NIA Report: S&P Downgrades US Debt Rating

 

S&P just announced late this evening that they have downgraded the U.S. debt rating from AAA to AA+ with a negative outlook.

 

NIA is absolutely shocked by this. What shocks us is just how long it took them to make this downgrade. Just like how S&P and Moody's didn't downgrade subprime CDOs until the mortgage-backed bonds they held were practically worthless, S&P waited for U.S. debt obligations to reach five times GDP and for the U.S. dollar to lose 84% of its purchasing power over the course of a single decade. The U.S. was a hair away from defaulting on its debt this week if the debt ceiling wasn't raised, yet it still had a AAA rating.

 

NIA believes that a AAA rating should be reserved for countries that have budget surpluses, low levels of debt that could easily be paid off without printing money, and low levels of inflation. The U.S. had a cash budget deficit last year of $1.3 trillion, but once you include increases to unfunded liabilities, our real budget deficit was approximately $5 trillion. Even if Americans were taxed 100% of their income it wouldn't be enough to balance the budget.

 

It is hard to imagine a fiscal situation worse than this, but the credit ratings agencies have justified giving the U.S. a AAA rating based on the dollar's status as the world's reserve currency and the Federal Reserve's ability to monetize our deficits and debts by printing money. If it wasn't for our printing press and the world's willingness to accept and hoard the dollars we print in return for the real products and commodities they produce, the U.S. credit rating would be junk.

 

S&P claims that their reason for downgrading the U.S. debt rating at this time is because, "the differences between political parties have proven to be extraordinarily difficult to bridge". According to S&P, it is because our two political parties are so far apart that we weren't able to pass a bill with anything but modest spending cuts. The reality is, the Republicans and Democrats aren't far apart at all. Neither parties are serious about cutting spending and the underlying fundamentals of both their proposed bills were exactly the same. The Republicans that American tea party supporters elected to office have broken their promises to make major spending cuts and have accomplished absolutely nothing positive since entering office.

 

Our country just had an unbelievable opportunity to dramatically cut government spending in a last ditch effort to prevent hyperinflation. Instead, our government passed a bill to raise the debt ceiling that had no real spending cuts at all. The mainstream media tried to spin the bill into being a victory for U.S. tea party supporters due to the purported "spending cuts" that it contained. The truth is, government spending is set to rise every single year until the dollar is worthless. The $2.1 trillion in phony spending cuts are only tiny reductions to large spending increases and none of them will begin until early 2013 when we will need to once again raise the debt ceiling. Even if the government in early 2013 decides to follow through with them, rising interest payments on our national debt will mean substantially larger budget deficits than what are projected today.

 

Credit ratings agencies have absolutely zero credibility left and we believe that with hyperinflation coming soon, credit ratings will become a thing of the past. To capitalize on this, on May 23rd NIA suggested to you put options in the only publicly traded pure credit ratings play, Moody's (MCO). On May 23rd with MCO trading for $37.90, NIA suggested to you MCO November 2011 $35 put options at $1.98. MCO today closed at $32.88 and our MCO put option suggestion finished the day with a last trade of $5.20 for a huge gain of 163% in a little over two months. NIA is very pleased that we figured out the #1 most profitable way to capitalize on the major fundamental shift that is taking place in this industry and as far as we are aware, NIA is the only organization in the world that suggested MCO puts in recent months.

With the stock market down big in recent weeks, NIA believes that this evening's news is already mostly factored into stock prices. With the Fed Funds Rate having been left near zero for over two years, the world is flooded with excess liquidity of U.S. dollars and there is no chance of the stock market crashing like in late-2008/early-2009. In fact, the recent downward move in the stock market means the Federal Reserve is likely to soon implement additional monetary inflation measures and will leave the Fed Funds Rate near zero permanently.

 

The GDP was already on its way to becoming negative in the second half of 2011 and if the U.S. wants to avoid a debt default later this decade, it needs the Federal Reserve to print enough money to see at least 5% annual nominal GDP growth. It's not just the Federal Government that needs GDP to grow, but most cities and states will default on their debts if GDP doesn't grow rapidly. Cities and states don't have printing presses so unless the U.S. government wants to bail them all out like the European Union is bailing out Greece, Portugal, and Ireland, it needs to create GDP growth even if that means the Federal Reserve eliminating interest payments on the $1.6 trillion in excess reserves held by banks and taxing banks who don't lend the money.

 

NIA prays that Americans don't make the mistake of buying U.S. Treasuries as a safe haven, as they are now the riskiest asset of all. If U.S. Treasuries rally next week, it will only be temporary and will be followed by the largest and sharpest reversal in history with a crash in Treasury prices and an explosion in yields like never seen before. Most Keynesian economists will likely forecast rising Treasury prices despite the U.S. debt crisis, because they claim the bond markets in other countries are tiny compared to ours and there simply is no other place to park safe haven money. In our opinion, there is no reason to own the fiat currency denominated bonds of any country or company. Gold and silver are the only true safe havens and it is our belief that by the end of this year, the U.S. public will begin investing into gold and silver in droves as they realize that although we avoided a debt default for now, a debt default by inflation is still on its way. The largest ever short-term rally in precious metals and mining stocks is ahead.

The Committee of 13

Kurt Nimmo
Infowars.com
August 4, 2011



The so-called debt ceiling crisis has nothing to do with the government running out of money. It is about the creation of a super committee, a council of thirteen, designed to circumvent Congress and ignore the will of the American people.

The ruling elite have a plan to take America down. The takedown has a timeline, a schedule, and it has been interrupted and set back by Congress. Despite the fact Congress usually does whatever the globalists tell them to do, certain members hold up the agenda by holding hearings and introducing resolutions on everything from the Federal Reserve to the globalist wars in the Middle East, South Asia and now Africa.


The handpicked “super Congress” – six members from the Senate, six from the House, and the president forming a committee or gang of 13 – will now push through the elite’s agenda behind closed doors in direct violation of the Constitution.

Like the Supreme Soviet, the Council of 13 will take on the trappings of democracy – because the committee was proposed by elected officials, namely Senate Minority Leader Mitch McConnell and his counterpart Majority Leader Harry Reid with the consent House Speaker John Boehner – but will act as dictatorship by committee. If allowed to stand, the United States will have its own Central Committee, just like the former Soviet Union.

The Constitution allows each house of Congress to set its own rules. Early on, debate and filibuster were added to the rules. The Committee of 13, however, will strip Congress of its power to filibuster. It will prevent the Speaker from stopping a vote in the House. It will fast-track the entire globalist agenda – from carbon taxes to the total destruction of the Second Amendment. It will end amendments to laws and only allow an up or down vote on legislation. It will turn Congress into a rubber stamp even more than it is already.

In their wisdom, the framers envisioned the House as a place of heated debate and the Senate as more staid place where rhetoric would cool down. It has its origins in the concept integral to our political system that the rights of the minority must be protected from the force of the majority. The idea and practice of a super Congress, a Committee of 13, puts an end to this tradition. It is a totalitarian steamroller.

By voting for the so-called debt ceiling bill, both houses of Congress are voting to legitimize the Soviet-style super committee of 13 globalist grocery clerks. It is another step by the elite to throw the Constitution under the bus.

