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Tag: Debt Ceiling

  • U.S. Default Looms Still No Resolution

    Central Bank officials have gathered to make contingency plans on how to sustain financial markets should the U.S. default on its debt.

    U.S. Federal Reserve Chairman, Ben Bernanke, hosted a lunch of counterparts on Oct.12 during the annual International Monetary Fund (IMF) meeting held in Washington D.C. A number of policy makers had the chance to discuss the threat of the U.S. default.

    U.S. default on its debt would likely send the nation into a depression and cause chaos worldwide. In 2008, Lehman Brothers Holdings Inc triggered a near global financial meltdown due to its investment in U.S. subprime mortgages. When the subprime bubble burst, Lehman Brothers owed $517 billion and filed for bankruptcy on Sept. 15. 2008 . Lehman’s bankruptcy filing remains the largest in U.S. history. Well, according to the U.S. debt clock, as of today the U.S. national debt is about $17 trillion – that’s nearly 30 times what Lehman Brothers owed, so the stakes are extremely high.

    Time is running out for the U.S. congress to end the gridlock that risk’s putting the nation into default if the debt ceiling isn’t raised by Oct, 17th. The government shutdown is now in its 15th day, and neither Democratic or Republican leaders have come to a resolution.

    “We’ve made tremendous progress,” Senate Majority Leader Harry Reid (D), said yesterday as the chamber adjourned. He expressed hope that a deal would be made today. Senate minority leader, Senator Mitch McConnell (R), said there was “substantial progress.”

    The U.S. has always managed to straighten things out and pay its bills. Policy makers around the world have expressed their confidence that the U.S. will not default. Congress may act stupidly, but they aren’t that stupid, right?

    In the past six years, central banks have increased their ability to deal with financial crisis starting in August of 2007 when it became apparent that the U.S. subprime market was insecure. Lehman failed, and set off a domino effect that negatively affected financial markets worldwide, especially in Europe.

    In actuality, there may be a number of things that countries and investors can do to minimize the damage caused by a default but truthfully, if the U.S. economy goes belly up there is no real fail safe. Let’s hope congress can resolve this problem before the deadline.

     

    (image via wikipedia)

  • Paul Ryan: Possible Dealstriker on Fiscal Crisis

    Paul Ryan is stepping up to the proverbial plate in negotiations within the troubled government on the two impending crises in our great nation, according to Fox News.

    He is proposing a plan to increase federal debt that is tied largely to simplifying the tax code, to make enough changes to Medicare to offset cuts to domestic spending and defense programs, and a solid promise from Senate Democrats and President Obama to continue talks about reopening the federal government, among other fiscal issues.

    Ryan seems to have support from establishment Republicans, as well as conservative Republicans. He also has a good working relationship with Democratic Sen. Patty Murray, chairwoman of the Senate Budget Committee, with whom he has yet to meet on the fiscal issues. Eventually, he will likely negotiate with her.

    “I’m working to get a budget agreement,” Ryan told a group of conservative meeting this weekend in Washington. “We need to completely rethink government’s role in helping the most vulnerable. … That means we can never give up on repealing and replacing ObamaCare.”

    His remarks reassured Tea party Conservatives, who were gathered at the Values Voter Summit over the weekend, that his stance on Obamacare has not changed. His recent op-ed piece in the Wall Street Journal seemed to insinuate that he had abandoned the defunding of the Affordable Care Act.

    Failure to increase the debt limit within roughly the next week would result in the country defaulting on its debt for the first time in history. The partial government shutdown started October 1st, and has yet to show hope of a solution.

    Image via wikipedia

  • Jack Lew: US Treasury Secretary Threatens America with Debt Ceiling

    In a brazen attempt to raise the already exploding US public debt, U.S. Treasury Secretary Jack Lew warned Congress on Wednesday that the government will spend all its borrowed cash by October 17th, and demanded trillions in new money to keep financing Washington DC’s insatiable appetite for debt.

    “The debt limit impasse that took place in 2011 caused significant harm to the economy…If Congress were to repeat that brinkmanship in 2013, it would inflict even greater harm on the economy. And if the government should ultimately become unable to pay all of its bills, the results could be catastrophic,” threatened Lew, in a letter addressed to Speaker of the House, John Boehner.

