Posted on 09/23/2009 9:25:00 PM PDT by Nachum
NEW YORK (Reuters) - The U.S. government will have issued $7 trillion in bonds by the time the current fiscal year ends next week, but it expects the debt deluge to stabilize by mid 2010, a Treasury official said on Wednesday.
Though markets and the economy are improving, efforts to provide a firm foundation for recovery will require increases to the U.S. Treasury's conventional bonds going forward, as well as debt securities that are indexed to inflation.
(Excerpt) Read more at finance.yahoo.com ...
The list, ping
Thanks again, Bush/Obama.
This is the same mistake Arnold made here in California, shortly after taking office. Massive bond sales, instead of budget cuts, that will insure debt for many years to come. We’re seeing the result now. It’s like a shot of whiskey to avoid a hangover the morning after.
Some of you may be interested in the following. ...no content allowed here from that site, BTW.
U.S. Debt Crisis May Cause ‘Fall of Rome’ Scenario, Duncan Says
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aJ6jnKWHrQgI
Debt to increase, conservatively, to $21 trillion by 2019...true figure...higher. It always is. Prognosis: essentially infinite borrowing required or default and final devaluation at some point in the next few years.
Dollar only worth 3 per cent of what it was in 1912. It has already crashed..not far to go, now. Dollar grew 11% from the late 1700s to 1912, then the Fed Reserve and fractional reserve banking, itself spinning out of control since the nineties, has resulted in the current debacle.
Here are Denningers hard numbers in a short video:
http://market-ticker.denninger.net/archives/1439-WARNING-Deflationary-Collapse-Dead-Ahead.html
Here’s another link if that one fails later.
http://www.bloomberg.com/apps/news?pid=email_en&sid=aJ6jnKWHrQgI
People must be wondering who can possibly have $7 trillion to lend to the government. No one does. Its brand new money created when the central banks (e.g. Federal Reserve) purchase government bonds by simply creating a book entry in a ledger and thus creating new money. They actually didn’t have anything to lend. But now we owe them trillions + interest. If we are going to create imaginary money, we might as well do it without debt.
Obooboo has been the ego and thief for nine months. By the end of 2010, with Obooboo and his merry band of NeoCom goons printing money to prop up the collapsing commercial real estate market and the bailout, stock market bubble, 7 trillion might seem like chicken feed. Our post American president has a lot of time to destroy us, and he is going to do his best.
A trillion here, a trillion there: before you know it it’s serious money
Great link. Republicans and Democrats have both been guilty over the past 27 years, Balanced Budget Amendment aside. With the porkulus earlier this year, a lot of Republicans added earmarks before voting against it knowing it would pass and their constituents would get money. Those RINOs need to get the boot as much as Chris Dodd and Barney Frank. In fact, RINOs need to go even more so. At least Democrats are honest about their intentions.
3 great quotes from the Bloomberg article:
1 The U.S. has run a current account deficit every year since 1982 except one, with a peak of $788 billion in 2006. Foreign purchases of U.S. debt has propped up the dollar and allowed a credit-fueled spending boom by the nation’s consumers
2 As unemployment remains above 10 percent well into the foreseeable future, it won’t be long before Americans start voting for protectionism
3 Once the U.S. debt burden becomes too large and the government can no longer sell debt to the public the Federal Reserve will likely step in and monetize it, resulting in high levels of inflation
I’d like to get some response to as to the reason for the urgency of the so called “healthcare” becoming law. Could it be that the real reason for the urgency of so called “healthcare” is to use every possible means, future modifications, etc., to funnel money to paying for this above debt and also to simultaneously bail out the collapsing banks and pension bondholders of these banks?
Another quote from the article: “The U.S. has little chance of resolving its deteriorating financial position because the manufacturing industry continues to shrink, leaving the nation with few goods to export, said Duncan, now at Singapore-based Blackhorse Asset Management.”
Rebuilding our manufacturing infrastructure is the key to rebuilding both our economy and the middle class. We cannot continue borrowing billions to pay for imported Chinese manufactured goods we could make at home and foreign oil to fuel our collapsing “service” economy.