As a first step, the Gang of 13 will impose taxation as a solution to the astronomical debt placed on the American people by the international bankers who own the private Federal Reserve. A super committee will be required to keep the debt and debt slavery scam going now that an increasing number of Americans understand that the Fed is nothing but a money printing machine designed to devalue the worth of our currency under the guise of stimulating the economy and the perpetually unfulfilled promise to create jobs and prosperity.

It is contempt for the Constitution and the intellectual and spiritual laziness of our so-called representatives that has allowed this atrocious state of affairs to exist under the excuse of confronting a debt the American people do not owe.

Direct political action will be required to put and end to this monstrosity. Short of that, we can expect another dagger to be stuck in the heart of our liberty as the global elite continue step by step to build their authoritarian control structure designed to turn the earth into a sprawling slave labor gulag and plantation.

Biden: Tea partiers like 'terrorists'

article from: Politico.com


Vice President Joe Biden joined House Democrats in lashing tea party Republicans Monday, accusing them of having “acted like terrorists” in the fight over raising the nation’s debt limit.

Biden was agreeing with a line of argument made by Rep. Mike Doyle (D-Pa.) at a two-hour, closed-door Democratic Caucus meeting.

“We have negotiated with terrorists,” an angry Doyle said, according to sources in the room. “This small group of TERROISTS have made it impossible to SPEND ANY MONEY!.”

Biden, driven by his Democratic allies’ misgivings about the debt-limit deal, responded: “They have acted like terrorists,” according to several sources in the room.

Biden’s office initially declined to comment about what the vice president said inside the closed-door session, but after POLITICO published the remarks, spokeswoman Kendra Barkoff said: “The word was used by several members of Congress. The vice president does not believe it’s an appropriate term in political discourse.”

Biden later denied he used that term in an interview with CBS.

“I did not use the terrorism word,” Biden told CBS Evening News anchor and managing editor Scott Pelley.
Earlier in the day, Biden told Senate Democrats that Republican leaders have “guns to their heads” in trying to negotiate deals.

The vice president’s hot rhetoric about tea party Republicans underscored the tense moment on Capitol Hill as four party leaders in both chambers work to round up the needed votes in an abbreviated time frame. The bill would raise the debt limit by as much as $2.4 trillion through the end of next year and reduce the deficit by an equal amount over the next decade.

Democrats had no shortage of colorful phrases in wake of the deal.

Rep. Emanuel Cleaver (D-Mo.) called it a “Satan sandwich,” and Rep. Luis Gutierrez (D-Ill.) called seemed to enjoy the heat analogy, saying: “the Tea Partiers and the GOP have made their slash and burn lunacy clear, and while I do not love this compromise, my vote is a hose to stop the burning. The arsonists must be stopped.

The deal was consummated Sunday night, the text of the bill was posted in the wee hours of Monday morning, and the House was expected to vote first on it Monday afternoon or evening. But there are still plenty of concerns in both parties and in both chambers.

Liberal Democrats have had the most averse reaction to the plan, which ensures between $2.1 trillion and $2.4 trillion in deficit reduction over the next decade without requiring any of it to come from tax increases.

Biden told Democratic lawmakers that the deal would take away the tea party’s “weapon of mass destruction” — the threat of a default on U.S. debt obligations.

“They have no compunction about blowing up the economy to get what they want,” Doyle told POLITICO after the meeting.

Judge Napolitano: An Open Letter To John Boehner — Stand Up for The People!

A few days ago, Judge Andrew P. Napolitano, host of Fox News’ “FreedomWatch,” delivered a heartfelt plea to John Boehner, the Republican from Ohio who currently serves as Speaker of the House of Representatives.

In an open letter to Mr. Boehner read by the Judge on his program, he began by saying:


“Dear Mr. Speaker,

    When the Founder’s of the Constitutional Convention in 1787 created the House of Representatives, it was fashioned to act as the voice of the people within the institutional checks and balances of the federal government. That’s why the entire House faces re-election every two years. That’s why constitutionally; you don’t even have to be a member of Congress to serve as Speaker. And that’s why the Constitution allows for thousands of members of the House for our current population. It is the people’s House and the people spoke last November; they cried out against a government completely out of control.”

“After President George W. Bush grew the US debt by seven trillion dollars in eight years in office and President Obama added four trillion in just two years in office, the people cried out against Big-Government policies that are sabatoging the economy and taking over our lives. And because they cried out, you are no longer just John Boehner from Ohio, you are now the second in line to succeed to the presidency. You are the Speaker for the House of Representatives. Mr. Speaker … Americans do not want to see the debt ceiling raised. They are sick and tired of paying interest on borrowed money, money borrowed in their name.”

And the good Judge is just getting started …

I’LL SAVE YOU A DOLLAR TOMORROW FOR A SPENDING INCREASE TODAY!

article from: angrywhitedude.com

JOHN 'WIMPY' BOEHNER

The plans coming from Washington for the debt limit situation remind me of the cartoon character from Popeye who said:
“I’ll pay you a dollar tomorrow for a hamburger today.”

I believe his name was Wimpy. Appropos for plans that promise to cut a trillion dollars over ten years for a $2 trillion advance today! Yes, Wimpy perfectly describes Republican and Democrat leadership these days.

FEAR THE TEA PARTY! AWD has been saying that for two years. There is little doubt now that the tea party has changed the entire Washington political dynamic! And now the establishment RINOs as well as the pathetic socialists in the Democrat party are quaking in fear of the growing power of ordinary American citizens who have banded together to say “no more!” to the fiscal insanity that has controlled Washington for far too long!

Speaker John “Boo Hoo” Boehner is crying over the fact that he cannot muster sufficient votes from the House Republicans to pass his lick and a promise plan to raise the debt limit. At least he has submitted a plan, unlike our Golfer in Chief! The Dims have not submitted a budget in over 820 days yet want us to give them another $2 trillion to “spread around.” Right!

Americans don’t trust Washington politicians. They have proven incapable of not spending money. They have also proven incapable of keeping promises. So it’s understandable that Americans are not excited about granting a $2 trillion extension to the debt limit on a promise that future cuts will be made. We simply know that will not be the case!

Now is the time the so-called “Tea Party” Congressmen and Senators need to break away from the RINO establishment and create their own plan that does what Americans sent them to do: eliminate the deficit! The federal government grows annually by built-in baseline budgets that grant an automatic 3-10% increase in federal budgets. It is time to stop this madness and start reducing budgets as it is done in the private sector. We do not want a decrease in additional spending, we demand drastic reductions in current spending levels in the federal government.

The freshmen Republicans should hold on to their votes and prohibit the Boehner plan from passing. DB Harry Reid has already said the Boehner plan is dead on arrival in the Dim controlled Senate. So the GOP freshmen should present a plan that, at the very least, holds spending at current levels and does not grant a debt limit increase. Let Obama and the Dims decide what must be cut. They wanted to lead, let them lead!
Social Security by law must be paid on time. So must our national debt. There is money for both as well as funds to pay for the military. After that, let Obama decide what to cut. I suggest he start with the Departments of Education, Labor, Energy, Agriculture, etc.

The Dims as well as the RINO Republicans despise the tea party. They should because we seek the political destruction of both groups. And we will see that soon enough. Next November is the next opportunity to clean house in Washington and retire big-spenders from both parties.

Angry White Dude calls on the fiscally responsible in the GOP to make a clean break from the “dumb ol’ boy” school in Washington. Stop the back-room deals and pay-offs and return government to the people instead of the lobbyists and unions. The GOP freshmen have the opportunity to be heroic statesmen and not footnotes in the history books. Footnotes that detail the financial destruction of the greatest wealth-creating machine the world has ever known.

