is good for it.' Investors still have an appetite for US debt and consider US treasuries a safe haven.

The annual cost though according to the administration of servicing the debt will reach $US700 billion by 2019, up $US500 billion on this year. That however is considered conservative by some forecasters who point out the administration's estimates for servicing the debt are based on declining deficits.

They say future deficits will be much higher because the 'perfect storm' of record deficits is coinciding with the first wave of the baby boomers, who are now close to retirement age, and who will trigger an avalanche of new spending on social security and medicare.

History has shown massive debt and exploding interest payments is a sure formula for the downfall of great powers. At West Point military academy two weeks ago President Obama said "Our prosperity provides a foundation for our power. It pays for our military. It underwrites our diplomacy".

He needs to find a credible path for the US, out of its debt fix, to maintain that power.

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Re: Daily Digest - December 14
dcm wrote:

Excellent: Max Keiser interviews economist Steve Keen

I saw this interview a few days back. (the actual Steve Keen interview starts at the 12:30 minute mark).

Steve Keen is the smartest economist on the planet.  I will (and have) bet all my marbles that his forecast is legit.

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Re: Daily Digest - December 14

An article by Sibel Edmonds discussing the 'nuances' of some aspects of government spending:

http://tinyurl.com/yanz6ae

Quote:

The Makings of a Police State – Part IV

Secret reports, Secret budgets, Secret operations, Secret courts … A Secret Government!

The liberties of a people never were, nor ever will be, secure, when the transactions of their rulers may be concealed from them.  — Patrick Henry

As stated by Patrick Henry with conviction and passion, a democratic government will not last if its operations and policies are not visible to its public. The foundation of our democratic republic is supposed to be based on an open and accountable government. Transparency is what enables accountability.

.........................

Quote:

For the fiscal year 2005, based on an official report released by the National Archives, the total security classification cost estimates for Government was $7.7 billion. This figure represents costs provided by 41 executive branch agencies, including the Department of Defense. But it does not include the cost estimates of the CIA, which is classified by the agency. Here is the breakdown:

Personnel Security = $1.15 Billion
Physical Security = $1 Billion
Information Security = $4 Billion

Information Technology = $3.6 Billion
Classification Management =
$310 Million
Declassification
= $57 Million

Professional Education and Training = $219 Million
Security Management and Planning = $1.2 Billion
Unique = $6.6 Million

Total= $7.7 Billion

Based on the consensus among the knowledgeable this was truly a new height for government secrecy spun out of control. But wait, this new record height was short-lived! It climbed much higher very quickly. Here is the major new height for 2007 secrecy as reported by the US Information Security Oversight Office:

The U.S. Information Security

Oversight Office recorded an all-time-high record in the cost of implementing the national security classification system.

The annual report, released Thursday, representing the classification and declassification activity throughout the executive branch, said the cost of national security classifications totaled $9.91 billion in 2007. The total cost was a 4.6 percent increase over 2006 and became the highest total recorded in ISOO’s history.

That’s right. In two years the cost of our government’s classification and its secrecy increased from $7.7 Billion to $9.91 Billion. And, as with the 2005 cost this too does not include the CIA and other classified operations and entities we don’t know about. Just keep in mind all those rendition, detention and torture operations we’ve been engaged in around the globe.

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Re: Daily Digest - December 14
dickey45 wrote:

Love the scare tactics for abortion on Brave New World.  How many Hawkins were aborted!  Those pesky women shouldn't have the choice (sarcasm: and I'm a woman)!  A bit of a contradiction.  At an estimated 9 billion people in 2050, something will have to give.  Either we limit population or something will limit it for us.  I prefer to limit it ourselves.

I get the impression he wants to say that Huxley (and himself?) would like people to restrict their sexual lives, and even suffer if that's what is required to survive... You know, mental power, be virtuous... I'm not a religious person myself, and I don't agree with that, but you know, we all have our beliefs.

Samuel

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American debt on Australian MSM

Debt has become America's life blood

By ABC's John Shovelan

The US government's borrowing binge of the past two years, considered unavoidable to save the country's financial system, has provoked a heated debate in the Congress, and in the public, that dealing with the country's budget crisis can no longer be put off.

