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In an interview with ABC’s George Stephanopoulos on “Good Morning America,” President Obama asserted that “there is no debt crisis in this country” and says he sees “no reason to bargain with Republicans over the budget.” “The amusing little analogies Republicans are making about households having to make cuts when times are tough simply don’t apply to the federal government,” Obama declared. “I’ll grant that debt can be a problem for households having to cope with limited resources. But how is this relevant to the government?” “Let’s assume we were going to pay back what we borrowed,” the President said....

The “Zero Hour” Scenario By Addison Wiggin 03/08/13 “Possession is nine-tenths of the law” —from a Scottish expression It’s a Sunday night. October 2013. Parents are making sure the kids’ homework is done. Football fans are settling in for the night’s NFL matchup. Reigning champs, Baltimore, are about to lose. And all hell is breaking loose in the precious metals markets. Moments before electronic trading opened at 6 p.m. EDT, Commodity Exchange Inc. — the Comex — announced it would settle a large gold contract in cash and not gold. To be blunt about it, the Comex has defaulted on...

A recently issued report by the Government Accountability Office says that the federal government is on a financially unsustainable course. The debt is so large that the anticipated annual interest payments are expected to exceed the economy’s rate of growth. The government would have to run annual budget surpluses just to maintain its current debt to GDP ratio. Despite all the publicity being given to the so called draconian cuts envisioned by the sequester, there are no actual cuts to spending. At best, only the rate of growth in spending would be slowed, but not by enough to generate a...

House Republicans on Wednesday are hoping to present a united front and jump-start the next several months’ worth of budget negotiations by approving a short-term debt-limit extension with near-unanimous GOP support. Members will vote on a “limited suspension” of the federal debt limit through May 19, which would temporarily allow the Treasury Department to issue new debt to cover obligations incurred during that period, along with a measure that would withhold Senators’ pay if they fail to pass a budget. “All we’re saying is: If the president and the Senate, if this country needs to incur more debt — Senate,...

WASHINGTON, D.C. – This afternoon, Sen. Rand Paul introduced the Default Prevention Act, which would require the President to prioritize federal revenue to interest on the national debt. Since the current debt limit was reached on Dec. 31, 2012, it is expected that the extraordinary measures the U.S. Treasury has taken to continue funding the government will be exhausted before March. In order to remove any chance of government default, Sen. Paul’s legislation spells out which government-funded programs should be held at the highest priority to continue funding, while paying down the interest and principal on debt held by the...

Nobel Prize winning left-wing economist Paul Krugman maintains that concern about bloated government spending and multi-trillion dollar debt is unwarranted. “The right-wing enemies of President Obama are playing on the average person’s fears of bankruptcy in order to limit his power,” Krugman said. “While it may be true that an individual who owes more than he can pay could face financial ruin, the same is not true for the Government.” “A key difference is that most individuals’ income is restricted to what they can earn by offering services in the marketplace,” Krugman continued. “Government, though, doesn’t have to earn its...

Budget Policy: Even if we don't raise the debt ceiling, enough revenue will still come in to the Treasury to pay our interest, our bonds and essential services. The government will not shut down- only its ability to borrow. Like the fiscal cliff, the dangers of hitting the debt ceiling, while dire, are not necessarily fatal. It would, however, concentrate the minds of the American taxpayer wonderfully and force Washington to do what American families do every day around the kitchen table - take the paycheck and pay the bills in order of priority. Pay the gas company and the...

Once upon a time, Congress didn't want to raise the debt ceiling,sending the country into default. It was bad, and we shouldn't do it again. The end. Oh, you wanted to hear the rest of the story? Okay, here it is. Back in 1979, Congress waited, and waited, and waited to lift the debt ceiling, because Congress never likes taking responsibility for the tax and spending decisions it's already made. Now, Congress usually does the right thing after it's exhausted every other possibility, at least when it comes to paying our bills, and this debt limit increase was no exception....

WASHINGTON (Reuters) - Republican lawmakers are preparing to introduce legislation to direct the U.S. Treasury to make interest payments on U.S. bonds first and then prioritize other government outlays in case Congress does not raise the debt ceiling. Supporters of the idea see it as a politically palatable alternative to default, which could rattle markets as occurred in the summer of 2011. The likelihood of another market-unsettling event is challenging Republicans to find another idea as they use the debt ceiling as leverage to extract spending cuts from President Barack Obama. But critics, including some Republicans, say prioritizing payments is...

The federal government will hit the statutory limit on its debt within the next two months, and further borrowing would require congressional action. Almost everybody recognizes that such action will need to take place, since no one has proposed a way to end all deficit spending immediately. But Republicans want to make sure that as Congress takes that action it both highlights the problem of overspending and takes steps to address it, while Democrats want to make sure that the problem receives neither attention nor remedy. To achieve its end, each party has focused on a different element of the...

