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14/11

Archive for the ‘Economy’ Category

Treasury Department increase the debt limit

January 6, 2011

The Honorable Harry Reid
Majority Leader
United States Senate
Washington, DC 20510

Dear Mr. Leader:

I am writing in response to your request for an estimate by the Treasury Department of when the statutory debt limit will be reached, and for a description of the consequences of default by the United States.

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. Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses and could lead to the loss of millions of American jobs. Even a very short-term or limited default would have catastrophic economic consequences that would last for decades. Failure to increase the limit would be deeply irresponsible. For these reasons, I am requesting that Congress act to increase the limit early this year, well before the threat of default becomes imminent.

As you know, in February of 2010 Congress passed legislation to increase the debt limit to $14.29 trillion. As of this writing, the outstanding debt that is subject to the limit stands at $13.95 trillion, leaving approximately $335 billion of “headroom” beneath the current limit. Because of the inherent uncertainty associated with tax receipts and refunds during the spring tax filing season, as well as other variable factors, it is not possible at this point to predict with precision the date by which the debt limit will be reached. However, the Treasury Department now estimates that the debt limit will be reached as early as March 31, 2011, and most likely sometime between that date and May 16, 2011. This estimate is subject to change depending on the performance of the economy, government receipts, and other factors. This means it is necessary for Congress to act by the end of the first quarter of 2011.

At several points in past years, Treasury has taken exceptional actions to delay the date by which the limit was reached in order to give Congress additional time to raise the limit. These extraordinary actions include: suspending sales of State and Local Government Series (SLGS) Treasury securities[1]; suspending reinvestment of the Government Securities Investment Fund (G-Fund)[2]; suspending reinvestment of the Exchange Stabilization Fund (ESF)[3]; and determining that a “debt issuance suspension period” exists, permitting redemption of existing, and suspension of new, investments of the Civil Service Retirement and Disability Fund (CSRDF)[4]. Treasury would prefer not to have to engage again in any of these extraordinary measures. If we are forced to do so again, these measures could delay the date by which the limit is reached by several weeks. Once these steps have been taken, no remaining legal and prudent measures would be available to create additional headroom under the debt limit, and the United States would begin to default on its obligations.

As discussed in greater detail below, raising the debt limit is necessary to allow the Treasury to meet obligations of the United States that have been established, authorized, and appropriated by the Congress. It is important to emphasize that changing the debt limit does not alter or increase the obligations we have as a nation; it simply permits the Treasury to fund those obligations Congress has already established.

In fact, even if Congress were immediately to adopt the deep cuts in discretionary spending of the magnitude suggested by some Members of Congress, such as reverting to Fiscal Year 2008 spending levels, the need to increase the debt limit would be delayed by no more than two weeks. The limit would still need to be raised to make it possible for the government to avoid default and to meet the other obligations established by Congress.

The national debt is the total amount of money borrowed in order to fulfill the requirements imposed by past Congresses and under past presidencies, during periods when both Republicans and Democrats were in control of different branches of government. These are legal obligations, incurred under the laws of the United States. Responsibility for creating the debt is bipartisan, and responsibility for meeting the Nation’s obligations must be shared by both parties.

As the 112th Congress turns to this issue, I want to stress that President Obama believes strongly in the need to restore balance to our fiscal position, and he is committed to working with both parties to put the Nation on a fiscally responsible path. This will require difficult choices and a comprehensive approach to reduce the gap between our commitments and our resources. It will require that the government spend less and spend more wisely. The President has already taken important steps, including enacting the savings in the Affordable Care Act; restoring Pay-As-You-Go budgeting; and undertaking a three-year freeze on non-security discretionary spending. The President’s proposals would put us on a path to cut the deficit by more than half in the medium term, and substantially reduce the rate of growth in federal health care costs in the long term. The President looks forward to working with Members of the 112th Congress on additional measures to address our medium- and long-term fiscal challenges.

