CBO Director: Publicly held US debt headed toward end of WW2 level...

The failed war on poverty has been expensive...

Via CNS News:

Testifying in the U.S Senate yesterday, Congressional Budget Office Director Keith Hall warned that the publicly held debt of the U.S. government, when measured as a percentage of Gross Domestic Product, is headed toward a level the United States has seen only once in its history—at the end of World War II.
To simply contain the debt at the high historical level where it currently sits—74 percent of GDP–would require either significant increases in federal tax revenue or decreases in non-interest federal spending (or a combination of the two).
Keep on reading…

Congratulations: If you are a taxpayer, your share of the federal-debt liability is $1.1 million

We have sold out our children's future. Each taxpayer has a federal-debt liability is $1.1 million.

Each U.S. taxpayer now has a federal-debt liability of $1.1 million, and rising.
Remember that when President Obama boasts that the federal deficit—the shortfall between annual revenues and spending—is declining. Of course, the primary reason for the decline is the sequester, which was his idea but now adamantly opposes.
The public tends to focus on the total national debt, which just passed the $17 trillion mark—up from $10.6 trillion when President Obama took office. But that figure pales in comparison to the federal government’s long term unfunded liabilities—money the government is obligated to pay over and above the revenues it is estimated to receive.
According to the U.S. Debt Clock, total long term unfunded liabilities are at $126 trillion, a $1.1 million liability for each U.S. taxpayer.
The main driver of that astronomical number is two of our major entitlement programs: Social Security and Medicare.

GAO warns nation’s current fiscal policy will lead to economic collapse...

The rise in the debt-to-GDP ratio is not sustainable...

Via Breitbart:

For two months, reporters and lawmakers have ignored a devastating report from the federal government itself, which warns that the nation’s current fiscal policy will lead to economic collapse.

The Government Accountability Office (GAO)—the personal auditor of President Obama and the federal government—released its assessmentof the federal government on January 17, 2013. The report’s findings illuminate just how dire America’s spending problem is and, therefore, how little the current cuts debated by Congress do to fix it.
The findings of the paper include these excerpts (emphasis added):

• “The projections in this Report indicate that current policy is not sustainable… Preventing the debt-to-GDP ratio from rising over the next 75 years is estimated to require some combination of spending reductions and revenue increases that amount to 2.7 percent of GDP over the period.”
• “It is estimated that running primary surpluses that average 1.0 percent of GDP over the next 75 years would result in the 2087 debt-to-GDP ratio equaling its level in fiscal year 2012, which compares with primary deficits that average 1.7 percent of GDP under current policies.”
• “It is noteworthy that preventing the debt-to-GDP ratio from rising over the next 75 years requires that primary surpluses be substantially positive on average. This is true because projected GDP growth is on average smaller than the projected government borrowing rate over the next 75 years.”

Keep reading…

Interesting Video: US Debt - Visualized in physical $100 bills

I found this video using stacks of $100 bills really brings the size of US debt home.

US Debt - Visualized in physical $100 bills

 

The political party of debt borrowed money to finance their convention

How appropriate...

Via Bloomberg:

Democrats ended their convention in Charlotte $5 million short of their budget even after being forced to draw down a $10 million line of credit from Duke Energy Corp. (DUK), according to a Democratic Party fundraiser.

That will leave a $15 million bill that eventually will have to be paid by President Barack Obama’s campaign or the Democratic National Committee, according to the fundraiser, who spoke on condition of anonymity to discuss internal deliberations.

The Charlotte Host Committee ended the convention with more than $5 million in immediate obligations and may require a direct cash infusion from the Obama campaign to pay vendors, said the fundraiser.

The national debt topped $16 trillion at the beginning of democrats Charlotte convention.

New RNC Web Ad: Unpatriotic Debt (Video)

If $4 trillion was unpatriotic, what's $5 trillion?

Why The Federal Budget Can Not Be Balanced (Must See Video)

This video breaks down the Federal Budget into major components that can be easily understood. In a nut shell, mandatory entitlement spending and interest on the Federal debt are larger in 2012 than total tax revenues. That means if we closed every government department and office, fired every government employee, disbanded our military and ended all discretionary spending, we would still have a small deficit. What would it take to balance the budget? We could raise taxes by 50% or cut entitlements like Social Security, Medicare and Medicaid by 60%. Do you see any of those things happening? Is it just a question of time before we go the way of Greece?

United States Budget Dilemma (Video)

New Mitt Romney Video Ad: Obama is America's Best President...At Piling On Debt

This ad featuring a cute baby and the revelation that Obama has almost doubled the national debt looks very effective.

Chart of the Day: Your Share of Obama's Budget Plan Debt

Every American will owe $73,000 in debt by 2022…

Via TWS:

Rasmussen: 42% of Americans think U.S. Debt Default is Somewhat Likely

Did you know America’s per capita government debt is worse than Greece?

Via Rasmussen:

Looking overseas at the catastrophic economic problems plaguing Greece and other European nations, a sizable number of Americans still think the United States is also a candidate for default in the near future. A new Rasmussen Reports national telephone survey finds that 42% of American Adults believe it is at least somewhat likely that the U.S. government will default on its debt in the next five years. Forty-eight percent (48%) now rate a national debt default as unlikely. (To see survey question wording, click here.)

