It was quite obvious to many in America and around the world (as elaborated by this blog earlier) that Tea Party's intransigence in Debt Dialogue would eventually hit the markets hard and that is exactly what has happened. Even the senior members of Republican Party, who knew better or should known better, also demonstrated a complete disdain for a reasonableness accommodation.
The unfortunate message from Washington DC is that America is ungovernable. This is a very un-comforting thought. It has caused a downgrade of US credit rating and a decline in stock markets.
Retirees and those near retirement, have built their nest eggs with hard earned savings over their lifespans. They had barely recovered from the 2008 crash that they once again face a major decline in values of their investments. This time, the market decline was entirely avoidable. Had Washington entered into a responsible debt deal a few months ago, the message to markets would have been positive. But Tea Party's one point agenda - defeat Barack Obama in 2012 no matter what the cost, became a stumbling block to arriving at a timely settlement.
The 600+ point drop in Dow Jones on August 8 is most unfortunate. As in the past, the markets will ride out this storm too, but for many retirees, their 401K is a worth a great deal less today, than it was a few months ago.
Hopefully, the American electorate will remember all this in 2012 elections and send all those Congressmen and Senators packing, who put their warped ideology ahead of their nation's interests.
Showing posts with label Debt Ceiling. Show all posts
Showing posts with label Debt Ceiling. Show all posts
Monday, August 8, 2011
Monday, August 1, 2011
A Convoluted Deal and America's Reputation in Tatters.
The American politicians may have reached a debt deal late last night and a default is now likely to be averted, but the political circus of last few weeks has left America's reputation in tatters.
The debt ceiling will now go up to $16.7 trillion over eighteen months. However, the deal barely patches economic wounds and methodology adopted is so convoluted and that it leaves many wondering about the caliber U.S. politicians. Also, many are wondering that if a deal could be done last minute, why could it not have been done three months ago, saving America this embarrassment?
What U.S. needed was an increase in debt ceiling and constitution of a bipartisan Commission to work out and implement a plan to revive U.S. economy, create more jobs, cut wasteful expenditure, enable innovators and entrepreneurs to start new businesses using new technologies so that the economy expands and revenues grow. Instead, there is no focus on jobs, economy or the well being of U.S., the only task of the Commission set up under this deal is to cut cut cut. This does not bode well for future of U.S. economy.
It is a pity that a country gave the world the concept of free market economy, innovation and opportunities for all; is going through dire straights. Even an ardent communist, Maoist country like China has very successfully adopted U.S. style free market, creating enormous prosperity for its citizens.
The U.S. public has watched all this in horror and hopefully some lessons have been learned and the voters will send those politicians packing in 2012 who perpetuated this crisis.
The debt ceiling will now go up to $16.7 trillion over eighteen months. However, the deal barely patches economic wounds and methodology adopted is so convoluted and that it leaves many wondering about the caliber U.S. politicians. Also, many are wondering that if a deal could be done last minute, why could it not have been done three months ago, saving America this embarrassment?
What U.S. needed was an increase in debt ceiling and constitution of a bipartisan Commission to work out and implement a plan to revive U.S. economy, create more jobs, cut wasteful expenditure, enable innovators and entrepreneurs to start new businesses using new technologies so that the economy expands and revenues grow. Instead, there is no focus on jobs, economy or the well being of U.S., the only task of the Commission set up under this deal is to cut cut cut. This does not bode well for future of U.S. economy.
It is a pity that a country gave the world the concept of free market economy, innovation and opportunities for all; is going through dire straights. Even an ardent communist, Maoist country like China has very successfully adopted U.S. style free market, creating enormous prosperity for its citizens.
The U.S. public has watched all this in horror and hopefully some lessons have been learned and the voters will send those politicians packing in 2012 who perpetuated this crisis.
