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America’s Debt Could Soon Spark A European-Style Crisis
WASHINGTON: America’s rapidly growing national debt could soon spark a European-style crisis unless Congress moves forcefully, the Congressional Budget Office warned Wednesday in a study that underscores the stakes for a bipartisan group working on a plan to reduce red ink.
Republicans seized on the nonpartisan report to renew their push to reduce costs in federal benefit programs such as Medicare, the federal government health care program that benefits the elderly.
At issue is the $9.7 trillion of US debt held by investors and foreign countries like China, the measure that economists deem most important. Government accounts like the Social Security trust funds account for the rest of the $14.3 trillion total debt.
Democrats and Republicans have been stepping up budget talks aimed at averting what could be the disastrous first-ever default on U.S. government debt. A bipartisan group led by Vice President Joe Biden tasked with reaching an agreement has not made the politically difficult compromises on the larger issues, such as Read more…
NIA Releases U.S. Economic and Inflation Update
The official U.S. unemployment rate rose during the month of May to 9.1%, up from 9% in April, with only 54,000 non-farm jobs being created for the month. The real unemployment rate including short and long-term discouraged workers is now 22.3%. The Bureau of Labor Statistics (BLS) used the birth/death model to produce a positive monthly bias during the month of May of 206,000 jobs, up from 175,000 in April, 117,000 in March, and 112,000 in February. Without the birth/death model, 152,000 jobs were lost during the month of May.
By utilizing the birth/death model, the BLS is assuming that during the month of May, the number of new jobs created by start-up businesses were 206,000 greater than the number of jobs lost from companies going out of business. NIA finds this assumption to be Read more…
US government will soon seize your retirement account
NaturalNews) – When it comes to your retirement account, you probably keep an eye on Wall Street and the financial markets because when they lose value, your account loses value. Little did you know you are going to have to keep an eye on Uncle Sam as well, because he’s eyeing your retirement too, and he could soon take what he will claim is his fair share of it.
If you think that sounds absurd, think again. In fact, it’s a concept that is already being used by some governments, the most recent of which is Ireland.
In a bid to finance a “jobs” program, the Irish government, which is heavily in debt, is set to impose a new levy – read “tax” – on private retirement accounts. The accounts of government workers will be exempt.
“It’s truly disgusting logic to force private workers to pay for years of political incompetence while absolving government employees,” writes Simon Read more…
58% Favor Government Shutdown Until Spending Cuts Are Agreed Upon
As Republicans and Democrats in Congress haggle over the budget, most voters would rather have a partial shutdown of the federal government than keep its spending at current levels.
A new Rasmussen Reports national telephone survey finds that just 33% of Likely U.S. Voters would rather have Congress avoid a government shutdown by authorizing spending at the same levels as last year. Fifty-eight percent (58%) says it’s better to have a partial shutdown until Democrats and Republicans can agree on what spending to cut. (To see survey question wording, click here.)
The partisan differences are striking. Fifty-eight percent (58%) of Democrats prefer avoiding a shutdown by going with current spending levels. But 80% of Republicans — and 59% of voters not affiliated with either major party — think a shutdown is a better option until Read more…
National Debt $200 Trillion Dollars
Dr. Laurence Kotlikoff economics professor at Boston University, discusses the national debt and unfunded liabilities – Aug. 11, 2010
Using CBO data, Kotlikoff says the real national debt is $202 trillion.
Compare the official deficit numbers for July – $165 billion – with the numbers for all of 2002 – where $165 billion covered the deficit for the entire fiscal year.
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Excerpt:
The Congressional Budget Office whose Long-Term Budget Outlook, released in June, shows an even larger problem.
‘Unofficial’ Liabilities
Based on the CBO’s data, I calculate a fiscal gap of $202 trillion, which is more than 15 times the official debt. This gargantuan discrepancy between our “official” debt and our actual net indebtedness isn’t surprising. It reflects what economists call the labeling problem. Congress has been very careful over the years to label most of its liabilities “unofficial” to keep them off the books and far in the future.