Economic Suicide!!!

[AGENDA21]

Anybody who has been lending money to the US federal government by buying T-Bills and its other debt instruments received a brutal one-two punch last week. It was hopefully a sobering experience, causing them to question why they would want to hold any US government paper.

The Washington Post landed the first punch with the following report on March 6th. “WASHINGTON -- Treasury Secretary John Snow notified Congress on Monday that the administration has now taken “all prudent and legal actions,” including tapping certain government retirement funds, to keep from hitting the $8.2 trillion national debt limit…Treasury officials, briefing congressional aides last week, said that the government will run out of maneuvering room to keep from exceeding the current limit sometime during the week of March 20.”

The second punch was delivered a couple of days later by this Dow Jones Newswires dispatch: “WASHINGTON (Dow Jones) -- The U.S. government ran a monthly budget deficit of $119.20 billion in February, an all-time monthly record that was still slightly less than forecast, according to a Treasury report Friday. The February federal government deficit was 5% greater than a year earlier, according to the Treasury Department's monthly budget statement.”

These two reports make clear the dire financial straits the federal government is facing, but its financial position is even worse than it appears. The $8.2 trillion debt limit -- that has proven inadequate to meet the federal government’s borrowing needs -- covers only its direct liabilities. In other words, this $8.2 trillion is the total amount of dollars owed to all the holders of US government debt instruments. Excluded from this total debt are all of the federal government’s other liabilities, which total another $38 trillion. In “The 2005 Financial Report of the United States Government”, US Comptroller General David Walker reported that “the federal government’s fiscal exposures now total more than $46 trillion, up from $20 trillion in 2000.”

http://news.goldseek.com/JamesTurk/1142438460.php

[ChairmanAgnostic]

1. Hey, I have an idea. Let's cut more taxes for the rich!

and funnel even more money to rightwing evangelical churches!

[Jackpine Radical]

2. Oh--and couldn't we save even more money if we pulled the DOJ

off all white-collar crime investigations & refocused them on porn, medical marijuana & prostitution?

[RaleighNCDUer]

7. Nah. Too complicated. If we're running out of money, we just need

to print some more. Problem solved.

[Jackpine Radical]

9. OK, so we print more.

THEN can we go after the hookers, potheads and closet jerkoffs?

[RaleighNCDUer]

10. Only if you promise to leave

MY hookers and dealers alone.

[Bandit]

3. US National Debt is increasing by over $100,000.00 a Second

We are charging that much money so we can kill and maim woman and children in Iraq and Afghanistan. Every single person killed is a civilian. Not a uniform to be had. We are not fighting an Army or Navy or Air Force. Nothing but helpless women and children.
http://www.toptips.com/debtclock.html

[corporate_mike]

11. or $2.1 billion per day!

[LSK]

4. lets cut that FAILED Iraq policy!!!

That should save us tons of money.

[AGENDA21]

6. I agree with ya...but it aint gonna happen!

[mainegreen]

5. So thats why interest rates are low!

Scary shit.

[Neil Lisst]

8. I fear China and Japan dumping US currency and debt instruments

Can you imagine the impact on the US economy if they both decided to dump their dollars and T bills? Either taxes would have to be jacked up, or interest rates would shoot up. It would be stagflation time.

[Deja Q]

13. China has its own debt to repay, now that it's a part of the community...

On bloomberg's website... interesting quote made by Bush. About democracy, especially now that we've helped them...

http://www.bloomberg.com/apps/news?pid=10000103&sid=adUsHhZ4T2GE&refer=us

``We must encourage Russia to respect the values of freedom and democracy at home and not to impede the cause of freedom and democracy'' in the region, the document says. ``Recent trends regrettably point toward a diminishing commitment to democratic freedom and institutions.''

On China, the administration applauds the country's economic successes, while calling its transition from a state- planned economy to a free-market system ``incomplete''

``China's leaders must realize, however, that they cannot stay on this peaceful path while holding on to old ways of thinking and acting that exacerbate concerns throughout the region and the world,'' it says. ``As China becomes a global player, it must act as a responsible stakeholder that fulfills its obligations and works with the United States and others to advance the international system that has enabled its success.''

[Neil Lisst]

15. I remember when Bush said that ...

And I remember thinking "talking shit again to the Chinese."

I also remember thinking "they're your banker, Bush, and they know you can't do a blessed thing."

[Strelnikov_]

12. All The Money We Send To The Export Nations Has To Go Somewhere

Maybe the plan is to recycle our current accounts deficit into T-bills.

Once the debts get too high to sustain, they bust out the country, and flee with their wealth to another country.

Meyer Lansky would be proud.

[rman]

14. To whichever country the money goes,

in almost all cases a disproportionate amount of it ends up in bank accounts of owners and investors of transnational corporations (many of which were originally US based).

A collapse of the US economy will hardly touch them.
It will hurt US citizens a lot though.
It's not suicide, it's murder.

[corporate_mike]

16. Unfunded obligation of Social Security and Medicare is > $81 TRILLION

[Nederland]

17. Things have been far worse

I disagree with you pessimistic outlook. The deficit today is not as high (in percentage terms, the only way that matters) at it was at the start of Clinton's term.