JP Morgan Chase is now a leader in the government payment card services business. Their website claim's what they can provide a state, county, or municipal agency. Many states have a contract with Chase and other big banks to provide child support debit cards, unemployment debit cards, as well as food stamp debit cards at no cost to the states. Click here for a list of banks behind the debit cards.
State's argue that they save on paper checks and postage, while streamlining their system. Some forty states have discontinued paying unemployment compensation by paper check, and are using pre-paid cards or debit cards. The National Consumer Law Center (NCLC) cites that pre-paid cards may be cheaper but they come with many fees, and that they don't really help those with bank accounts. The center reports that fees can nickel and dime people who can least afford the typical unemployment check of $294. The National Consumer Law Center has recently released a 72 page report entitled, Unemployment Compensation Pre-Paid Cards: States can deal workers a winning hand by discarding junk fees.
The Nebraska Health and Human Services website summarizes their food stamp program. It seems straight forward. The Department of Health and Human Services (DHHS) determines if you are eligible for the food stamp program and what your benefits are. They pass the information to JP Morgan Chase in which an account is set up for the household. Then DHHS mails a pre-paid card to the client. The client uses the pre-paid card at a point of sale device where it is swiped at the check out counter, and the amount is deducted from the client's account. At the bottom of the Nebraska Health and Human Services web page is an interesting insight. It reads, "each day JP Morgan totals all food stamp purchases and deposits funds into the bank accounts of the food retailers."
According to a Huffington Post article, institutions such as Wells Fargo, Bank of America, Cardtronics, and Affiliated Computer Services (ACS) received more than $17 million in fees from EBT's from California's poor in 2010. The cards can charge fees up to $4 per transaction. It is estimated that the first 8 months of 2011 that ACS received more than $800,000 in fees, and banks in general received $12.9 million for transaction charges.
According the Texas Health and Human Services most recent average data ending January 2013, more than 3 million people are enrolled in the supplemental nutrition assistance program (SNAP). The majority of those are between the ages of 5 and 59.
The United States Department of Agriculture has released it's two year data ending December 2012 on participation rates among the states. It is estimated that 46 million people per month currently participate in SNAP.
Saturday, December 1, 2012
Saturday, June 25, 2011
Has the US ever defaulted?
Ron Paul has made the comment that the federal government has defaulted three times in history. There are various opinions on default and some see it as restructuring. The Funding Act of 1790, signed by President Washington is considered by some as a modification of obligations incurred by the states, and not an actual default. "This act directed the Secretary of the Treasury, Alexander Hamilton, to assume the Revolutionary War debts of the states, allowing creditors to exchange the state-backed war debt with bonds issued by the US Treasury. The interest on the bonds was deferred until 1801. A total of $21.5 million dollars was assumed." Read more of the story here.
Nine states defaulted during 1841-1842, but the federal goverment was not involved.
Ten states defaulted from 1873-1844 without intervention by the federal government.
The closest US default was in 1933, when President Roosevelt took office, and the US defaulted on the gold standard. It was a default on domestic debt obligations. At that time the United States had the largest gold reserves in the world. On March 8, 1933 Roosevelt announced that gold was safe. On April 5, 1933 he issued executive order 6102 prohibiting gold payments by banks, and limiting gold ownership of the citizens.
"Unfortunately for the bondholders, when President Roosevelt and the Congress decided that it was a good idea to depreciate the currency in the economic crisis of the time, they also decided not to honor their unambiguous obligation to pay in gold."....Alex J. Pollack, The American Spectator.
FSK's Guide to Reality gives one perspective of how President Roosevelt solved the problem in 1933:
"A corrupt Congress and Supreme Court ruled this theft valid. As usual, this theft benefited financial industry insiders at the expense of everyone else. Freed from the restriction of gold-redeemable money starting in 1933, the Federal Reserve inflated to bail out the banks, just like the Federal Reserve is inflating to bail out banks in the present. The result was a massive transfer of wealth from the productive sector of society to the parasite sector. This exacerbated and prolonged the Great Depression. In the present, the massive inflation by the Federal Reserve and Federal government will benefit the parasite sector of the economy at the expense of productive workers, who lose their salary and savings to inflation."
