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After reading headlines such as "Congress raises debt ceiling to new record high" and "No county could afford to purchase US debt" I was prompted to do a little research to try and get an idea of how much a Trillion really is. The current US National Debt is approximately $12.1 Trillion ($12,162,000,000,000.00) and growing. (Source: National Debt Clock) How much is that? 1,000 = 1 Thousand 1,000 Thousands = 1,000,000 = 1 Million 1,000 Million = 1,000,000,000 = 1 Billion (or a thousand Million) 1,000 Billion = 1,000,000,000,000 = 1 Trillion (or a thousand Billion or a million Millions)...

In nearly its final act of the year, the US Senate on Thursday approved a $290 billion increase in the nation's borrowing limit, a move that sets up a contentious debate about the federal government's largesse early in 2010. The additional $290 billion in borrowing ability lifts the total public debt the federal government can hold to around $12.4 trillion and will allow the government to keep borrowing through February. The House passed the measure last week. The Senate vote was 60-39, and was almost exclusively along party lines. Generally a vote on raising the debt limit requires only a...

Sometimes in life there are just no words available to explain certain events, certain people or certain emotions. That is how I felt this week when I saw President Barack Obama make the comments shown in the video below. He incredulously states the following: “We can’t continue to spend as if deficits don’t have consequences, as if waste doesn’t matter, as if the hard-earned tax dollars of the American people can be treated like Monopoly money.” Since I cannot fully express my outrage at perhaps the most hypocritical words ever uttered by a president of this great nation, I will...

California got $7 billion in state grants from Porkulus, and an opportunity to catch their breath while they attacked a monstrous state budget that desperately needs pruning. Congress has now begun to consider Porkulus II, with even more block grants for states, enabling them to paper over serious budget gaps. But that’s not enough for Arnold Schwarzenegger, who wants an additional $8 billion from the feds in order to bail out a state that seems incapable of governing itself: Facing a budget deficit of more than $20 billion, Gov. Arnold Schwarzenegger is expected to call for deep reductions in already...

If governments continue to pile on more and more debt, when will they reach the tipping point? The Greeks appear to be close to the tipping point, and it is only a matter of time before other European countries, and eventually even the United States, begin their fiscal death spiral. The Greek government's unwillingness to make the hard choices necessary to put its fiscal house in order in the past few weeks has caused investors to demand a 2.5 percent premium on its government-issued Eurobonds over those issued by the German government. First, a little background. Eurozone governments have a...

President Obama's rhetoric may sound like a deficit hawk and voice of reason, but his actions don't match his words. The Democrat-controlled Congress and a Democrat President, is a prescription for a financial train wreck. They are addicted to spending your money. And not only is your money being used to buy votes from the public, but it's also being used to buy votes from other representatives like Mary Landreau and Ben Nelson. Who would have thought that "Hope and Change" would be so expensive?

For state lawmakers, ringing in the New Year also means getting ready for what's shaping up to be another painful budget season. They'll return to the Capitol Jan. 4 to tackle a deficit that is expected to swell to $6.3 billion by the end of the fiscal year. Filling that hole -- and the $21 billion deficit projected for the next 18 months --tops Senate President Pro Tem Darrell Steinberg's list of priorities for the new year. Steinberg said in an interview with The Bee that while further cuts and new revenues will be needed to close that gap, the...

New York, NY – [Editor's note: In a series of three memos to President Barack Obama, Sioan Bethel recommends that real US assets be used to amortize or repurchase the US national debt.] MEMORANDUM #2 To: President Barack Obama From: Sioan Stephen Bethel Subject: The German Rentenmark, issued in 1924, is a persuasive precedent for a multi-trillion dollar issue of American public land based representative money, in order to, amortize or repurchase relevant portions of the U.S. National Debt and fund or reimburse funding for bailouts and stimulus aid. After the apogee of hyperinflation in 1922, the Weimar Republic of...

"A wise and frugal government...shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government." Thomas Jefferson, First Inaugural Address, March 4, 1801 The party of Jefferson has come to this: the most reckless, cavalier spendthrifts in the history of the United States. With no regard for public opinion nor for the debt burden they hoist onto future generations, this Congress and this Administration march determinedly toward a Marxist,...

If the government stays on the course it's been on for the past forty years without a radical change, the federal government will soon have a $10 trillion budget. In other words, the federal budget deficit will be $1.4 trillion. Just to make the size more visible, that's $1,400 billion. Our colleague Rob Arnott, who always does terrific research, wrote in his recent report that "at all levels, federal, state, local and GSEs, the total public debt is now at 141% of GDP. That puts the United States in some elite company--only Japan, Lebanon and Zimbabwe are higher. That's only...

