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Election Season 2014

And it has brought us to this trainwreck called ObamaCare and we have bankrupted our kids and grandkids!

We are now headed into the 2014 Election Season and common sense and conservatism are on the rise. Please stand-up and be counted!

Reading Collusion: How the Media Stole the 2012 Election is a great place to start!

The Founding Father's Real Reason for the Second Amendment

And remember the words of Thomas Jefferson "The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government." See Video of Suzanna Gratia-Hupp’s Congressional Testimony: What the Second Amendment is REALLY For, below (u-tube HERE).

The Leaders Are Here... Palin, Cruz, Lee, Paul, Chaffetz....

T'S A WONDERFUL LIFE

Can You Really Still Believe That None of These People Would Have Done a Better Job???

Bloggers' Rights at EFF

SIGN THE PETITION TODAY...

Tuesday, May 17, 2011

U.S. hits $14.3 TRILLION debt ceiling. Obama raids pensions to keep gov’t going! As Geithner Prepares to Blame GOP for Economy/Housing Woes

Enron execs are in prison for a long time for doing things like this.

WALL STREET JOURNAL: The U.S. government hit the $14.294 trillion debt ceiling today (Monday, May 16, 2011) and has now already exceeded it, setting in motion an uncertain, 11-week political scramble to avoid a default.

Remember last week when Geithner said that all of a sudden we had until August, instead of this week for Congress to increase the debt ceiling?  And we were all wondering where this money to cover the shortage was coming from? The Treasury Department plans to announced it will stop issuing and reinvesting government securities in certain government pension plans, part of a series of steps designed to delay a default until Aug. 2.

The Treasury’s moves buy time for the White House and congressional leaders to reach a deficit-reduction agreement that could clear the way for enough lawmakers to vote to raise the amount of money Congress allows the nation to borrow.

However most informed American people and a majority of the experts do not want the debt ceiling raised.  If for once Congress would listen and not hike the debt ceiling… what happens to these pensions?  What happens to them is exactly what happened to Social Security that is a treasure chest filled with I.O.U’s from the Federal Government instead of the funds people have paid in for generations now.  

GEORGE SANTAYANA is often quoted for the aphorism that “Those who cannot remember the past are condemned to repeat it.” Looking back on the financial crisis, we can see why the study of history is often so contentious and why revisionist histories are so easy to construct. There are always many factors that could have caused a historical event; the difficult task is to discern which, among a welter of possible causes, were the significant ones — the ones without which history would have been different.

Using this standard, I believe that the sine qua non of the financial crisis was U.S. government housing policy, which led to the creation of 27 million subprime and other risky loans — half of all mortgages in the United States — which were ready to default as soon as the massive 1997-2007 housing bubble began to deflate. If the U.S. government had not chosen this policy path — fostering the growth of a bubble of unprecedented size and an equally unprecedented number of weak and high-risk residential mortgages — the great financial crisis of 2008 would never have occurred.

It was the U.S. government’s housing policies — and nothing else — that were responsible for the 2008 financial crisis.

The inquiry has to begin with what everyone agrees was the trigger for the crisis — the so-called mortgage meltdown that occurred in 2007. That was the relatively sudden outbreak of delinquencies and defaults among mortgages, primarily in a few states — California, Arizona, Nevada, and Florida — but to a lesser degree everywhere in the country. No one disputes that the losses on these mortgages and the decline in housing values that resulted from the ensuing foreclosures weakened financial institutions in the U.S. and around the world and were the precipitating cause of the crisis.

This raised a significant question. The U.S. had experienced housing bubbles in the past. Since the Second World War, there had been two — beginning in 1979 and 1989 — but when these bubbles deflated they had triggered only local losses. Why was the deflation of the housing bubble in 2007 so destructive?

The Financial Crisis Inquiry Commission’s answer was that there were weaknesses in the financial system — failures of regulation and risk management, excessive leverage and risk-taking — that were responsible for the ensuing devastation. To establish this idea, the Commission had to show that these weaknesses were something new. It didn’t attempt to do this, although that was an essential logical step in establishing its point. And the Commission ignored a more obvious answer: the quality of the mortgages in the bubble. As I noted earlier — and as the Commission never acknowledged or disputed — by 2008, half all mortgages in the U.S. — 27 million — were subprime or otherwise risky loans. If the Commission had really been looking for the reasons that the collapsing bubble was so destructive, the poor quality of the mortgages in the bubble was a far more likely hypothesis than that there had been a previously undetected weakening in the way the U.S. financial system operated.  (Read full Article HERE at American Spectator)

With a failing and ailing housing market that Zillow predicts won’t hit bottom until 2012 *at the earliest*…, a US dollar with rapidly declining value driving prices of oil up, as well as every product down line in the transportation chain, this administration’s leadership thru the US economic woes have proven not to steer the nation towards recovery, but instead thrown us into a double dip recession.