Because Congress has always acted to increase the debt limit when necessary, and because failure to do so would be harmful to the interests of every American, I am confident that Congress will act in a timely manner to increase the limit this year. However, for the benefit of Members of Congress and the public, I want to make clear, for the record, what the implications of a default would be so there can be no misunderstanding when the issue is debated in the House and Senate.

Reaching the debt limit would mean the Treasury would be prevented by law from borrowing in order to pay obligations the Nation is legally required to pay, an event that has no precedent in American history. Such a default should be understood as distinct from a temporary government shutdown resulting from failure to enact appropriations bills, which occurred in late 1995 and early 1996. Those government shutdowns, which were unwise and highly disruptive, did not have the same long-term negative impact on U.S. creditworthiness as a default would, because there was headroom available under the debt limit at that time.

I am certain you will agree that it is strongly in our national interest for Congress to act well before the debt limit is reached. However, if Congress were to fail to act, the specific consequences would be as follows:

* The Treasury would be forced to default on legal obligations of the United States, causing catastrophic damage to the economy, potentially much more harmful than the effects of the financial crisis of 2008 and 2009.
* A default would impose a substantial tax on all Americans. Because Treasuries represent the benchmark borrowing rate for all other sectors, default would raise all borrowing costs. Interest rates for state and local government, corporate and consumer borrowing, including home mortgage interest, would all rise sharply. Equity prices and home values would decline, reducing retirement savings and hurting the economic security of all Americans, leading to reductions in spending and investment, which would cause job losses and business failures on a significant scale.
* Default would have prolonged and far-reaching negative consequences on the safe-haven status of Treasuries and the dollar’s dominant role in the international financial system, causing further increases in interest rates and reducing the willingness of investors here and around the world to invest in the United States.
* Payments on a broad range of benefits and other U.S. obligations would be discontinued, limited, or adversely affected, including:
o U.S. military salaries and retirement benefits;
o Social Security and Medicare benefits;
o veterans’ benefits;
o federal civil service salaries and retirement benefits;
o individual and corporate tax refunds;
o unemployment benefits to states;
o defense vendor payments;
o interest and principal payments on Treasury bonds and other securities;
o student loan payments;
o Medicaid payments to states; and
o payments necessary to keep government facilities open.

For these reasons, any default on the legal debt obligations of the United States is unthinkable and must be avoided. It is critically important that Congress act before the debt limit is reached so that the full faith and credit of the United States is not called into question. The confidence of citizens and investors here and around the world that the United States stands fully behind its legal obligations is a unique national asset. Throughout our history, that confidence has made U.S. government bonds among the best and safest investments available and has allowed us to borrow at very low rates.

Failure to increase the debt limit in a timely manner would threaten this position and compromise America’s creditworthiness in the eyes of the world. Every Secretary of the Treasury in the modern era, regardless of party, has strongly held this view. Given the gravity of the challenges facing the U.S. and world economies, the world’s confidence in our creditworthiness is even more critical today.

I hope this information is responsive to your request and will be helpful as Congress considers this important legislation.

Sincerely,

Timothy F. Geithner

 

cc: The Honorable John A. Boehner, Speaker of the House
The Honorable Nancy Pelosi, House Minority Leader
The Honorable Mitch McConnell, Senate Minority Leader
The Honorable Dave Camp, Chairman, House Committee on Ways and Means
The Honorable Sander M. Levin, Ranking Member, House Committee on Ways and Means
The Honorable Max Baucus, Chairman, Senate Committee on Finance
The Honorable Orrin Hatch, Ranking Member, Senate Committee

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The American Dream Film Part 1 HD

From: theamericandreamfilm | January 05, 2011 | 56,025 views

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If you liked this film please visit our site, donate or buy the dvd: http://www.theamericandreamfilm.com

The AMERICAN DREAM is a 30 minute animated film that shows you how you’ve been scammed by the most basic elements of our government system. All of us Americans strive for the American Dream, and this film shows you why your dream is getting farther and farther away. Do you know how your money is created? Or how banking works? Why did housing prices skyrocket and then plunge? Do you really know what the Federal Reserve System is and how it affects you every single day? THE AMERICAN DREAM takes an entertaining but hard hitting look at how the problems we have today are nothing new, and why leaders throughout our history have warned us and fought against the current type of financial system we have in America today. You will be challenged to investigate some very entrenched and powerful institutions in this nation, and hopefully encouraged to help get our nation back on track.