    Boehner quickly signaled complete capitulation and surrender by assuring Lew that the debt limit in fact will be raised. “…we need to surrender work together soon on a bill that raises the debt limit and deals with causes of the debt by cutting Washington spending and increasing economic growth,” said Boehner’s spokesman, Michael Steel.

    Jack Lew has been notorious in his total disregard for the American people and has been criticized for deception and evasiveness by both Democrats and Republicans in the past. Here is Senator Jeff Sessions (R-Alabama) questioning Lew, the then White House Budget Director, during the February 2011 budget hearings.

    After Lew’s anointment as Treasury Secretary he squared off with Senator Elizabeth Warren (D-Massachusetts) on the systemic nature of US financial crisis in May this year:

    Democrats and Republicans have repeatedly quarreled over raising of the debt ceiling, with each side blaming the other for the catastrophe that would unleash if the deadline passes without satisfying Washington DC’s demands.

    While the conservative wing of the Republican Party has made some faint noises of rebellion in opposition to raising the limit, every time the deadline approaches, the far-left GOP House leadership led by John Boehner, Eric Cantor and former Vice-Presidential nominee Paul Ryan, invariably yields without a fight over spending cuts.

    The latest debt limit bill could be introduced as early as Friday in the House, where GOP holds the majority, but there are indications that enough Republicans will join the overwhelming majority of Democrats to offer trillions in new money to finance Federal government’s programs.

    A few Republicans including Senator Ted Cruz (R-Texas) have waged a quixotic crusade to use debt ceiling as a leverage to delay the implementation of Obamacare, but with scant support from within their own party, all their efforts have been null and void from the start.

    At the same time President Barack Obama has made it clear that he will not bargain with GOP on tearing an even bigger hole in America’s finances, and Democratic leadership led by Nancy Pelosi and Harry Reid are clamoring for a debt limit increase without any stipulations or spending cuts.

    From 1995 to 2011, the debt ceiling was raised 12 times to finance the enormous growth in US government spending.

    During this period, Federal Reserve, which has an unlimited capacity to create “money”, pumped trillions of Dollars in the financial sector leading to massive real-estate and bond bubbles coupled with runaway inflation in medical-care, education and housing.

    In order to placate the gullible GOP electorate, the Republican led House has already passed a stop-gap spending bill that prioritizes payments to bondholders, Social Security retirement checks and provisions for nation-building abroad.

    [image from youtube]

  • Debt Ceiling Debate Nears Deadline, Obama Gets Busy On Twitter

    Debt Ceiling Debate Nears Deadline, Obama Gets Busy On Twitter

    As the deadline to raise the debt ceiling fast approaches, the White House is using Twitter to rally support for what the call the “balanced approach.” In the simplest terms, this means an approach to tackle the national debt that both cuts spending and raises revenues through tax increases and/or elimination of tax breaks.

    House Republicans and the President (with congressional Democrats) have been in negotiations for weeks, but a comprehensive plan has yet to emerge that analysts feel could pass the legislature and be signed by the President.

    While the White House’s Twitter account is livening up the mood by Rickrolling its followers during an open Twitter forum, President Barack Obama’s Twitter account is busy rallying support for his vision.

    In a continuation of Obama’s message from Monday night’s primetime speech on the debt situation (that resulted in the shutting down of dozens of congressional websites), his Twitter account is in the middle of a giant feed-swarming campaign to ask Twitter users to tweet their congressman.

    Ever since it was announced that tweets coming directly from the mouth of the President would all be signed “BO,” they have been elusive. But we got one a couple of hours ago –

    @BarackObama
    Barack Obama    The time for putting party first is over. If you want to see a bipartisan #compromise, let Congress know. Call. Email. Tweet. —BO 2 hours ago via web · powered by @socialditto

    After that, his team has been busy tweeting out messages to his near-10 million followers about how they can contact their congresspeople via Twitter to express their support for his plan.

