Posts Tagged ‘interest’

Liar-In-Chief Obama Demagogues Congress On Student Loans (Fact: House GOP PASSED Student Loan Interest Rate Fix OVER OBAMA’S VETO THREAT)

June 12, 2012

Meet Barack Obama, the liar in chief, from several days ago:

Obama to UNLV crowd: Student loan legislation a ‘no-brainer’
By Sun Staff (contact)
Published Thursday, June 7, 2012 | 12:15 p.m

President Barack Obama, welcomed to the stage at UNLV’s Cox Pavilion with chants of “four more years,” used his speech today in Las Vegas to push Congress to approve legislation to keep student loan interest rates at their current level and push colleges to keep tuition from rampantly increasing.

Everybody’s got to do their part, colleges, students… and Congress, the president said in his lunch-hour speech that ended about 1:20 p.m.

During the talk, he said Congress must act to keep student loan interest rates at their current level. To neglect to do so, he said, would cost the average student an extra $1,000 to attend college.

“This is a no-brainer,” Obama said, “so, I’m telling Congress, get this done.”

Apparently, it’s either not a “no-brainer” or Obama doesn’t have any brains.  Because what he’s claiming flies in the face of the facts.

When Obama demagogued student loan interest rates and claimed it was a “no-brainer” to fix the issue, he in fact was at that very moment BRAINLESSLY threatening to veto a Republican-passed bill that in fact fixed the student loan issue.

From over two full weeks ago:

GOP ignores veto threat, passes student loan bill
Published April 26, 2012

The GOP-led House passed a bill Friday to keep interest rates on millions of federal student loans from doubling this summer, ignoring a White House veto threat and setting up another likely election-year battle.

The House approved the bill by a 215-195 vote, also amid pressure from conservative groups that essentially said the government cannot afford the $5.9 billion cost right now.

President Obama also wants to keep down the interest rates, but the White House doesn’t agree with House Republicans’ plan to pay the costs, by cutting a preventive health fund created under the president’s health care overhaul law of 2010.

Democrats argued on the House floor the fund mostly benefits women. Republicans call it a loosely controlled slush fund.

Nobody wants to see student loans go up,” House Speaker John Boehner said before the vote. “Now were are going to fight over women’s health. Give me a break. This controversy was created by my colleagues across the aisle for political purposes.”

The White House called the proposed cuts politically motivated and not a serious response to the problems students face.

Despite the bill passing, it will likely go nowhere in the Democrat-controlled Senate. Democrats want to pay for the measure by boosting payroll taxes paid by high-earning owners of some private firms.

Both parties essentially support the basic plan — extending the 3.4 percent rate for one year on the undergraduate Stafford Direct Loans. The rate would revert back to 6.8 percent without intervention.

The GOP’s Student Interest Rate Reduction Act would, more specifically, take money from the health care law’s Prevention and Public Health Fund for prevention, wellness and public-health activities. It is administered by Secretary of Health and Human Services Kathleen Sebelius, who has full discretion on how to spend the money.

Sebelius testified Thursday on Capitol Hill that the GOP plan to strip the fund would “doom future generations to pay higher and higher health bills and get mediocre results.”

Republicans also have called on the president to reimburse taxpayers for this week’s college tour, where he touted his student loan plan.

Boehner said the president’s trip to three big universities in swing states were obvious campaign stops and that his efforts to make the loan rate a campaign issue is “pathetic.” He said it makes the most powerful office in the world look “smaller.”

“The emperor has no clothes,” Boehner, R-Ohio, said.

Republicans have also argued Obama’s economic policies have resulted in roughly 50 percent of recent college graduates in America either unemployed or underemployed — in part because the health care law is making it harder for small businesses to hire new workers.

Boehner’s suggestion that the president reimburse his travel expenses followed a similar letter Wednesday from the Republican National Committee to the Government Accountability Office.

“Throughout his administration, but particularly in recent weeks, President Obama has been passing off campaign travel as ‘official events,’ thereby allowing taxpayers, rather than his campaign, to pay for his reelection efforts,” committee Chairman Reince Priebus wrote.

The White House, though, described the trips as part of Obama’s “official responsibility” to hear from students and discuss how to stop interest rates from doubling in July.

The Associated Press contributed to this report.

Meet the Republican Party – the only people who have actually passed legislation to keep student loans at their present rate.  Democrats have done nothing but slander, lie and threaten to veto that Republican-passed legislation.

There’s only one man who will be completely responsible for the student loan interest rate hiking up: and Barack Hussein Obama is wearing that man’s underwear.  Barack Obama is lying.  As usual.

I hope you kids who voted for Obama can dig deep in your pockets to pay this huge interest rate your party and your messiah are going to force you to pay.  You rancid little punks deserve it.

Meanwhile, this weasel-in-chief who has now ATTENDED MORE FUNDRAISERS THAN THE LAST FIVE PRESIDENTS COMBINED is constantly campaigning at taxpayer expense.

Barack Obama is a liar, pure and simple.  If student loan interest rates go up, it will be because this lying turd demonized and demagogued and lied and slandered on this issue.