Unfortunately our globalist leaders, Republican and Democrat, worship at the altar of “free” trade which means open access to the US market for other nations while they restrict actions of US businesses in the markets. It also means billions of fees from corporations to investment banks as they close US factories to send production and jobs overseas. Plus billions in banking fees trading government and private debt. Wall Street, big business and big government have colluded for two decades to outsource US manufacturing. Short term actions actions to prop up this quarter’s earnings and stock price have decimated once mighty companies and the economy.
We need a new industrial policy for this nation based on free market principles, not government subsidies choosing the winners and losers. A plan to revitalize the US economy would look like this:
1) Eliminate the federal corporate tax on profits earned on goods manufactured in the United States. This would be a powerful economic incentive for entrepreneurs and corporations to produce products in this country instead of outsourcing them to other countries. Investment would flow into creating long term productive assets instead creating speculative financial bubbles.
2) Tort reform, limiting payouts to actual damages and requiring losers of lawsuits to pay the expenses of the winner. Also restrictions on class action lawsuits.
3) Assessing fees on each container of imported products to ensure the price of imported goods in the US market reflects the cost maintaining the infrastructure associated with imports. For example the annual cost of the Coast Guard, Customs Service, Army Corps of Engineers, and other agencies involved in building and maintaining places of entry for imported products and facilitating the import of goods should be determined and allocated as a fee levied on each container brought into the US by air, sea or ground.
4) Restore US sovereignty by withdrawing from the WTO and other world organizations that restrict the ability of the US government to assess fees on imports or regulate the flow of products into the country. Assess a minimum 15% tariff on all products brought into this country as a revenue raising levy. Until the imposition of the income tax in the early 20th Century tariffs were the primary source of revenue for the federal government. Plus they encouraged the development of domestic industries. This minimum tariff can be designated to be used for rebuilding the decaying US transportation infrastructure, a program which will provide real jobs for Americans.
5) Impose reciprocal non-tariff barriers and quotas on each country imposing such restrictions on US goods. If a foreign nation imposes 20% tariffs on imports of US products, or restricts imports of US goods via quotas and non-tariff barriers, those same restrictions will be placed on the imports of products from that country. It isn’t free trade if we open our markets by eliminating quotas and non-tariff barriers while foreign countries impose quotas and other restrictions on the movement of US goods into their markets.
6) Adopt an energy policy that drives to energy independence by releasing restrictions on market forces. Remove restrictions on developing domestic petroleum resources, including drilling and the construction of new refineries and pipelines. We need to reduce imports of petroleum products to improve our balance of payments. Drilling onshore and offshore will create new jobs. At the same time, encourage construction of new nuclear power generating capacity by opening the Yucca Mountain disposal site and fast tracking the licensing of new facilities. Allow the free market to choose what green and alternative energy options merit investment by eliminating government subsidies for energy development.
7) Simplify the US tax code for individuals and corporations. Move to a flat federal corporate tax rate of 15% with no exemptions except the 0% tax levy on profits derived from US manufacturing operations. Permit accelerated depreciation of investments in manufacturing assets used for the production of goods inside the borders of the US.
8) Reduce the regulatory burden on businesses by requiring all regulations to have a “sunset” provision of no more than ten years. Imposition of a new regulation or extension of an old regulation will require a thorough cost benefit analysis showing its positive or negative impact on the economy. In addition, require any new regulation or proposal for extending the life of a regulation, to be posted on the internet for comment at least 180 days prior to enactment as well as a public hearing 30 days prior to enactment.
9) Reform labor laws to eliminate government interference in the labor market. Eliminate all federal regulations mandating the use of union employees for federal projects. Implement a right to work and right to organize law. Employees should have the right to organize but employees should also have the right to work without belonging to a union or paying union dues.
10) Enforce antitrust laws. The economy benefits from a diversity of small suppliers of goods and services as well as retail establishments. The recent financial crisis has demonstrated the unhealthy and undemocratic consequences of the alliance of big government with big businesses having excessive control over markets. When institutions become “too big to fail” they exist due to their influence over government and not to their economic value in a free marketplace.