    As of right now, the Barack Obama account has listed the Twitter handles of Republican members of Congress in Alabama, Arkansas, Alaska, Arizona, California, Colorado…are you sensing a pattern? As of the writing of this article, they are on Kentucky in the alphabetical listing of the states. Here’s what they are saying –

    @BarackObama
    Barack Obama    If you live in Arizona, ask @SenJonKyl and @SenJohnMcCain to support a bipartisan compromise to the debt crisis. 1 hour ago via web · powered by @socialditto

    @BarackObama
    Barack Obama    California Republican reps on Twitter: @RepJohnCampbell (CA-48),@DarrellIssa (CA-49), @BilbrayCA50 (CA-50), @repjeffdenham (CA-19) 1 hour ago via web · powered by @socialditto

    @BarackObama
    Barack Obama    Voters in Idaho: Tweet your Republican representative and ask them to support a bipartisan solution to the deficit crisis. #compromise 51 minutes ago via web · powered by @socialditto

    @BarackObama
    Barack Obama    Kentucky voters: Tweet @SenRandPaul and ask him to compromise on a balanced deficit solution. 7 minutes ago via web · powered by @socialditto

    Put this in the “aggressive social media politicking” folder, as the White House is in the middle of an impressive Twitter campaign.

    Is this type of Twitter interaction a good thing for either party? Should all politicians be using Twitter to this degree to spur debate? Let us know in the comments.

  • Obama, John Boehner Speeches Crash Congressional Websites

    Last night, President Barack Obama and Speaker of the House John Boehner both delivered speeches outlining the state of negotiations surrounding the debt ceiling and the budget.

    And it appears that those speeches provoked people to flock to the websites of congresspeople is massive numbers.

    During his speech, Obama asked the American people to contact their members of congress and let them know what approach is necessary to tackle the problem –

    The American people may have voted for divided government, but they didn’t vote for a dysfunctional government. So I’m asking you all to make your voice heard. If you want a balanced approach to reducing the deficit, let your Member of Congress know. If you believe we can solve this problem through compromise, send that message.

    It looks like people may have listened. Reports began flying in via Twitter that various congressional websites were down, and some that were still running were doing so slowly. Did a flood a web traffic, possibly citizens looking for how to contact their representatives, shut down these sites?

    The Huffington Post has a list of which member’s sites were affected by this traffic increase. Shortly after Obama and Boehner’s speeches, the following sites were down –

    • John Boehner (R-OH)
    • Senate Minority Leader Mitch McConnell (R-KY)
    • Rep. Elliot Engel (D-NY)
    • Sen. Mike Crapo (R-ID)
    • Sen. Jim DeMint (R-SC)
    • Rep. Charles Rangel (D-NY)
    • Sen. Rand Paul (R-KY)
    • Sen. Amy Klobuchar (D-MN)
    • Sen. Tom Harkin (D-IA)

    Later in the evening, other sites were running slowly. Freshman Florida Senator Marco Rubio (R), Nan Hayworth (R-NY) and a several other’s sites also shut down shortly before midnight. According to HuffPo, Boehner’s site was one of the last to get up and running again,

    The “debt crisis” has been presented as a battle between the parties, with each side wanting a different approach to tackling our large national deficit. Last night, President Obama championed a “balanced approach” that includes both cuts in spending and the elimination of tax breaks for the wealthiest Americans –

    Let’s live within our means by making serious, historic cuts in government spending. Let’s cut domestic spending to the lowest level it’s been since Dwight Eisenhower was President. Let’s cut defense spending at the Pentagon by hundreds of billions of dollars. Let’s cut out the waste and fraud in health care programs like Medicare – and at the same time, let’s make modest adjustments so that Medicare is still there for future generations. Finally, let’s ask the wealthiest Americans and biggest corporations to give up some of their tax breaks and special deductions.

    The only reason this balanced approach isn’t on its way to becoming law right now is because a significant number of Republicans in Congress are insisting on a cuts-only approach – an approach that doesn’t ask the wealthiest Americans or biggest corporations to contribute anything at all. And because nothing is asked of those at the top of the income scales, such an approach would close the deficit only with more severe cuts to programs we all care about – cuts that place a greater burden on working families.

    Rep. Boehner said that Obama wants a “blank check.” He went on to say –

    You know, I’ve always believed, the bigger government, the smaller the people. And right now, we have a government so big and so expensive it’s sapping the drive of our people and keeping our economy from running at full capacity.

    The solution to this crisis is not complicated: if you’re spending more money than you’re taking in, you need to spend less of it,

    There is no symptom of big government more menacing than our debt. Break its grip, and we begin to liberate our economy and our future.

    Watch both of the speeches below –

    What do you think? Let us know in the comments.