SOMETIMES economies can be too good.That is one lesson from the history of a new “misery index,” created by Pierre Cailleteau, an economist and sovereign risk analyst at Moody’s. The index adds together a country’s budget deficit, as a percentage of gross domestic product, and its unemployment rate. It captures the current conundrum for many countries: their economies need stimulus, but their budgets may not be able to afford it. The unfortunate leader in that misery index among the countries cited by Moody’s is Spain, with an index of 30, thanks to an unemployment rate of 20 percent and a...

.. that does not involve serious pain. Go ahead folks - tell me how we can simply ignore this. How we can pretend that the outstanding debt does not have to come back down to reasonable levels. That these levels are "reasonable" - and that these rates of growth are "reasonable." This is the "magic of compounding" writ large - and in a fashion that is going to inflict severe pain on our population - and the longer we wait to deal with it, the worse it will be. Bernanke, who was at The Fed during Greenspan's time there, should...

Humorous (or not) video at site...

he buildup in government debt threatens to push interest rates higher, says Hans Blommestein, head of public debt management at the Organization for Economic Cooperation and Development. Gross borrowing needs of OECD governments will likely reach almost $16 trillion in 2009, up from an earlier estimate of about $12 trillion, he writes in the Financial Times. That would represent a post-World War II high of 8.25 percent of GDP. That by itself is not good, of course. “A looming additional challenge is the risk that, when the recovery gains traction and risk aversion falls further, yields will start to rise,”...

Could the next black/green/dark gray swan be so obvious that it has avoided everyone? Well, except for the deputy governor of the Bank of China, who just gave the world a startling reminder of economics 101, when he said that it is "getting harder for governments to buy United States Treasuries because the US's shrinking current-account gap is reducing the supply of dollars overseas." Oops. The funny thing about natural (and economic) systems: they can only be pushed so far before they snap back to default state. With the entire world embarking on an unprecedented spree of domestic bubble blowing...

Norman Spector at Canada's Globe & Mail correctly sizes up Obama and Copenhagen from the Chinese perspective The Chinese, who’ve been negotiating for a heck of a lot longer than the United States has been on the map, are fully aware of President Barack Obama’s stunning political weakness at the end of his first year in office. They also understand, as does Canada, the inconvenient truth that Bill Clinton and Al Gore did not even attempt to have the Kyoto Protocol ratified by the U.S. Senate — and there’s no assurance this time either, as can be seen in the...

House Speaker Nancy Pelosi (D-Calif.) and other senior Democrats vowed in Copenhagen Thursday to back up Secretary of State Hillary Rodham Clinton’s pledge to increase U.S. climate aid for poor nations. But Democrats also endorsed Clinton’s linking the commitment to China and other nations making their emissions curbs subject to outside verification, a major issue of dispute at the international climate summit.

WASHINGTON – Washington is moving to assist California and other cash-strapped states that face the prospect of raising taxes or cutting spending again in 2010 to balance their books. The House took the first step Wednesday evening, passing a $75 billion jobs bill that would help states pay for infrastructure projects and prevent more public employees from being laid off. Some are calling it Stimulus II, and the sequel would come as good news for 35 states that face budget gaps totaling $31.5 billion by the middle of next year. California is projecting the largest shortfall, at $6.3 billion, followed...

The nausea we feel with respect to Citigroup (C) and our Treasury Secretary just hit a new high. Perhaps it's true that civilization would have ended if we had just allowed Sandy Weill's colossal junk pile to finish blowing itself up. But at this point that seems a more attractive alternative. In case you missed it, here's the latest outrage: As of yesterday afternoon, the United States taxpayer owned 34% of Citigroup's common stock, in addition to a massive amout of TARP preferred stock. The US taxpayer did not own 34% of Citigroup's common stock by choice. We owned it...

California revenues lag, underscore budget woes By Jim Christie Wed Dec 16, 5:51 pm ET SAN FRANCISCO (Reuters) – California's revenues since the start of its fiscal year are trailing estimates by more than $1 billion, according to the state's November revenue report, which comes as Governor Arnold Schwarzenegger wrestles with crafting a balanced state spending plan. Next month Schwarzenegger must present to lawmakers a balanced budget plan for California's next fiscal year beginning in July, while closing the deficit that has reopened in the current fiscal year's spending plan. The combined shortfall for the two years has been pegged...