With a new POTUS election year looming, this comes as quite the inconvenient talking point. So it comes as no surprise that Geithner decides to play politics with a crises… laying the groundwork for blaming policies that brought us to this point on on the GOPs demands for spending cuts in exchange for raising the debt ceiling.

A short-term default on government debts would do “irrevocable damage” to the American economy, according to Treasury Secretary Timothy Geithner.

In addition, failing to raise the debt limit and forcing the government to miss payments on some obligations would “likely push us into a double dip recession,” he warned Friday in one of the administration’s bluntest warnings yet on the dangers of inaction.

In a letter sent to Sen. Michael Bennet (D-Colo.), Geithner painted a bleak picture of what would happen if Congress were to fail to raise the $14.3 trillion debt limit in time. A government default would hurt an already weak housing market, drive down household wealth by hitting 401(k) accounts and pension funds, and actually increase the government’s debt burden by driving up costs.

I’m not sure if Geithner’s bothered to look closely, but with, or without, that debt ceiling, a double dip recession has already been upon us. That is if you want to focus on the economic health of anyone other than the financials, who’ve been the biggest beneficiaries of Fed’s low interest/big bucks capital gains scenario. Main Street is feeling anything but recovery as our home values continue to tumble, unemployment remains high, and costs of necessities rise unabated. And I’m sure many of will consider candle making when the inexpensive incandescent bulb is mandated out of existence thanks to a nanny “green” Congress.

Political rhetoric, in the form of the game of “chicken”, is at the foundation of this cheap fear mongering. As even Mike Shedlock at Mish’s Global Economic points out, there’s no doubt the debt ceiling will be raised. It’s just under what circumstances that it will. The GOP is using the debate as leverage for spending/cutting concessions from across the aisle, and from this big spending WH denizen.

In what is one of Mish’s more uncharacteristically harsh observations, Shedlock calls the Geithner/Bennett letter staged.

Last week Senator Michael Bennett of Colorado sent a letter to Treasury Secretary Tim Geithner asking what would happen if the debt ceiling was not raised.

Geithner’s Fear-Mongering Response to Senator Michael Bennett was quite entertaining. Here are a few select quotes from Geithner

A default would call into question, for the first time, the full faith and credit of the U. S. government. As a result, investors in the United States and around the world would demand much higher rates, reflecting the increased risk we might default on our obligations again.

A Default would not only increase borrowing costs for the Federal Government. but also for families, businesses, and local governments.

Even a short-term default could cause irrevocable damage to the American economy.

The letter goes on and on with colorful warnings about double-dip recessions.

The entire setup looks like a staged event. Michael Bennett is a Democrat from Colorado who wants the debt ceiling raised. Purposely or not, Bennett lobbed a softball to Geithner who drooled all over it.

To link the non existent housing recovery – as well as a stagnant (at best) economy in the wake of the massive government injection of taxpayer stimulus cash – to the current event of the debt ceiling is an obvious political feint, designed to mask the fiscal policy failures of the current administration and Fed Reserve. To buy into this nonsense, we would have to assume that an automatic raise of the debt ceiling, unopposed, would result in the rosy future this admin attempts to paint at every opportunity.

This deliberate mischaracterization for political gain is a dangerous game of chicken for we, the people. Our problem is less the specifics of the debt ceiling debate than it is the effect of both spending and never ending QE policies on the stability of the US dollar. While the days and weeks bring us a yoyo effect, the dollar has been steadily losing against the Euro over the years, driven by the nation’s increasing debt.

Nor does it give me a bit of satisfaction that the dollar has risen against the yen…. Give me a break. If there’s a nation that’s never recovered fully from their “lost decade”, and now in further economic crisis by their earthquake and tsunami, it’s Japan.

Below is a chart from the St. Louis Fed site, with the weighted average of the US dollar against the Euro area, Canada, Japan, the UK, Switzerland, Australia and Sweden from 1970 to 2011. The officially recognized US recession eras are noted by the shaded grey.

There are some who see a devalued dollar as a boost… and that’s true if you only want to consider short term, immediate effects. But we’re anything but short term with our soaring debt, reduced abilities to grow the economy or our individual incomes. Playing chicken with the dollar, while never curtailing out of control spending, is the stuff currency failures are made of historically. Something that many of you may remember is the third phase of the Kevin D. Freeman “Financial Terrorism” report I wrote about in March of this year. While “financial terrorism” may not be the stated goals of the Treasury Sec’y, the Fed Reserve or this WH, one can’t help but notice they are proceeding right along the path this report warns of for the fall of the US as a superpower.