Americans Are Frighteningly Underwater Due To The Obama Regime’s Massive Debts

August 13, 2011

I’m not big on libertarians over all (I am a fiscal and moral conservative), but here’s a libertarian who seems to have a detailed and accurate take on fiscal and economic issues.  After looking over a few of his posts, I checked his “about” section – and wasn’t surprised to find out that he’s a professor of finance at a fine university.

Anyway, he caught something about our debt clock that will keep you awake at night if you’re smart enough to worry about impending future reality:

The Two Charts That Scare S&P and The World

The rhetoric in the U.S. from politicians, economists and the media over S&P’s downgrade of the U.S. Treasury debt has gotten vicious with most opining that it was undeserved. True, the U.S. can pay its interest payments for the foreseeable future. But can the U.S. actually pay off the PRINCIPAL? With housing, a borrow can qualify if the lender is satisfied that they are able to meet monthly mortgage payments. But with a mortgage, one of the assumptions made by lenders is that the principal can be paid in full upon sale of the house (the due-on-sale clause). In addition, mortgage debt is amortized so that the principal is gradually paid off.

But with Treasury bonds, the debt is interest-only. And the principal that is owed is $10 trillion to investors (and over $14 trillion to investors and other government entities). Can we pay off the $10 trillion? In theory we could pay it off. But it would be hard work. Take a look at usdebtclock.org. Now look at the bottom of the chart where it shows the taxpayer liability for entitlements: over $1 million per taxpayer!

The line above shows that Assets Per Citizen is just under $250,000 per citizen. Roughly, we have $250,000 per citizen in assets and $1,000,000 per taxpayer in liabilities. Stated differently, we are more underwater than the housing market in Arizona and Nevada.

Now, look at The Federal Government Savings chart (government receipts less government expenditures). Notice any alarming change in government indebtedness starting in 2007 and spiking in 2009 and 2010?

Admit it, wouldn’t YOU be scared about the ability of the U.S. Federal government (or taxpayers) being able to pay the interest AND the principal?

Hell yeah, I’m scared.

I’ve got $250,000 in assets that of course I’ll never be able to profit from, versus a million dollars in debt that I’m actually on the hook for.  And when it all comes crashing down somebody’s going to want their money back – and I don’t got it.

And I’m afraid I won’t have the wheelbarrow full of money I’ll need to buy a loaf of bread, either.

Americans More Pessimistic About US Outlook Than At Any Time Since Start Of Obama’s Failed Presidency

April 22, 2011

As much as the mainstream media propaganda tries to pretend otherwise by restating Obama’s talking points as if they were facts, things are NOT going well for the U.S. economy.

And the American people know it:

Americans hold dim view of U.S. economic outlook: poll
Thu Apr 21, 10:54 pm ET

WASHINGTON (Reuters) – Americans are more pessimistic about the U.S. economic outlook than they have been since the start of the Obama administration and most believe the United States is on the wrong track, according to a New York Times/CBS News poll released on Thursday.

The number of Americans who think the economy is getting worse jumped 13 percentage points in just one month, to 39 percent, the poll suggested.

Just 23 percent said they thought the economy was improving, down 3 percentage points from the previous month.

Seventy percent of respondents said the country was heading in the wrong direction and most think neither President Barack Obama nor Congressional Republicans share their priorities for the country, the poll showed.

The dour mood is dragging down performance ratings for President Barack Obama and both parties in Congress with the 2012 election season already underway, the poll found.

Fifty-seven percent of respondents said they disapprove of Obama’s handling of the economy, while 75 percent said they disapprove of the way Congress is handling its job.

While Washington is consumed with debate over deficit-reduction proposals, Americans seemed uncertain about the impact of cutting the deficit on the U.S. economy.

Some 29 percent of those polled said cutting the deficit would create more jobs, while 29 percent said deficit-cutting would cost jobs and 27 percent said it would have no effect on the employment outlook.

The poll found considerable support for Obama’s proposal to raise taxes on the wealthy — 72 percent of respondents approved of that idea as a way to address the deficit.

Obama’s job approval stood at 46 percent, while 45 percent did not approve of his performance in office.

More than half of poll respondents, 56 percent, said they did not have a favorable view of Republicans in Congress, as opposed to 37 percent who said they did.

The Democratic Party fared somewhat better, with a 49 percent approval rating versus 44 percent disapproval.

The telephone survey of 1,224 adults was conducted Friday through Wednesday and had a margin of sampling error of plus or minus three percentage points.

According to Standard & Poor’s, “we believe the risks from the U.S. financial sector are higher than we considered them to be before 2008.”  Which is to say that all of Obama’s financial fascism has made the American economy more vulnerable to total collapse than it has ever been.

If you saw an Obama election victory after the Republican and Democrat Party national conventions in August of 2008 and abandoned the stock market in favor of gold and silver, you would be closing in on about a 90% profit on the gold, which would pale in comparison to the more than 250% profit you would have made in silver. 

I’ve watched the market go up and down, but the numbers reveal it has clearly generally gone up.  But I’ve also noticed that most of the trades are held for a matter of minutes or even seconds and that the low volume that has characterized the market pretty much mean it’s only major-league institutional investors that are making the lion’s share of the profits.

