Free Republic

Washington -- Health care may have been the last big bang of the Obama presidency. With ferocious speed, the financial crisis, recession and efforts to combat the recession have swung the U.S. debt from worrisome to ruinous, promising to handcuff the administration. Lost amid last month's passage of the new health care law, the Congressional Budget Office issued a report showing that within this decade, President Obama's own budget sends the U.S. government to a potential tipping point where the debt reaches 90 percent of gross domestic product.

President Obama's fiscal 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than the administration projected, and raise the federal debt to 90 percent of the nation's economic output by 2020, the Congressional Budget Office reported Thursday. In its 2011 budget, which the White House Office of Management and Budget (OMB) released Feb. 1, the administration projected a 10-year deficit total of $8.53 trillion. After looking it over, CBO said in its final analysis, released Thursday, that the president's budget would generate a combined $9.75 trillion in deficits over the...

03/03/2010 12:09 USA - ASIA This year, US public debt could reach end game by Maurizio d'Orlando Federal Reserve Chairman Bernanke issues the warning. Asian nations, China and India first, are no longer willing to purchase securities issued by the US Treasury, which this year has about US$ two trillion short-term debt to refinance. Beijing is buying gold instead. Milan (AsiaNews) – For at least four years, AsiaNews has sounded the alarm bells against the risks due to the huge size reached by speculative finance[1]. In 2008, we said that the attempt to save US banks could push the US...

Judging from the noises emanating from some corners of Washington these days, the federal debt has assumed pride of place as the source of national anxiety. President Obama has called for independent commissions to seek ways to reduce spending. The media are filled with talk of America's path of financial suicide; economists warn that the debt crisis in Greece is a dry run for the cataclysm that awaits America and the world as U.S. deficits and debt balloon. The numbers are undoubtedly big, running into many trillions of dollars. The percentages are also daunting, with projections of total gross debt...

This image shows how big a block of pennies would be for 10 trillion dollars. Unfortunately the projected deficit under Obamacare would (or will be) 12 Trillion. Those first 2 buildings on the left are the Sears Tower and the Empire State Buiding.     value  $10,000,670,883,840.00(Ten trillion, six hundred seventy million, eight hundredeighty-three thousand, eight hundred and forty dollarsand zero cents) width  2,730 feet height  2,730 feet thickness  2,730 feet total weight  3,125,000,000 tons height stacked  986,426,768 Miles area (laid flat)  89,675,161 acres You could cover about 95% of California with a single layer of pennies for this amount.

Frédéric Bastiat must have been looking toward the future of the United States today when he said, “When plunder has become a way of life for a group of people living together in society, they create for themselves in the course of time a legal system that authorizes it, and a moral code that glorifies it.” I fear the federal government will plunder much of our private wealth, retirement plans and personal savings through hyperinflation, financial controls and confiscatory tax rates all in the name of protecting the public from a future debt crisis unless the states can secede from...

Behind closed doors and with no cameras present, President Obama signed into law Friday afternoon the bill raising the public debt limit from $12.394 trillion to $14.294 trillion. The current national debt is $12.3 trillion. Check out the National Debt Clock, which tells you your share of that -- roughly $40,000 per citizen, $113,000 per taxpayer.

On a nightly basis, MSNBC's Keith Olbermann pompously presents himself as being the smartest guy in the room as he belittles every leading Republican in the nation. But on Tuesday, the "Countdown" host exhibited a staggering level of ignorance as he claimed "federal budget debt" -- whatever that is! -- as a percentage of Gross Domestic Product is "about the same as it was in 1970," and "far less than it was throughout the Reagan administration." To begin with, there is no "federal budget debt." There's a federal budget DEFICIT and federal DEBT. That this self-proclaimed genius doesn't know these...