The nonpartisan Congressional Budget Office today released an analysis finding that the major climate and energy bill the Senate Environment and Public Works Committee approved in November would reduce the budget deficit by $21 billion over the next decade. The cap-and-trade bill is sponsored by EPW Committee Chairwoman Barbara Boxer (D-Calif.) and Sen. John Kerry (D-Mass.). It would require U.S. emissions curbs of 20 percent by 2020 and 83 percent by 2050. The committee approved the bill with no GOP support. But Kerry is working on a compromise climate and energy bill with Sens. Lindsey Graham (R-S.C.) and Joe Lieberman...

Imagine for a moment, a Utopian land. One where the leaders of the government require their subjects to remit only ten percent of earnings for the maintenance of peace and order. Where the supreme ruler is bound by the responsibility to prudently steward those funds, to not abuse the right to tax his subjects. A land where abuse by the leader would result in sanctioned rebellion by the people because the leader (in breaking the bargain) lost his divine mandate to rule. "Not possible!" you quickly reply. "No such land has or ever will exist." But it did my friends....

David Rosenberg's Last Thought Of The Year: Time To Freak Out About Sovereign Debt Vince VenezianiDec. 16, 2009, 11:32 AM Analyst Dave Rosenberg is going into hibernation for a few weeks as the holidays approach, but before doing so, he took one last moment to address two growing concerns: The growing amount of U.S. debt and sovereign risk: Breakfast With Dave: We are not sure if this is a well known “fact”, but the U.S. government has a record $2.5 trillion of its debt, including bills, bonds and notes, rolling over in 2010. That, my friends, is 35% of the...

Congress is taking the final steps needed to raise the national debt ceiling from its current $12.1 trillion to make room for more borrowing. With the economy growing only sluggishly and Congress spending heavily on economic stimulus, two wars and extended unemployment benefits, the nation is running a deficit that hit a record $1.4 trillion in the latest fiscal year, adding to the national debt. That raises the question of whether the government's growing need to borrow money for operations could eventually drive interest rates higher, threatening the nascent economic recovery.

Dec. 16, 2009, 8:53 a.m. EST Current account deficit widens to $108 billion By Greg Robb, MarketWatch WASHINGTON (MarketWatch) -- The U.S. balance of payments deficit widened sharply in the third quarter to $108 billion from $98 billion in the second quarter, the Commerce Department reported Wednesday. The increase in the second quarter deficit was due to a larger deficit on goods. The current account deficit totaled 3.0% of gross domestic product, up from 2.8% in the second quarter, which was the smallest percentage since the first quarter of 1999. The deficit peaked at 6.5% of GDP in the fourth...

IT'S TIME to stop worrying about the deficit -- and start panicking about the debt. To put it another way, short-term deficits aren't the real problem. The punishing hangover of borrowed money is. The ballooning national debt once looked like a long-term problem. Now, the long-term has become the middle-term, fast-forwarded by the cratering economy and the unavoidable and immense spending in the service of saving it. Consider: In the space of a single fiscal year, 2009, the debt soared from 41 percent of the gross domestic product to 53 percent. By way of comparison, the average for the past...

At least someone in America isn't feeling a credit squeeze: Uncle Sam. This week Congress will vote to raise the national debt ceiling by nearly $2 trillion, to a total of $14 trillion. In this economy, everyone de-leverages except government. It's a sign of how deep the fiscal pathologies run in this Congress that $2 trillion will buy the federal government only one year before it has to seek another debt hike—conveniently timed to come after the midterm elections. Since Democrats began running Congress again in 2007, the federal debt limit has climbed by 39%. The new hike will lift...

Leaders are considering a hike of roughly $300 billion to the nation's $12.1 trillion deficit, though the final figure has not been nailed down, congressional aides said on condition of anonymity. Democratic leaders had previously hoped to raise the limit by at least $1.8 trillion, enough to take care of the government's debt needs through the November 2010 congressional elections. What was your first hint the former $1.8 trillion increase attempt was a bad idea? Perhaps this? Or was it China buying a literal zero of Treasury debt in October? Or was it the TIC report this morning (which I'm...

I wish it were possible to obtain a single amendment to our constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its constitution; I mean an additional article, taking from the federal government the power of borrowing. - Thomas Jefferson, 1798 On Thursday December 10th, congressional Democrats led by Speaker Pelosi put forth legislation to raise the Treasury's debt ceiling by nearly $2T to $13.9T. She is hastily lining up a vote before the end of the year because the treasury expects the congress to...

President Barack Obama and Democratic Congressional leaders have hypocritically promised since taken office in January that are going to be “deficit hawks”. We have not even reached the one-year anniversary of the Inauguration and the same Democratic leaders are raising the debt ceiling by $1.8 trillion. The national debt is already nearing $12.1 trillion and the economic geniuses in DC have realized that their historic deficit spending has made it imperative to raise the ceiling.