In the market itself, two things are happening: one is that banks are able to borrow money at nearly a zero percent interest rate and then reinvest it in bonds for a safe and easy profit without those risky and pesky loans to small businesses.  The other thing is that there are virtually zero bankrupties of major business and financial sector entities because they can borrow money at the aforementioned artificially low interest to keep themselves alive no matter “artificial” that life is.  The moment we start to see interest rates go to their natural levels, you are going to see a giant swath of reorganizations (which is a fancy word for bankruptices).  It’s coming.

I’ve also watched as QE2 (that’s Quantitative Easing, the Obama Fed plan to manipulate interest rates by creating bogus money based on the government essentially borrowing from itself) has fed this big player stock market gluttony with artificial money creating artificially low interest rates.  The last time quantitative easing ended, the market lost about 16% of its total value in about two weeks.  QE2 is scheduled to end in June.  You do the predictive math about what’s going to happen in June/July.

I am reminded of a rather chilling 7 minute video about a fictional scenario which is starting to look more and more like a prophecy:

The plot of the highly realistic video is that Obama’s announcment of QE4 is met with the world market finally realizing that Obama is a clueless idiot.  And it proceeds to detail the unravelling of the entire financial system.

We are almost certainly going to see QE3.  The only way we WON’T see QE3 is if the “experts” rename what will be virtually exactly the same thing.  The liberal/progressive/socialist powers that be simply don’t have any other plan.  And whether it’s QE4 or QE5, at some point the world markets will come to the same conclusion that they arrive at in the fictional video above.

Last year, Democrat Congressman Anthony Weiner actually used the power of the government to launch an investigation into Glenn Beck for pushing gold.  Media Matters mocked Glenn Beck, as usual.  A poster calling himself blk-in-alabam wrote on May 19 (8:08 pm ET):

“Beck cult members probably bought more gold today.  He tells they must taste the hair of the dog that bit them to get over the money they have already spent on gold.  Glen Beck tells them to hurry and buy gold before the facist socialist government take away their right to be used and suckered.”

If you were one of the Beck cult members who bought gold, congratulations: you made ($1,503 – $1,192) $311 an ounce – a 26% profit – without even leaving your house.  Not a bad profit for a paranoid cultist.  I wonder how much blk-in-alabam made on his portfolio, assuming he isn’t living in the basement of his mom’s house and “investing” all of his allowance on video games???

Here’s my question: has there been an investigation of Anthony Weiner for demonizing gold???

The American people are totally confused and divided, which is exactly what you would expect from “No, no, no.  Not God bless America.  God DAMN America!”  The other thing you’d expect from God damn America is that wicked and foolish people will continue to make poor choices and poor decisions.

California Bucked Trend, Voted For Democrats – And Now Will Get A Facefull Of Hell

November 20, 2010

California is in a total meltdown.  But don’t worry.  The state elected a governor formerly known as “Moonbeam” to face reality so the residents wouldn’t have to.  It re-elected the most ideological witch (I’m sorry, SENATOR Witch – she worked so darned hard for that title) in the entire US Senate.  And it actually ADDED to the number of Democrats who already had total control of the state.  Oh, and it passed a proposition that will give Democrats even more total control by making the Republican minority totally irrelevant in the budget process.

Which is another way of staying, it’s time for all the rats to jump overboard and start paddling furiously.  Because the Good Ship Lollipop is about to take a trip to Davy Jones’ Locker.  And she aint no submarine:

Panic in the California Municipal Bonds
November 17th, 2010 1:30 pm MT

There is a fund called the PIMCO California Municipal Income Fund II symbol PCK on the New York stock exchange.

In the last few days the fund has been going vertical down.  Investors can’t get rid of this turkey fast enough. (SEE PICTURE TOP LEFT-DOUBLE CLICK ON CHART TO ENLARGE).

“It might be argued that muni markets are merely reflecting similar declines in Treasuries (TLT). Fair enough. Bond holders, though, are probably are more interested in the fact that their bonds have declined rather than why.

Warren Buffett warned back in June on the muni bond market as local and state municipalities struggle to meet their obligations amid declining tax revenues.

There was a time — before the 2008 crash — when triple AAA rated, insured munis were seen as the safest of safe investments. Times have changed though. Only Assured Guarantee (AGO) still insures municipals, but the company has been recently downgraded from AAA to AA. Ambac (ABK) is in bankruptcy. MBIA (MBI) is entangled in litigation and no longer writes new policies. The financial guarantee business today is but a shadow of its past.

Even though defaults, so far, are rare, the Fed’s zero interest rate policy has thrown a cloud of uncertainty over all bond markets. One can’t help but wonder what happens when ZIRP is withdrawn. Declining tax revenues, rating downgrades, loss of insurance and rumors of bailouts all contribute to the uncertainity and suspicion.

It may be wise to lighten up on all medium to long term bonds at this juncture. Greece, Ireland and Portugal may not be as far removed from New York, Illinois, and California as we might wish.” More…

You have got to love the above quote especially when it says that this precipitous drop is no cause for alarm but at the same time it might be a good idea to lighten up. We prefer to say that there is panic in the California bond markets.

Basically what investors are saying is that they want more interest from these bonds because they are not paying enough. When bonds go down interest on the bond goes up. The problem is that California has no money. The more it raises taxes, the worse the economy does and the less revenue there is. Where is the money going to come from to pay more interest?

