Category: US Debt
The analysis published under this category are as follows.
Thursday, August 04, 2011
Is it a Sea Change if Rating Agencies Stick a Lower Rating for U.S. Sovereign Debt? / Interest-Rates / US Debt
By: Asha_Bangalore
The debt ceiling has been raised through 2012 and political drama related to the debt ceiling is unlikely to be repeated soon. Fitch and Moody’s indicated that the coveted AAA status of U.S. debt remains in place with a possibility of downgrades tied to the nature of fiscal consolidation Congress may deliver. As of this writing, S&P has not made public its opinion, but the new law does not meet its requirement of a $4 trillion reduction of the projected deficits indicated last month. Federal government debt (gross) of the United States stood at 93% of GDP in 2010 (see Chart 1). The Congressional Budget Office’s (CBO) projections show this number at 105% by 2021.
Wednesday, August 03, 2011
U.S. Debt Impasse: Fake and Real, The Republican Legacy / Politics / US Debt
By: Gary_North
The debt ceiling agreement that came over the weekend will raise the ceiling by $2.1 trillion – enough to get this issue off the political table until January 1, 2013, which was Obama's desire.
The House called the bill the Budget Control Act. It was the budget out of control act. It is 74 pages long. No one in Congress had time to read it. Typical.
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Tuesday, August 02, 2011
No Plan B - But Plan Crisis Default Is Coming / Politics / US Debt
By: Andrew_McKillop
It is a truism, and a total consensus view among all analysts of the present sovereign debt financing and monetary meltdown that no Plan B exists. For starters, if there was or had been a Plan B, it would have been used, already, a long time ago. Plan A only has one solution: print money and forget. We now have a radically politicizing context where the bolt-ons to Plan A including austerity-type quick fixes are shorting out any prospect of economic recovery and aggravating existing social stress among the crowd of increasingly enraged victims, the working population, consumers and voters. No Plan B exists.
Tuesday, August 02, 2011
Toothless Debt Deal Won’t Stop a U.S. Credit-Rating Downgrade / Stock-Markets / US Debt
By: Money_Morning
Jason Simpkins writes:
It's often said that the sign of a good compromise is that both parties walk away dissatisfied - but that's not necessarily true of the debt deal Congress is close to passing.
To be sure, both parties are dissatisfied with the outcome of this contentious battle. Progressive Democrats are disappointed that planned cuts to government spending won't be augmented with tax increases, while fiscally conservative Republicans are angry that the cuts to spending haven't gone far enough.
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Tuesday, August 02, 2011
U.S. Debt Cut Deal is Just Smoke & Mirrors / Interest-Rates / US Debt
By: Jeff_Berwick
That's it? This is the deal? This is what they've been supposedly fighting over for months?
We'll get to the exact details in a moment but let's start by doing a fantasy comparison of the same "cuts" being made in a format that the regular man on the street can understand.
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Tuesday, August 02, 2011
What’s not for the WSJ to Like about the Debt-Ceiling Legislation? / Interest-Rates / US Debt
By: Paul_L_Kasriel
Milton Friedman taught us that the real economic cost of government is not how it raises its funds – taxes or borrowing -- but how many funds in toto it raises. That is, according to Friedman, the real economic cost of government is how much it spends. The pending legislation on the increase in the U.S. public debt ceiling dictates that federal outlays be reduced in the coming 10 fiscal years. So, the editorial board of the WSJ should be ecstatic about the outcome of this debate about the debt-ceiling increase, right? Federal spending will be decreased. But I suspect that very shortly the op-ed page of the WSJ will be complaining about this pending debt-ceiling legislation.
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Tuesday, August 02, 2011
U.S. Debt Deal is a Blank Check / Politics / US Debt
By: Peter_Schiff
By supposedly compromising to raise the debt ceiling, Congress and the President have now paved the way for ever higher levels of federal spending. Although, the nation was spared the trauma of borrowing restrictions, the actual risk of default existed solely in the minds of Washington politicians. But the real crisis is not, nor has it ever been, the debt ceiling. The crisis is the debt itself. Economic Armageddon would not have resulted from failure to raise the ceiling, but it will come because we succeeded in raising it. This outcome falls along the lines that I had forecast (See my commentary, "Don't Be Fooled by Political Posturing" from July 9th).
Monday, August 01, 2011
Obama Our Saviour, the U.S. Debt Ceiling Deal / Politics / US Debt
By: Submissions
Jonathan Davis writes:So, Obama and The Democratic leadership and The Republican leadership twisted loads of arms, tightened screws and got a deal. All over the media you hear $2.5Trns of cuts have been agreed. Rubbish!
First, this deal has to be approved by Congress. It will be.
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Monday, August 01, 2011
Raising the Debt Ceiling Avoids the Spending Addiction / Politics / US Debt
By: BATR
The latest example of political hyperbole is that the U.S. Treasury is ready to default on its debt. An actual examination of the underlying facts is that the relative purchasing value of the currency has long ago swindled debt holder in U.S. Bonds of their promised returns. A default defined under this definition is part of the equation. Repudiation of the entire debt obligation is the real fear. Contrary to all the public scare tactics that the financial world will stop turning, the Federal Treasury has ample revenue to pay the interests on bonds and notes that come due. The essential issue is whether the new bond lenders are willing to roll over the debt that is coming due and keep the shell game going.