One month before Obama was elected as President of the United States the National Debt Clock, a digital counter near Times Square, ran out of space to track the national debt. This was after a Democratically controlled Congress had promised in 2006 during their first 100 hours in control they would drain the swamp, break the link between legislation and lobbyists and beyond that: "All the days after that: "Pay as you go," meaning no increasing the deficit, whether the issue is middle class tax relief, health care or some other priority." Today that same debt clock reads slightly over...

It sounds like the lead in to a bad joke: What do a Chicago-based dinner cruise company, a study of libidinous female college students and a former Hillary Clinton advisor have in common? But the joke is on us, because each of the above has been awarded hefty doses of taxpayer-funded stimulus money since February, according to a new stimulus report card by Senators Tom Coburn and John McCain. In his “jobs speech” this week, President Obama implicitly acknowledged that last February’s $1.2 trillion stimulus package has failed. Then he demanded another one in order to bolster his plan to...

As of late this summer, Democrats in Washington shared a tidy consensus about the economy: The stimulus was working more or less on schedule, and the job market was gradually recovering. That meant the administration could start thinking about how to rein in the country’s yawning budget deficit, if not actually scale it back yet. What followed turned that tidy consensus into a pigsty. On October 2, the Labor Department announced that September’s job-loss total was roughly 60,000 higher than the previous month, prompting a hastily convened powwow between the president, House Speaker Nancy Pelosi, and Senate Majority Leader Harry...

Obama's Debt CrisisHow much is the National Debt costing America?It’s interesting to note that the total interest paid on the National Debt since 1988 has been $7,393 billion (that’s $7.4 trillion). That’s a lot of money being wasted by politicians in Washington, D.C. and there are not enough people talking about it. There is an even more deafening silence regarding what the cost will be over the next 10 years. The United States will pay almost as much interest as it did over the last 20 years in just the next 10. And no one in Washington is addressing the...

Where will the money come from? Christina Romer, chair of the White House Council of Economic Advisers, says some of it could come from the $200 billion the government plans to get back in TARP funds. "Obviously you don't use that directly on any of these programs but it does tell you we have made some progress in the fiscal space," she tells Tech Ticker. "And we think [this] frees up some resources that can be used to for this incredibly important priority which is putting people back to work." Only in Washington could someone get away with this kind...

Data recently made public by the Social Security Administration confirm that in October, 2009, the program reached a grim milestone: six consecutive months of operating cash deficits. This is the first time Social Security has faced this situation over the entire time period, dating back through 1987, for which SSA posts the monthly data online. From May through October inclusive, Social Security’s outgoing payments have exceeded incoming program revenue, generated mostly by the payroll tax (with a smaller amount coming in via the taxation of benefits). When a cash-deficit situation develops during a period that the program is still technically...

All of a sudden we are living in a lowest common denominator world. We are being told everyone is entitled to health care, mortgages, whatever they lack. These are rights we hear. It was inevitable I suppose. A woman's "right" to abortion, to privacy (ironic in light of current health care proposals) started the snowball. But the fact is, we aren't entitled to any such thing. None of the above. Allow me to illustrate with a personal story. During high school, women's gymnastics was the rage. Olga Korbut, Nadia Comenici these were my idols. Gymnastics was one of the few...

Countries must get their fiscal houses in order or face credit downgrades, international ratings agencies say. International ratings agencies are warning the United States and several European governments that they face credit downgrades if they don't soon come up with clear plans to get their deteriorating fiscal houses in order. Moody's Investors Service said Tuesday the weakening public finances in the U.S. and Britain may “test the Aaa [triple-A] boundaries” for their ratings. While analysts say there is no immediate risk of a cut in the ratings of major developed economies, the less stable fringe players are already feeling the...

With the national debt topping out over $12,020,717,005,598 the Ship of State is now sailing in a sea of red ink. But is this foreign or domestic ink? According to the U.S. Treasury Department 25% of the debt is owed to foreign interests. With your share of the debt at close to $40,000 you owe foreign governments like Japan and China more than $10,000. Yes you owe them that. You see Washington views your paycheck as collateral that it can put on the market at any time it wants to and then you get stuck with the bill. The Treasury...

John Mauldin, President, Millennium Wave Advisors, LLC (4 min) We're borrowing ourselves to death But government spending doesn't fix anything--investments must be made in the private sector in order to create jobs The U.S. will not reach a $2 trillion deficit--because government will raise taxes and cut spending before that happens. These moves will kill the economy. Another financial crisis will occur if there is no credible plan to get back to manageable debts

By doubling the money supply and making extensive loans, Paul says, Bernanke's Fed has made "the entire federal government one giant toxic asset." The dollar will tank; inflation will return; the sun will set on what is left of the American empire—or at least so says Paul in his new bestseller, End the Fed. Somebody has to take the fall, and Bernanke—who has trillions of dollars at his disposal but not one dime of PAC money—could be the guy. No one thinks Ron Paul is going to lead the GOP, let alone be president. He's 74 years old and just...