11) Balance the federal government budget by bringing expenses in line with revenues and begin paying down the national debt. This involves making hard choices that will have consequences for domestic and foreign policy. Just as a family who’s primary breadwinner has lost a job must dramatically adjust its spending priorities the government must live within its means. Reform government as follows.
a) Require the President to submit to Congress each year a “balanced budget” proposal along with his recommended budget. In simple terms, his budget for each department and spending category should provide both his/her recommendation and the amount she/he would spend on that item if the budget were to be balanced in the year.
b) Increase transparency by imposing Sarbanes Oxley reporting rules on the US government. Move all “off budget” items into the budget. Show the total liabilities of the US government by forcing it to disclose obligations to guarantee debts and obligations of persons or entities.
c) Adopt a balanced budget amendment to the Constitution requiring a 3/4 supermajority to engage in deficit spending. If Congress fails to pass a budget by the beginning of the fiscal year, require that any continuing budget resolution force spending of each department to be reduced by 10% from the prior year level with the President authorized to identify and impose the reductions. This requirement will be a strong incentive to Congress to do its job of budgeting and setting spending priorities on schedule.
d) All funded programs must have sunset provisions of no longer than 5 years. Expiring programs must be rejustified and refunded.
e) Institute an immediate 10% across the board reduction in government employees for all departments except active duty and reserve military. In recessionary times businesses cut employment by 10-15% in order to conserve cash and adjust to lower sales volume. This reduction would include congressional and executive branch staffs. It is time for a similar belt tightening to occur with the bloated federal bureaucracy. Give the President and Cabinet secretaries broad discretion to impose the cuts.
f) End foreign aid. End participation in the UN and other organizations that consume tax dollars and do not advance our national interests.
g) Reduce the size and cost of the federal government by returning to the states those government activities not assigned to the federal government in the Constitution. The department of Education should be immediately defunded and disbanded followed by the unwinding of most health, housing, and human services functions.
h) Eliminate all federal mandates for state funding of activities or projects. Also eliminate all federal grants to the states. Let the states determine if the activities should be funded or not.
f) Reinstitute election of US Senators by the state legislatures. This will add to the checks and balances in our system. Plus it will make citizens more aware of the consequence of their state and local elections thereby giving them a greater incentive to be informed and involved at the local level.
g) Restrict the Judiciary’s role to administration of the law. Eliminate the power of judges to legislate from the bench by changing laws or imposing spending requirements on the executive and legislative branches of government.
h) Institute term limits for Congress (6 terms) and the Senate (2 terms) to make the legislative branch more responsive to the people. In addition, impose restrictions on gerrymandering of congressional districts.
i) Reform campaign finance by increasing transparency and eliminating restrictions on donations. Require the names and addresses of any contributor to a campaign, as well as amount contributed, to be posted on the internet within 24 hours of receipt of the donation. Contributions include money as well as the value of goods and services. Ban any contributions by foreigners or foreign entities. Require campaign committee financial transactions to be audited by an independent CPA firm and the results of audits to be posted on the internet. Any funds received from organizations must disclose the name and address of the organization as well as the organization’s source of funds.
j) Reduce our military presence around the globe. We can no longer afford to be the world’s peacekeeper. Let Europe defend Europe, Korea defend Korea, Japan defend Japan. Develop an end game strategy for Iraq and Afghanistan — either define victory and achieve it or withdraw. Our founders warned about the dangers of foreign entanglements. We’ve wasted billions of dollars and countless American lives since WWII trying to impose democracy around the world with limited success. Let other nations deal with their problems and determine how they wish to be governed. Focus our military spending on protecting the homeland (i.e. secure the borders from illegal immigration and drug trafficking), keeping the seas open for trade, and advancing our national interest in the Western Hemisphere.
This nation must take drastic action to repair the economy. We must release the entrepreneurial spirit of the American people by encouraging development of enterprises and manufacturing in this country. We must develop our own energy resources to fuel internal economic development and reduce debt. We must downsize government to balance the budget and reduce its interference in the lives of citizens as well as internal commerce.
The alternative is bankruptcy and deterioration into a third world subsistence economy overseen by a powerful dictatorial government.
I believe they're doing this already - issuing debt on the one hand and then buying it on the other. Treasury/Fed tapdance.
I'm waiting for more info on Fed activity in gold market.
Great ideas! Too bad they make too much sense to be implemented.
Impressive. Did you think this up or are you quoting someone else?
Our barbarian hordes are already inside the gates, just waiting for the day their welfare checks start bouncing.
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