NEW YORK (TheStreet) -- Investors should understand why some Republicans are willing to allow the U.S. to default on its debt. President Barack Obama on Monday took a preemptive approach to criticize Republicans on the looming debt-ceiling clash, as he said they had the choice between acting responsibly and paying Congress' bills, or acting irresponsibly by allowing the economy to crash.

Washington, D.C. – It is possible, possible, that the massive shuffling of Cabinet positions for president Obama will have a positive effect on his next four years in office. With so many people leaving the make-up of the team that led to a lot of mediocrity and divisiveness will be fundamentally altered.timothy geithner leaving obama administration Some of those changes, say Secretary of State, clearly trade one strong player for another but in other places the changeover will not be as smooth or as clearly good. There is, perhaps, no position more important in all of this than the change...

Amid all the political and media hoopla about the "fiscal cliff" crisis, there are a few facts that are worth noting. First of all, despite all the melodrama about raising taxes on "the rich," even if that is done it will scarcely make a dent in the government's financial problems. Raising the tax rates on everybody in the top two percent will not get enough additional tax revenue to run the government for ten days. And what will the government do to pay for the other 355 days in the year? All the political angst and moral melodrama about getting...

To call Greece First World may be a stretch, but Greece has defaulted once already, and it is only a matter of time until Greece defaults again. Welcome to default-o-rama, the next chapter in the First World's struggle for fiscal sustainability. Japan is piling up debt in the manner of a nation beyond hope. France, Belgium, Spain and Italy are defaults waiting to happen unless Europe can somehow generate the kind of growth that has eluded it for decades. America's fiscal cliff is an artificial crisis. We have no trouble borrowing in the short term. But at some point the...

Venezuela vs. Argentina, Which Will Run Out of Money First? Politics / Emerging MarketsOct 17, 2012 - 03:12 PM By: Money MorningMartin Hutchinson Martin Hutchinson writes: After a surprisingly comfortable re-election, Venezuela has decided to stick with Hugo Chavez and all that comes with him. That has prompted The Wall Street Journal and other pundits to forecast nothing less than economic doom for Venezuela in 2013. But when it comes to poorly run South American countries, Cristina Fernandez de Kirchner is someone that could easily give Chavez a run for his money. As Argentina's president, Fernandez de Kirchner is a...

Crisis Replay… Soon Argentina Will Be On Sale Again By Ronan McMahonSeptember 20,2012Just over a decade ago Argentina spectacularly unraveled with the biggest default in history — $100 billion. Dollar deposits were converted to pesos. Then, overnight, the peg of one-to-one with the dollar was broken. The unpegged currency immediately devalued. Savings were wiped out. Banks were set alight and locals took to the streets in protest. That crisis created the biggest buying opportunity of a decade. During the fire sales you could have picked up a historic, high-end property in Buenos Aires or a vineyard in Mendoza for a...

Greeks are pulling cash out of banks, stocking up on food in panic ahead of make-or-break election Sunday Dina Kyriakidou and George Georgiopoulos, Reuters Jun 13, 2012 – 8:41 AM ET ATHENS — Greeks pulled their cash out of the banks and stocked up with food ahead of a cliffhanger election on Sunday that many fear will result in the country being forced out of the euro. Bankers said up to 800 million euros (US$1 billion) were leaving major banks daily and retailers said some of the money was being used to buy pasta and canned goods, as fears of...

Staying in the eurozone will mean that the country will be lorded over by bankster operatives. They will provide enough money to keep the country alive, but they will also demand allegiance to their plans of "austerity", which will mean more cuts in government services, higher taxes and better tax collection methods. It won't be pleasant for anyone in Greece. ... But there is a better alternative . That alternative is for Greece to leave the eurozone and return to the drachma. Here's how this could be done in a way that could put Greece on its way to a...

Greece's two main parties are set for heavy losses in Sunday's (6 May) elections, with anti-bailout groups on the extreme left and right to enter parliament for the first time, raising again the prospect of an exit from the eurozone. Public anger at the austerity measures linked to the second, €130-billion-strong bailout package could translate into a new Parliament unable to form a ruling coalition and a new round of elections being called in the next months. Observers expect the ruling center-right New Democracy and the center-left Pasok parties to come in first and second, but it is unclear whether...

It's time to round off this short series of screeds. If these "Terminus" posts have struck you, Gentle Reader, as unusually angry or strident, I can scarcely be surprised. I'm very angry; the country is going downhill far faster than even I expected it to go, and good men have done little more than complain about it. My contempt at such limpness in the face of social, economic, and political calamity has caused me to jack up the stridency of my prose. Whether that's for good or for ill, I can only wait and see. * * * The belief...