August 2, 2011 is our deadline for default, unlike 1933 it includes external debt obligations. As of today's date the political parties have walked away from each other!
The Netherlands has experienced it's own gold situation. The glassworkers pension fund (SPVG) has been ordered by De Nederlandsche Bank which is the equivelent to the Dutch Central Bank to sell the bulk of it's gold assets. The bank claims that gold is nothing more than a volatile commodity and that holding 13% was over weight as compared to the 2.7% average that pension funds hold. The Dutch Central Bank has forced investors to reduce their holdings!
As of the close of trading day July 15, 2011 it will be illegal to trade currency against precious metals as a result of the Dodd-Frank Law. There are some blogs that help to explain what this means in layman's terms. Read more at Gold Is Money, and Ron Paul Forums.
An interesting report on May 31, 2011 suggests IMF Chief Dominique Strauss-Kahn was charged and jailed for a secret about US gold reserves. Read the full report from The European Union times. The International Monetary Fund website dated April 8, 2011, has a Gold Factsheet post which does not mention the US pledge to deliver 191.3 metric tons to the IMF. It reports that as of February 2010, 191.3 metric tons remained to be sold in a "phased period over time." The full report from Reuters can be read here. The Economic Populist also ran the Reuters story, their site has additional economic facts. Strauss-Kahn has claimed that Russian Prime Minister Vladamir Putin is a player in the plot to have him removed as IMF Chief, thus stopping him from running for the French presidency.
Whatever historical perspective of United States default you follow, at least Ron Paul opens the dialogue of default. Having the conversation of what might happen is important in solving our debt problems.
Nine states defaulted during 1841-1842, but the federal goverment was not involved.
Ten states defaulted from 1873-1844 without intervention by the federal government.
The closest US default was in 1933, when President Roosevelt took office, and the US defaulted on the gold standard. It was a default on domestic debt obligations. At that time the United States had the largest gold reserves in the world. On March 8, 1933 Roosevelt announced that gold was safe. On April 5, 1933 he issued executive order 6102 prohibiting gold payments by banks, and limiting gold ownership of the citizens.
"Unfortunately for the bondholders, when President Roosevelt and the Congress decided that it was a good idea to depreciate the currency in the economic crisis of the time, they also decided not to honor their unambiguous obligation to pay in gold."....Alex J. Pollack, The American Spectator.
FSK's Guide to Reality gives one perspective of how President Roosevelt solved the problem in 1933:
"A corrupt Congress and Supreme Court ruled this theft valid. As usual, this theft benefited financial industry insiders at the expense of everyone else. Freed from the restriction of gold-redeemable money starting in 1933, the Federal Reserve inflated to bail out the banks, just like the Federal Reserve is inflating to bail out banks in the present. The result was a massive transfer of wealth from the productive sector of society to the parasite sector. This exacerbated and prolonged the Great Depression. In the present, the massive inflation by the Federal Reserve and Federal government will benefit the parasite sector of the economy at the expense of productive workers, who lose their salary and savings to inflation."
August 2, 2011 is our deadline for default, unlike 1933 it includes external debt obligations. As of today's date the political parties have walked away from each other!
The Netherlands has experienced it's own gold situation. The glassworkers pension fund (SPVG) has been ordered by De Nederlandsche Bank which is the equivelent to the Dutch Central Bank to sell the bulk of it's gold assets. The bank claims that gold is nothing more than a volatile commodity and that holding 13% was over weight as compared to the 2.7% average that pension funds hold. The Dutch Central Bank has forced investors to reduce their holdings!
As of the close of trading day July 15, 2011 it will be illegal to trade currency against precious metals as a result of the Dodd-Frank Law. There are some blogs that help to explain what this means in layman's terms. Read more at Gold Is Money, and Ron Paul Forums.
