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Showing posts with label debt ceiling. Show all posts
Showing posts with label debt ceiling. Show all posts

Thursday, January 10, 2013

Trillion Dollar Coin Reveals the Monetary System in Death Throes



Eric Blair

I’m thrilled that the trillion dollar coin idea is being taken seriously by the establishment. Not because I think it is a viable solution to the national debt, necessarily, but because it shows just how close our monetary system is to reform.

First, for those not familiar with the trillion dollar coin; the idea is that the U.S. Treasury can coin any monetary value they want for whatever purpose they choose.

In this case the idea has been floated to Obama to avert the mandatory raising of the debt ceiling by coining a trillion dollar coin. In other words, Obama can use the coin to pay off a trillion in debt to allow an increase in federal spending without Congress’ approval.

Friday, July 1, 2011

US debt ceiling deadline still August 2: Treasury

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The deadline for raising the US debt ceiling or risk a
default remains August 2, the US Treasury said
© AFP/Getty Images/File Chip Somodevilla
AFP

WASHINGTON (AFP) - The deadline for raising the US debt ceiling or risk a default remains August 2, the US Treasury said Friday, after speculation that there might be more leeway for politicians to carve a deal.

"The Treasury Department continues to project that the United States will exhaust its borrowing authority under the debt limit on August 2, 2011," the Treasury said in a statement.

"Secretary (Timothy) Geithner urges Congress to avoid the catastrophic economic and market consequences of a default crisis by raising the statutory debt limit in a timely manner."

Geithner might quit after debt deal: reports

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Timothy Geithner might leave his job after deal on debt
© AFP/File Tim Sloan
AFP

US Treasury Secretary Timothy Geithner might leave his job after the White House reaches a deal with Congress over raising the US debt ceiling, US media reported Thursday.

But Geithner fudged when asked about the reports, saying he would stick to the job "for the foreseeable future."

"I've only worked in public service. I live for this work, it's the only thing I've ever done, I believe in it," Geithner told former president Bill Clinton in a webcast Chicago seminar on jobs and the economy.

Thursday, June 30, 2011

The IMF joins Bernanke in threatening US legislators

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The International Monetary Fund's Washington D.C. Headquarters
M. Ruppert, Contributing Writer
Activist Post

The debt ceiling issue is irrefutably a “hot button” issue that has Washington seemingly irreparably divided over smallbudget cuts that have little to no effect on the massive deficit. To make matters worse for the clowns in Washington arguing over tens of billions of dollars with a public debt realistically in the neighborhood of $100 trillion, the private Federal Reserve and the International Monetary Fund are now stoking the fire.

As the men and women of Capitol Hill bicker, Bernanke makes comments like, ”History makes clear that failure to put our fiscal house in order will erode the vitality of our economy, reduce the standard of living in the United States, and increase the risk of economic and financial instability.” While the IMF says that we need to raise our debt ceiling ”expeditiously to avoid a severe shock to the economy and world financial markets.”

A note about the above linked AP article addressing the IMF’s concerns: there is a massive typo that seemed to elude one of the world’s largest news organization’s entire editorial staff. The debt ceiling is not $14.3 billion, it is $14.3 trillion. This is no minor mistake as a trillion is a hefty 1,000 billion.

Friday, June 24, 2011

US debt ceiling talks fold after Republican walkout

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Speaker of the House John Boehner speaks during
his weekly press briefing on Capitol Hill
© AFP/Getty Images Mark Wilson
AFP

WASHINGTON (AFP) - Crucial high-level talks on raising the US borrowing limit collapsed Thursday after Republicans walked out, accusing the White House of provoking an impasse with demands to raise spending and taxes.

The move sparked fears that Congress will fail to raise the 14.29 trillion dollar debt ceiling by an August 2 deadline and cause the United States to default on its obligations, sending shockwaves through the global economy.

Republicans, who won the House of Representatives last November amid public anxiety over government debt, will only back raising the borrowing limit in return for steep cuts in the annual deficit set to hit 1.6 trillion this year.

Friday, June 17, 2011

IMF urges US Congress to raise debt limit

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The US government hit its legal borrowing
limit of $14.29 trillion on May 16
© AFP/File Shawn Thew
AFP

SAO PAULO (AFP) - The International Monetary Fund on Friday joined calls for the US Congress to raise the country's debt limit, warning that failure to act would risk a major global market upheaval.

"For the United States, it is critical to immediately address the debt ceiling and launch a deficit reduction plan that includes entitlement reform and revenue-raising tax reform," the IMF said in an update of its April forecasts issued in Sao Paulo.

The US government hit its legal borrowing limit of $14.29 trillion on May 16. The Treasury has taken extraordinary technical measures to avert a debt default, but says it will run out of maneuvering room by August 2.

Tuesday, June 14, 2011

Debt crisis could trigger economic meltdown: Obama

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© AFP/File Saul Loeb
AFP

WASHINGTON (AFP) - Delay in raising the US debt ceiling could reverse the fledgling recovery and trigger a new economic meltdown, US President Barack Obama said in a interview broadcast on Tuesday.