Are you listening, Mike Pence? Are you listening, Jeb Hensarling? Jim Jordan? Marco Rubio, Rand Paul and Mike Lee? Do you know the opportunity that has landed at your feet? You know the right thing to do. Now go and do it! Be bold! The American people are behind you!

Swelling Nostalgia For Gold-Backed Money And A Balanced Budget Amendment

article by: Bill Bonner

After such stunning gains over the last few weeks, the stuff that Ben Bernanke does not regard as money, gold, needed a rest. But if gold isn’t real money, what is?  Pieces of paper that a private bank and the U.S. Treasury say is real money?

There’s no magic to money. It works as a medium of exchange and a store of value when its quantity is strictly controlled. That’s what’s nice about gold. Its quantity is controlled by nature herself. People have been trying to get around it for centuries. Alchemists labored long and hard to turn base metal into gold.

None succeeded.

The only way you can increase the supply of gold is by mining it, which is expensive and time consuming. Of course, technology helps. But technology tends to advance with the economy itself. So when the economy is growing at 1% a year, the quantity of gold tends to increase at about a 1% rate too.

What a miracle! Prices remain stable because the quantity of gold increases at almost the exact rate necessary. This is why you can reach about as far back in history as you want, you’ll find that gold was just about as valuable a thousand years ago as it is now.

In the 19th century, paper money was backed by gold. People had learned their lessons in the panics and bubbles of the 18th century. They didn’t trust pure paper currencies. Lincoln fiddled the dollar during the War Between the States, inflating the currency to pay for Union military campaigns but it was put right soon after. Apart from that, for the whole period, from the beginning of the 19th century to the creation of the Federal Reserve in 1913, the dollar was stable and reliable.  People trusted it because there was real money (gold) standing behind it.

Now the chief of America’s central bank says that gold is not money; the dollar is supposed to be money now. And now, the feds don’t worry too much about how many dollars they issue. Their primary goal is no longer preserving the purchasing power of the buck – it’s lost 95% of its value since the Fed was set up. Now, they’re more concerned with the stock market, with the housing market, with consumer spending, and with the next election.

Can we have confidence in these men?

Do they know what they are doing?

Did they see the crisis coming?

Did they understand what was happening?

Have their efforts to fix it been successful so far?

Is protecting the value of your money, and the financial health of the nation, their number one goal?

Five years from now, which do you think will be worth more? The dollar without gold behind it? Or gold, without the dollar?

A few people in Congress are trying to protect the dollar and America’s credit. The more the U.S. government spends, they reason, the more dollars it will have to borrow and print. Many of these debt-fighters are determined to hold the line against a debt ceiling increase. Others are hoping to cut a deal that will reduce America’s borrowing needs.  Still others just want to cause trouble for the Obama administration.
The U.S. Senate on Friday voted 51-to-46 to reject a “cut, cap and balance” bill that called for massive spending cuts and implementation of a balanced budget amendment to the Constitution.  The House passed the bill 234-to-190 on Tuesday.

How this brings back memories! Just out of college, I got a job helping a friend on Capitol Hill. He worked for a group called the National Taxpayers Union. NTU. Frequently calumnied as NUT.

Long before the Tea Party, our goal was to reduce the burden of government, to move the nation back towards the liberty imagined by the founding fathers, and to reduce the power of the jerks in Congress.  It was a shoestring operation with no real hope of success. We didn’t know it then, but the great tide of history was moving against us. We could swim as hard as we wanted but we still wouldn’t get anywhere.

At first, we thought we might get big support from very rich business people who had a lot to gain by cutting Washington down to size. We recall our first meeting with one of these people, Jack Eckerd of Eckerd drugstores.

A nice man with an earnest desire to make the world a better place, he came to our dump on East Capitol Street.  It had peeling wall paper, no air-conditioning, raggy carpeting, and mice. We paid $250 a month in rent. On our desks, we had the essential supplies of the time:  a bag of cookies, a pile of letters, an electric typewriter, a bottle of Liquid Paper and a roll of toilet paper.

“I see you have everything you need,” Eckerd said in good humor.

“We could also use $100,000 of your money,” we wanted to reply. We rolled out our best chair, a tall-backed office chair on casters with a cracked naugahyde seat.  It was a chair that we had found in the alley behind the office.

“Here, sit here.”   Mr. Eckerd took the seat, sat down, and leaned back.

In a flash, we knew exactly what was going to happen but were powerless to stop it.  Mr. Eckerd had passed the point of no-return.  The chair’s wheels rolled forward while the seat tumbled backwards.  Poor Mr. Eckerd hit his head on another desk on his way down.

Pardon the digression.  But the balanced budget amendment is exactly the measure we pushed 35 years ago.

The idea came to us from a Maryland state senator, Jim Clark, a descendant of Johns Hopkins.

Jim had been watching the U.S. budget for years. He looked ahead. He knew what was coming. And he came up with a way to prevent the U.S. from going broke.  “Congress will never do this on its own,” he explained. “They like spending other peoples’ money. But state legislators typically have to balance their own budgets and they don’t see any reason Washington should not be required to do the same thing.”
The Committee to Balance the Budget was formed. It worked, state by state, getting state legislatures to approve an amendment to the constitution forbidding deficits. How the world might be different if it had been enacted.

I left Washington and political activism for the world of publishing in 1980. At that point, the amendment was very close to passage. But then, in came Ronald Reagan and people stopped worrying about deficits.

If the Republicans weren’t going to worry about debt, the Democrats certainly weren’t going to sweat it either. Budgets got bigger and bigger. Deficits soared under Reagan, declined under Clinton, and then soared again under Bush and Obama. 

Now here we are, deeper in debt than Jim Clark, who died a few years ago, ever imagined.

Don’t Get Caught Holding Dollars When The U.S. Default Arrives

by: Addison Wiggin / Forbes.com

Greece can’t solve a problem of too much debt by taking on even more. We will note, however, that by some measures, the United States is even more deeply in hock than Greece.

Greece’s debt-to-GDP ratio is 143%. America’s is officially 97%. But the $14.3 trillion national debt, stacked up against a $14.7 trillion economy, doesn’t tell the whole story. Look at these numbers:
• $14.3 trillion: “official” national debt
• $5 trillion: Amount Uncle Sam is on the hook for Fannie Mae and Freddie Mac
• $62 trillion: Total liabilities and unfunded obligations for Social Security and Medicare

That doesn’t count the black box of bailouts.


We know how much the Federal Reserve doled out in emergency loans: $16.1 trillion between Dec. 1, 2007, and July 21, 2010. We know that because yesterday the Government Accountability Office completed its first-ever audit of the Fed, made possible largely through the persistence of Rep. Ron Paul (R.-Tex.) making that audit, however incomplete, the law.

What we don’t know is how much of that has been paid back.  “We have literally injected about $5.3 trillion,” said Dr. Paul earlier this month during his questioning of Fed chief Ben Bernanke, “and I don’t think we got very much for it. The national debt went up $5.1 trillion.”

Bernanke did not challenge those figures.

“To get our overall fiscal gap under control,” writes Boston University professor Laurence Kotlikoff in Bloomberg, “the U.S. must cut spending or raise tax revenue by $20 trillion over the next decade, far more than either the president wants or the House Republicans seek.”