The Federal Government can pay off the National Debt in 30 years by making interest and principal payments of $699,013,323,930.52 per year. In Fiscal Year 2009 the government made interest payments of $383,656,592,545.78. So it would only take another $315,356,731,384.74 per year, or about $1,051 per capita to completely extinguish the debt. Since this will cost $8,883,038,042,900.88 in interest (at 4% over 30 years), I would suggest that you get started right away.If you politicians were serious about fiscal responsibility, surely you could find a way to cut spending by $315,356,731,384.74 per year. I mean after all, many of you...

For our money, one of the better parts of President Obama's speech at West Point this week was his connection between a healthy economy and U.S. national security. To quote: "Our prosperity provides a foundation for our power. It pays for our military. It underwrites our diplomacy." We only wish Mr. Obama understood the link between the larger welfare state he is trying to build at home and the economic weakness that will undermine our military power. The proof is right before his eyes in the U.S. struggle to get Europe to contribute more forces to Afghanistan. Mr. Obama has...

(VIDEO): The national debt has gotten to be so gargantuan that it's hard to wrap your head around it. Once you get up in the hundreds of billions and trillions, it becomes so unfathomable that it's easier to avoid the topic than it is to deal with the anxiety, fear, and uncertainty that the numbers bring. This very brief video (see below) makes understanding the national debt much easier to grasp...

The Porkulus bill was the our first taste of how the new Democratic Party Majority was going to govern the United States. As you may remember it was passed so fast that the members of congress weren't even allowed to take the time to read it. But they had an excuse, they were told that if it wasn't passed in time for Nancy Pelosi to take her trip to Italy there would be "wrath of God" type implications: Fire and brimstone coming down from the sky, Rivers and seas boiling! Years of darkness! Earthquakes, volcanoes... The dead rising from the...

During a recent visit to Tokyo, Timothy Geithner, the secretary of the US treasury, said that a strong dollar is "very important" to Washington, even as the American currency continued its noticeable depreciation. This is a very curious statement as it seems to indicate that the US treasury is going to defend the dollar from any further slide in the near future. But this is highly unlikely as the US treasury does not have a history of intervening in foreign exchange markets. It is true that the treasury's Exchange Stabilisation Fund (ESF) can be used to prop up the dollar,...

When President Barack Obama entered office in January, the greatest problem America faced was neither the war in Afghanistan nor the recession. It was the imminent crisis of the welfare state. Not only has Obama failed to deal with this crisis, he is pursuing policies that will bankrupt America. In March, the Peter G. Peterson Foundation, led by former U.S. Comptroller General David Walker, calculated the total value of the federal government's "unfunded liabilities" as they stood at the end of fiscal 2008. These liabilities include the publicly held portion of the national debt plus the amount the government must...

then you must believe all of the following (via The Health Care Blog): Health reform adds a heap of new cost saving political obligations on Congress. A partial list: 1)that Congress not extend the five-year shelter for states from their share of the cost of a 15 million person Medicaid expansion (e.g. more than a 30% increase). Presently, states are sheltered from Medicaid cost sharing for this expansion until 2014, but then have to find $34 billion in new money to pay their share. States, who are drowning in Medicaid costs already, will press hard to have their existing matching...

In health-care reform, no deficit cure Debate rages over bill's impact on costs -- and how much that matters By Lori Montgomery Washington Post Staff Writer Monday, November 30, 2009 As the long battle over health care is rejoined in the Senate this week, experts remain deeply divided over whether the legislation would rein in soaring health-care costs or simply add millions of people to a system that is already driving the nation toward bankruptcy. Optimists say the $848 billion package drafted by Senate Majority Leader Harry M. Reid (D-Nev.) contains all the most promising ideas for transforming the health-care...

Now, who said the following? "My prediction is that politicians will eventually be tempted to resolve the [fiscal] crisis the way irresponsible governments usually do: by printing money, both to pay current bills and to inflate away debt. And as that temptation becomes obvious, interest rates will soar." Seems pretty reasonable to me. The surprising thing is that this was none other than Paul Krugman, the high priest of Keynesianism, writing back in March 2003. A year and a half later he was comparing the U.S. deficit with Argentina's (at a time when it was 4.5 percent of GDP). Has...