"We could actually have a reprise of a financial crisis, if we play this too close to the line," Obama told NBC television's "Today Show" program.

"We're going be working hard over the next month. My expectation is we're going get it done in a sensible way. That's what the American people expect."

Obama and congressional Republicans have been engaged in heated wrangling over raising the debt ceiling, with the GOP demanding deep cuts in exchange for any deal to raise the spending limit.

Thursday, June 2, 2011

Despite Political Theater US Gov't is "Too Big to Fail"

Paul Craig Roberts
Lew Rockwell

Although the financial press speculates about a downgrade of the US government's credit rating and default if political impasse prevents the debt ceiling from being raised in time, I doubt anyone really believes that the debt ceiling will not be raised. It is just all a part of the political theater of the next couple of months.

Republicans will blame the budget deficit and accumulated national debt on Medicare and Social Security. Wall Street sees billions of profits in privatizing either, and debt rating agencies will oblige their Wall Street paymasters by opining from time to time that US Treasury bonds might be downgraded unless "entitlements can be addressed and the deficit brought under control."

Democrats will say that the budget deficit cannot be addressed without an increase in tax revenues, especially from the rich whose incomes have exploded upward while their tax rates have declined.

Tuesday, May 31, 2011

Political theater clouds US debt ceiling vote

US lawmakers Tuesday hold a certain-to-fail
vote on raising the government's borrowing limit
© AFP/File Shawn Thew
AFP

WASHINGTON (AFP) - US lawmakers Tuesday hold a certain-to-fail vote on raising the government's borrowing limit, revealing political posturing on a issue the White House warns could have "calamitous" economic consequences.

The Treasury says that unless Congress votes to raise the $14.29 trillion debt ceiling by August 2, Washington could be forced to default on its obligations, in a move that would send shockwaves through the global economy.

Opposition Republicans, who won the House of Representatives last November amid a public mood of steep anxiety over the ballooning size of government debt, will only back raising the debt limit in return for steep cuts in the deficit.

Monday, May 16, 2011

Obama warns on debt ceiling risk

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© AFP/File Brendan Smialowski
AFP

WASHINGTON (AFP) - President Barack Obama warned the United States risked plunging back into recession if a standoff over the US debt ceiling lingers, as a top Republican said he was ready to cut a deal.

The United States is due to hit the $14.29-trillion ceiling set by Congress on Monday, creating a cash crunch that puts the country's credit standing at risk as politicians battle over its long-term deficit.

"If investors around the world thought that the full faith and credit of the United States was not being backed up, if they thought that we might renege on our IOUs, it could unravel the entire financial system," Obama warned at a CBS town hall meeting last week that was broadcast on Sunday.

Sunday, May 15, 2011

Money-hungry US to hit borrowing cap

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© AFP/File Shawn Thew
AFP

WASHINGTON (AFP) - The debt-laden US government's credit card will hit its limit Monday, creating a cash crunch that puts the country's credit standing at risk as politicians battle over its long-term deficit.

Reaching the $14.29 trillion ceiling set by Congress will not have an immediate impact on government finances, because the Treasury has found about ten weeks of wiggle-room in short-term adjustments and an unexpected April jump in tax revenues.

But with Republicans refusing to increase the ceiling without massive future spending cuts, the longer the fight over bridging the country's deficit goes on, the higher the stakes will get.

If nothing is done by about August 2, there is a chance the United States, which has always merited a top-grade credit rating, could do the unthinkable -- default on its debt payments.

Tuesday, May 3, 2011

US Treasury to cut issues as May 16 debt cap nears

The US Treasury © AFP/File Karen Bleier
AFP 

WASHINGTON (AFP) - The US Treasury said Monday it would begin cutting certain debt issues as it confirmed the government would reach its borrowing ceiling on May 16.

With Congress still not agreed on raising the ceiling to permit the government to continue financing its spending, the Treasury said it would stop issuing state- and local-government series securities on May 6, money used for things such as local infrastructure development.

While the move appeared aimed at sparking pressure from the states on the legislature, it also would help buy time for a political deal on the ceiling, by extending to August 2 the time the country would be forced to stop borrowing and possibly default on its debt.

Sunday, April 17, 2011

Geithner certain of debt limit deal

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Editor's Note: The Treasury Department has been playing the "catastrophe" card since the beginning of the year, claiming we'd hit the ceiling in March, then in April, and now by May 16th.How the Treasury could be off by a quarter is an indictment in itself.

Geithner says the US admninistration wants to put in
place a comprehensive debt framework
© AFP/File Nicholas Kamm
AFP

WASHINGTON (AFP) - Treasury Secretary Timothy Geithner expressed confidence Sunday that feuding US political parties will reach an agreement to lift the country's debt limit before its is forced into default.

With Republicans demanding long-term spending cuts in return for voting to raise the debt ceiling, Geithner said the administration was willing to enter parallel talks, but in the end the limit would be raised either way.

"I want to make it perfectly clear that Congress will raise the debt ceiling," Geithner told the ABC channel "they told the president that on Wednesday in the White House."