Decades of living beyond its means has resulted in a federal deficit this year of around 1.5 trillion dollars and a national debt of $US 12 trillion dollars.

To close the gap the US has borrowed or simply printed more money.

In the Congress, neither side has credibility with voters on the issue.

The Republicans were silent during the Bush administration when the financial cost of two wars was kept 'off the books' and huge tax cuts and an expensive medical entitlement programme introduced, also unfunded.

Republicans are now parading as budget hawks, after leaving the country's finances and economy in a deep black hole, a hole the Democrats have jumped in, to only dig deeper.

Over the weekend 60 Democrats in the Senate overcame a Republican filibuster to pass a $1.1 trillion spending measure with 5000 individual pet projects or 'ear marks' attached, at a cost of hundreds of millions of dollars.

Departmental budget increases included are way over the inflation rate with some up by 10 per cent.

Then there is $US200 billion dollars allocated for financial bailouts or TARP (Troubled Asset Relief Programme) that hasn't been needed. The Whitehouse has a proposal that it should go to banks as long as the funds are used for loans to small businesses.

Republicans with their now found voice oppose the plan. Senator John McCain says the money should be used to pay down the deficit. "It was very clear...... if not spent, (it) was supposed to go to deficit reduction."

In an address where he sketched out broad ideas to assist small business President Obama accused the other side of hypocrisy,"...budget-busting tax cuts and spending programs were approved by many of the same people who are now waxing political about fiscal responsibility... It's a sight to see."

At what is normally a very civil event, a meeting last week with Congressional leaders at the Whitehouse had a nastier tone, with the President telling Republicans they "seem to be almost rooting against recovery."

The massive expansion of government spending, its trillion dollar deficits and the scale of the national debt, along with the 'to hell with tomorrow' approach by some in the Congress is scaring many Americans.

A recent poll found 42 per cent thought cutting the deficit in half by the end of the president's first term should be the administration's top priority. It's an argument as old as the Republic itself and dates back to when the muskets were put aside at the end of the war of independence. George Washington had to scrounge money from the French and the Dutch to arm and pay his troops. Foreign debt was crucial to his success.

In 1790 the country's first treasurer Alexander Hamilton, said the $100 million owed at the end of the war was the "price of liberty" and must be repaid in full because the new nation would almost certainly need to borrow again.

But the author of the Declaration of Independence, Thomas Jefferson wanted a total ban on government borrowing.

Future generations he argued would be bonded by the debt. Jefferson lost.

This week the Congress will vote on increasing government borrowing limits so that the US doesn't default. The 'full faith and credit' of the US government that Hamilton fought to establish is at stake.

House Majority Leader, Democrat Steny Hoyer says the government needs Congressional approval to borrow $1.8 trillion more than its current limit to avoid defaulting. He says, "it is not an acceptable alternative for the US to not pay its bills." Raising the debt ceiling bails the government out and allows new debt to pay off old debt.

Every day the US borrows billions of dollars more than it receives in revenues from taxation and Government debt has almost doubled in just the past two years.

Many believe US government debt is on an unsustainable path and defaulting, while still unlikely, is no longer unimaginable.

Should Congress increase the borrowing limit it would lift the ceiling to $US14,000,000,000,000. That's 14 trillion dollars!

Debt has become the nations life blood.

Treasury Bonds, notes and securities, sold out of an office building in Washington keep the US government open for business.

It is not unusual for the Bureau of Public Debt to raise 200 billion dollars in a week.

What is just as remarkable as the ballooning debt is the faith all over the world that the US government 'is good for it.' Investors still have an appetite for US debt and consider US treasuries a safe haven.

The annual cost though according to the administration of servicing the debt will reach $US700 billion by 2019, up $US500 billion on this year. That however is considered conservative by some forecasters who point out the administration's estimates for servicing the debt are based on declining deficits.

