Category: US Debt
The analysis published under this category are as follows.Saturday, May 26, 2012
U.S. Muni Bond Market Debt Default Tsunami / Interest-Rates / US Debt
The front edge of the coming bond default tsunami is clearly visible in our discussion of the burgeoning credit crisis in Europe. Less publicised, but every bit as important, is the debt burden that is smothering U.S. municipalities. CTC warned that muni bond tax-exemptions would "ultimately trap investors into a risky position," and EWFF has continually stated that defaults will rise as cushy municipal pensions and health benefits garden a bigger share of a decreasing tax base.
Read full article... Read full article...
Saturday, May 26, 2012
Don't Worry About Your Kids' Economic Future, Worry about Yours / Politics / US Debt
I read that Americans who have spoken to poll-takers express the fear that their children will not live as well as they have. Here is an example. The poll was taken in October 2011.
Read full article... Read full article...More than two-thirds of voters say the United States is declining, and a clear majority think the next generation will be worse off than this one, according to the results of a new poll commissioned by The Hill.
Friday, May 25, 2012
U.S. Government Budget Deficit Sorting Out America's Fiscal Cliff Issue / Politics / US Debt
Under current law, the federal budget deficit in fiscal year 2013 will show a drastic decline from fiscal year 2012 as a result of scheduled increases in taxes and reductions in government spending. The Congressional Budget Office (CBO) estimates that the federal budget deficit of $1.17 trillion in fiscal 2012 will shrink to $612 billion in fiscal 2013. This sharp reduction of the federal budget deficit is referred to as the “fiscal cliff” in the financial media and macroeconomic discussions. The economic impact of these likely changes in the federal budget deficit is the subject of intense debate at the present time. The objective here is to highlight the impending changes in federal taxes and spending, with the help of CBO’s summary presented in Table 1, and attempt to understand the economic consequences of these changes.
Read full article... Read full article...
Saturday, May 12, 2012
Student Loans, The Next Bubble? / Interest-Rates / US Debt
Since the housing bubble burst spectacularly in late 2007, many analysts have been actively seeking out the next likely explosion. Rest assured, it will be related to debt in some way. US Treasuries, credit cards, and potentially another disaster on Wall Street thanks to over-leveraging have all been mentioned as potential leading candidates. However, there is another bubble out there and it too is debt related. This one, in my opinion, has far greater consequences because it involves a group that is the least financially able to deal with the ramifications. I’m talking about student loans and the massive bubble that has been expanding for at least the past decade.
Read full article... Read full article...
Sunday, April 22, 2012
More Americans Are Sneaking Out of the Subprime State / Politics / US Debt
Memories take time. Like history. Or wine. Or cement.
At first, they are loose, fluid…and watery. Then, over time, they dry up…and develop more body…more shape…more substance.
Our recollections from our trip to Argentina are still congealing…setting up like a stone wall. We’ll show it to you in the days ahead.
Read full article... Read full article...
Tuesday, April 17, 2012
Falling Standard of Living for Average American's, Debt/Income/Productivity / Economics / US Debt
Lacy Hunt kicks things off with a bang in Hoisington's Quarterly Review and Outlook, this week's Outside the Box:
"The standard of living of the average American continues to fall."
The reason, in a word: debt. Lacy explains what happens:
"Efforts by fiscal and monetary authorities to sustain growth by further debt accumulation may produce some short-term benefit. Sadly, these interludes fade quickly as the debt becomes more destabilizing. The net result of increased indebtedness then becomes the opposite of what policymakers intend when they promote economic growth by either borrowing funds for increased government expenditures or encourage consumers to borrow with artificial and temporary incentives."
Read full article... Read full article...
Friday, March 30, 2012
U.S. Debt, Deficit, Economy and Financial NO SPIN Zone / Economics / US Debt
As leviathan government, Central Bankers and the welfare states battle Mother Nature and Darwin, the stakes for the global banksters and elites could not be higher. Governments in the US and Europe are striving to place debt and legal shackles on those they pretend to serve and working for the interests of banksters, power-hungry public servants and entrenched government bureaucrats against that of their own constituents.