Wednesday, April 13, 2011

US deficit up 15.7% in first half of fiscal 2011

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US deficit up 15.7 % in the first 6 months of fiscal 2011
US Treasury Building © AFP/File Karen Bleier
AFP

WASHINGTON (AFP) - The US budget deficit shot up 15.7 percent in the first six months of fiscal 2011, the Treasury Department said Wednesday as political knives were being sharpened for a new budget battle.

The Treasury reported a deficit of $829 billion for the October-March period, compared with $717 billion a year earlier, as revenue rose a sluggish 6.9 percent as the economic recovery slowly gained pace.

The Treasury argued that the pace of increase in the deficit was deceptive because of large one-off reductions in expenditures made during the first half of fiscal 2010, compared with previous and subsequent periods.

Tuesday, April 12, 2011

White House warns of debt 'Armageddon'

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The White House warned Republicans of
"Armageddon-like" debt consequences
© AFP Mandel Ngan
AFP

WASHINGTON (AFP) - The White House warned Republicans on Monday that failing to raise the $14.29 trillion US debt limit would spark "Armageddon-like" consequences for the slowly recovering US economy.

As a new political showdown looms over the economy following a defused budget row, aides also said President Barack Obama now "regrets" his vote as a senator against raising the debt ceiling in 2006, calling it "a mistake."

"The consequences ... of failure to raise the debt ceiling would be Armageddon-like in terms of the economy," said White House spokesman Jay Carney.

Tuesday, April 5, 2011

US to reach debt limit by May 16: Treasury

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"Default would cause a financial crisis potentially more severe than the crisis from which we are only now starting to recover," Geithner said. He warned that military pay, social assistance payments and tax refunds could be among the first things to be blocked.

US Treasury Department said US likely to hit
$14.29 trln debt limit sooner than thought
© AFP/File Karen Bleier
AFP

WASHINGTON (AFP) - The United States is likely to hit its $14.29 trillion debt limit sooner than thought, the Treasury Department said Monday, pressuring lawmakers to raise the ceiling or face a possible government default.

"The Treasury Department now projects that the debt limit will be reached no later than May 16, 2011," the Treasury said.

The department previously estimated it would hit the ceiling by May 31.

If it is not raised, the United States would only have weeks before it runs out of cash to pay its bills, according to government estimates.

Wednesday, March 2, 2011

Democrats warn of US shutdown over debt


Editor's Note:  Anyone else having a flashback

Dees Illustration
AFP/Activist Post

WASHINGTON - Senate Democrats warned Thursday of dire economic consequences if Congress fails to raise the US debt ceiling, saying it could prompt a shutdown of the federal government.

"It's playing with fire," said US Senator Chuck Schumer said of the legislative standoff.

If a shutdown were to occur, "citizens couldn't get their checks, veterans couldn't get their benefits, military payments would stop," the veteran New York lawmaker said.

Congress early in 2010 raised the US debt ceiling to nearly $14.3 trillion -- very near the current US debt of some $13.9 trillion dollars.

The government will run out of money in about two months' time, according to the US Treasury Department, unless Congress votes to raise the federal debt ceiling.


But while Democrats, along with most Republicans, agree on the need to avoid having the United States default on its debt, which likely would likely trigger a massive economic meltdown, some conservatives remain firmly against increasing ceiling.


They insist instead of that it is time for massive spending cuts and belt-tightening, and say that raising the debt ceiling further only forestalls needed austerity moves.


Illinois Senator Richard Durbin said a similar curtailment of government services today could "precipitate an economic crisis, driving up interest rates on mortgages, loans, businesses, families across America."


Durbin called it a "political tactic could kill our economic recovery and drive unemployment even higher."


Democrats noted that the last similar such standoff which led in 1995 to a brief government shutdown that was limited in scope, proved politically costly for Republicans after the public sided en masse with Democratic President Bill Clinton. 
© AFP


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US could reach debt limit by April 15: Treasury



US Treasury © AFP/File Karen Bleier
AFP

WASHINGTON (AFP) - The United States is likely to hit its $14.29 trillion debt limit a little later than expected, the US Treasury said Tuesday, as lawmakers worked to avert a government shutdown.

"The Treasury Department now estimates that the United States will reach the debt limit between April 15, 2011, and May 31, 2011," senior Treasury official Mary Miller said.

If the ceiling is not raised, the United States would only have weeks before it runs out of cash to pay its bills, according to government estimates.

The Treasury had expected to run up against the ceiling between April 5 and May 31.


The warning came as US lawmakers, battling over how to slash spending, eyed a stopgap measure to avert a government shutdown.

Although the issues of extending the debt ceiling and keeping the government funded are not linked, they have become enmeshed thanks to Washington's political deal making.

President Barack Obama's Republican foes have tied raising the debt limit to fierce spending cuts, which are seen as too extreme by many Democrats.

The debt ceiling became a hot-button issue after Republicans took control of the US House of Representatives in early January, leaving Obama's Democrats only in control of the Senate.



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