The answer is that it will not come from anywhere. The bond market knows this and is getting rid of this investment in search of better performance. It could also be argued that the bond market is also giving the newly elected government Jerry Brown and his union supporters a vote of no confidence. The bond markets know that Brown and Company  will not be able to find the money to pay higher bond yields and therefore the value of the bond is greatly diminished.

At least 80% of states are in this mess and Arizona is no exception. Just yesterday a Hispanic man on Access, Arizona’s welfare healthcare system. was denied a liver transplant because the Obamacare health care reform has heaped an extra $1.2 billion shortfall on the state. There was outrage that this man was not able to get his liver. What does this have to do a a collapsing bond market? People still just expect government to pay and pay and pay and that money is unlimited. This collapse of the bond market signals very clearly that the party is over and the money has dried up even though many people expect differently.

Arizona just does not have the means to pay its existing overhead or to raise money through the bond market. The more states raise taxes the less tax revenue comes in because our economy is shrinking. Arizona’s plight is no different than California’s and the illustration of the PCK bond fund collapse reflects clearly that the markets are signaling they have no faith in the states’ abilities to pay their bills.

Someone is probably going to say, “But Arnold Schwarzenegger was a Republican!”

Because everyone knows that a guy who is pro-gay marriage, pro-abortion, pro-embryonic stem cell research, pro-global warming alarmist, pro-radical environmental agenda, pro-illegal immigrant, pro-bailout, and pro-Obama-stimulus, is clearly a “Republican.”

And California decided to teach RINO pseudo-Republicans a lesson by deciding to pass on the successful billionaire chief executive officer of the incredibly successful company and elect Moonbeam instead!!!  Because I don’t want to look at the hand I just pooped in; I want to look at all the wishes in my other hand instead.

California is facing a MASSIVE $25.4 BILLION deficit.  And unlike Barry Hussein, Governor Moonbeam can’t just print more increasingly worthless dollars.

If that isn’t insane enough, California is facing its black hole of debt by digging faster than ever.  As we speak, California is borrowing $40 million PER DAY 24/7 from the federal government (which can print money and devalue the dollar further and further) to pay for jobless benefits.

Because California’s unemployment rate is 12.4%, and, after two years of bennies, liberals have decided that unemployed workers should get a lifetime of unemployment benefits so they never need to worry about finding a job.

ObamaCare Destroying Demand For US Treasury Bills

March 29, 2010

Boy, this ObamaCare deal just keeps looking better and better.

First, we see US corporations and businesses forced to take writedowns to the tune of billions of dollars of profits that would otherwise have gone into getting the economy out of recession and creating jobs.  Why are they losing all this money?  Because they committed the unpardonable sin of trying to give their retirees excellent private health care.  The Democrats – whom we’ve been saying all along want to socialize the health care system – can’t be having that.  So they took away the tax incentives that made providing such benefits worth doing for the companies.

That’s bad.  That’s really bad.  And anyone who is actually paying attention should be coming unglued that our new law of the land health care system is not only going to destroy American jobs, but American employee-based health care, too, all in one fell swoop.

But as it so often has been with Obama, it actually gets even worse:

Sell-off in US Treasuries raises sovereign debt fears
Investors are braced for a further sell-off in US Treasuries after dramatic moves last week raised fears that the surfeit of US government debt is starting to saturate bond markets.

By Ambrose Evans-Pritchard
Published: 9:06PM BST 28 Mar 2010

The yield on 10-year Treasuries – the benchmark price of global capital – surged 30 basis points in just two days last week to over 3.9pc, the highest level since the Lehman crisis. Alan Greenspan, ex-head of the US Federal Reserve, said the abrupt move may be “the canary in the coal mine”, a warning to Washington that it can no longer borrow with impunity. He said there is a “huge overhang of federal debt, which we have never seen before”.

David Rosenberg at Gluskin Sheff said Treasury yields have ratcheted up 90 basis points since December in a “destabilising fashion”, for the wrong reasons. Growth has not been strong enough to revive fears of inflation. Commodity prices peaked in January and US home sales have fallen for the last three months, pointing to a double-dip in the housing market.

Mr Rosenberg said the yield spike recalls the move in the spring of 2007 just as the credit system started to unravel. “The question is how the equity market is going to handle this back-up in rates,” he said.

The trigger for last week’s sell-off was poor demand at Treasury auctions, linked to the passage of the Obama health care reform. Critics say it will add $1 trillion (£670bn) to America’s debt over the next decade, a claim disputed fiercely by Democrats.

It is unclear whether China is selling US Treasuries after cutting its holdings for three months in a row, or what its motive may be. There are concerns that Beijing may be sending a coded message before the US Treasury rules next month on whether China is a “currency manipulator”, though experts say China is clearly still buying dollar assets because it is holding down the yuan against the greenback. Some investors may be selling Treasuries as a precaution against a trade spat.

Looming over everything is the worry that markets will not be able to absorb the glut of US debt as the Fed winds down its policy of bond purchases, starting with an exit from mortgage-backed securities. It currently holds a quarter of the $5 trillion of the MBS market.

The rise in US bond yields has set off mayhem in the 10-year US swaps markets. Spreads turned negative last week, touching the lowest level in 20 years. The effect was to drive credit costs for high-grade companies such as Berkshire Hathaway below that of the US government. This may have been a technical aberration.

