Posts Tagged ‘debt-to-GDP’

Chairman Of Joint Chiefs Of Staff Points Out Obama Is Greatest Threat To Our National Security

July 3, 2010

Chairman of the Joint Chiefs of Staff Admiral Mike Mullen says that Barrack Hussein is the greatest threat to our national security without naming any names.

Admiral Mullen lays it out:

Pentagon leaders, the military services and defense contractors must work together to cut bureaucratic bloat and unnecessary programs, the chairman of the Joint Chiefs of Staff said Thursday.

Adm. Mike Mullen also renewed his warning that the nation’s debt is the biggest threat to U.S. national security.

“I was shown the figures the other day by the comptroller of the Pentagon that said that the interest on our debt is $571 billion in 2012,” Mullen said at a breakfast hosted by The Hill. “That is, noticeably, about the size of the defense budget. It is not sustainable.”

Obama’s debt spending terrorism, in one scary picture:

Facts from the Wall Street Journal:

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.

Mr. Obama’s spending plan approved by Congress last February calls for doubling the national debt in five years and nearly tripling it in 10.

It’s not a distant crisis.  It is a crisis right now.  Today.

From The Hill:

The national debt will reach 62 percent of gross domestic product (GDP) by the end of this year, the nonpartisan Congressional Budget Office (CBO) said Wednesday.

The budget office said the debt will reach its highest percentage of GDP since the end of World War II. The jump is driven by lower tax revenues and higher federal spending in the recent recession.

But that’s nothing.  Wait until you see the trick Obama has planned for us in 2012.

From Bloomberg:

President Barack Obama is poised to increase the U.S. debt to a level that exceeds the value of the nation’s annual economic output, a step toward what Bill Gross called a “debt super cycle.”

The CHART OF THE DAY tracks U.S. gross domestic product and the government’s total debt, which rose past $13 trillion for the first time this month. The amount owed will surpass GDP in 2012, based on forecasts by the International Monetary Fund.

Wait for it.  Wait for it.  How much was debt-to-GDP under Dubya in 2008?  39.7%.  Bad, yes.  Unless you compare it to what Obama has done.  Bush raised it by about five percentage points during his eight-year term from where Bill Clinton – who was blessed with a Republican Congress – had left it (at about 35%).  And what has Obama done?  Obama will increase it by an insane 55% over what Bush left in just two years!!! And that increase is shooting straight up like a rocket ship.

Some ignoramuses (i.e., liberals) will see the statement that our debt level was even higher just immediately after World War II, and foolishly conclude that we beat it before, so we can beat the crisis again.  If that has even once occurred to you, please read this article.  A lot of things are different since the end of WWII, including the way we calculated our debt, and the fact that we actually saved money and manufactured things back in those days.

We are so screwed.

This nation is now facing its greatest threat to its national security.  It wasn’t Nazism, and it wasn’t the Cold War.  It isn’t terrorism.  It is Barack Hussein Obama, who is imploding the nation from within.

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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.