 

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Raising the debt limit

The Republican house will almost certainly have to raise the debt limit. It is doubtful, if not impossible, to cut spending in two or three months to keep from exceeding the debt limit. However, they could vote to freeze all federal hiring or similar actions. They will have to do something to show they are serious about cutting the deficit and fixing the long term debt. Doing so, might well slow the slide of the US dollar.

Killing all earmarks, in any form, would be a step in the right direction. No matter what justification anyone uses to defend them, too often they look like corruption.

Read the rest of this entry »

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Now that’s inflation!

And you thought oil was bad?

College Inflation Rate - www.inflationdata.com

Found at www.inflationdata.com.

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Unemployment – December 2010 9.4% Woo-Hoo!

December 2010 – Unemployment rate 9.4% – lowest in 19 months. The unemployment rate dropped 0.4% in ONE month. Isn’t that fantastic?

Actually, NO! New jobs were only 103,000 – the real number to watch, which is about 25,000 to 50,000 less than needed to just keep up with new people entering the labor force.

You have to remember the unemployment rate is a division of those unemployed – that is looking for work, by the number of people in the labor force. What made the rate drop in December was that fewer people were looking for work. Partly, this may have come about because unemployment benefits were to expire so people no longer had to show they were looking for work. To make any real dent in unemployment, the economy needs to add 250,000 to 350,000 jobs each month.

Here is the disturbing number in the report – The number of unemployed persons decreased by 556,000 to 14.5 million. We are going to need a LOT more than 103,000 jobs each month to make a dent in that number.

The other disturbing information in the report is that they are going to revise how the numbers are computed.

Workforce participation rate is at a 26 year low! You have to go back to The Great Depression to find worse numbers. Calculated Risk – Compared to previous recessions – and this shows how long it may take to get back to zero – try 24 to 30 months more to make a significant dent.

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Which retailer has added 9,000 jobs in the last two years?

Dollar General. Add 6,000 more for 2011.

Unlike many other companies that have spent the past several years laying off employees, 2011 will mark Dollar General’s third consecutive year of creating, rather than eliminating jobs. If its estimates for this year are accurate, from 2009 though 2011, the company will have created more than 15,000 new jobs.

This should be no surprise with the current economy. Even the big box stores are stagnant or dropping employees. More and more shoppers are shopping the dollar stores first instead of the last resort.

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Raising the debt limit – then vs. now

Who said, “Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren … America has a debt problem and a failure of leadership.”

Senator Barak Obama – March 16, 2006

In two years, he and his party, the current leadership, has borrowed $4 trillion dollars. It could have been much less if only the government hadn’t bailed out the “too big to fail” group of idiots. That goes for the Bush administration as well since Obama only extended the philosophy to include even more companies and industries.

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Sen. Tom Coburn – AKA Dr. No

We need more legislators like the good doctor – a real doctor in the real world. He believes in the citizen legislator so after his two terms, he is leaving. Perhaps that is why he opposed all those trimmings that other legislators love, and voted NO on expanding government and frivolous spending. Hence his peers and the press labeled him “Dr. No”.

This was from Fox News Sunday on 26 Dec 2010.

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More like Mike Kelly please!

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You might see a bit of yourself in Mike Kelly and his “real world”. The Democrats are in denial about the “real world”. And when he told Weiner he had never done anything on his own with his own “skin in the game” – Priceless!