Democrats can say whatever the hell they want, but people who AREN’T arrogant, incompetent, ignorant fools understand that ObamaCare is going to be to the US deficit what the HMS Titanic was to the cruise liner industry.

Let’s sum up the above article in bullet points.  Stop me when I get to something that sounds like it ISN’T a complete unmitigated disaster in the making:

  • Investors are braced for a further sell-off in US Treasuries after dramatic moves last week raised fears that the surfeit of US government debt is starting to saturate bond markets
  • The yield on 10-year Treasuries – the benchmark price of global capital – surged 30 basis points in just two days last week to over 3.9pc, the highest level since the Lehman crisis
  • Alan Greenspan, ex-head of the US Federal Reserve, said the abrupt move may be “the canary in the coal mine”
  • there is a “huge overhang of federal debt, which we have never seen before”
  • Treasury yields have ratcheted up 90 basis points since December in a “destabilising fashion”, for the wrong reasons
  • the yield spike recalls the move in the spring of 2007 just as the credit system started to unravel
  • The trigger for last week’s sell-off was poor demand at Treasury auctions, linked to the passage of the Obama health care reform
  • Looming over everything is the worry that markets will not be able to absorb the glut of US debt
  • The rise in US bond yields has set off mayhem in the 10-year US swaps markets
  • Spreads turned negative last week, touching the lowest level in 20 years

I tried to explain this growing economic crisis facing the US last month in an article entitled, “Greek Crisis Coming To Your Neighborhood Soon“:

We’re borrowing huge sums of money at a current rate of about 3% interest.  But as the lenders start getting nervous, they’re going to want to increase that interest.  We are in plenty of trouble paying these trillions of dollars back at 3% – but what happens if the interest increases to 5% or 7% as it could very quickly do?  The costs of paying these loans would rise to catastrophic levels, and we could find ourselves literally bankrupt overnight.

And we’ve just jumped from 3 to 4 percent in a great big hurry.

Like I’ve been saying: ObamaCare will ultimately be the anvil that breaks the camels back.

Democrats are telling you this is all just so good.  It’s good that the Democrats created the most gigantic and sweeping legislation in 60 years on a hard-core partisan vote.  It’s good that said bill was shenaniganized to create the illusion that it was “deficit neutral” while in reality it will cost over $6 trillion dollars.  It’s good that companies are going to lose billions of job-creating dollars as Democrats robbed every money-bag they could to fund their next boondoggle.  It’s good that Obama is sending our deficit into the stratosphere while setting up a banana republic-style debt-to-GDP ratio.  And, of course, it’s good that we’re seeing the value of our national holdings rapidly dissolving away.

You’re not that stupid, are you?

I mean, I have to ask: after all, you DID vote stupid when you elected Obama and loaded Congress with Democrats.

    Greek Crisis Coming To Your Neighborhood Soon

    February 21, 2010

    Let me summarize what is going on: the Western world (and most definitely the United States) is playing the subprime loan game.  We’re not talking about a few schmucks; we’re talking about the whole country.

    We’re borrowing huge sums of money at a current rate of about 3% interest.  But as the lenders start getting nervous, they’re going to want to increase that interest.  We are in plenty of trouble paying these trillions of dollars back at 3% – but what happens if the interest increases to 5% or 7% as it could very quickly do?  The costs of paying these loans would rise to catastrophic levels, and we could find ourselves literally bankrupt overnight.

    That’s what happened to Greece.  And it’s what’s ultimately going to happen to the USA.

    A Greek crisis is coming to America
    By Niall Ferguson
    Published: February 10 2010 20:15

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    The writer is a contributing editor of the FT and author of ‘The Ascent of Money: A Financial History of the World‘

    The United States is on life support, and it won’t be long before the doctor turns off the machine and calls the time of death:

    It is now mathematically impossible for the United States to repay its debts, even if every single penny was seized from every single man, woman, and child, from every single bank, and from every single business.

    This is our future, assuming we can stave ff the fate of Greece:

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

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

    Greece’s budget deficit-to-GDP is an astonishing 12.7%.  And that massive unsustainable spending is the thing that is killing them.  But we shouldn’t laugh: ours is at 11.2%, according to Goldman Sachs:

    We now expect the US budget deficit to rise to $1.64 trillion (11.2% of GDP) in fiscal year (FY) 2010 and to total $10.8 trillion (trn) over the next ten years. This profile is modestly above our early October forecast and well above the administration’s figures.

    Even so, near-term risks lie to the side of a bigger deficit. Tax receipts have started the year in a deep hole and could continue to fall short. And if the economy struggles as the current dose of fiscal stimulus wears off, as we expect, then policymakers are apt to adopt more stimulus than we have assumed.

    The United States is sixth on the list of countries with the highest ratios of budget deficit to GDP.  And the other countries are PIIGS (Portugal, Ireland, Italy, Greece, and Spain).

    About the only thing separating us from the fate of Greece right now is the fact that we can keep printing our own currency until we plunge right off the economic cliff.

    One morning we’re going to wake up and learn that our currency isn’t worth the paper it’s printed on.