An interesting report on May 31, 2011 suggests IMF Chief Dominique Strauss-Kahn was charged and jailed for a secret about US gold reserves. Read the full report from The European Union times. The International Monetary Fund website dated April 8, 2011, has a Gold Factsheet post which does not mention the US pledge to deliver 191.3 metric tons to the IMF. It reports that as of February 2010, 191.3 metric tons remained to be sold in a "phased period over time." The full report from Reuters can be read here. The Economic Populist also ran the Reuters story, their site has additional economic facts. Strauss-Kahn has claimed that Russian Prime Minister Vladamir Putin is a player in the plot to have him removed as IMF Chief, thus stopping him from running for the French presidency.
Whatever historical perspective of United States default you follow, at least Ron Paul opens the dialogue of default. Having the conversation of what might happen is important in solving our debt problems.
Protests erupt on three sides of Israeli's borders
Three sides of Israel's borders erupt in protests just days after the resignation of George Mitchell, President Barack Obama's middle east envoy to the region.
The May 15th protests were organized by activists using Facebook and other social media to mobilize Palestinians to march on the border. Palestinians mark this day every year with demonstrations, but never from three borders; Syria, Lebanon, and the Gaza Strip. Read the full story here.
May 15, 1948 is the day in history that marks the anniversary of the founding of Israel. According to palestine.com, it's the day the British government announced its plans to withdraw from Palestine. It also marks the day that hundreds of thousands of Palestinians were displaced. Palestinians refer to their defeat as the "nakbah," or "catastrophe." More than 750,000 Palestinians left the Gaza strip, the West Bank and other Arab countries like Syria , Lebanon, Jordan, as well as other countries.
It's reported that Israel has accused Syria and Iran of orchestrating the demonstrations, read more here.
Palestinians demand for a state in the West Bank, Gaza, and East Jerusalem. Areas that Israel captured during the 1967 Six Day War. It seems that President Obama favors this idea too. Could the current organized march on Israel's borders be a warm up for something in the future? Is Israel in a diplomatic and strategic dead end, read more from Global research.
The May 15th protests were organized by activists using Facebook and other social media to mobilize Palestinians to march on the border. Palestinians mark this day every year with demonstrations, but never from three borders; Syria, Lebanon, and the Gaza Strip. Read the full story here.
May 15, 1948 is the day in history that marks the anniversary of the founding of Israel. According to palestine.com, it's the day the British government announced its plans to withdraw from Palestine. It also marks the day that hundreds of thousands of Palestinians were displaced. Palestinians refer to their defeat as the "nakbah," or "catastrophe." More than 750,000 Palestinians left the Gaza strip, the West Bank and other Arab countries like Syria , Lebanon, Jordan, as well as other countries.
It's reported that Israel has accused Syria and Iran of orchestrating the demonstrations, read more here.
Palestinians demand for a state in the West Bank, Gaza, and East Jerusalem. Areas that Israel captured during the 1967 Six Day War. It seems that President Obama favors this idea too. Could the current organized march on Israel's borders be a warm up for something in the future? Is Israel in a diplomatic and strategic dead end, read more from Global research.
Thursday, June 2, 2011
Monday, May 16, 2011
Weapons of Mass Destruction, the disguise to access the oil!
A host of nations pose a threat as having weapons of mass destruction (WMD's). The list of all the countries with nuclear, biological, and chemical programs can be seen here, and these type of weapons are not new ideas.
Evidence of chemical warfare has been found from 256 AD suggesting that the Persian army gassed Roman soldiers by pumping toxic fumes of bitumen and sulphur crystals into a tunnel. The soldiers were "unconscious in seconds, dead in minutes." WMD's are nothing new in ancient or modern warfare.