At the very least, Bernanke – riding herd on continued low rates while continuing to run the US printing presses – and Geithner are doing a delicate tightrope act without a safety net. And neither are above playing political cards with fear mongering and cheap tricks to stay balanced on that wire.

The problem with the Geithner/Bernanke circus act they aren’t telling the audience when the show is over, nor how they plan to get off that tightrope. But Geithner is going to make sure that, in the inevitable fall, it’s definitely not his fault, or that of his WH POTUS. They are already pointing that finger at the GOP, and hoping the US voter buys their storyline that the GOP, holding the debt ceiling vote hostage on spending cut negotiations, is the reason they tumbled.

Source: Flopping Aces

Scheduling a Crisis

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When is the best time to hold a fiscal crisis?

The obvious answer might seem to be: never. Crises are not much fun, can be very costly, and people tend to get hurt. Had President Obama embraced the recommendations of his own bipartisan fiscal commission, or had he put forward a budget that addressed the country's long-term fiscal imbalances, 'never' might have been an option. But he did not. Instead, the country is on an unsustainable fiscal path of borrowing and escalating debt.

As Herb Stein once aptly put it, if something cannot go on forever, it will stop. In fiscal matters, such stops can precipitate crises. When the rest of the world decides a country is not credit-worthy, interest rates can soar at the same moment that the country is trying to cut back on spending and raise taxes, thus combining contractionary fiscal and monetary policy in an ugly mix.

If that is what lies in the future for the United States, is it better to face that future sooner or later? It may depend on whom you ask. For the country as a whole, there are a number of reasons to prefer sooner.

First, the longer fiscal adjustment is postponed, the greater and more painful the ultimate fix needs to be. The debt burden rises over time and inescapable interest payments rise with it. For spending cuts, if those in and near retirement are to be shielded from major entitlement changes, the "grandfathered" populations will grow dramatically in the years ahead.

Second, crises can occur at inopportune moments. The global financial crisis that exploded in September 2008 came at a particularly bad time. The country was led by a lame duck administration that felt it had little sway over an opposition Congress. The political class was caught up in an election that was not conducive to crafting a careful, bipartisan policy response.

Portugal provides a more recent example of awkwardly-timed crisis. Its government fell just as it was negotiating a financial rescue package that required painful and contentious adjustments. It was constitutionally prohibited from holding a quick election and has thus been trying to conduct critical and difficult bailout negotiations with only a caretaker government.

So why not move quickly to address an impending fiscal crisis? If you're an incumbent politician, later can look better than sooner. You might hope that something unexpected will come along to avert the crisis, such as a global economic boom. Or, at least, you might hope that the crisis will wait until you've left office. Moreover, if you choose to address the crisis sooner and successfully avert it, there will inevitably be those who wonder whether all the painful adjustment was really necessary and whether the crisis would have taken place at all. This may be the case in Britain, which took serious steps to address its fiscal imbalance this past year.

Back in the United States, at present, commentators have heaped scorn on Republicans for daring to play chicken with the debt ceiling, calling it wildly irresponsible. Implicitly, those are arguments that it is better to hold our crisis later rather than sooner. That may be neither responsible nor right.

If U.S. political leaders do not act now to address the growing federal debt, when is the next propitious moment?  Given recent rhetoric, it seems unlikely that a bipartisan accord would spontaneously emerge during an election year. One can imagine electoral outcomes that would allow serious action in 2013, after the next vote, but that begs the question of whether global financial markets will wait that long. At the moment, U.S. debt is precariously balanced between dire analyses, such as that accompanying the recent S&P downgrade warning, and the woeful lack of attractive alternatives on the world scene. This balance could persist for years, but to assume it will is undeniably risky.

Given the president's reluctance to put forward or embrace viable fiscal solutions, the debt ceiling looks like one of the very few options for forcing an adult conversation about fiscal imbalances in the near future. Critics are correct that this approach risks a crisis, but that's really just a question of timing. If the confrontation prompts a serious approach to fiscal issues, that may be the country's best hope of avoiding a crisis altogether.

Remember Rahm Emanuel and Hillary Clinton’s famous lines:  Never let a good crisis go to waste… and perhaps create one if you need it?

Source: American Enterprise Institute for Public Policy Research

Debt Ceiling Reached. Now What?

Video: Debt Ceiling Reached. Now What?

This video explains how quickly we’ve reached the latest debt ceiling and why a debate is taking place right now regarding what to do next.

And don’t worry about the Obama’s: Obama worth millions, mainly due to book royalties

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