Who’s Jon Galt? asked:


http://www.bloomberg.com/apps/news?pid=20601087&sid=aJsSb4qtILhg&refer=worldwide

“May 14 (Bloomberg) — President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.

“We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”

The national debt is currently $1.26 trillion.
Obama has proposed a whopping $17 billion be cut from the budget. At the same time he is seeking $81 billion in spending increases.

Have we not been telling you this all along?

And no lip about Bush. I disliked him also.

Trillion

Tril”lion\, n. [F. trillion, formed from the pref. tri- in imitation of million a million. Cf. Billion.] According to the French notation, which is used upon the Continent generally and in the United States, the number expressed by a unit with twelve ciphers annexed; a million millions; according to the English notation, the number produced by involving a million to the third power, or the number represented by a unit with eighteen ciphers annexed. See the Note under Numeration.
Webster’s Revised Unabridged Dictionary, © 1996, 1998 MICRA, Inc.
Cite This Source
Beverly, did you read anything other than my headline?
Chuck, I say “no lip about Bush” because he is no longer the president. At some point, Obama will have to own this debt that BOTH parties have accrued, and under Obama’s watch, has doubled.
Show me an example where a nation has spent its way to prosperity.

Jesse

WHITE HOUSE WATCHING asked:


President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.

“We can’t keep on just borrowing from China,” Obama said

I agree President Obama. Can we return the money that you two have not spent? Will you get the heck out of the way and let the country do what it does best?

http://bloomberg.com/apps/news?pid=20603037&sid=abXWfVxx_e8w&refer=home

iamct01………………………you need to read more. It was CLINTON that enacted NAFTA that sent our jobs overseas and south.

Margaret

Warren T asked:


HEALTHCARE: OBAMA’S WATERLOO?

By DICK MORRIS

Published on TheHill.com on June 16, 2009

To quote the esteemed Rev. Jeremiah Wright, the chickens that were hatched in the stimulus package are coming home to roost in the healthcare proposal. The budget deficit Obama racked up paying for the massive federal spending passed in January is now having a real economic and political impact, which is forcing the president and his congressional allies into hard choices as they face his healthcare legislation.

Of course, the prudent thing to do is postpone healthcare changes until the economy generates some revenues and trims the deficit. But the socialist in the White House can’t do that. He’s got to strike while his congressional majority is hot. So he is forcing his administration and his party to choose among unpalatable choices to finance his program. His demand may be a bridge too far, endangering his popularity with the American people.

First of all, the very fact of a focus on healthcare reform inevitably stirs discussion of the deficit. Americans are allergic to deficit spending and worry the more the deficit grows. As interest rates rise and the government finds it more and more difficult to borrow enough to cover Obama’s massive spending, the economy is likely to show the negative effects. It is a matter of a few months, certainly no more, before voters start to realize that it is the deficit, not the pre-existing conditions Obama inherited, which is causing the prolongation of the recession. Already the jump in mortgage rates has slowed the refinancing, which was the only aspect of the Obama economic program that was working well.

But the foreign and domestic focus on the deficit has a harsher political impact: It forces the Democrats to come up with money to fund healthcare reform. In other words, it makes them raise taxes. The Democratic Party is good at fooling itself that tax increases don’t matter and are politically palatable, but they do and they are not.

The massive spending healthcare will require dwarfs the capacity for the rich alone to pay the bill, no matter how confiscatory Obama chooses to become. Only broader taxes will do the job. Obama faces two practical choices: a value added tax or taxing health insurance benefits.

The political harm either way will be enormous. Not only will Obama be breaking his pledge not to tax the middle class, but he will be doing so in a particularly pernicious way. If Obama opts for the value added tax (VAT), Democrats will hope to cloak the increase in the price of the product. They reason that the consumer won’t know how much the tax is since it will be added on throughout the sale and resale of the product rather than at the cash register at the end, as the sales tax is. But it will work the other way. As inflation sets in, triggered by Obama’s deficit spending, consumers will blame the whole thing on Obama. His VAT will be much magnified in the voters’ minds to include all of the inflation going on. Just as voters blamed Clinton’s gas tax increase of five cents in 1993 for the entire run-up in gasoline prices at the pump, so they will place all the blame for inflation on Obama’s VAT.

Or Obama could tax healthcare benefits, a direct reversal of his campaign pledge. He would be adopting a policy for which he overtly and loudly criticized McCain. And his popularity will wilt as taxpayers suddenly have to add onto their tax liability the money their employer has always paid for their health insurance. Obama will probably have his own separate line on the 1040 and even on the short form for his new tax. That’s not the way to stay popular.

Obama’s only good option is not to move so quickly on healthcare reform, to give himself some wiggle room. But as the song says, “we’re knee deep in the big muddy but the damn fool says to push on!”

Pearl

Rick asked:


We are currently seeing bank failures, insurance company failures, stock failures, mortgage failures and an increase in unemployment. Unfortunately, the U.S. is having to borrow the money from other countries to finance the bailouts as the U.S. is seriously in debt. This, in turn, will seriously impact the value of our dollar which is already worth much less than the euro.

My personal belief is that we are not going to be able to dig our way out of this and we will plunge into a full blown depression within the next 12 months. Because we are the international consumers of the world this will crash everyone’s market as we won’t be able to continue to spend on a consumer level.

Let’s hope I’m wrong.

Eddie

nora22000 asked:


It seems that the needs of the future for transportation may require nimble, innovative entrepreneurial firms that are lean and hungry, not just making gestures of shedding private jets. Is it time to let Detroit out of the responsibility of keeping our economy going?

Many critics of the auto industry argue that bankruptcy is the best choice for the Big Three. A bankruptcy judge has broad powers to let the automakers shed their debts and other obligations, as well as get out of labor contracts that they can no longer afford.

Other industries, including steel and airlines, have used bankruptcies to emerge financially healthy.

But the automakers say that consumers’ concerns about warranties and the resale value of vehicles would stop them from buying from a bankrupt automaker. The resulting drop in sales would make already bleak conditions worse.

There are also questions about whether the automakers could get the financing they need to operate under bankruptcy court. Many lenders that have loaned to bankrupt companies in the past have exited the field in the wake of the credit crunch. And experts question whether the crucial source of funds needed to emerge from bankruptcy would be available to the automakers.

“The size of the companies, the state of the capital markets [and] the uncertainty about how bankruptcy would play out…means the ability to get [financing] is a big question mark,” said S&P’s Schulz.

Giggle Bear: The ‘domino effect’ was last disproven in regard to the Vietnam War. For example, if auto workers become unemployed, they will have unemployment insurance which can be extended while retraining and other efforts to get them employed take place.

The only people who will be left out in the cold are the bigwigs at the auto companies. They won’t be able to add millions to their trust funds and other personal accounts.

Fear, uncertainty and doubt are great sales tools, but I ain’t buyin’.

Eugene