Monday, August 01, 2011
President Obama’s Debt Ceiling Deal More Fizz Than Bang / Politics / US Debt
By: Bob_Kirtley
President Barack Obama announced on Sunday that an agreement between Democrat and Republican leaders had been reached which would reduce the U.S. deficit and postpone default, at least for now. The President said that the agreement would cut about $1 trillion over 10 years and therefore would not have an immediate effect on the fragile U.S. economy. There is also another $1.2 trillion to be cut if a joint committee cannot find at least that amount in budget savings.
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Monday, August 01, 2011
Stock Index Futures Surge on Pathetic U.S. Debt Ceiling Deal / Politics / US Debt
By: Mike_Shedlock
After spending a day in the garden weeding and transplanting I arrive at my computer to see S&P futures up 20 points, 1.5% on news a compromise was reached. Quite frankly this is ludicrous given that anyone not brain dead knew a deal would be reached.
Monday, August 01, 2011
The Reality of the Debt Ceiling Drama / Politics / US Debt
By: Mike_Stathis
Over the past several weeks, the media has had a field day covering the debt ceiling talks between both political parties. It’s been dominates news headlines for more than a month. Prior to the latest distraction by the media, the focus was Casey Anthony, followed by Congressman Weiner, then Casey Anthony again.
Sunday, July 31, 2011
Bipartisan "Russian Roulette", The Debt Ceiling Is Unconstitutional / Politics / US Debt
By: Ellen_Brown
The debt ceiling crisis can be averted by enforcing the Fourteenth Amendment, which mandates the government to pay its debts already incurred, including pensions. That means Social Security, which IS an “entitlement,” in the original sense of the word. We’re entitled to it because we’ve paid for it with taxes.
Sunday, July 31, 2011
After U.S. Debt Ceiling Agreement - What's Next? / Politics / US Debt
By: George_Maniere
Before I begin I want to say to my readers that I believe our founding fathers believed that serving in the government was a privilege not a profession. Sadly, when I look at our government I see people in elected office that by any measure have no practical experiences in life. I look and see people that have groomed themselves for a life in the political arena and for the most part their careers have been carefully orchestrated to lead them down that path. As with any generalizations there are exceptions. I am sure that there are members of Congress that had a life in business before they ran for political office. I will use a random example of Speaker of the House John Boehner.
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Sunday, July 31, 2011
U.S. Debt Ceiling Politics of Default Hype, Fear Mongering and Idle Threats / Politics / US Debt
By: Mike_Shedlock
In a nearly useless face-saving maneuver, House Speaker John Boehner managed to twist enough arms to narrowly pass his bill that was instantly rejected in the Senate.
Questions abound.
Saturday, July 30, 2011
While Washington Fiddled The U.S. Economy Burned! / Politics / US Debt
By: Sy_Harding
While media focus has been almost entirely on the short-term debt ceiling foolishness in Washington, not much attention has been paid to the more serious worsening of the six-month recessionary trend in the economy.Yet that information and how you handle it will almost surely have more influence on your well-being going forward than Washington’s short-term political game-playing.
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Saturday, July 30, 2011
United States Defaulted Long Ago, Approaching Final Collapse of our Credit Expansion Boom / Interest-Rates / US Debt
By: James_Quinn
“There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved.” – Ludwig von Mises
Friday, July 29, 2011
USA AAA Credit Rating in Label Only / Politics / US Debt
By: Janet_Tavakoli
Sovereigns that bailed out banks are saddled with much greater government debt than before the crisis. In the spring of 2007, the Fed and the U.K.'s FSA reported that the degree of leverage in the global financial system was less than at the time of Long Term Capital Management, but in reality it was much greater. Global regulators are now repeating their mistakes. The risks in the interconnected global banking system have moved to currency trading and currency derivatives (remember the contribution of knock-in options to the 1995 currency crisis), leveraged loans, credit derivatives, market-linked derivatives, speculation in commodities, and both foreign and domestic government debt. Winston Churchill said we must alert somnolent authority to novel dangers; but our regulators are complacent, and the dangers are not novel.
Friday, July 29, 2011
Disastrous Outcomes From An Orchestrated U.S. Public Debt Crisis / Politics / US Debt
By: Paul_Craig_Roberts
With the world concerned about US financial credibility and the poor outlook for the US economy, now is not the time for the Republicans to grandstand on the public debt. The debt ceiling needed to be quietly raised. Instead, the Republicans started a fire and then threw gasoline on it, creating an inferno that could burn up the US social safety net or the US Treasury’s credit rating and the US dollar’s role as reserve currency or what remains of the separation of powers.
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Friday, July 29, 2011
U.S. Debt Ceiling Consquences, If Cooler Heads Do Not Prevail / Economics / US Debt
By: Paul_L_Kasriel
Our working assumption is that legislation authorizing an increase on the ceiling on federal debt will be enacted in time for the U.S. Treasury to make all of its previously-authorized expenditures. If, however, this legislation is not passed, then the U.S. federal budget will move into balance. In the 12 months ended June 2011, the Treasury had run a cumulative budget deficit of $1.26 trillion. For the sake of argument, let's assume that the August 2011 budget deficit at an annual rate also is $1.26 trillion. At an annual rate, this is the amount that federal outlays would immediately decline. $1.26 trillion is about 8.4% of what U.S. nominal GDP was running at an annualized pace in the first quarter.
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