Weapons of Mass Destruction were not found by the United States in Operation Iraqi Freedom. Click here to check out old figures on how much the US spent. It's estimated that over one million innocent Iraqi's were killed, and some four million were removed from their homes. Rev. William E. Alberts calls it a "falsely-based illegal invasion, and occupation of Iraq," read more of Alberts article.
The war still rages on as the Iraqi people are killed from Improvised Explosive Devices (IED's-roadside bombs), and daily violence. A database that keeps a record of violent incidents in Iraq can be viewed at iraq body count.
It's just a mouse click away to view the list of daily incidents against the Iraqi people, "Housing Ministry Official shot dead," "Foreign Ministry Official shot dead," "23-year old protester shot dead," "Police driver shot dead," Body of man found burnt."
It is always interesting to look back in time to see how events before the invasion unfolded.
July 15, 2004, BBC News, Royal Dutch/Shell investors shocked. Walter van de Vijver, head of exploration and production lied to the Securities and Exchange Commission (SEC) about the extent of the companies reserves. It was reported to the SEC that Royal Dutch/Shell had nearly 20 billion barrels of oil and gas reserves that were proven and commercially viable to exploit when the figure was nearer to 16 billion barrels of oil and gas reserves. For more information on Royal Dutch/Shell click here. Read the Royal Dutch/Shell Reserves Fraud case here. More on Walter van de Vijver here.
November 22, 2005, The Independent, Iraqi's could lose billions in an American plan to hand over development of it's oil reserves to multi-national corporations. Iraq has the world's third largest oil reserves. In a report entitled, Crude Designs: The Rip Off of Iraq's Oil Wealth, "Oil accounts for 95% of Iraq's government revenues." Seventeen of Iraq's eighty known oil fields represent 40 billion of the 115 billion known oil reserves. The policy to allocate undeveloped oil fields to multi-national companies would give them control of 64%. If foreign companies take a share of its vast energy reserves, it will be caught in an "old colonial trap." The report named several companies, including the Anglo-Dutch Shell group, as jockeying for position before a new government is elected.
In the September 16, 2007, Sunday Times, the truth of why we invaded Iraq was acknowledged by former US Federal Reserve chairman Alan Greenspan, "it is politically inconvenient to acknowledge what everyone knows, the Iraq war is largely about oil."
April 18, 2011, Globe and Mail, reported that Britain discussed plans to exploit Iraq’s oil reserves with some of the world’s biggest oil companies five months before it joined the United States in invading the country. The Daily Mail, reported that the WMD intel was fabricated, read more of the story here.
April 22, 2011, The Independent, "What happened to the oil?" This is the question Greg Muttitt asks in his new book, "Fuel on the Fire," which documents just how highly oil figured in the thinking of those who led what is widely thought to have been an illegal invasion. "The primary strategic interest for the US and Britain is to have a low and stable oil price. A secondary interest is for their own corporations to do well." At the heart of "Fuel on the Fire" is the story of the Iraqi peoples' fight against the Oil Law – a law which would have removed the need for parliamentary approval of contracts with oil companies.
Lets presume for a moment that the invasion was illegal. Lets also take a few moments to look at the costs of the war, before and after the June 28th "transfer of power." The Institute for Policy Studies outlines the cost details. It's revelatory study, can be viewed here. The report suggests, "A failed transition is the most comprehensive accounting of the mounting costs and consequences of the Iraq war on the United States, Iraq, and the world."
If there were no WMD's, and the invasion was illegal, and we see that the US was unsuccessful in establishing control over the Iraqi oil, and we know that the costs of the war to the American people was huge, and we know it was even more costly to the Iraqi people in terms of loss of life, and loss of way of life through a dismantled social and economic infrastructure......then what was the purpose?
Evidence of chemical warfare has been found from 256 AD suggesting that the Persian army gassed Roman soldiers by pumping toxic fumes of bitumen and sulphur crystals into a tunnel. The soldiers were "unconscious in seconds, dead in minutes." WMD's are nothing new in ancient or modern warfare.
