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head: "(Repug) deficits don't matter"
US deficit hawks, wealthy enough to be mostly immune to the ed enconomy, are continuing their scorched-earth class warfare by prolonging the Banksters Great Depression by stopping govt counter-cyclical spending.
http://www.bloomberg.com/apps/news?p...d=aa0cI64Gx.4EU.S.’s $13 Trillion Debt Poised to Overtake GDP
By Garfield Reynolds and Wes Goodman
June 4 (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. The lower panel shows U.S. annual GDP growth as tracked by the IMF, which projects the world’s largest economy to expand at a slower pace than the 3.2 percent average during the past five decades.
“Over the long term, interest rates on government debt will likely have to rise to attract investors,” said Hiroki Shimazu, a market economist in Tokyo at Nikko Cordial Securities Inc., a unit of Japan’s third-largest publicly traded bank. “That will be a big burden on the government and the people.”
Gross, who runs the world’s largest mutual fund at Pacific Investment Management Co. in Newport Beach, California, said in his June outlook report that “the debt super cycle trend” suggests U.S. economic growth won’t be enough to support the borrowings “if real interest rates were ever to go up instead of down.”
Dan Fuss, who manages the Loomis Sayles Bond Fund, which beat 94 percent of compe ors the past year, said last week that he sold all of his Treasury bonds because of prospects interest rates will rise as the U.S. borrows unprecedented amounts. Obama is borrowing record amounts to fund spending programs to help the economy recover from its longest recession since the 1930s.
“The incremental borrower of funds in the U.S. capital markets is rapidly becoming the U.S. Treasury,” Boston-based Fuss said. “Do you really want to buy the debt of the biggest issuer?”
head: "(Repug) deficits don't matter"
US deficit hawks, wealthy enough to be mostly immune to the ed enconomy, are continuing their scorched-earth class warfare by prolonging the Banksters Great Depression by stopping govt counter-cyclical spending.
Last edited by boutons_deux; 06-07-2010 at 11:29 AM.
That deficits don't matter is one thing you and head agree on, I guess.
An economy that is 70% consumers over-consuming ain't going nowhere, if the consumers don't have money to buy , and unemployed/under-employed people are making enough money to pay taxes to offset the counter-cyclical spending.
Erstwhile bankster Tim Geithner agrees with Boutons.“Those countries with serious fiscal challenges need to accelerate the pace of consolidation,” it said. “We welcome the recent announcements by some countries to reduce their deficits in 2010 and strengthen their fiscal frameworks and ins utions.”
These words were in marked contrast to the G20’s April communiqué, which called for support to be maintained until the recovery picked up steam.
After the meeting, finance ministers acknowledged the landscape had changed. George Osborne, British finance minister, claimed credit for this shift in tone.
Many other finance ministers accepted market realities had changed the G20’s policy. Christine Lagarde, France’s finance minister, said: “There’s a large majority for whom redressing the public finances is priority number one. For a minority, it’s supporting growth.”
Even Dominique Strauss-Kahn, managing director of the International Monetary Fund, who has championed fiscal stimulus since January 2008, recognised the world was suddenly different. Asked whether he felt comfortable with the change in tone, he replied: “Totally comfortable. I am not the champion of fiscal stimulus but the champion of right fiscal policy”.
But there were concerns around the G20 that the rush to reduce budget deficits would undermine recovery in the near term.
G20 officials said the US had been the most concerned about the new austerity drive and feared for the momentum for global growth. It had called in the meeting for China to revalue the renminbi and for Germany to boost domestic demand, officials said.
In a letter to the rest of the G20, Tim Geithner, US Treasury secretary, argued: “Concerns about growth as Europe makes needed policy adjustments threaten to undercut the momentum of the recovery”
I think we have bigger things to worry about in 2012
Cameron Warns Britons of ‘Decades’ of Austerity
By SARAH LYALL
LONDON — Prime Minister David Cameron said Monday that Britain’s financial situation was “even worse than we thought” and that the country would have to make savage spending cuts to bring its swelling deficit under control.
Stern and grim-faced in a speech in Milton Keynes, just north of London, Mr. Cameron said, “How we deal with these things will affect our economy, our society — indeed our whole way of life.”
“The decisions we make will affect every single person in our country,” he said. “And the effects of those decisions will stay with us for years, perhaps decades, to come.”
http://www.nytimes.com/2010/06/08/wo...gewanted=print
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And not one gambling-addicted-/loser UK or US Bankster is fined or jailed.
if you don't realize that what the govt is doing is only HELPING the bankers at the expense of everyone else than I don't know what to tell you.