Yep: The latest number we see bruited in Washington is $3 trillion. Whatever the final number — and there will be a last-minute deal; there always is — it will be substantially less than $20 trillion over 10 years. The can will be kicked as it keeps getting kicked in Greece.

We note here that the total of outstanding credit default swaps on U.S. Treasuries crested $4.8 billion this week. Uncle Sam has now surpassed Greece in this category.

Measured in year-over-year change, America is number one: Net notional CDS outstanding grew 109%. That means there’s double the bets out there on a U.S. default compared with a year ago.

“You may not know this, but the U.S. has actually defaulted a number of times already,” writes Chris Mayer this morning. He cites five instances:
• 1779: The government was unable to redeem the continental currency issued during the Revolutionary War
• 1782: The colonies defaulted on the debt they took out to pay for the war
• 1862: During the Civil War, the Union failed to redeem dollars for gold at terms stated by the debt contracts
• 1934: FDR defaults on the debt issued to finance World War I, refusing to redeem it in gold. The dollar is devalued 40% against gold
• 1979: A bureaucratic snafu results in interest going unpaid on some small bills.

“With the exception of 1979,” Chris says, “which was mostly due to administrative confusion — the U.S. simply ran out of money each time. The end result was the dollar had to be devalued. Meaning it lost significant purchasing power.

“My guess is that the U.S. will default again. It may not technically be called that, but the only way for the U.S. to meet its financial obligations is to print a lot of money.”

What does that mean in practical terms?  In Greece, professor Savas Robolis at Panteion University in Athens reckons that by 2015, the average Greek employee and pensioner’s standard of living will have fallen 40% compared with 2008.

Even now, Americans are turning to their credit cards to pay for groceries and gas. According to First Data Corp., the volume of gasoline purchases put on credit cards jumped 39% over the last 12 months.

You don’t want to be the average American in a default scenario, whenever it arrives. Ray Dalio, the head of Bridgewater Associates, the world’s biggest hedge fund, puts that day in “late 2012 or early 2013.”

'Super Congress': Debt Ceiling Negotiators Aim To Create New Legislative Body

Just when you thought you had seen it all!

These days there seems to be no limit as to how far our elected officials will go in their attempt to destroy our Constitution. This just released article from the Huffington Post should scare the hell out of every red blooded American.


article by: Ryan Grim

WASHINGTON -- Debt ceiling negotiators think they've hit on a solution to address the debt ceiling impasse and the public's unwillingness to let go of benefits such as Medicare and Social Security that have been earned over a lifetime of work: Create a new Congress.

This "Super Congress," composed of members of both chambers and both parties, isn't mentioned anywhere in the Constitution, but would be granted extraordinary new powers. Under a plan put forth by Senate Minority Leader Mitch McConnell (R-Ky.) and his counterpart Majority Leader Harry Reid (D-Nev.), legislation to lift the debt ceiling would be accompanied by the creation of a 12-member panel made up of 12 lawmakers -- six from each chamber and six from each party.


Legislation approved by the Super Congress -- which some on Capitol Hill are calling the "super committee" -- would then be fast-tracked through both chambers, where it couldn't be amended by simple, regular lawmakers, who'd have the ability only to cast an up or down vote. With the weight of both leaderships behind it, a product originated by the Super Congress would have a strong chance of moving through the little Congress and quickly becoming law. A Super Congress would be less accountable than the system that exists today, and would find it easier to strip the public of popular benefits. Negotiators are currently considering cutting the mortgage deduction and tax credits for retirement savings, for instance, extremely popular policies that would be difficult to slice up using the traditional legislative process.

House Speaker John Boehner (R-Ohio) has made a Super Congress a central part of his last-minute proposal, multiple news reports and people familiar with his plan say. A picture of Boehner's proposal began to come into focus Saturday evening: The debt ceiling would be raised for a short-term period and coupled with an equal dollar figure of cuts, somewhere in the vicinity of a trillion dollars over ten years. A second increase in the debt ceiling would be tied to the creation of a Super Congress that would be required to find a minimum amount of spending cuts. Because the elevated panel would need at least one Democratic vote, its plan would presumably include at least some revenue, though if it's anything like the deals on the table today, it would likely be heavily slanted toward spending cuts. Or, as Obama said of the deal he was offering Republicans before Boehner walked out, "If it was unbalanced, it was unbalanced in the direction of not enough revenue."

Republicans, however, are looking to force a second debt ceiling fight as part of the package, despite the Democratic rejection of the plan. Under the Republican plan, lawmakers would need to weigh in on the debt ceiling during the heat of the presidential election, a proposal Democrats reject as risky to the nation's credit rating. "We expressed openness to two stages of cuts, but not to a short-term debt limit extension," a Democratic aide close to the negotiations said. "Republicans only want the debt ceiling extended as far as the cuts in each tranch. That means we’ll be right back where we are today a few months down the road. We are not a Banana Republic. You don’t run America like that."

The aide said that Democrats are open to a series of cuts as well as a Super Congress, but only if the debt ceiling is raised sufficiently so that it pushes past the election. "Our proposal tonight was, do two tranches of cuts, but raise the debt ceiling through 2012 right now, though the McConnell process would be one way," said the aide, leaving open the possibility that Boehner could craft a new process and distinguish it from McConnell's, which the Tea Party despises as a dereliction of duty. "Do that now with a package of cuts, and have the joint committee" -- the Super Congress -- "report out a package that would be the second tranch. Republicans rejected that, and continued to push a short-term despite the fact that Reid, Pelosi and Obama all could not have been clearer that they will not support a short-term increase. A short term risks some of the same consequences as outright failure to raise the ceiling -- downgraded credit rating, stocks plunge, interest rates spike, etc. It is unclear why Republicans have made this their sticking point."

Boehner spokesman Michael Steel argued that the inability to come to a larger deal so far left a short-term extension as an "inevitable" option. "For months, we have laid out our principles to pass a bill that fulfills the president's request to increase the debt limit beyond the next election. We have passed a debt limit increase with the reforms the American people demand, the 'Cut, Cap, and Balance' bill. The Democrats who run Washington have refused to offer a plan," he said in a statement. "Now, as a result, a two-step process is inevitable. Like the president and the entire bipartisan, bicameral congressional leadership, we continue to believe that defaulting on the full faith and credit of the United States is not an option."

Obama has shown himself to be a fan of the commission approach to cutting social programs and entitlements. Shortly after taking office, Obama held a major conference on deficit reduction and subsequently created, by executive order, The National Commission on Fiscal Responsibility and Reform. The White House made two telling appointments to chair the commission: The first was former Sen. Alan Simpson (R-Wyo.), a well-known critic of Social Security who earned notoriety by suggesting, among other things, that the American government had become "a milk cow with 310 million tits!" Yet Obama's Democratic appointment was even more indicative of whose interests took priority: former Clinton White House Chief of Staff Erskine Bowles. Bowles is a member of Morgan Stanley's board of directors; an adviser to Carousel Capital, a private equity firm; and a director of Cousins Properties Incorporated, a firm with significant investments in commercial and mixed-use real estate.

Simpson and Bowles, perhaps unsurprisingly, produced a report recommending corporate and high-end tax cuts, along with cuts to Social Security, Medicare, veterans' benefits and a host of other social programs.
The commission needed 14 of 18 members to approve the plan in order for it to advance to Congress for a vote. The commission fell short, but did win a majority.