Weapons of Mass Destruction were not found by the United States in Operation Iraqi Freedom. Click here to check out old figures on how much the US spent. It's estimated that over one million innocent Iraqi's were killed, and some four million were removed from their homes. Rev. William E. Alberts calls it a "falsely-based illegal invasion, and occupation of Iraq," read more of Alberts article.
The war still rages on as the Iraqi people are killed from Improvised Explosive Devices (IED's-roadside bombs), and daily violence. A database that keeps a record of violent incidents in Iraq can be viewed at iraq body count.
It's just a mouse click away to view the list of daily incidents against the Iraqi people, "Housing Ministry Official shot dead," "Foreign Ministry Official shot dead," "23-year old protester shot dead," "Police driver shot dead," Body of man found burnt."
It is always interesting to look back in time to see how events before the invasion unfolded.
July 15, 2004, BBC News, Royal Dutch/Shell investors shocked. Walter van de Vijver, head of exploration and production lied to the Securities and Exchange Commission (SEC) about the extent of the companies reserves. It was reported to the SEC that Royal Dutch/Shell had nearly 20 billion barrels of oil and gas reserves that were proven and commercially viable to exploit when the figure was nearer to 16 billion barrels of oil and gas reserves. For more information on Royal Dutch/Shell click here. Read the Royal Dutch/Shell Reserves Fraud case here. More on Walter van de Vijver here.
November 22, 2005, The Independent, Iraqi's could lose billions in an American plan to hand over development of it's oil reserves to multi-national corporations. Iraq has the world's third largest oil reserves. In a report entitled, Crude Designs: The Rip Off of Iraq's Oil Wealth, "Oil accounts for 95% of Iraq's government revenues." Seventeen of Iraq's eighty known oil fields represent 40 billion of the 115 billion known oil reserves. The policy to allocate undeveloped oil fields to multi-national companies would give them control of 64%. If foreign companies take a share of its vast energy reserves, it will be caught in an "old colonial trap." The report named several companies, including the Anglo-Dutch Shell group, as jockeying for position before a new government is elected.
In the September 16, 2007, Sunday Times, the truth of why we invaded Iraq was acknowledged by former US Federal Reserve chairman Alan Greenspan, "it is politically inconvenient to acknowledge what everyone knows, the Iraq war is largely about oil."
April 18, 2011, Globe and Mail, reported that Britain discussed plans to exploit Iraq’s oil reserves with some of the world’s biggest oil companies five months before it joined the United States in invading the country. The Daily Mail, reported that the WMD intel was fabricated, read more of the story here.
April 22, 2011, The Independent, "What happened to the oil?" This is the question Greg Muttitt asks in his new book, "Fuel on the Fire," which documents just how highly oil figured in the thinking of those who led what is widely thought to have been an illegal invasion. "The primary strategic interest for the US and Britain is to have a low and stable oil price. A secondary interest is for their own corporations to do well." At the heart of "Fuel on the Fire" is the story of the Iraqi peoples' fight against the Oil Law – a law which would have removed the need for parliamentary approval of contracts with oil companies.
Lets presume for a moment that the invasion was illegal. Lets also take a few moments to look at the costs of the war, before and after the June 28th "transfer of power." The Institute for Policy Studies outlines the cost details. It's revelatory study, can be viewed here. The report suggests, "A failed transition is the most comprehensive accounting of the mounting costs and consequences of the Iraq war on the United States, Iraq, and the world."
If there were no WMD's, and the invasion was illegal, and we see that the US was unsuccessful in establishing control over the Iraqi oil, and we know that the costs of the war to the American people was huge, and we know it was even more costly to the Iraqi people in terms of loss of life, and loss of way of life through a dismantled social and economic infrastructure......then what was the purpose?