Dollar-denominated risk assets, including asset-backed securities and corporates, are no longer wanted at the State Administration of Foreign Exchange (SAFE), nor at China’s large commercial banks. The Chinese government has ordered its reserve managers to divest itself of riskier securities and hold only Treasuries and US agency debt with an implicit or explicit government guarantee. This already has been communicated to American securities dealers, according to market participants with direct knowledge of the events. It is not clear whether China’s motive is simple risk aversion in the wake of a sharp widening of corporate and mortgage spreads during the past...

Military leaders in China called for the sale of U.S. debt securities on Monday, February 8, 2010 in response to arms sales recently made to Taiwan.

David Goldman: China's Dumping Of US Assets Means A Coming Spike In Borrowing Costs Joe Weisenthal Feb. 10, 2010, 8:14 AM Last night on Kudlow, credit analyst David Goldman discussed the news that China is dumping any US fixed-income assets that aren't explicitly backed by the government. What does this mean? Trouble for banks and big increases in borrowing costs for businesses. His comments come around the 11:00 mark. Before that Greece is discussed, which is also worthwhile.[snip]

Unveiling his latest budget proposal, President Barack Obama announced: “The bottom line is this: We simply cannot 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; as if we can ignore this challenge for another generation.” Unfortunately, few in Washington are listening -- including the president himself. His budget would boost spending to $3.8 trillion in the next fiscal year. It would generate a $1.5 trillion deficit for next year alone, on top of the trillions American taxpayers already...

Defense officials on the island that has fallen behind in the military balance of power with China had agreed with Washington in 2008 to a study on upgrading Taiwan's aging submarine fleet but will stop pushing the item to keep peace with Beijing, said a source close to the Defense ministry in Taipei. "Taiwan isn't asking for the submarines anymore," the source told Reuters. "The biggest consideration was the warming of relations with mainland China." China has blasted the United States over a planned $6.4-billion arms package for Taiwan, saying it would place sanctions on U.S. firms that sell weapons...

Chinese Leaders Threaten To Sell US Debt As Punishment For Taiwanese Arms Sale Vince Veneziani Feb. 9, 2010, 3:12 PM The doomsday scenario we've feared since World War II has arrived. In response to the United States' latest arms sale to Taiwan, the Chinese military has suggested that China sell off some of the U.S. debt it owns to give the U.S. an economic punch of sorts. 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...

Wake up investors. Are you prepared for the economic anarchy coming after a global-debt time bomb explodes? Are you thinking outside the box? Investing differently? Act now -- tomorrow will be too late. Start by looking past the endless cable skirmishes between Rush, Glenn, Bill and Shawn versus Harry, Nancy, Ben and Barack. Look way past the insurgency bonding Sarah and her diehard Tea Party revolutionaries with Ron Paul's Neo-Reaganite ideologues, Fat-Cat Bankers and the Party of No, all planning a massive frontal assault on the 2010 elections, hell-bent on destroying the presidency. All that's the sideshow. The Big One...

Flush with cash despite the global economic downturn, China’s sovereign wealth fund quietly snapped up more than $9 billion worth of shares last year in some of the biggest American corporations, including Morgan Stanley, Bank of America and Citigroup. Although most of the stakes were small, China Investment Corp., the government’s $300 billion investment fund, now owns stock in some of the best-known American brands, including Apple, Coca-Cola, Johnson & Johnson, Motorola and Visa. The detailed list, which contained holdings totaling $9.6 billion as of Dec. 31, was disclosed Friday in a filing with the U.S. Securities and Exchange Commission;...

So, exactly when does a lot of debt for a country such as the U.S., Japan, the United Kingdom, Greece or Italy become too much debt? The threshold is when government debt rises above 90% of national gross domestic product, economists Carmen Reinhart and Kenneth Rogoff argue in a paper headed for publication in the American Economic Review. The U.S. finished 2009 with a debt-to-GDP ratio of 85%, according to the International Monetary Fund (IMF). On current trend, the U.S. will finish 2010 at 94% and 2011 at 98%.