Proponents of slashing spending won't make the same mistake with a new Super Congress. Only a simple majority will be necessary.

A Few Years From Now You’re Going To Wake Up With A Bunch Of New Taxes

article by: Bruce Krasting

 

 

 

A Trillion dollars of revenue is on the plate.

 

We’re coming down to the wire on the debt limit. “Hard” deals are now being put on the table. The Republicans have said all along they don’t want any new taxes. But only a fool could think this can be done without a significant amount of revenue increase. So if we’re to get a deal what has to give? Easy. Rather than increase taxes the government can phase out deductions.

This data looks at individual deductions. This come to a whopping $950 billion. You tell me, are you on this list? Have a mortgage? Pay state or property taxes? School debt? Health care costs? Charity? Kids? Veterans? At one point or another every American is on this hit list.

Consider the deductions at the corporate level in America. It’s only $65b. Peanuts compared to the tax breaks of individuals.

Now think of yourself in a room trying to negotiate this big deal. It’s all well and good to say that the end result will be more taxes for corporations. But at a ratio of 15 to 1 you have to hit individuals pretty hard in order to raise any serious money. At this point everyone understands that. Cutting personal deductions in a very big way is the only possible outcome where all sides can save some face.

The way that these cuts in deductions will be phased out will hit high incomes the hardest. But don’t kid yourself; this will end up in three to four years as a very middle class tax increase. Should something like this come about you have to look askance at owning real estate. You’ll get hit with a tax from employer 401 contributions. You might think twice about having a child. Those charitable deductions are just that, charity.

I guess this is what has to happen when you need to raise a trillion in revenue to sell a deal. We’re going to hate it a few years from now when all this kicks in.

 

9 Ways That The World Has Gotten Even Crazier In May

article from: theeconomiccollapseblog.com

In case you haven't noticed, the world has gotten even crazier in May. Just when you think that things can't get any more bizarre, events go to a whole new level. Sadly, millions of Americans seem almost completely oblivious to all of the world-altering things that are going on all around us. I recently got back from doing a bit of traveling, and the reality is that most people out there are so busy living their lives and trying to survive from month to month that they don't really have much time to pay attention to what is going on in the world around them. They are too busy working their tails off to make a living, they are too busy stocking up on groceries and foreign-made goods at the big box retail stores and they are too busy cheering for Scotty on American Idol. Unfortunately, what little information about the rest of the world that most Americans actually take in comes from the mainstream media. Most of the time the mainstream media is very adept at lulling the American people to sleep, but things are starting to get so crazy out there that a growing minority of Americans are starting to sit up and take notice.


When I was away on vacation I kept a bit of an eye on the news, but I had no idea just how crazy things were getting until I returned home. These days more seems to happen in a single week than used to happen in an entire month. The globe has become an incredibly unstable place, and you never know what is going to happen next.

The following are 9 ways that the world has gotten even crazier in May....

#1 What in the world is going on with the weather?  All of a sudden "unprecedented tornadoes" are popping up almost every day now.  Did you see what happened in Joplin, Missouri the other day?  There are very few things that will put sheer terror into you like an F5 tornado will.  If you doubt that, just check out this video.

The National Weather Service says that the Joplin tornado was the 8th worst tornado to ever hit the United States.  At least 122 people were killed and at least 750 people were injured.

Sadly, the Joplin tornado is part of a larger trend.  Many are already calling this a "100 year" tornado season.  It seems like a major tornado outbreak somewhere in the U.S. is a nightly occurence now.  For example, just tonight a huge tornado near Oklahoma City killed a couple of people.

In April, there were approximately 600 tornadoes across the country.  That is the most tornadoes that have ever been recorded in a single month inside the United States.  Usually, we only have about 1,200 tornadoes for the entire year.

There is nothing "normal" about these tornado outbreaks.  Something really weird is happening.
In addition, we have just experienced the worst Mississippi River flood ever.  That flood is also being called something that only happens "once in a hundred years".

Why are such horrible natural disasters striking the United States right now?

Can anyone explain why this is happening?

#2 The globe continues to inch ever closer to World War III.  Just consider a few of the headlines we have seen just this week....

*NATO Warplanes in New Bombing Campaign on Tripoli
*Obama's hidden war: US intensifies drone attacks in Pakistan
*US, Pakistan Near Open War; Chinese Ultimatum Warns Washington Against Attack
*Netanyahu's defiance on deal is 'declaration of war'

Sadly, it appears that the appetite for war is growing.  Many had hoped that Barack Obama would be a peacemaker, but that definitely is not the case.

The United States has been at war for so long that the American people have learned to accept it as a normal part of life.  As long as it is something that happens "over there", most Americans don't really seem too concerned about it.

But in the end, what is unfolding in the Middle East will have dramatic consequences for the United States.  Unfortunately, most Americans have become so "dumbed down" that they simply do not understand what is happening.

#3 The news from Japan just continues to get worse and worse.  Now TEPCO is finally admitting that there were at least partial meltdowns at three of the reactors at Fukushima.  Why we are only finding this out now is anyone's guess.

It has been more than 2 months since the tsunami and officials in Japan still do not have Fukushima under control.  Every single day the complex continues to release massive amounts of radioactive material into the environment and the effects of this disaster will be felt for decades to come.

#4 When all of the crazy new security measures went into airports, we were all assured that scanners and "enhanced pat-downs" would never show up in subway stations, bus stations, sporting events and public schools.

Well, sadly the ridiculous security measures that have been implemented at our airports are spreading.  In fact, if you can believe it, a "certified TSA official" was brought in to oversee student searches at the Santa Fe High School prom last weekend.

When TSA officials start showing up at high school proms that should be a major red flag for all of us.  America is becoming a much different place than it used to be.

Do you enjoy living in a prison grid where we are all being constantly watched, tracked and searched?  If not, you better say something now before it is too late.

#5 The U.S. Supreme Court has upheld an order from a three-judge panel in California that mandates the release of approximately 40,000 inmates from California prisons.

Yes, the prisons are so overcrowded that up to 54 prisoners are using a single toilet, but you can't just release thousands upon thousands of criminals on to the streets of California and expect that there will not be major problems.

California Governor Jerry Brown is proposing a "realignment plan" which would shift tens of thousands of prisoners to county jails, but the California legislature so far has not authorized the hundreds of millions of dollars that it is going to take to implement the plan.

Hopefully something can be done, because releasing more than one out of every four California inmates back on to the streets sure does seem like a bad idea to me.

#6 It is looking more likely than ever that the U.S. debt ceiling may not be raised and that we could actually see the U.S. government default on some debt.  The Democrats and the Republicans are fighting like cats and dogs again and there is such a deadlock right now that this could actually happen.

U.S. Representative Barney Frank certainly does not sound optimistic....

"It may be that we’re going to have to see some failure to raise the debt limit and some temporary hiatus in our ability to pay our bills (for lawmakers to act)."

JPMorgan Chase CEO Jamie Dimon is using language that is even more apocalyptic.  Dimon says that a U.S. debt default would "dwarf Lehman Brothers" and that in the event of a default things will take place "that are not going to be pretty".

#7 The U.S. real estate crash continues to get even worse. This week it was announced that U.S. commercial real estate is now down 47 percent from 2007 and has now reached a post-crash low. The following is how an article by Bloomberg described the latest data....