    Obama Sends Dalai Lama Out With The Garbage To Appease Chinese Masters

    February 20, 2010

    Remember all those bows Obama gave to every foreign leader he met?  At just about the 1-minute mark in this video, Obama was like a bobble-head doll in Shanghai:

    Well, Obama’s masters told him not to show any love for the Dalai Lama, and Obama sent him packing out the back door:

    Obama sends Dalai Lama Out With the Trash

    I think we can safely say the left has ceded their moral superiority on human rights. Afraid of offending their Chinese baker friends, they block the press from their meeting and then send their holy guest out the side door where the trash is sent.

    Yes.  That is the White House.  That is the White House garbage.  And that is Obama sending the Dalai Lama out the back door to keep China from getting angry and showing Obama who is really boss.

    Hope that door didn’t hit your ass while Obama was throwing you out.

    This picture was almost as pathetic as the image of Tiger Woods rushing his porn star girlfriend out the back door as his wife was coming home.

    Obama screwed the Dalai Lama, but he isn’t the porn star in this sorry situation, Barry Hussein’s treatment of him notwithstanding.

    The U.S. sold Taiwan some weapons, and China showed its disapproval:

    BEIJING (Reuters) – Senior Chinese military officers have proposed that their country boost defense spending, adjust PLA deployments, and possibly sell some U.S. bonds to punish Washington for its latest round of arms sales to Taiwan.

    And then, BOOM!!! China’s gut-punch was more than Obama’s “just words”:

    The government said Tuesday that foreign demand for U.S. Treasury securities fell by the largest amount on record in December with China reducing its holdings by $34.2 billion.

    The reductions in holdings, if they continue, could force the government to make higher interest payments at a time that it is running record federal deficits.

    Interest is more and more of a problem because Obama has spent us more and more into oblivion:

    Consider that from Jan. 20, 2001, to Jan. 20, 2009, the debt held by the public grew $3 trillion under Mr. Bush—to $6.3 trillion from $3.3 trillion at a time when the national economy grew as well.

    By comparison, from the day Mr. Obama took office last year to the end of the current fiscal year, according to the Office of Management and Budget, the debt held by the public will grow by $3.3 trillion. In 20 months, Mr. Obama will add as much debt as Mr. Bush ran up in eight years.

    Thanks to Obama’s trillions in spending, the only thing that keeps the United States from all of a sudden becoming like Greece is low interest rates.   If it cost us more to borrow, Obama’s insane spending will very quickly “come home to roost” as it becomes increasingly difficult just to service our debt (i.e. pay the interest rate).

    Here’s what Real Clear Politics has to say about Greece’s situation (which we’re not far away from):

    The markets, however, are rating Greek bonds as risky bonds. To borrow, Athens must pay more than twice the interest rate Germany pays. Faced with strikes by public employees and students, Athens appears to lack the political will to make the cuts necessary to bring the budget back toward balance.

    As Portugal, Ireland and Spain gaze on, Greece approaches a moment of truth. Should she default, their bonds, too, will plunge in value out of fear of a copycat default, and the interest rate they pay would also rise. They, too, might then take the Argentine road.

    The EU’s crisis would then be like a crisis in the United States should California default on its state bonds and interest rates on other municipal bonds surged to double digits.

    Is there a way out?

    As goes California, so goes the nation.

    We’re a lot closer to total disaster than most people realize.

    Which is why China owns us now.

    You keep bowing and appeasing, Barry Hussein.  It’s not going to do the country any good, but at least it underscores America’s incredibly diminished status under your disaster of a presidency.

    Obama Stimulus Robin Hood In Reverse: Poor Get Poorer

    May 13, 2009

    Remember that woman at one of Obama’s rallies saying Obama was going to pay her mortgage and fill her gas tank?  No, he won’t.

    Remember that woman who beseeched Obama to give her a kitchen? After a momentary freebie, she’s still on the down and outs, too.

    “Little people” believe Obama is the ticket to “finally getting their slice of the pie.”  But that is only because they are naive and frankly ignorant.

    The reality is that Obama will take from the haves and piss it away rather than perform the usual Robin Hood function.  Just like all the liberals promising their liberal utopias before him.  And the poor will actually end up worse off rather than better off as the overall economy shrinks due to Obama’s policies.

    Newsflash: the poor will remain poor under Obama’s stimulus giveaways.

    STIMULUS WATCH: Jobs, but not where needed most

    By MATT APUZZO and BRETT J. BLACKLEDGE, Associated Press Writers

    WASHINGTON – The billions in transportation stimulus dollars that President Barack Obama promoted as a way to create jobs shortchange counties that need the work the most, an Associated Press analysis has found.

    The AP’s review of more than 5,500 planned transportation projects nationwide is the most complete picture available of where states plan to spend the first wave of highway money. It reveals that states are planning to spend 50 percent more per person in areas with the lowest unemployment than in communities with the highest. The Transportation Department said it will attempt to replicate the AP’s analysis as it continues pressing states to dole out money fairly.

    One result among many: Elk County, Pa., isn’t receiving any road money despite its 13.8 percent unemployment rate. Yet the military and college community of Riley County, Kan., with 3.4 percent unemployment, will benefit from about $56 million to build a highway, improve an intersection and restore a historic farmhouse.[...]

    The AP reviewed $18.9 billion in projects. They account for about half of the money set aside for states and local governments to spend on roads, bridges and infrastructure in the stimulus plan.