If you thought the Greek financial mess was solved, think again.

The deal required Greece to get 95% of bondholders 50% cut in their holdings and accept new bonds with a lower premium by next Thursday. It doesn't look like that is going to happen. If the deal is imposed on bondholders, Greece will likely declared in default by credit rating agencies. This may bar them from getting the $170 billion loan they need to pay the bills.

Via Telegraph:

Authorities in Athens are ready to enforce the controversial collective action clauses, or CACs, to impose the restructuring deal on all bondholders as the number of voluntary agreements look set to fall short of the required amount.

Credit rating agencies have warned they will declare Athens to be in default if the CACs are triggered which would be a dramatic culmination to a three-year rollercoaster ride for Athens, the eurozone and global markets.

While the markets have been ready for a Greek default for months, the move could leave Greece and its banks barred from funding from the European Central Bank (ECB). On Monday, Standard & Poor's declared Greece to be in a state of "selective default" which led to the ECB announcing it would no longer accept Greek government bonds as security for new loans.

The rating agency said its decision had been prompted by the threat of the CACs and the actual use of them is likely to tip Greece into actual default. The agency said it regarded the process as a "distressed debt restructuring".

Raoul Ruparel of Open Europe, the London-based think-tank, said: "Greece is likely to struggle to reach the targets for a voluntary agreement so the credit rating agencies are almost certainly going to see this as a default.

"What happens next is unknown territory. Read more here...

Chart of the Day: America’s Per Capita Government Debt Worse Than Greece

Oh, my.


Via Weekly Standard

Germany preparing for Greece to default on debt

This has been inevitable for a long time. A country where hairdressers get early retirement because their jobs are deemed hazardous is unsustainable in the age of global economies.

The Telegraph reported:

The German finance ministry is actively pushing for Greece to declare itself bankrupt and to agree a "haircut" on the bulk of its debts held by banks, a move that would be classed as a default by financial markets.

Eurozone finance ministers meet on Monday to approve the next tranche of loans from the EU and the International Monetary Fund, designed to stave off national bankruptcy while the new Greek government puts the country's finances in order.

But the severe austerity measures being demanded have caused such fury in Greece, and the cuts required are so deep, that Wolfgang Schäuble, the German finance minister, does not believe that any government would be able to implement them.

His pessimism has been tipped into despair with a secret European Commission, Central and IMF report that even if Greece made good on its promises, it would not be enough to reach the target of bringing total debt to 120 per cent of GDP by 2020. Keep on reading...

Average family of four will owe $70,000 more in federal debt after four years of Obama

President Obama has been a disaster of biblical proportions.

Via Weekly Standard:

President Obama’s fourth budget has now been released, which allows for a relatively full accounting of deficit spending during his four years in office. The picture isn’t pretty, but it is revealing.

According to the White House’s own figures (see table S-1 here for 2011 to 2013, and table S-1 here for 2010), the actual or projected deficit tallies for the four years in which Obama has submitted budgets are as follows: $1.293 trillion in 2010, $1.300 trillion in 2011, $1.327 trillion in 2012, and $901 billion in 2013. In addition, Obama is responsible for the estimated $200 billion (the Congressional Budget Office’s figure) that his economic “stimulus” added to the deficit in 2009. Moreover, he shouldn’t get credit for the $149 billion in TARP (Troubled Asset Relief Program) repayments made in 2010 and 2011 to cover most of the $154 billion in bank loans that remained unpaid at the end of the 2009 fiscal year — loans that count against President Bush’s 2009 deficit tally.

Adding all of this up, deficit spending during Obama’s four years in the White House (based on his own figures) will be an estimated $5.170 trillion — or $5,170,000,000,000.00.

To help put that colossal sum of money into perspective, if you take our deficit spending under Obama and divide it evenly among the roughly 300 million American citizens, that works out to just over $17,000 per person — or about $70,000 for a family of four.

Keep on reading…

Why is Greece broke? Hairdressers in Greece can retire at 50 because they have a hazardous job.

Much of the reason for Greece's financial crisis is an overextended social net. Hairdressers and musicians can retire as early as 50 because they are deemed to have hazardous jobs.

ATHENS — Vasia Veremi may be only 28, but as a hairdresser in Athens, she is keenly aware that, under a current law that treats her job as hazardous to her health, she has the right to retire with a full pension at age 50.

“I use a hundred different chemicals every day — dyes, ammonia, you name it,” she said. “You think there’s no risk in that?”

“People should be able to retire at a decent age,” Ms. Veremi added. “We are not made to live 150 years.”

Perhaps not, but it is still difficult to explain to outsiders why the Greek government has identified at least 580 job categories deemed to be hazardous enough to merit retiring early — at age 50 for women and 55 for men...

As a consequence of decades of bargains struck between strong unions and weak governments, Greece has promised early retirement to about 700,000 employees, or 14 percent of its work force, giving it an average retirement age of 61, one of the lowest in Europe.