Thursday, July 28, 2011
US VOTERS SHOULD THROW OUT THE ENTIRE CONGRESS
A Congress that repeatedly voted funds totaling trillions of dollars for an illegal, ill planned and an ill executed war in Iraq, also voted nearly a trillion dollars for another badly managed, over extended war in Afghanistan, is now not prepared to vote for an increased debt ceiling to avoid a US default? Such a Congress deserves to be thrown out.
US voters should hold each and every Senator and House member accountable for this political debacle and elect new representatives who will be more responsible in running nation's affairs than this bunch of idiots.
Had the US Congress been sensible, it would have shut down Iraq & Afghan wars early enough to save $4 trillion. Had that been done, total US debt today would have been $10.3 trillion not $14.3 trillion. An increase in debt limit would not be needed.
US voters should hold each and every Senator and House member accountable for this political debacle and elect new representatives who will be more responsible in running nation's affairs than this bunch of idiots.
Had the US Congress been sensible, it would have shut down Iraq & Afghan wars early enough to save $4 trillion. Had that been done, total US debt today would have been $10.3 trillion not $14.3 trillion. An increase in debt limit would not be needed.
Tuesday, July 26, 2011
Uncle Sam is Bankrupt, this Financial Statement stinks.
US PUBLIC DEBT $14.3 TRILLION
DEBT PER CITIZEN (TAX PAYING OR NOT) $46,624
DEBT PER TAX PAYING CITIZEN $130,000
INCOME & EXPENDITURE:
INCOME: US FEDERAL TAX REVENUE $2.19 TRILLION COMPRISING
PERSONAL INCOME TAX $949 BILLION
PAYROLL TAXES (INCLUDING SOCIAL SECURITY ETC.) $839 BILLION
CORPORATE TAXES $196 BILLION
OTHER $206 BILLION
EXPENDITURE: US ANNUAL EXPENDITURE $3.456 TRILLION
DEFENSE $702 BILLION
SOCIAL SECURITY $716 BILLION
MEDICARE $823 BILLION
TOTAL OF THESE 3 ITEMS $2.24 TRILLION
THESE THREE ITEMS ALONE EXCEED TOTAL US REVENUE
INCOME SECURITY $421 BILLION
INTEREST ON DEBT $213 BILLION
FEDERAL PENSIONS $213 BILLION
OTHER $368 BILLION
(Source: US Debt Clock.org, The Globe and Mail)
Which Corporation or business in the world spends 154% of what it earns and still survives?
Apart from excessive expenditure on first three items, the main culprit is the US Corporations. They earn billions of dollar each quarter and pay only $196 billion in taxes, which is a mere 20% of what private citizens pay in personal taxes!
More wars anyone?
DEBT PER CITIZEN (TAX PAYING OR NOT) $46,624
DEBT PER TAX PAYING CITIZEN $130,000
INCOME & EXPENDITURE:
INCOME: US FEDERAL TAX REVENUE $2.19 TRILLION COMPRISING
PERSONAL INCOME TAX $949 BILLION
PAYROLL TAXES (INCLUDING SOCIAL SECURITY ETC.) $839 BILLION
CORPORATE TAXES $196 BILLION
OTHER $206 BILLION
EXPENDITURE: US ANNUAL EXPENDITURE $3.456 TRILLION
DEFENSE $702 BILLION
SOCIAL SECURITY $716 BILLION
MEDICARE $823 BILLION
TOTAL OF THESE 3 ITEMS $2.24 TRILLION
THESE THREE ITEMS ALONE EXCEED TOTAL US REVENUE
INCOME SECURITY $421 BILLION
INTEREST ON DEBT $213 BILLION
FEDERAL PENSIONS $213 BILLION
OTHER $368 BILLION
(Source: US Debt Clock.org, The Globe and Mail)
Which Corporation or business in the world spends 154% of what it earns and still survives?
Apart from excessive expenditure on first three items, the main culprit is the US Corporations. They earn billions of dollar each quarter and pay only $196 billion in taxes, which is a mere 20% of what private citizens pay in personal taxes!
