Jan 14

Related information:

Marc Faber on Coming Sovereign Debt Crisis: Next Countries to Default are the US, Japan and the ‘PIIGS’ (Yahoo Finance)

Fitch: US Must Cut Spending To Save AAA Rating; US December Deficit Nearly Doubles (Telegraph)

The Coming Sovereign Debt Crisis (Forbes)

A global fiasco: Japan is about to blow up (Telegraph)

Surprise:

All that bailout and stimulus money has to be paid back by the US taxpayer through higher taxes or by the Fed monetizing US debt (= quantitative easing = printing money = creating money out of thin air), which creates inflation, which is nothing more than a tax on monetary assets!

Change you can believe in!

“Deficits mean future tax increases, pure and simple. Deficit spending should be viewed as a tax on future generations, and politicians who create deficits should be exposed as tax hikers.” – Ron Paul



dollar-bills

(Reuters) — The United States must soon raise taxes or cut government spending to curb its debt, and failure to act will risk a crippling dollar crisis as investor confidence ebbs, a panel of experts said on Wednesday.

“It has got to be done. It will be done some day. It may be done with enormous pain. Or it may be done more rationally,” said Rudolph Penner, a former head of the nonpartisan Congressional Budget office who co-chaired the 24-strong Committee on the Fiscal Future of the United States.

President Barack Obama’s administration will present his budget for fiscal 2011 early next month amid intense pressure to live up to election campaign promises not to raise taxes on middle class Americans, while confronting a record deficit.

As a result, Obama is expected to focus on long-term fiscal discipline, while maintaining policy support for an economic recovery in the near-term as the country rebuilds after its worst recession since the Great Depression.

The two-year study by the panel, assembled by the highly respected National Research Council and the National Academy of Public Administration, said that the White House had some time on its side to restore growth, but must then act.

“In the next year or two, large deficits and more borrowing are unavoidable given the severity of the economic downturn. However, action ought to begin soon thereafter,” they said.

The national debt has risen above 50 percent of GDP (gross domestic product) from 40 percent two years ago, and within 20 years will blow past a previous record above 100 percent of GDP set after World War Two without stern official steps.

Mounting debt could sap investor confidence in the economy, and the nation’s ability to honor its obligations, pushing up interest rates and causing a steep fall in the value of the dollar as international creditors seek safer returns elsewhere.

Cut Health Care

The committee identified curbing Medicare, Medicaid and Social Security spending as the top challenge, and had a lukewarm assessment of cost containment in health care reform currently before Congress that Obama hopes to sign soon.

Committee co-chair John Palmer said the reforms might lay the foundation for improvements in the future, but he was skeptical about presumed saving levels and said that “passage would not change in any substantial way our analysis.”

The committee, which included three former heads of the CBO, outlined a range of options to lower the ratio of the national debt to 60 percent of the size of the economy.

The 60 percent threshold of debt to GDP, a target that is also used by the nations sharing the euro common currency, was a “judgment choice”, said Penner, who is a senior fellow at the Urban Institute, a Washington think-tank.

Predictions ’10 – See Complete Coverage

He said it was deemed to be the most that could be borne without incurring debt levels that would drive up long-term interest rates, and the least that was politically feasible in terms of reductions in government spending.

At one end of the options, the committee reviewed a policy mix based on low spending and low taxes. This envisaged payroll and income tax rates staying as they are, around 18-19 percent of GDP, but healthcare and retirement program costs sharply curtailed and defense and domestic spending cut 20 percent.

The other end of the scale looked at a high spending/high taxes policy mix that would maintain the projected growth in Social Security and allow higher spending on federal programs.

However, this would see taxes rise above 40 percent of GDP, or in the neighborhood of Denmark or Sweden, in order to hold the national debt to 60 percent, unless a value added sales tax was also introduced to augment government revenue.

Between the two were several intermediary solutions relying on a blend of higher taxes and lower spending. The committee made no recommendations but warned there was no time to waste.