    The very promise that Obama made, to spend money quickly and create jobs, is locking out many struggling communities needing those jobs.

    The money goes to projects ready to start. But many struggling communities don’t have projects waiting. They couldn’t afford the millions of dollars for preparation and plans that often is required.

    “It’s not fair,” said Martin Schuller, the borough manager in the Elk County seat of Ridgway, who commiserates about the inequity in highway aid with colleagues in nearby towns. “It’s a joke because we’re not going to get it, because we don’t have any projects ready to go.”

    I seem to recall hearing the Republicans – who were completely locked out of the $3.27 trillion Obama stimulus plan – predicting that this spending plan wouldn’t stimulate anything but the size of an already-bloated federal government.  And lo and behold: Obama promised Caterpillar his stimulus would save the day for them, but it hasn’t done squat for them; and state after state is saying the stimulus package hasn’t helped them.  Oh, well: what’s a few trillion dollars wasted?

    Quote: “The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion.”  That’ $42,105 for every single man, woman and child in the U.S.  Where’s your $42,105 slice of the pie?  I know I haven’t seen mine yet.  And I’m not going to hold my breath that I ever will.

    Obama is promising a “tax cut” for 95% of Americans (which actually just means more welfare for the 43.4 percent who already don’t pay any federal income tax at all) at the expense of taxing the bejeezus out of the wealthiest five percent (including a great many small business that employ most of our workers who file as individuals).  But how much is Obama going to actually put in your pockets?  Answer: Nada.  Nothing.  Zilch.  And a lot of poor and middle-class workers are going to wake up very surprised one day as they find out that “taxing the rich” cost them their jobs.

    You’re going to be paying more for your electricity.  A lot more.  In fact, Obama promised that “electricity rates would necessarily skyrocket” under his energy plan.

    You’re going to be paying a lot more for your next car.  Again, a lot more.  As auto analyst Rebecca Lindland put it, “The consumer needs to understand that they will see significant increases in the cost of vehicles.”  As much as $10,000 more, in fact.  You’ve got Obama now.  And soon you’ll have a bus pass to go along with him.

    If you’d like to keep your own health care benefits, you’ll be paying taxes on them under Obama’s new plans.  In a dramatic reversal from his campaign position, Obama is now “open” to taxing health benefits in order to gin up money for his socialized system.

    And you WILL be paying more in taxes, whether you’re smart enough to realize it or not.  The average 30 year old will pay $136,932.75 just for the interest of just Obama’s 2010 budget over the course of his or her working lifetime.  Obama’s massive budgets are stratospheric even in spite of the fact that he keeps lying about it.  Obama’s $3.6 trillion 2009 budget adds more to the debt than all previous presidents – from George Washington to Goerge W. Bush – combined, according to the Wall Street Journal‘s Michael Boskin.  And that was BEFORE Obama raised his current budget deficit by another $89 billion.  That means the budget red ink will top $1.8 trillion – more than FOUR TIMES the record set by Bush last year.  That means the US will borrow nearly 50 cents out of every dollar it spends.

    And you think someone else is going to continue to pay for all of that?  When we could literally confiscate all the wealth of the richest 5% and STILL NOT scratch the surface of all the debt we are accumulating?

    In 2008 we spent $412 billion to service the $11 trillion national debt.  That figure will easily double over the next ten years, dwarfing everything else in the federal budget.  Obama’s spending will add $9.3 trillion to the national debt, nearly doubling it.  Obama’s spending will cause debt to double from 41% of GDP in 2008 to a crushing 82% of GDP in 2019.

    You may be like the women who believed that Obama would pay their mortgages, fill their gas tanks, and give them new kitchens.  But you seriously need to realize something: what Obama is far more likely to give you is food riots by 2012.

    Wanda Sykes: Anything Less Than Blind Devotion To Obama Is Treason

    May 11, 2009

    Barack Obama greeted the White House Press Corespondents by saying, “My name is Barack Obama.  Most of you covered me.  All of you voted for me.”

    I don’t know how funny that was, but it certainly had the virtue of being true.  The media is so completely biased today, and has turned into such a pro-liberal, pro-Obama propaganda operation, that it is positively unreal.

    But it was Wanda Sykes who expressed the unspoken zeitgeist of the mainstream media.

    Youtube link

    Sykes said:

    Rush Limbaugh, one of your big critics, boy, Rush Limbaugh said he hopes this administration fails. So, you’re saying “I hope America fails,” it’s like, I don’t care about people losing their homes, or their jobs, our soldiers in Iraq. He just wants the country to fail. To me, that’s treason. He’s not saying anything differently than what Osama bin Laden is saying. You know, you might want to look into this, Sir, because I think maybe Rush Limbaugh was the 20th hijacker, but he was just so strung out on oxycontin he missed his flight.

    And you’ll notice if you watch the video that Obama clearly laughs at the rabid punchline.

    And then Sykes says:

    Rush Limbaugh, I hope the country fails, I hope his kidneys fail, how ’bout that? Needs a little waterboarding, that’s what he needs.

    And the President of the United States thinks it’s also quite hilarious that one of his fellow citizens’ kidneys fail.  Because that’s just the kind of guy he is, I guess.

