Posted on 01/06/2011 5:24:37 PM PST by jazusamo
Obama administration wants to extend the national credit line
Within the next few months, America will reach its credit limit. After blowing through $2.6 trillion in tax dollars, the government will only be able to charge a mere $280 billion extra to future generations - a horrifying prospect that has sent the White House into a panic. Treasury Secretary Timothy F. Geithner yesterday urged Senate Majority Leader Harry Reid, Nevada Democrat, to restore the president's ability to spend beyond the nation's means. If the new Republican House majority concedes on this point, it will have lost the only hope of restoring fiscal sanity.
Less than four years ago, then-Sen. Barack Obama accused President George W. Bush of a "leadership failure" for seeking an identical debt-ceiling increase after adding $3.5 trillion in red ink to the books during five years in office. "That's trillion with a 'T'," Mr. Obama emphasized at the time. Of course, now that he is president, Mr. Obama replaced his fiscal bomb-throwing rhetoric with a spending rate double his predecessor's. It only took two years for the current administration to rack up that much debt.
White House economist Austan Goolsbee said Sunday on ABC's "This Week" that allowing the U.S. government to default on its debt obligations would be "insanity" bringing catastrophic financial effects. Indeed, just one result of ruining the national credit rating would be to drive the cost of interest payments, currently $197 billion a year, to unprecedented levels.
(Excerpt) Read more at washingtontimes.com ...
That deal was in the cards long ago for the republicans sadly enough.
Thanks. That is absolutely the best comparison I’ve ever seen, it’s mind boggling!
I keep reading article after article that says the other countries are going away from the dollar as the standard. That seems inevitable. What then?
And what happens when China and Japan et al, stops buying our debt? Print more money?
Then what happens when the geniuses devalue the dollar. Am I just being paranoid?
What about the $6.3 Trillion in GSE’s that were kept off the budget, makes you wonder what else has been kept out of the public view.
We really have no hope now since the Republicans are going soft already on Fannie/Freddie and the budget some have already said they will sign up for a higher deficit. We are headed for a collapse.
GOP Shifts on Fannie, Freddie Overhaul
http://online.wsj.com/article/SB10001424052970204467204576048062199771064.html
Obama’s $6.3 Trillion Scam Is America’s Shame
Year-End Debt-Stravaganza
http://market-ticker.org/akcs-www?post=176364
A couple stories of them softening is not good but I don’t believe there’s no hope. The enemedia will say anything, especially at this point.
Attach the repeal of ObamaCare to the bill to raise the debt ceiling. Republicans need to show some spine and surprise all of us.
Amen to that!
Forcing one person to pay for the debts of another used to be called INVOLUNTARY SERVITUDE.
The price of everything we buy overseas and across borders will go through the roof.
And what happens when China and Japan et al, stops buying our debt? Print more money?
If the government does that then the value of dollars you have inside the country will fall through the floor. A loaf of bread 20-30 dollars, or more.
Then what happens when the geniuses devalue the dollar. Am I just being paranoid?
Circumstances will take care of devaluing the dollar. The government may try fiat money. That is, saying the new Bozo Buck is worth 1000 of the old green back but that never works. You are not paranoid. By any rational accounting regimen the United States and indeed the world is bankrupt. The reason we have not collapsed yet is that essentially we are ignoring enforcement. And changing the game quietly behind the scenes. Banks are allowed to carry non performing loans as performing...for public consumption. Reserve requirements are made more lenient. Eventually everyone is solvent. If you can play this game long enough you may get away with it. Perhaps we will be able to pull it off and essentially avert a world economic collapse. Certainly shambling along as we are now is preferable to a collapse by far. I wish all luck.
That statement is absolutely true.
If the GOP squanders this opportunity they will cease to exist as a party in 2012.
The VOTING public is absolutely fed up with the SPENDING, STUPID!
The pigs feeding at the trough in DC better be hearing that message.
I appreciate your continuous research on these matters. We are all being edified as a result.
I'm wonderin' though...isn't pulling the plug on Fannie and Freddie on a gradual, accelerated and announced basis a prudent course? Say, let's pass a law that says Uncle Sam will reduce it's implied assurance by 10 or 20% annually over x years.
Pull the plug overnight and there won't be another Mortgage issued in this country for another 5 years?
I'm guessing this would drop housing prices 50-70% in a year, but I don't know jack.
Yes, that would be a HEALTHY deflation, but could we not ease the pain by putting some serious economic growth on a parallel and gradual path?
if we dont raise the 'debt ceiling' then we will loose credit ratings due to 'defaulting' on what ?
not printing more money [w/o assets] to make it seem real ???
is there some kind of starwars type 'force' that keeps the gubmint credit cards from being declined ???
This is just standard DC doomsday talk like Global Warming, Obama stimulus and Bushes speeches on WMD/Iraq and TARP/depression plea, 'we will all die' again.
If they don't raise it the tax revenues will still cover interest payments but some parts of government will have to shutdown to make up the difference(you cant add debt). The congress cant spent the printed money without this vote. Someone explained this on Cavuto today which is why I watch that show,
It's a 1995 scenario again.
at my bank, if i dont have assets on hand, im broke...
OTOH, as long as i have checks, i guess i can keep buyin...8^}
What you're getting at is similar to what Peter Schiff said ~ 2 years ago in a couple of video-log posts I loved posting:
”No one will buy US government bonds because we can't pay anyone back. The way the US government operates is we borrow money, and when the interest payments are due, we borrow that, and when the principle comes due, we borrow that,it's just a big ponzi scheme. It depends on an ever increasing supply of people to loan us money, and hope there's even a bigger fool willing to loan us even more so we can get it back. ”
Peter Schiff on BNN Canada Jan 7 2009 (Bond market is the next to go)
”The initial reaction in the bond market is a rally because the fed buying bonds will push up the price. The fact that they have to print the money to buy the bonds is negative for bonds. By printing and debasing money they are making dollars less valuable. All that bonds are is promises to pay dollars. So what the treasury is doing is bearish for bonds(over time) ”
Peter Schiff Vlog Report (”A day that should shock the world” but not us)
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.