Read full article... Read full article...
Thursday, March 29, 2012
The National Debt Clock is Ticking / Interest-Rates / US Debt
U.S. Treasury Secretary Geithner said yesterday that the U.S. won't hit the debt limit (ceiling) unitl late in the year. Zerohedge has projected that the debt limit of $16'394 billion will be hit on September 14th, 2012. Presently the National Debt is at $15'596 billion according to the debt clock.
Read full article... Read full article...
Wednesday, March 21, 2012
US Public Debt Growing at Unsustainable Rate / Interest-Rates / US Debt
We often blame Fed monetary policy for the GFC, with interest rates at exceptionally low levels leading to "Greenspan's bubble." Treasury was just as culpable, however, with the massive 2004-2005 surge in public debt flooding the market with liquidity. The repeat in 2008-2011 was more justifiable: the spike in public debt was necessary to offset the sharp decline in private (non-financial) debt which would have caused a deflationary spiral. The effect was to smooth out the fall in total domestic debt (public and private) and create a relatively "soft" landing for the economy.
Read full article... Read full article...
Monday, March 19, 2012
How Can U.S. Economy Be Recovering When Cities Are Going Bankrupt? / Economics / US Debt
As pundits chatter about an economic recovery, 80 miles east of San Francisco you'll find a city (pop. 292,000) facing bankruptcy:
Stockton is on the verge of becoming the largest city in the United States to declare bankruptcy...
San Francisco Chronicle (3/4)
Read full article... Read full article...
Monday, March 19, 2012
American's Asleep At the Wheel Driving Into Debt Slavery / Interest-Rates / US Debt
Americans have an illogical love affair with their vehicles. There are 209 million licensed drivers in the U.S. and 260 million vehicles. The U.S. has a higher number of motor vehicles per capita than every country in the world at 845 per 1,000 people. Germany has 540; Japan has 593; Britain has 525; and China has 37. The population of the United States has risen from 203 million in 1970 to 311 million today, an increase of 108 million in 42 years. Over this same time frame, the number of motor vehicles on our crumbling highways has grown by 150 million. This might explain why a country that has 4.5% of the world’s population consumes 22% of the world’s daily oil supply. This might also further explain the Iraq War, the Afghanistan occupation, the Libyan “intervention”, and the coming war with Iran.
Read full article... Read full article...
Friday, March 09, 2012
If Economy is Recovering, Why Are U.S. Cities Going Bankrupt? / Interest-Rates / US Debt
As pundits chatter about an economic recovery, 80 miles east of San Francisco you'll find a city (pop. 292,000) facing bankruptcy:
Stockton is on the verge of becoming the largest city in the United States to declare bankruptcy...
San Francisco Chronicle (3/4)
Read full article... Read full article...
Friday, March 09, 2012
How to Ruin Your Economy / Politics / US Debt
We can learn a lot from the Argentines. When it comes to messing up an economy, they’re Numero Uno. They’re Olympians of financial legerdemain and masters of the old false shuffle.
In 2001, the country was deeply in debt. The government was out of money. And the currency was losing value fast. What did the Argentines do?
Read full article... Read full article...
Tuesday, March 06, 2012
The Debt Deleveraging Big Lie / Politics / US Debt
Cause, Effect & The Fallacy Of Return To Normalcy
“Thousands upon thousands are yearly brought into a state of real poverty by their great anxiety not to be thought of as poor.” - Robert Mallett
I hear the term de-leveraging relentlessly from the mainstream media. The storyline that the American consumer has been denying themselves and paying down debt is completely 100% false. The proliferation of this Big Lie has been spread by Wall Street and their mouthpieces in the corporate media. The purpose is to convince the ignorant masses they have deprived themselves long enough and deserve to start spending again. The propaganda being spouted by those who depend on Americans to go further into debt is relentless. The “fantastic” automaker recovery is being driven by 0% financing for seven years peddled to subprime (aka deadbeats) borrowers for mammoth SUVs and pickup trucks that get 15 mpg as gas prices surge past $4.00 a gallon. What could possibly go wrong in that scenario? Furniture merchants are offering no interest, no payment deals for four years on their product lines. Of course, the interest rate from your friends at GE Capital reverts retroactively to 29.99% at the end of four years after the average dolt forgot to save enough to pay off the balance. I’m again receiving two to three credit card offers per day in the mail. According to the Wall Street vampire squids that continue to suck the life blood from what’s left of the American economy, this is a return to normalcy.