U.S. commercial property prices fell to a post-recession low in March as sales of financially distressed assets weighed on the market, according to Moody’s Investors Service.
The Moody’s/REAL Commercial Property Price Index dropped 4.2 percent from February and is now 47 percent below the peak of October 2007, Moody’s said in a statement today.

But it is not just commercial real estate that is a giant mess.  New home sales also continue to struggle mightily.

In April, the number of new homes sold in the United States tied the lowest level ever recorded for that month.

These latest statistics just underscore the reality that the U.S. housing crash if very far from over.  As I have written about previously, the real estate crisis is absolutely crippling the economy and instead of signs of hope arising, things seem to be getting even worse.  For example, during the first quarter of 2011, home values declined at the fastest rate since late 2008.

So when in the world are things going to finally start turning around?

#8 Most Americans don't realize it, but Europe is closer to a financial meltdown than it ever has been before. Greece is either going to get another bailout or it is going to default.  If you do not understand the kind of chaos this would set off on world financial markets, just read this editorial.

The Greek debt crisis continues to get worse.  At this point, the yield on 10-year Greek bonds has now reached an astounding 16.76%.

But it is not just Greece that is in trouble.  All over Europe there are nations that are on the verge of financial collapse.  In Spain, nearly half of those between the ages of 18 and 25 are unemployed and the economic protests there have reached a frightening level.

Everyone hoped that a bailout or two would be enough to make the European debt crisis go away.  It has now become obvious that is not going to happen.

A financial meltdown in Europe is happening.  The only question is how it is going to play out.
#9 Over the past couple weeks, one of the most talked about people in the world has been Harold Camping.  I have avoided writing about him because there are at least a billion issues that are more important than what Harold Camping is saying.

But this is what the mainstream media loves to do.  They love to find a Christian with a crackpot theory and splash him all over the front page.

Camping has a very limited following and the vast majority of Christians think he is totally and completely wrong.

However, the mainstream media loves to talk about people like Camping because it is a tremendous opportunity for them to mock Christians and Christianity.

Look, anyone that put any stock in any of Camping's predictions is seriously deceived.  In case you didn't know, Camping predicted the date of the rapture before.  On September 6th, 1994, hundreds of Camping's followers gathered at an auditorium in Alameda, California waiting for the rapture.

So now Camping has been wrong two times.

Now Camping is saying that Judgment Day is going to be on October 21st and he says that he has figured out why he was wrong about May 21st.

If you believe that, I have a bridge to sell you.

If you are a Christian, then you know that there are dozens of prophecies that still need to be fulfilled before "the end of the world".  What Camping is proposing is literally impossible according to the Bible.

Of course the mainstream media knows this, but they have no problem turning Camping into a household name while ignoring the thousands upon thousands of Christians around the world that are doing really great things.

But this is the crazy world we live in.  We are all talking about Harold Camping because the big media companies decided that was the way it was going to be.

It is time that all of us wake up and start thinking for ourselves.

Our world is becoming crazier by the minute and the mainstream media is certainly not helping things.  In times like these, it is going to be absolutely vital for all of us to engage our critical thinking skills and to not just blindly accept anything that someone else is trying to tell us.

Ron Paul Says: Sell The Gold In Ft. Knox (If There Is Any)

Selling Gold at Fort Knox Emerges as Next Big Question in Debate on Federal Debt Limit

by: David Pietrusza

NEW YORK — The next big question on the federal debt limit could be whether to start selling the government’s holdings of gold at Fort Knox — and at least one presidential contender, Ron Paul, has told The New York Sun he thinks it would be a good move.

The question has been ricocheting around the policy circles today. An analyst at the Heritage Foundation, Ron Utt, told the Washington Post that the gold holdings of the government are “just sort of sitting there.” He added: “Given the high price it is now, and the tremendous debt problem we now have, by all means, sell at the peak.”


His comment came in the wake of not only the government having reached the statutory debt limit of $14.29 trillion but also the release of a report by the Heritage Foundation of a report on asset sales. The report outlined how a “partial sales of federal properties, real estate, mineral rights, the electromagnetic spectrum, and energy-generation facilities” might garner the federal treasury $260 billion over the course of the next 15 years.

The report did not mention the possibility of selling the government’s holding of 147 million ounces of bullion, which at recent prices of $1,500 an ounce, would be worth about $370 billion. But the possibility has not been lost in the policy debate now raging in Washington. The Wall Street Journal reported Monday that a group of Republican congressmen supports the idea of selling gold.

Officials of the Obama administration have taken notice — and disagree. The assistant Treasury secretary for financial markets, Mary Miller, wrote in a posting on the Treasury Department’s Website May 6 that “fire sale” of the government’s financial assets, including gold, would not be a “viable option.” She urged instead a raising of the debt limit.

An unnamed senior administration official was quoted by the Washington Post as saying, “Selling off the gold is just one level of crazy away from selling Mount Rushmore.” The Wall Street Journal, in its dispatch Monday, reported that Treasury “could be forced to rethink” their opposition if the budget talks fail.
A study of gold reserve sales in the late 1990s noted that seven nations — Australia, Austria, Belgium, the Netherlands, Portugal, and Sweden — had then recently sold off substantial portions of their gold reserves. The sales, which amounted to 48% of those reserves, presaged a 26% devaluation in their nation’s respective currencies. Between 1999 and 2002, in 17 separate auctions, Britain sold off half of its gold reserve, netting $3.5 billion. What Britain sold is now worth $10.5 billion.

In September 2009 the International Monetary Fund authorized sales from its gold reserves. At the conclusion of its sales, the IMF had disposed of 403.3 tons of gold or 13% of reserves. Over half was purchased by the central banks of India, Sri Lanka, Mauritius, and Bangladesh. In early 2011, Communist China announced plans to increase its gold reserves from to 10,000 tons by decade’s end from the 1,200 tons it currently holds. Mexico has acquired 93.3 tons of gold this year, while Thailand added 9.3 tons to its national reserves this March. Russia added 22.5 tons in January and February.

In August 2010, a leading figure in the monetary debate in Congress, Ron Paul, a Republican of Texas, called for an audit of the federal government’s gold reserves. “If there was no question, you’d think they would be very anxious to prove to us that the gold is there. . . . ,” Dr. Paul then said, “In the early 1980s when I was on the gold commission, I asked them to recommend to the Congress that they audit the gold reserves – we had 17 members of the commission and 15 voted not to the audit. I think there was only one decent audit done 50 years ago.”

“If we ever get around to deciding we should use gold in relationship to our currency we ought to know how much is there,” Dr. Paul added, “Our Federal Reserve admits to nothing and they should prove all the gold is there. There is a reason to be suspicious and even if you are not suspicious why wouldn’t you have an audit?” In March 2008 the Times of London quoted a spokesman of the American treasury as saying that American gold holdings “are audited every year by the Department of Treasury's Office of Inspector General. He confirmed that although independent auditors oversee the process they are not given access to the Fort Knox vault.”

Dr. Paul told the Sun today that he reckoned the sale of gold reserves would be “a good and moral decision. An individual would have to do the same.” The sentiment is echoed by another big name in the debate on monetary reform, Edwin Vieira Jr., who told the Sun he has little hope of the government moving to sound money and would prefer that it coin its gold holdings in pieces marked with their weight and use them to pay off debts, particularly individuals — who might be owed, say, tax refunds.