Wednesday, May 11, 2011
PIMCO's chief view of the global economic picture
There is always a point in time when a series of events take shape to show a clearer picture of the situation at hand. The chief's at PIMCO believe that the global economic transformation is already visible above the horizon. A transformation that Mohamed El-Erain has described as, "The world was a plane flying on a big engine called the US consumer. That engine is getting exhausted. Many smaller, new engines are coming on: China, India, Brazil, & Russia." These smaller new engines are visible to the Obama administration too. It's clear from the President's budget speech that he knows that other countries are advancing to transform their economies. The scenario of unfolding events is in the eye of the beholder. What picture emerges for you?
Wednesday, June 17, 2008: Who is Mohamed El-Erain? Co-chief executive officer and co-chief investment officer of Pacific Investment Management Company, or PIMCO. El-Erain lays out major trends in global economic transformation. Trends such as the re-alignment in global growth, inflation, the innovation of structured finance, and the transfer of wealth. An outline of El-Erain's trends are described in an article by Thomas Tan. Why is El-Erain important? Because PIMCO is the worlds largest mutual fund, and what El-Erain thinks about US debt is an indicator in itself. In light of seeing global transformation, is El- Erain telling investors that hold US bonds to "take our risk of of the table?"
Thursday, January 6, 2011: Treasury Secretary Tim Geithner debt limit letter to congress. "Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States."
Wednesday, March 8, 2011: PIMCO reportedly cashes out of US Treasuries in January 2011.
Tuesday, March 29, 2011: The PIMCO outlook. What advice do you have for US investors? Mohamed El Erain, "Be careful of overloading on US based investments."
Thursday, March 31, 2011: PIMCO's founder William Gross reduces US Debt to zero.
Monday, April 4, 2011: Treasury Secretary Tim Geithner's debt limit letter to congress. "If the debt limit is not increased by May 16, the Treasury Department has authority to take certain extraordinary measures, described in detail in the appendix, to temporarily postpone the date that the United States would otherwise default on its obligations."
Wednesday, April 13, 2011: Senate Committe On Finance. Ranking members Max Baucus (D-Mont.) and Orrin Hatch (R-UT) release hearing statements regarding the deficit reduction. Witness Testimony provided by Dr. J.D. Foster, The Honorable David Walker, and Dr. Alan S. Binder.
Wednesday, April 13, 2011: President Barak Obama Budget Speech. "Go to China and you’ll see businesses opening research labs and solar facilities. South Korean children are outpacing our kids in math and science. They’re scrambling to figure out how they put more money into education. Brazil is investing billions in new infrastructure and can run half their cars not on high-priced gasoline, but on biofuels. And yet, we are presented with a vision that says the American people, the United States of America – the greatest nation on Earth – can’t afford any of this."
Sunday, April 17, 2011: Meet The Press-Treasury Secretay Tim Geithner. "Congress will raise the debt limit," and "it is essential to preserve the credit worthiness of the United States of America."
Monday April 18, 2011: Standard & Poor's Rating Service downgraded it's outlook on U.S. Government debt expressing doubts that about bringing massive federal budget deficits under control.
Monday, May 2, 2011: Treasury Secretary Tim Geithner extends the deadline for raising the national debt to August 2, 2011.
Monday, May 9, 2011: PIMCO, Bill Gross manager of the world's largest bond fund announces that he will raise his bet against government debt one percent.
If the managers of the worlds largest mutual fund have decided that buying US debt is not a good investment right now; if our President knows that smaller economies are steadily growing, and if our Congress can't agree on working budget, then where does the US go from here?
Wednesday, June 17, 2008: Who is Mohamed El-Erain? Co-chief executive officer and co-chief investment officer of Pacific Investment Management Company, or PIMCO. El-Erain lays out major trends in global economic transformation. Trends such as the re-alignment in global growth, inflation, the innovation of structured finance, and the transfer of wealth. An outline of El-Erain's trends are described in an article by Thomas Tan. Why is El-Erain important? Because PIMCO is the worlds largest mutual fund, and what El-Erain thinks about US debt is an indicator in itself. In light of seeing global transformation, is El- Erain telling investors that hold US bonds to "take our risk of of the table?"