Read full article... Read full article...
Tuesday, February 28, 2012
Ron Paul: U.S. Economy Squeezed As Debt Accelerates / Economics / US Debt
Senator Jeff Sessions, ranking member of the Senate Budget Committee has pointed out that our per capita government debt is already larger than Greece's. Per person, our government owes over $49,000 compared to $38,937 per Greek citizen. Our debt has just reached 101% of our Gross Domestic Product. Our creditors see this and have quietly slowed down or stopped their lending to us. As a result, the Federal Reserve has been outright monetizing debt as a way to patch things together and keep the economy on life support a little longer. There is rapidly shrinking demand for our debt, and confidence in the dollar is falling. This phenomenon is hidden only by the fact that confidence in all other fiat currencies is falling faster.
Read full article... Read full article...
Saturday, February 25, 2012
Our Depraved Future of Debt Slavery (Part II) / Interest-Rates / US Debt
"Debt" has been used as a means of slavery throughout human history, in ancient societies dating as far back as thousands of years ago, such as those in Mesopotamia, Egypt, North/South America, etc. Debtors in these societies would be forced to relinquish their crops, land, freedom and even their wives and children to satisfy unpaid debts. Such extravagant periods of debt creation often culminated in the necessity for systemic debt forgiveness (or "Jubilee") by the decree of chiefs, emperors and kings to simply maintain some sense of social order [see Debt: The First 5000 years].
Read full article... Read full article...
Friday, February 24, 2012
Fatally Flawed Approaches to the U.S. Budget Deficit and Taxes... / Politics / US Debt
... Debt Will Swell Under 3 of 4 Republican Hopefuls' Tax Plans
A number of proposals on taxes and the budget have come out recently, one by President Obama, one by Mitt Romney, and one by a friend, John Mauldin.
Every one of the proposals are fatally flawed, most of the for multiple reasons. Before one can fix a problem one must understand it.
Read full article... Read full article...
Thursday, February 23, 2012
Our Depraved Future of Debt Slavery (Part I) / Politics / US Debt
It is almost surprising that the concept of slavery is very foreign to those living in the developed world, especially the U.S., since it was extensively practiced as recently as 70 years ago. What’s more disturbing about this ignorance is the fact that the system of post-Civil War slavery in the U.S. was not so different than the systems of slavery many Americans and Europeans will be experiencing in upcoming years. Indeed, I’m sure many people will probably take offense to such a comparison even being made, as they feel it demeans the atrocious acts committed in the past.
Read full article... Read full article...
Sunday, February 19, 2012
The Cancer of Debt and Deficits / Interest-Rates / US Debt
We are coming to the point in the United States when even the US government will no longer be able to borrow at very low long-term rates. That point is a few years off, and we have time to change paths; but as I have shown in previous letters, the longer we wait to get the deficit under control, the fewer choices we have and the more painful they are. NO country can run deficits the size we are currently running, along with unfunded deficits over four times the size of the economy and a growing overall debt burden, without consequences. At some point, investors in bonds will start wondering exactly what the process is by which they will be repaid. And what will the value of those future payments be?
Read full article... Read full article...
Tuesday, February 07, 2012
US Debt Will Explode Without Changes / Interest-Rates / US Debt
John Taylor, economics professor at Stanford University, spoke to Bloomberg Television's Trish Regan today and said that the U.S. "could get into a situation like Greece, quite frankly."
Taylor went on to say, "People have to realize it is a precarious situation. The debt is going to explode if we don't make some changes."
Read full article... Read full article...