Mr. Vieira is a proponent of what he calls the “absolute separation between currency and debt.” He considers specified weights of gold and silver as the only constitutional currency. “Redeemable currency,” he says, “is an oxymoron.” And given that America is in an era of fiat money with no plans on the government’s part to mount a reform, he says of the government: “They don’t need the gold. They’ve just been sitting on it since Roosevelt stole it.”

However, one of the most famous advocates of the gold standard, Lewis Lehrman, opposes the sale of the gold holdings of the American government — or any part of them. “Under no circumstances should the United States consider selling a single ounce of gold,” Mr. Lehrman, who runs the internet project TheGoldStandardNow.org, told the Sun. “On the contrary, depending upon the facts and circumstances and the level of prices, the United States might be a gradual buyer.”

Mr. Lehrman, who had served in the early 1980s with Dr. Paul as a member of the United States Gold Commission, had just been this afternoon interviewed by Diane Rehm of National Public Radio, on which he called for American leadership in restoring a gold standard. He did not suggest that it could be done immediately, but he argued that this is the time to start, saying: “We have all the grounding and the basis for the United States taking the lead in establishing the convertibility of the dollar today.”

http://www.nysun.com/national/selling-gold-at-fort-knox-emerges-as-next-big/87350/

$2 Trillion Mile Marker on Road to Perdition

This week, Treasury Secretary Tim Geithner proposed raising the debt ceiling by $2 trillion.  I thought, this should be big news!  After all, a trillion is a thousand billion.  This adds up to 2 thousand billion over the next 2 years!! 

The mainstream media greeted this story with a great big yawn. I do not get that because the Republicans and Democrats fought for weeks to only cut the budget a measly $38 billion.  The press was non-stop, and Congress was only an hour away from shutting down the government.  Even the $38 billion cut was a big fat lie according to CBS News.  The story said in mid-April, “Well, thanks to the Congressional Budget Office and some great reporting by the Washington Post, it turns out the government won’t be cutting $38 billion in one year after all. No, the real cuts will be more like $352 million!  You heard me right, $352 million, NOT $38 billion.  The rest? Mostly smoke, mirrors and accounting gimmicks.” (Click here for the entire CBS News story.)

Both parties want to cut roughly $4 trillion out of the budget over the next 10 to 12 years.  Can someone please explain how that is accomplished by tacking on another $2 trillion to the national tab?  I do not get the math and neither does Bill Gross, the head of the biggest bond fund in the world.   He said in early January, “We have a deficit in the $1 trillion plus arena, which means we must borrow at least a trillion dollars additional a year in order to fund the deficit.  And, so, the debt ceiling currently at $14.3 trillion, which is 95% of GDP, has to go up by another trillion or so every 12 months.” (Click here to read my original post on the debt ceiling.) Not long after Gross made this statement, he sold most, if not all, of his U.S Treasuries.   What do you know?  He was right on the money.  The proposal from the Treasury is a $2 trillion increase in the debt ceiling to cover most of the next 2 years.

You see, it’s not just the Treasuries he’s worried about, but the currency he will be paid back in.  A Treasury bond pays interest.  Investors buy them, if they think they can get paid back enough dollars to offset inflation and make a profit.  Mr. Gross is betting the dollars he would get paid back would actually be worth less when the bond matures, and thus he holds very little U.S. government debt.  In a recent article, he said, “I spoke last month to the reality of investors being “skunked” and having their pockets picked simply by receiving yields less than inflation, and suggested that as a major reason why the PIMCO ship was carrying a limited supply of Treasuries on board.” (Click here to read the latest post from Bill Gross.)

The debt ceiling currently stands at $14.3 trillion and word is we will exceed that amount by August (although some say we have already exceeded it).  Reuters reported this week, “Geithner said he could avoid default until August 2, but repeated his warning that a failure to raise the borrowing cap would have a “catastrophic” impact on the economy. . . .If the debt ceiling is not raised, investors may fear that the United States could not repay its loans and so would sell U.S. government bonds. That would drive down bond prices and force the United States to offer higher interest rates to make its debt more attractive to lenders — a move that would lead to a dangerous spike in interest rates throughout the economy.” (Click here for the complete Reuters story.)

But, Mr. Geithner may have another reason for the big debt limit increase.  It is continued back-door bank bailouts!  Earlier this year, Geithner forgave Bank of America $127 billion in possible buy-backs of toxic mortgage debt packed into government owned mortgage giant Freddie Mac.  (Click here to read more on this story.)  What do you bet the other big banks want the same deal?  What they should be getting is investigated and indicted for ripping off the American taxpayer.  Not a single financial elite has gone to jail for causing the $12 trillion meltdown of the economy and causing millions to be foreclosed upon.  The U.S. Justice Department cannot find a single crime in the entire financial debacle, but Wall Street banker bonuses keep getting bigger.

Raising the debt cap by $2 trillion will be granted to Mr. Geithner.  That’s about all that will get done because if Congress can’t even cut $38 billion, how can it cut $4 trillion?  (That’s 4 thousand billion.)  It can’t—the cuts will never materialize.  America will just get more and more inflation as the dollar is printed out of thin air to cover the cost.

 There is no way this ends well.

http://usawatchdog.com/raising-the-debt-ceiling/

If You Are Against Raising The Debt Ceiling You Are Part Of Al-Qaeda?

Are you against raising the debt ceiling?  If so, according to former Bush Treasury Secretary Paul O'Neill you are actually part of al-Qaeda.  Yes, seriously.  During an interview on Bloomberg TV the other day, O'Neill actually made the following statement:

"The people who are threatening not to pass the debt ceiling are our version of al-Qaeda terrorists. Really. They're really putting our whole society at risk by threatening to round up 50 percent of the members of the Congress, who are looney, who would put our credit at risk." 

For a high ranking Bush administration official to equate Tea Party activists with al-Qaeda is extremely frightening.  Just remember what the Bush administration did to anyone supposedly associated with al-Qaeda.  They shipped them off to Guantanamo Bay and waterboarded them into oblivion.  It also shows how out of touch the Bush administration really was with the conservative base of the Republican Party.  The Bush administration ran up record setting deficit after record setting deficit and now any conservatives that dare to want some assurances that we are actually going to do something about our rampant debt problem are labeled as "al-Qaeda terrorists".  Of course the Obama administration is essentially doing the exact same thing.  The current Treasury Secretary, Timothy Geithner, has been running around frothing at the mouth and declaring that we are going to experience financial armageddon if the debt ceiling is not raised.  This whole episode is yet another example that shows what a fraud the false left/right political paradigm in this country really is.

The debt ceiling is one of the only points of leverage that the Republican-controlled House of Representatives has available.  If the Republicans want to make a stand on the national debt, they need to do it somewhere.  John Boehner already caved badly when it came to the 2011 budget.  The Republicans are running out of opportunities to make a statement before the 2012 election.

Not that Boehner and the rest of the "establishment Republicans" are much interested in seriously cutting the budget.  If they were, they would have done it during the Bush years.

But there are millions of Americans (and a few members of Congress) associated with the Tea Party movement that are deeply troubled by our soaring budget deficits and that desperately want something done before it is too late.

If the U.S. government keeps running up debt like it is right now, it is going to completely destroy our economy.  America has a debt problem unlike anything ever seen in the history of the world.  If left unchecked, it is going to destroy the economic future of our children and our grandchildren.

Something needs to be done.