More wars anyone?
Monday, July 18, 2011
US Debt Ceiling - Just to Defeat Obama in 2012, will the Republicans sink the US Economy?
The Republican Congressmen and Senators are playing an extremely dangerous game with their nation's finances. In their desire to defeat Barack Obama in 2012, they are pushing the issue of National Debt Ceiling to the brink.
If Congress does not approve an increase in country's debt ceiling by August 2,2011, United States Government will default on its debt obligations at the rate of $4 billion a day. The will result in lowering of US credit rating from AAA and no one will be willing to lend money to US Government unless there is a substantial increase in interest rates.
The interest rate hike will hit the already weak economy hard, pushing unemployment to double digits, the housing market will suffer a down turn like it has never been seen before. Already some 29 million homes are under water i.e. their mortgages are higher than market values, increase in mortgage defaults will bankrupt many US banks and unlike 2008, Uncle Sam will not be able to save them this time as Uncle Sam will itself be bankrupt.
Are the Republicans really this desperate to defeat Obama that they will sink the entire US ship? Many think they are playing brinkmanship and will come good at the last minute to avoid default. I hope they are right, because otherwise they have to be extremely despondent to do this to their own country.
The US default will also impact the World economy. The already suffering European economies of Greece, Ireland, Portugal and others will sink even further, resulting in a possible breakup of EU or the Euro as a single EU currency.
And why are Republicans not willing to increase the debt ceiling even once in Obama's three years, when they raised it no less than seven times in Bush's eight years? Apparently they want more tax cuts for the wealthy and oppose closing tax loopholes for big Corporations. They want to eliminate Medicare and cut Social Security for the poor. The American public knows well that the high debt is a Republican legacy from George Bush's ill planned wars and tax cuts cuts for the rich.
If a default occurs, Obama will probably take the high road and heap entire blame on Republicans and rather than winning the White House in 2012, Republicans could end up losing majority in the House and many Senate seats too.
In case of default, US voters have only themselves to blame for giving Republicans and Tea Party candidates a majority in the The House in 2010 despite George Bush's disastrous eight year Presidency.
If Congress does not approve an increase in country's debt ceiling by August 2,2011, United States Government will default on its debt obligations at the rate of $4 billion a day. The will result in lowering of US credit rating from AAA and no one will be willing to lend money to US Government unless there is a substantial increase in interest rates.
The interest rate hike will hit the already weak economy hard, pushing unemployment to double digits, the housing market will suffer a down turn like it has never been seen before. Already some 29 million homes are under water i.e. their mortgages are higher than market values, increase in mortgage defaults will bankrupt many US banks and unlike 2008, Uncle Sam will not be able to save them this time as Uncle Sam will itself be bankrupt.
Are the Republicans really this desperate to defeat Obama that they will sink the entire US ship? Many think they are playing brinkmanship and will come good at the last minute to avoid default. I hope they are right, because otherwise they have to be extremely despondent to do this to their own country.
The US default will also impact the World economy. The already suffering European economies of Greece, Ireland, Portugal and others will sink even further, resulting in a possible breakup of EU or the Euro as a single EU currency.
And why are Republicans not willing to increase the debt ceiling even once in Obama's three years, when they raised it no less than seven times in Bush's eight years? Apparently they want more tax cuts for the wealthy and oppose closing tax loopholes for big Corporations. They want to eliminate Medicare and cut Social Security for the poor. The American public knows well that the high debt is a Republican legacy from George Bush's ill planned wars and tax cuts cuts for the rich.
If a default occurs, Obama will probably take the high road and heap entire blame on Republicans and rather than winning the White House in 2012, Republicans could end up losing majority in the House and many Senate seats too.
In case of default, US voters have only themselves to blame for giving Republicans and Tea Party candidates a majority in the The House in 2010 despite George Bush's disastrous eight year Presidency.
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