“If action is taken soon, the country has a wide choice of options to help achieve fiscal sustainability. All are difficult; but if action is postponed, the options will be fewer and the choices even more difficult,” they said.

Published: Wednesday, 13 Jan 2010

Source: Reuters

The Fed and the US government are destroying America:

US slides deeper into depression as Wall Street revels

PIMCO’S Bill Gross: ‘Let’s Get Fisical’ (… or why the US will not make it.)

Barack Obama’s Health Care Lies And Reversals

US sheds 85,000 jobs in December; Record 40% Of Unemployed Without Job For 27+ Weeks

Peter Schiff on Fast Money: ‘America is broke’; ‘The Fed created a currency crisis’; ‘Dollar to collapse 50-70% or more’

US: Public Pensions Face $2 Trillion Deficit

U.S. Avoids Technical Default By Three Days

As an American, I refuse to buy mandatory health insurance … that supports Big Pharma

The US Government Is Preparing For Collapse: Your Legal Right To Redeem Your Money Market Account Has Been Denied

Prof. Dr. David Michael Green: Now I’m Really Getting Pissed Off … With Obama

US Treasuries Post Worst Performance Among Sovereign Markets In 2009

US losses will top $400 billion on Fannie Mae and Freddie Mac

US: More Ammo For The Treasury Bazooka

US government wants farmers to use coal waste on fields

The No.1 Trend Forecaster Gerald Celente: The Terror And The Crash of 2010

We’re Screwed! Hyperinflation like in the Weimar Republic; Great Depression worse than in the 1930s

US Congress: Banksters Get $4 Trillion Gift From Barney Frank

Treason: Obama gives INTERPOL immunity from the Constitution (Amending Executive Order 12425)

Peter Schiff on Obamacare, Freddie Mac & Fannie Mae: The Nightmare Before Christmas

Obama administration backs Fannie Mae and Freddie Mac no matter how big their losses may be

Rep. Dennis Kucinich: US War Presidents ignore Congress and Constitution

Obamacare: Big payoffs to senators on health bill stoke public anger

US: Trillions Of Troubles Ahead

Chinese central banker Zhu Min: ‘The world does not have so much money to buy more US Treasuries.’

Obamacare: Change Nobody Believes In

Obama’s surge comes at a cost: At least $57,077.60 per minute

US National Debt Tops Debt Limit

Hypocrite in Chief (Funny):
President Obama: Another Busy Day in The Oval Office!

Fascism in America: By Political Definition The US Is Now Fascist, Not A Constitutional Republic

John Williams of Shadowstats: Prepare For The Hyperinflationary Great Depression

Liar in Chief (NOT funny!!!):
Barack Obama Lies 7 Times In Under 2 Minutes!!!!!

Robert Fisk, The Independent’s award-winning Middle East correspondent: Obama is a Disaster, Worse than Bush

Rep. Dennis Kucinich: ‘These Wars Are Corrupting The Heart Of Our Nation!’

Famous Investor Jim Rogers: Incompetence In Washington, Abolish The Fed And The Treasury

Rep. Dennis Kucinich: The Truth About Afghanistan

Obama’s Big Sellout (Rolling Stone Magazine)

Obama administration to lift debt ceiling by $1.8 trillion

Climategate: President Obama’s rule by EPA decree is a coup d’etat against Congress, made in Britain

Obama administration tells Pakistan: Tackle Taliban or we will

MSNBC Rachel Maddow: War President Obama

Ron Paul: ‘Obama is Actually Preparing Us For Perpetual War’

–  Afghanistan Surge to Cost At Least $40 Billion, That Is $1.333.333 For One US Soldier Per Year

Rep. Brad Sherman: Geithner rejects $1 trillion limit on bailout power (Section 1204 is unlimited in dollar amount!)

Liar in Chief (Over 300 soldiers died in 2009 because of this lie!!!):
Obama: ‘I will promise you this, that if we have not gotten our troops out by the time I am President, it is the first thing I will do. I will get our troops home. We will bring an end to this war. You can take that to the bank.’

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