The law includes dangerous jobs like coal mining and bomb disposal. But it also covers radio and television presenters, who are thought to be at risk from the bacteria on their microphones, and musicians playing wind instruments, who must contend with gastric reflux as they puff and blow.

An alternate title for this post is "My Big Fat Greek Retirement."

Obama blows through debt ceiling and keeps on borrowing

Obama can get away with this because he is now Emperor Obama.

Via Zero Hedge:

America may have breached its debt ceiling, but that is certainly not preventing it from issuing debt, placing another $21 billion in 10 Year bonds in a reopening, which priced 1.5 bps through the WI tail of 1.915% or at 1.90%. This is merely the latest record low yield in the history of the auction. The Bid To Cover came at 3.29: not a record, but certainly one of the top 5 highest. Oddly enough, while the Directs disappeared from yesterday’s 3 Year auction, today they surged, coming at double last month’s 8.4% at 17.4%, the highest since the August post-downgrade auction. Primary Dealers accounted for 44.3% with Indirects coming in at a very weak 38.3%. Still, the take home is that in the past two days, the US has raised over $50 billion in debt with no capacity, and instead is plundering from government retirement accounts, just like it did back in July 2011 at the first, but not last, debt ceiling theater. SSDD.At least we know what it takes to get new record low yields: just keep breaching the debt ceiling — guaranteed way to raise 30 Year debt at 0.00% in a few months.

U.S. joins triple digit “debt to GDP” club

This is an ignoble Christmas present for America.

Via Zero Hedge:

With precisely one year left for the world and all of its inhabitants, at least according to the Mayans, not to mention on the day of the Winter Solstice, it is only fitting that US debt, net of all settlements for all already completed bond auctions, is now at precisely $15,182,756,264,288.80. Why is this relevant? Because the latest annualized US GDP, according to the BEA, was $15,180,900,000.00. Which means that, as of today, total US debt to GDP is 100.012%.

Congratulations America: you are now in the triple digit “debt to GDP” club!

I. Total debt as of December 20: $15,131,979,264,288,80 (source)

II. Net cash settlement of all completed auctions: $50,777,000,000 (source)

III. Total GDP: $15,180,900,000,000 (source)

=> Total Debt/GDP= $15,182,756,264,288.80/$15,180,900,000,000 = 100.012%

Read more here…

National Debt Busts Through $15 Trillion Mark

Thanks, President Obama.

(ABC News) — Don’t look now, members of the “supercommittee” battling the national debt, but the amount the U.S. owes topped the $15 trillion mark Wednesday afternoon.

That’s a lot of George Washingtons, as you can see here live at USdebtclock.org.

With a week until the committee’s deadline to reach agreement on cutting $1.2 trillion to $1.5 trillion from the federal deficit over the next 10 years, the Joint Select Committee on Deficit Reduction still has no agreement to stem automatic cuts to the budget.

Shocker: States are in debt for $4.2 trillion

States are drowning in debt. Much of it is due to unfunded pension liabilities caused by aggressive public employee unions..

(CNBC) — The total of U.S. state debt, including pension liabilities, could surpass $4 trillion, with California owing the most and Vermont owing the least, a new analysis says.

The nonprofit State Budget Solutions combined states’ major debt and future liabilities, primarily for pensions and employee healthcare, unemployment insurance loans, outstanding bonds and projected fiscal 2011 budget gaps. It found that in total, states are in debt for $4.2 trillion.

The group, which follows state fiscal conditions and advocates for limited spending and taxes, said the deficit calculations that states make “do not offer a full picture of the states’ liabilities and can rely on budget gimmicks and accounting games to hide the extent of the deficit.”...

The top debt owing states are 'who's who' list of states that voted for Barack Obama in 2008.

California still owes the most under the alternative computation, but the state's total debt drops significantly, to $307 billion. With the Pew numbers, New Jersey follows with $183 billion of debt and Illinois is next at $150 billion.

According to the analysis, California has also borrowed the most from the federal government to pay for unemployment benefits, $8.6 billion. Michigan was next, taking out $3.1 billion, and then New York, borrowing $2.9 billion.

New Dem Talking Point: “Tea Party Downgrade"

How is the debt downgrade for failing to cut enough the fault of the group that wants to cut the most? Democrats and liberals are living in bizarro world. They are working the theory that if you say something enough, people will believe it is true.

(TheDC) — The left-wing activist group MoveOn.org picked up the new liberal slogan bashing conservatives for Standard & Poor’s U.S. credit rating downgrade: “Tea Party downgrade.” President Obama’s chief campaign strategist David Axelrod and Massachusetts Democratic Sen. John Kerry both used the phrase on Sunday talk shows.

In a Sunday afternoon email to supporters, MoveOn.org accused tea partiers of being responsible for the first-ever credit downgrade in U.S. history. “This ‘tea party downgrade’ is a shameful blow to our nation’s honor and risks throwing us right back into recession,” Moveon.org wrote. “Worst of all? It was completely avoidable. But when given the choice between extremist posturing and responsible leadership, tea party Republicans chose wrong.”

MoveOn.org added that “now, amazingly, they’re trying to pin the blame on Democrats.”