They say future deficits will be much higher because the 'perfect storm' of record deficits is coinciding with the first wave of the baby boomers, who are now close to retirement age, and who will trigger an avalanche of new spending on social security and medicare.

History has shown massive debt and exploding interest payments is a sure formula for the downfall of great powers. At West Point military academy two weeks ago President Obama said "Our prosperity provides a foundation for our power. It pays for our military. It underwrites our diplomacy".

He needs to find a credible path for the US, out of its debt fix, to maintain that power.

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Are Americans a broken people?

Are Americans a broken people?

The article compairs americans to abused spouses.  Powerless. Thats how I feel.  Poweress to stop what is being done to a county "by the people, of the people".  Powerless to stop vested interest from stealing everything that isn't nailed down.  Powerless to stop my government from killing people in my name.  That article was really powerful, if you havent read it please do. One passage jumped out at me, and I re read it several times:

When people get caught up in humiliating abuse syndromes, more truths about their oppressive humiliations don't set them free. What sets them free is morale.

What gives people morale? Encouragement. Small victories. Models of courageous behaviors. And anything that helps them break out of the vicious cycle of pain, shut down, immobilization, shame over immobilization, more pain, and more shut down.

Thats what Chris does.  Moves us to that last stage of accpetance and preparedness.  Then we can take action.  Gives us encouragement and a model of courageous behavior.

Now we have to do the same for others.  1000 Chris Martensons across the country, giving people the morale they need to shrug off their powerlessness. And then they can be a model for others.  It could spread like a virus across the continent.

Become the change you want to see in the world.

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
American debt on Australian MSM

Debt has become America's life blood

By ABC's John Shovelan

The US government's borrowing binge of the past two years, considered unavoidable to save the country's financial system, has provoked a heated debate in the Congress, and in the public, that dealing with the country's budget crisis can no longer be put off.

Decades of living beyond its means has resulted in a federal deficit this year of around 1.5 trillion dollars and a national debt of $US 12 trillion dollars.

To close the gap the US has borrowed or simply printed more money.

In the Congress, neither side has credibility with voters on the issue.

The Republicans were silent during the Bush administration when the financial cost of two wars was kept 'off the books' and huge tax cuts and an expensive medical entitlement programme introduced, also unfunded.

Republicans are now parading as budget hawks, after leaving the country's finances and economy in a deep black hole, a hole the Democrats have jumped in, to only dig deeper.

Over the weekend 60 Democrats in the Senate overcame a Republican filibuster to pass a $1.1 trillion spending measure with 5000 individual pet projects or 'ear marks' attached, at a cost of hundreds of millions of dollars.

Departmental budget increases included are way over the inflation rate with some up by 10 per cent.

Then there is $US200 billion dollars allocated for financial bailouts or TARP (Troubled Asset Relief Programme) that hasn't been needed. The Whitehouse has a proposal that it should go to banks as long as the funds are used for loans to small businesses.

Republicans with their now found voice oppose the plan. Senator John McCain says the money should be used to pay down the deficit. "It was very clear...... if not spent, (it) was supposed to go to deficit reduction."

In an address where he sketched out broad ideas to assist small business President Obama accused the other side of hypocrisy,"...budget-busting tax cuts and spending programs were approved by many of the same people who are now waxing political about fiscal responsibility... It's a sight to see."

At what is normally a very civil event, a meeting last week with Congressional leaders at the Whitehouse had a nastier tone, with the President telling Republicans they "seem to be almost rooting against recovery."

The massive expansion of government spending, its trillion dollar deficits and the scale of the national debt, along with the 'to hell with tomorrow' approach by some in the Congress is scaring many Americans.

A recent poll found 42 per cent thought cutting the deficit in half by the end of the president's first term should be the administration's top priority. It's an argument as old as the Republic itself and dates back to when the muskets were put aside at the end of the war of independence. George Washington had to scrounge money from the French and the Dutch to arm and pay his troops. Foreign debt was crucial to his success.

In 1790 the country's first treasurer Alexander Hamilton, said the $100 million owed at the end of the war was the "price of liberty" and must be repaid in full because the new nation would almost certainly need to borrow again.