- SpeakEasy - http://blogs.alternet.org/speakeasy -
Genius Blue Dogs Curry Favor With Voters By Increasing Unemployment
Congress returns to session this week. In case you missed it, after passing Afghanistan war funding without battling an eyelash, last week Blue Dogs slashed an economic relief bill by nearly $100 billion. It was a glorious “victory” for them:
The Blue Dogs won a significant victory by forcing House Democratic leaders to cut $79 billion in spending, including subsidies to help laid-off workers buy health insurance and ease state budget cutbacks.
This is only a victory if self-immolation is considered a victory. Consider:
1. Blue Dogs slash aid to states;
2. In response, states will engage in massive layoffs of public sector workers;
3. These layoffs will exacerbate an already dismal employment picture;
4. Voters will likely turn against Democrats as a result;
5. More Democrats in vulnerable seats will lose re-election;
6. Blue Dogs are disproportionately from vulnerable seats.
So yes, truly a big victory for the blue Dogs. They managed to reduce their own chances of re-election. Awesome!
Of course, the Blue dogs don’t think they are doing this. Instead, they think they are following the will of the voters:
“We are hearing from the public, ‘You’re adding to the deficit, you’re adding to the deficit,’” said Rep. Henry Cuellar, D-Texas, a member of the conservative Blue Dogs who have held together against many proposals that require even more borrowing by the Treasury to pay for them.
Yeah, sure they are. That is why, when Americans are asked to list the biggest problem facing the country today, and are not prompted with a list of problems, only 5% cite the budget deficit:
CBS News/New York Times Poll. April 5-12, 2010. N=1,580 adults nationwide. MoE ± 3.
“What do you think is the most important problem facing this country today?”
Economy/Jobs: 49%
Health care: 8%
Budget deficit / National debt: 5%
Poverty / homelessness: 4%
War / Iraq / Afghanistan: 4%
Big government / bureaucracy: 2%
Moral values: 2%
Other: 21%
Unsure: 5%
The country cares a a lot more about jobs than about the deficit. So, naturally, to fulfill the will of the voters, Blue Dogs slash aid to states that will result in huge layoffs, all in the name of reducing the deficit.
Genius. The name “Blue Dog” derives from supposedly being choked blue by the left-wing of the party, but it seems to me that Blue Dogs are engaged in a self-asphyxiation right now.
URL to article: http://blogs.alternet.org/speakeasy/...-unemployment/
We'll worry about it in 2013...
"if you don't realize that what the govt is doing is only HELPING the bankers at the expense of everyone else than I don't know what to tell you."
Where do you see that I don't realize that?
The "govt" ie Exec and Legislature, is controlled by the finance sector's power aka $$$, then you have radical activist right-wing assholes on SCOTUS enabling corps to buy candidates, elections.
The entire conservative "hate govt" strategy is to dupe sheeple is to blind people that the real cuprits are the capitalists/corporate class warriors controlling govt, to deflect criticism from the string pullers.
Time to raise taxes.
Hard to do that in the era of the Tea Party though.
Its true. Everyone wants to lower the deficit but no one wants higher taxes. You cannot cut spending and bring down the debt. Taxes will have to go up along with budget cuts.
Bull .
Taxes are already set to increase for 2011.
That's why we have to stop adding social programs, and scale back those we have.
probably need to cut some en lements too
Best way to "raise taxes" is to get 20M people back to the employment rolls, and consuming so sales taxes go up.
Cutting the deficit should start with pulling out of Iraq and Afganistan, then cutting the defense budget by 40%.
Whatever the wisdom of this suggestion, there's no political will to do this. Another deflationary panic could change that, though.
Should be on the chopping block along with en lements. Defense spending is big government too.
@ raise taxes. Try not spending trillions of public dollars in private bailouts next time. Taxes should never be raised again, based on principle alone, until we are out of debt.
I agree.
Given the magnitude of US debt plus unfunded liabilities, I doubt we can afford the principle. In order to get out of debt we'll have to slash spending and raise taxes, in spite of what this means for our standard of living.
Soooo after we are out of debt, *then* we raise taxes?
How about we raise taxes and keep them higher until we are pretty much out of debt, then scale back taxes as the interest charges drop?
Government debt is not all bad, as US Treasuries offer a rather valuable commodity: risk-free assets that earn some return, so I don't think getting rid of US government debt is an entirely good thing.
I do think we should get our debt to income ratio under control though. Under 50% would be my goal.
Maybe just time to send politicians to a class on how to balance a checkbook.
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