Thursday, January 6, 2011: Treasury Secretary Tim Geithner debt limit letter to congress. "Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States."
Wednesday, March 8, 2011: PIMCO reportedly cashes out of US Treasuries in January 2011.
Tuesday, March 29, 2011: The PIMCO outlook. What advice do you have for US investors? Mohamed El Erain, "Be careful of overloading on US based investments."
Thursday, March 31, 2011: PIMCO's founder William Gross reduces US Debt to zero.
Monday, April 4, 2011: Treasury Secretary Tim Geithner's debt limit letter to congress. "If the debt limit is not increased by May 16, the Treasury Department has authority to take certain extraordinary measures, described in detail in the appendix, to temporarily postpone the date that the United States would otherwise default on its obligations."
Wednesday, April 13, 2011: Senate Committe On Finance. Ranking members Max Baucus (D-Mont.) and Orrin Hatch (R-UT) release hearing statements regarding the deficit reduction. Witness Testimony provided by Dr. J.D. Foster, The Honorable David Walker, and Dr. Alan S. Binder.
Wednesday, April 13, 2011: President Barak Obama Budget Speech. "Go to China and you’ll see businesses opening research labs and solar facilities. South Korean children are outpacing our kids in math and science. They’re scrambling to figure out how they put more money into education. Brazil is investing billions in new infrastructure and can run half their cars not on high-priced gasoline, but on biofuels. And yet, we are presented with a vision that says the American people, the United States of America – the greatest nation on Earth – can’t afford any of this."
Sunday, April 17, 2011: Meet The Press-Treasury Secretay Tim Geithner. "Congress will raise the debt limit," and "it is essential to preserve the credit worthiness of the United States of America."
Monday April 18, 2011: Standard & Poor's Rating Service downgraded it's outlook on U.S. Government debt expressing doubts that about bringing massive federal budget deficits under control.
Monday, May 2, 2011: Treasury Secretary Tim Geithner extends the deadline for raising the national debt to August 2, 2011.
Monday, May 9, 2011: PIMCO, Bill Gross manager of the world's largest bond fund announces that he will raise his bet against government debt one percent.
If the managers of the worlds largest mutual fund have decided that buying US debt is not a good investment right now; if our President knows that smaller economies are steadily growing, and if our Congress can't agree on working budget, then where does the US go from here?
Thursday, February 17, 2011
The US has been in Debt for a long time with interest payments and budget deficits!
The interest on the United States debt is an unstoppable time bomb. Currently the United States is the largest debtor nation! To see some of the other debtor countries go to the CIA World Fact Book website. The US federal government has always been in debt, except during the presidency of Andrew Jackson. In 1835 he reduced the federal debt to $33,733.05, and is said to be the only US President to have paid off the national debt. Things changed in 1837 when a depression caused a tenfold increase in debt that lasted until 1844.
The current fiscal year ends Sept. 30, 2011 with a deficit of more than $1.26 trillion, and is reported as being the largest shortfall since the end of World War II. The Obama administration has just released its 2012 budget projections.
I wonder how many Americans realize that the US Constitution does not require congress to have a balanced budget. We have a Fiscal Commission that is charged with balancing the budget excluding interest payments by the year 2015 (you need to rotate the summary tables, I think these are the same tables that Paul Ryan is currently using to question Tim Geithner). While our states have a constitutional requirement to balance their budgets, we keep the federal government open with continuing resolutions, that have the likely potential to increase our debt position. An amendment is needed for the federal government to balance the budget. See if your state was in the 2010 top debt position.
Over 70 years later we still don't have one. Some members of Congress are trying to get a Balanced Budget Amendment passed. Lets hope they have the political stamina to make change happen. In the U.S. House of Representatives Robert Goodlatte, along with a group of his colleagues have sponsored a bill to adopt a Balanced Budget Amendment to the U.S. Constitution. Goodlatte also sponsored the amendment in 2007 and 2009.