But the author of the Declaration of Independence, Thomas Jefferson wanted a total ban on government borrowing.

Future generations he argued would be bonded by the debt. Jefferson lost.

This week the Congress will vote on increasing government borrowing limits so that the US doesn't default. The 'full faith and credit' of the US government that Hamilton fought to establish is at stake.

House Majority Leader, Democrat Steny Hoyer says the government needs Congressional approval to borrow $1.8 trillion more than its current limit to avoid defaulting. He says, "it is not an acceptable alternative for the US to not pay its bills." Raising the debt ceiling bails the government out and allows new debt to pay off old debt.

Every day the US borrows billions of dollars more than it receives in revenues from taxation and Government debt has almost doubled in just the past two years.

Many believe US government debt is on an unsustainable path and defaulting, while still unlikely, is no longer unimaginable.

Should Congress increase the borrowing limit it would lift the ceiling to $US14,000,000,000,000. That's 14 trillion dollars!

Debt has become the nations life blood.

Treasury Bonds, notes and securities, sold out of an office building in Washington keep the US government open for business.

It is not unusual for the Bureau of Public Debt to raise 200 billion dollars in a week.

What is just as remarkable as the ballooning debt is the faith all over the world that the US government 'is good for it.' Investors still have an appetite for US debt and consider US treasuries a safe haven.

The annual cost though according to the administration of servicing the debt will reach $US700 billion by 2019, up $US500 billion on this year. That however is considered conservative by some forecasters who point out the administration's estimates for servicing the debt are based on declining deficits.

They say future deficits will be much higher because the 'perfect storm' of record deficits is coinciding with the first wave of the baby boomers, who are now close to retirement age, and who will trigger an avalanche of new spending on social security and medicare.

History has shown massive debt and exploding interest payments is a sure formula for the downfall of great powers. At West Point military academy two weeks ago President Obama said "Our prosperity provides a foundation for our power. It pays for our military. It underwrites our diplomacy".

He needs to find a credible path for the US, out of its debt fix, to maintain that power.

Gungnir's picture
Gungnir
Status: Platinum Member (Offline)
Joined: Mar 2 2009
Posts: 643
Re: Are Americans a broken people?

Are we a broken people?

I don't know?

Here's what I do know, this country was founded by a small group of men, who were dissatisfied with treatment under the regime of the time. They felt that they had no representation, that they were unfairly treated, and that they were restricted in their "god given rights."

This was in 1776.

It's now 235 years later, and those men left us a legacy, that many people in the United States have forgotten. We The People have the power vested in us to rule this Republic. It was written on the Declaration of Independence, and it was written in the Constitution. I believe perhaps naively that Jefferson, Adams, Washington, Madison, Franklin and the rest have vision and saw that there might come a time when the injustices of British rule were becoming more prevalent in the government of the US. Which is precisely why they wrote the Constitution, now it's time to go back to that old piece of handwritten paper and see we do have the power to change the Government, whether they like it or not, regardless of what they government says, if you employ a maid you don't believe her when she says you can't fire her, so why is the Federal Government any different? If she tells you to pay her more you don't reach for your wallet, if she takes some of your possessions, you don't believe her if she says that they're hers, because she's changing the terms of employment. Not at all you're in control. The Federal Government is exactly the same as a maid, or more aptly a Dog, that should be brought to heel, and reminded just who is the Alpha in the pack.

I think it's time that The Executive Branch, Senators, and Congressmen were reminded that they work for us, not the other way around. I've always believed that if you take an oath, then you should honor it. Do we see the President honoring his oath to uphold and defend the Constitution against all enemies foreign and domestic? Actions speak louder than words, my interpretation is that no the Executive branch has broken that oath already, in only a few short months. What's more, there was a youtube video posted the other day, where a Democratic Congressman was imploring Congress to debate the new proposed troop deployments in Afghanistan, Hello; McFly; these people (however not the Congressman raising the issue) in Congress are the arbiters of whether the United States goes to war, or not. It's not the President's job, and rightly so, it's too much power for one person which is exactly why those small group of men decided that Congress should be the decider, because they'd just finished the first American war ever, and I'm sure that they knew full well the horrors that resulted in, so intended it to be a majority vote of Congress, and Congress also charged to maintain the Armed Forces, and has the power of the purse, and most of them are only in office for two years so you can get them out faster if they're not listening to you.