    And waterboarding is only torture when it is applied to terrorist murderers who want to kill Americans by the millions.  It is most definitely NOT torture if its done to conservatives.  Obama laughs at the thought of Rush Limbaugh being waterboarded.  But the waterboarding of a terrorist responsible for over three thousand American lives is a proof that we have lost our moral bearings.

    Let me contrast Obama with a President that actually had some class.  Show me footage of George Bush laughing at the idea of a terrible wasting disease befalling, oh, I don’t know, Wanda Sykes.  The fact of the matter is, we used to have a President who was above that kind of rabid and clearly hateful partisanship.

    And its the sheer, total, all-encompassing hypocrisy of the left that will never cease to continue to surprise me.

    These same people who were for that war before they were against it, who literally hoped Bush would fail in Iraq and our troops would lose (recall Harry Reid’s proclamation of surrender when our troops were still fighting for victory: “I believe that this war is lost“), used to call dissent “the highest form of patriotism” when it suited them.

    Dissent has NEVER been “the highest form of patriotism,” of course, and liberals had to butcher Thomas Jefferson the same way they butchered the Constitution to obtain that understanding.  But Democrats had a “standard” that they clung to when it suited them, only to show their hypocrisy by turning on the same standard they had just held.

    Kind of like the war in Iraq itself.  Wanda Sykes speaks of conservatives such as Rush Limbaugh somehow betraying our soldiers in Iraq.  Let’s look at who REALLY undermined and betrayed our soldiers in Iraq.

    This is what these cut-and-run-cowards USED to say before they publicly claimed “this war is lost” while our troops were still in the field fighting to win:

    http://www.truthorfiction.com/rumors/b/bushlied.htm
    http://www.freedomagenda.com/iraq/wmd_quotes.html
    http://www.snopes.com/politics/war/wmdquotes.asp

    These liberals, who backstabbed, undermined, blocked, obstructed, demonized, and demagogued Bush and his agenda at every single turn – including hoping we failed in time of war – now have a frankly terrifying view of loyalty and patriotism.

    If we are against Obama, we are against the country.  Because Barack Hussein Obama is our Fuhrer, and in him does the destiny of the new Reich lay.  He is our Big Brother, and we owe our lives, our fortunes, and our sacred honor not to our principles, but to our messiah.

    You tell me: was that these hypocrite liberals’ view of the Bush presidency during the last eight years?

    Obama is NOT America.  He is NOT our Big Brother, he is NOT our messiah, and he is most certainly not MY Fuhrer.  And I will fight with words, with fists, or even with weapons if anyone tries to take away my right to say otherwise.

    Rush Limbaugh has very patiently explained to some incredibly stupid and immoral people that he hopes Obama fails FOR THE GOOD OF THE COUNTRY.  Obama is a hard core socialist who has already spent more money than every single president from George Washington to George W. Bush COMBINED.  He is imposing a debt upon us that we and our children can never hope to repay.  The average 30 year-old planning to retire at age 70 will have to pay $136,932.75 just for the interest on President Obama’s 2010 budget.  And that doesn’t include the MUCH greater cost of paying for the overal deficit black hole to which Obama has added $12.8 TRILLION.  The interest on the national debt–interest alone–currently amounts to over $800 million a day, and about $300 billion per year.  In ten years we will be paying more than $800 billion a year in interest to finance our debt.

    And we are already at a position that in order to make payments on the debt, we have to borrow more money.  A Washington Post article entitled, “U.S. Debt Set to Soar This Year” points that factoid out:

    But about 40 percent of the debt held by private investors will mature in a year or less, according to Treasury officials. When those loans come due, the Treasury will have to borrow more money to repay them, even as it launches perhaps the most aggressive expansion of U.S. debt in modern history.

    We’re broke, but that doesn’t stop Barack Obama from trying to nationalize another one-sixth of our economy (health care) at the cost of another $634 billion – just for starters.  He wants to nationalize our energy industry.  He wants to nationalize the student loan program.  He’s already nationalized the banks and the auto industry.

    Obama’s spending will go on and on and on.  If all goes well, he will only put us $9.3 trillion in the hole. Even the Congressional Budget Office acknowledges that such reckless spending is totally unsustainable.

    And I’m supposed to be akin to Osama bin Laden for hoping that Barack Hussein fails in his task of bankrupting the country?  Excuse me?

    This was all been predicted before the election by men and women who knew a hell of a lot better than Wanda Sykes.

    In a poll of chief executive officers taken prior to the election, 74 percent of the executives said they feared “that an Obama presidency would be disastrous for the country.”  And some of the CEOs predicted that “some of his programs would bankrupt the country within three years, if implemented.”  And with the Congress in nearly total Democratic control, they ARE being implemented.

    Rush Limbaugh explained what he meant in an address that is worth reading.  He explained why we should ALL hope Obama fails.

    I hope Obama fails – and fails big – and that the people recognize his failure and turn on him before America goes into a hole that it will never be able to claw its way out of.

    And in the meantime, I’ll wear Democrats’ charges of treason as a badge of personal honor.  Being called a “traitor” by Democrats bothers me about as much as it would bother me if a child molester (whom Democrats protect as sacred cows, btw) called me “a bad person.”


    Follow

    Get every new post delivered to your Inbox.

    Join 527 other followers