And note the stock market really turned around when polls showed the Republicans would take control of the House. One million jobs in the last year? What about the year before? And for most of the Bush terms, in spite of 9-11, the economy preformed respectable with low unemployment. Personally, I’m willing to let Paul Ryan set the budget ceiling.

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Lesbian activist Chai Feldblum confirmed for on EEOC:

Lesbian activist Chai Feldblum confirmed for on EEOC: US Senate’s lame-duck gift to the homosexual movement
Cave-in by conservatives (and Scott Brown) gives huge victory to homosexual movement in America
POSTED: Dec 31, 2010

Last week the homosexual movement got another big victory thanks to the US Senate Republicans (including Scott Brown) caving in. By unanimous consent in the Senate, Chai Feldblum, a lesbian law professor and the primary author of the pro-homosexual Employment Non-Discrimination Act (ENDA), was finally confirmed as a member of the powerful Equal Employment Opportunity Commission (EEOC), which wields enormous power over the nation’s employers.
Republicans cave after year-long lobby campaign

Feldblum’s hearing was held in November, 2009. But when the Senate’s confirmation vote stalled, Obama put her on the EEOC temporarily via a “recess appointment.” However, Republicans continued to block her confirmation using a rule that allows just one Senator to hold up a vote.

But in the end it was similar to the repeal of DADT — a sophisticated year-long behind-the-scenes lobbying effort by the homosexual lobby. And as time ran out on the lame-duck session, the homosexual lobby accelerated their pressure, even getting organizations such as the US Chamber of Commerce to send letters to the Senate leadership urging her confirmation. See report in homosexual news service describing lobby effort results.

Finally last week, with momentum following their DADT victory, the homosexual lobby persuaded all the Senate Republicans to fall into line and use the sleazy lame-duck session to confirm Feldblum by unanimous consent. They knew that once the lame-duck session ended at the end of this week their chances with the newly elected Republican Senators would be severely diminished. It’s a disgusting way to conduct the nation’s affairs.
A radical homosexual activist now directing the nation’s employers

Feldblum’s pro-homosexual radicalism goes back years. Her main passion — which her position on the EEOC will accelerate — will be to use the provisions laid out in the EDNA bill to force the acceptance of homosexuality into businesses and other institutions (including religious organizations) across America.

Feldblum’s dangerous potential was recognized early on in pro-family circles. The Traditional Values Coalition, which lobbied against her, said that she would “use her power to strip nearly all First Amendment rights of freedom of expression/free exercise of religion from businesses.” Family Research Council said she “openly admitted to supporting polygamy.” Concerned Women for America said she “represents one of the most serious threats to religious freedom we have seen in a long time.”

Traditional Values Coalition’s posting on Feldblum goes on to say:

At Georgetown Law School, Feldblum runs the Federal Legislation Clinic. Her goal is to teach young law students to be “legislative lawyers” – to use the law for political agendas – including for her main focus overturning laws in support of LGBT goals. She is creating an army of far left lawyers who will wage war against traditional values.

Feldblum has created the term “identity liberty” that conflicts with “belief liberty.” According to Feldblum, a person’s sexual identity “rights” must routinely trump “belief liberty” which is religious liberty guaranteed by the First Amendment to the Constitution.

In addition, Feldblum rejects the right of the Boy Scouts to set their own moral standards for membership.

Feldblum believes that the Christian owner of a business loses his religious liberty when he engages in commerce.

In short, Feldblum has stated: “We want to change the American workplace and revolutionize social norms.” Instead of being an unbiased referee on the EEOC, she would be a radical activist who would use the force of government to implement aggressive and intrusive employment non-discrimination laws to benefit the LGBT political agenda . . .

See TVC’s full write-up here

The fact that all the Republicans all caved in on this is unforgivable. Chai Feldblum should not be in any position of power at all, much less the EEOC. As with the repeal of DADT, the oppression against people with traditional values that she will bring can only be imagined at this point. If you live in Massachusetts, this is just one more reason that Scott Brown needs to be thrown out in 2012.

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