Yes, if the debt ceiling is not raised, the financial world will throw a fit.  There may even be a bit of a panic.  But you can't really blame those associated with the Tea Party for wanting some assurances about getting the debt under control before agreeing to raise the debt ceiling yet again.

Our national debt is a horrific national crisis.  It threatens to destroy everything that our forefathers built.
But members of the political establishment such as former Treasury Secretary Paul O'Neill don't have much patience for those that want to question the status quo.

Look, when any member of the Bush administration uses the words "al-Qaeda" in relation to a group of people you need to pay careful attention.

Do you remember how the Bush administration treated anyone that was accused of being part of al-Qaeda?  The following are some of the kinder things that they would do to them according to official U.S. government memos....

*Forced nudity
*"Walling", which is slamming a prisoner into a wall
*"Cramped confinement" which means "placement of the individual in a confined space"
*Stinging insects placed inside "a confinement box"
*Waterboarding - one of the memos actually admits that "the use of waterboarding constitutes a threat of imminent death"
*Sleep deprivation for several days
*Sleep deprivation while wearing a diaper
*The use of "stress positions" to cause "muscle fatigue"
*"Dietary manipulation"
*Facial and abdominal slapping

There are a lot worse things that they would do to "members of al-Qaeda" but they cannot be printed in this space.

So when Paul O'Neill says that you are part of al-Qaeda, let's just say that he does not plan to invite you out for a Sunday picnic.

This is yet another example of how dirty politics in America is becoming.  Liberals hate conservatives and conservatives hate liberals.  They both hate libertarians and libertarians hate them.  America is a deeply, deeply divided nation and hatred and bitterness are growing at a staggering pace.

Meanwhile, the U.S. government is absolutely drowning in debt and the plans put forward by both the Democrats and the Republicans are total jokes.  Nobody seems to have any idea how to get out of this mess.

We have accumulated the largest mountain of debt in the history of the world and we expect our children and our grandchildren to pay it off.

What we have done to future generations is absolutely inexcusable.

In a previous article on U.S. government finances, I detailed some absolutely horrifying statistics about U.S. government debt....

#1 If you divide the national debt up equally among all U.S. households, each one owes a staggering $125,475.18.

#2 The federal government has borrowed 29,660 more dollars per household since Barack Obama signed the economic stimulus law two years ago.

#3 During Barack Obama's first two years in office, the U.S. government added more to the U.S. national debt than the first 100 U.S. Congresses combined.

#4 In the new budget that the Obama administration has proposed, the U.S. government would spend 3.7 trillion dollars in 2012 and by 2021 the U.S. government would be spending a whopping 5.6 trillion dollars per year.

#5 The U.S. government currently has to borrow approximately 41 cents of every single dollar that it spends.

#6 The total compensation that the federal government workforce earned last year came to a grand total of approximately 447 billion dollars.

#7 The U.S. national debt is currently rising by well over 4 billion dollars every single day.

#8 The U.S. government is borrowing over 2 million more dollars every single minute.

#9 The U.S. national debt is over 14 times larger than it was just 30 years ago.

#10 Unfunded liabilities for entitlement programs such as Social Security and Medicare are estimated to be well over $100 trillion, and nobody in the U.S. government seems to have any idea how we are actually even going to come close to meeting all of those obligations.

#11 If you were alive when Christ was born and you spent one million dollars every single day since that point, you still would not have spent one trillion dollars by now.  But this year alone the U.S. government is going to go about 1.6 trillion dollars more into debt.

#12 If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.

You would think that our politicians would be working night and day to solve this problem.

But instead, anyone that is actually serious enough to want to pause before raising the debt ceiling again is called an "al-Qaeda terrorist".

Even if you are against the Tea Party and in favor of raising the debt ceiling immediately, you should still be extremely concerned when a former high ranking member of the government equates a group of Americans with "al-Qaeda" just because of their political beliefs.

Our country is being transformed. Liberty and freedom are dying. Today, when Americans are concerned about the national debt they are called "terrorists", but when our women and our children are sexually molested at "security checkpoints" it is called "patriotic".

Just check out what happened to a former Miss America as she went through "airport security" recently. 

This video is incredibly upsetting....

Read this article and more at: endoftheamericandream.com

Obama's Permanent Spending Binge

article by: John B. Taylor

Americans are clamoring for a fact-based debate about the budget, but the numbers they're hearing from Washington are terribly confusing. Here's an example: Speaking at a Facebook town hall meeting here on Wednesday, President Obama sometimes talked about saving $4 trillion, at other times $2 trillion, and he varied whether it was over 10 years or 12 years, never mentioning any one year.


A simple chart, like the one below, would greatly clarify the debate. It shows total federal government spending year-by-year for the two decades starting in the year 2000. Spending is shown as a percentage of GDP, which is a sensible and quite common way to assess trends: When the percentage rises, government spending rises relative to total income or total goods and services produced in our economy.

For the past decade, the chart shows the recent history of government spending. For the next decade—the window for the current budget—it shows three different spending visions for the future.

The uppermost line shows outlays under the official budget submitted by Mr. Obama to Congress on Feb. 14. The lowest line shows the House Budget Resolution submitted by House Budget Committee Chairman Paul Ryan on April 5, while the third line shows year-by-year outlays I estimated from the 12-year totals in the new budget proposed by the president on April 13.

The chart clearly reveals a number of important facts that are not coming up in town hall meetings. Most obvious is the huge bulge in spending in the past few years. In 2000 spending was 18.2% of GDP. In 2007 it was 19.6%. But in the three years since 2009 it's jumped to an average of 24.4%.

Second, and perhaps even more striking, the chart shows that Mr. Obama, in his budget submitted in February, proposed to make that spending binge permanent. Spending would still be more than 24% of GDP at the end of the budget window in 2021. The administration revealed its preference in the February budget for a much higher level of government spending than the 18.2% of GDP in 2000 or the 19.6% in 2007.

Third, the House budget plan proposed by Rep. Paul Ryan (R., Wis.) simply removes that spending binge—it gradually returns spending as a share of GDP back to a level seen only three years ago.

When I show people this chart they ask why Washington is even having the debate. They say: If government agencies and programs functioned with 19% to 20% of GDP in 2007, why is it so hard for them to function with that percentage in 2021, when GDP will be substantially higher and with many opportunities for reforms and increased efficiencies? And if GDP and employment grow more quickly, as they would if private investment increased as a result of lower government spending and debt, then that 19% to 20% share of GDP could provide much more in the way of public goods.

Fourth, the chart shows that the second Obama administration budget, submitted a week after the Ryan House budget, is substantially different from the first administration budget. It is highly unusual for an administration to decide to submit a second budget, and the effect of this revision is to move the administration's spending vision closer to that of the House. But it still leaves a big chunk of the spending binge in place.

Fifth, and perhaps most important for economic growth, the chart shows that the House budget effectively deals with the deficit and brings the debt down as a share of GDP without a tax increase. Under the current tax system, revenues as a share of GDP were 18.5% in 2007, so that the budget deficit was only 1.1% of GDP that year. With higher real incomes moving people into higher tax brackets, it is quite likely that under the current tax system revenues will be higher as a share of GDP when the economy fully recovers, perhaps in the 19% to 20% range.

This means that the House budget plan, with spending in the same range, approximately balances the budget with no increase in taxes. This is good news for economic growth. In contrast, balancing the first or even the second Obama budget requires substantial tax increases—more than the administration has yet to propose.

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