So in answer I don't think we're broken, I think we've been asleep, and have abstained from our responsibilities of running our country. If we really want to make a change, we need to do it and need to do it now or in the near future, and we can, because the LAW SAYS WE CAN but sometimes we just need to be reminded.

So write to your Congressmen, and your Senators, and remind them they work for you, and if they don't listen then in November vote them out. Or better yet, talk to your friends, your family, express your concerns and get them all to do the same. We talk about how Banking Cartels and Industry and Commerce have a huge influence on Government by Lobbiests. You know if even a quarter of the 308 Million Americans said "Hey we think you're screwing things up worse" that would be possibly the largest Lobby group ever. If we write our representatives and get no traction, but have numbers,we protest (peacefully), we reach out to others who feel similarly regardless of their soapbox and bring them along because it's purely numbers if all of Congress the Senate, and the executive branch got a million dollar kickback from a company, then that could be counteracted by only 103200 people (0.04% of the polulation) refusing to pay $5000 in taxes, we could explain that it's a federal bailout for people who work for a living, without whom the United States would still be a colony.

I likely haven't said anything here that any American doesn't know, but like everything in life, sometimes we forget what we know. Maybe it's time that we began to remember. I don't think that means we're a broken people just human.

 

MarkM's picture
MarkM
Status: Platinum Member (Offline)
Joined: Jul 22 2008
Posts: 849
Re: Are Americans a broken people?

G,

We are not broken.  However, we have been very deceived and redirected, I believe.

As far as making a change, not only does the "law say we can". the Declaration orders us to do so. I say it is high time we began following those orders.

 

"But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, IT IS THEIR DUTY, to throw off such Government, and to provide new Guards for their future security."

 

"I likely haven't said anything here that any American doesn't know,..."

I disagree.  Most don't know (remember) any of the great teachings or sacrifice of our founders, nor the absolute importance of the Constitution.  It is up to those of us that do value this to "re-educate" our fellow citizens. I think(hope) more and more are open to this One of the reasons I appreciate this board so much is the level of awareness of our Constitution and the level of knowledege of that by so many of the contributors here.

 

V's picture
V
Status: Platinum Member (Offline)
Joined: Dec 14 2009
Posts: 849
Are Americans a broken people?

Yes

gregroberts's picture
gregroberts
Status: Diamond Member (Offline)
Joined: Oct 6 2008
Posts: 1024
Re: Daily Digest - December 14

"By 1787, there were two dominant parties in America. Unlike the two dominant parties today, the Federalists and what would later become the Democratic-Republicans of that time really were diametrically opposed on fundamental issues. Led by Alexander Hamilton, the Federalists sought a much more powerful central government with a central bank, a standing army, and an alliance with big business that would control the economy. In opposition to them were Thomas Jefferson, Patrick Henry, and their followers that believed that the central government’s powers should be limited, and that power should be concentrated locally (and mistrusted generally). They opposed a central bank and a standing army and supported a truly free market.

It was not Thomas Jefferson or Patrick Henry that led the effort to call the Constitutional Convention, which neither even attended. It was Hamilton and his Federalists that wanted it. As superbly documented in his book, Hamilton’s Curse, Thomas Dilorenzo reminds us that Hamilton actually wanted even more power for the central government than he eventually got into the Constitution."

"The U.S. Constitution does not embody the American spirit. It is a document that grants power to government. The document that truly embodies the American spirit is the Declaration of Independence, which was written expressly to remove all power from the existing government. If Americans are truly interested in reclaiming their liberty, they should look to this revolutionary document as the source of their inspiration. After such a long train of abuses, it is past time that we instituted new guards for our future security."

http://www.dailypaul.com/node/118874

Interesting in that the writer asserts that the Constitution actually gives the govt too much power

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