Long time politician U.S. Sen. Orrin Hatch, R-Utah, has sponsored the Balanced Budget Amendment 4 times and co-sponsored it 13 times in his 34 year career. U.S. Sen. Mark Udall, D-Eldorado Springs, is also a co-sponsor of the current Balanced Budget Amendment.
The amendment would prohibit federal spending from exceeding revenues except in those circumstances of a war declared by Congress. Approval of the amendment would require two-thirds majorities of both houses of Congress, and ratification by at least three-fourths of the states.
The reality is that the government debt comes from years of spending more money than it has received. The last time the US had a balanced budget was in 1957.
The debt level is expressed as a percent of the country's total production, or gross domestic product (GDP), which was $14.7 trillion in the third quarter of 2010.
The current debt of $14.7 trillion is 95% of gross domestic product, that's up 51% since 1988. The GDP is defined as the total value of all of a country's goods and services that were produced in a year. It's the number used to put a size on the economy.
Even before the economic crisis, the U.S. debt grew 50% between 2000-2007, ballooning from $6-$9 trillion. The $700 billion dollar bailout helped the debt grow to $10.5 trillion by December 2008.
Two-thirds of the public debt is owned by the people, businesses, and foreign governments who bought treasury bills, notes, and bonds. Purchasers of Treasury bills expect the U.S. economy to recover enough to pay them back. The U.S. is such a large customer for foreign investors like China and Japan, it is allowed to run a huge tab so it will keep buying exports.
Debt is a form of bondage, and we should use extreme caution when borrowing money. It's time to balance the federal budget as well as reduce the interest payments on our debt!
The current fiscal year ends Sept. 30, 2011 with a deficit of more than $1.26 trillion, and is reported as being the largest shortfall since the end of World War II. The Obama administration has just released its 2012 budget projections.
I wonder how many Americans realize that the US Constitution does not require congress to have a balanced budget. We have a Fiscal Commission that is charged with balancing the budget excluding interest payments by the year 2015 (you need to rotate the summary tables, I think these are the same tables that Paul Ryan is currently using to question Tim Geithner). While our states have a constitutional requirement to balance their budgets, we keep the federal government open with continuing resolutions, that have the likely potential to increase our debt position. An amendment is needed for the federal government to balance the budget. See if your state was in the 2010 top debt position.
In 1936, Congress was first presented with a Balanced Budget Amendment (BBA) by Republican representative Harold Knutson of Minnesota, but it died in the Judiciary Committee.
Long time politician U.S. Sen. Orrin Hatch, R-Utah, has sponsored the Balanced Budget Amendment 4 times and co-sponsored it 13 times in his 34 year career. U.S. Sen. Mark Udall, D-Eldorado Springs, is also a co-sponsor of the current Balanced Budget Amendment.
The amendment would prohibit federal spending from exceeding revenues except in those circumstances of a war declared by Congress. Approval of the amendment would require two-thirds majorities of both houses of Congress, and ratification by at least three-fourths of the states.
The debt level is expressed as a percent of the country's total production, or gross domestic product (GDP), which was $14.7 trillion in the third quarter of 2010.
The current debt of $14.7 trillion is 95% of gross domestic product, that's up 51% since 1988. The GDP is defined as the total value of all of a country's goods and services that were produced in a year. It's the number used to put a size on the economy.
Even before the economic crisis, the U.S. debt grew 50% between 2000-2007, ballooning from $6-$9 trillion. The $700 billion dollar bailout helped the debt grow to $10.5 trillion by December 2008.
Two-thirds of the public debt is owned by the people, businesses, and foreign governments who bought treasury bills, notes, and bonds. Purchasers of Treasury bills expect the U.S. economy to recover enough to pay them back. The U.S. is such a large customer for foreign investors like China and Japan, it is allowed to run a huge tab so it will keep buying exports.
Debt is a form of bondage, and we should use extreme caution when borrowing money. It's time to balance the federal budget as well as reduce the interest payments on our debt!
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