Obama 2006 On Raising the Debt Ceiling

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.

Over the past 5 years, our federal debt has increased by $3.5 trillion to $8.6 trillion.That is “trillion” with a “T.” That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. And over the next 5 years, between now and 2011, the President’s budget will increase the debt by almost another $3.5 trillion.

Numbers that large are sometimes hard to understand. Some people may wonder why they matter. Here is why: This year, the Federal Government will spend $220 billion on interest. That is more money to pay interest on our national debt than we’ll spend on Medicaid and the State Children’s Health Insurance Program. That is more money to pay interest on our debt this year than we will spend on education, homeland security, transportation, and veterans benefits combined. It is more money in one year than we are likely to spend to rebuild the devastated gulf coast in a way that honors the best of America.

And the cost of our debt is one of the fastest growing expenses in the Federal budget. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infrastructure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on.

Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities.

Senator Barack Obama
Senate Floor Speech on Public Debt
March 16, 2006

Not sure who wrote this for Obama in 2006 but he should go back and read his speech again. This is all a farce, the debt ceiling will get raised at the last minute and both parties will come out shaking hands taking about how that they got a deal done…"Status Quo" err "Kicking the can down the road"

I lean more toward Jim Rogers take on this subject:

MUST WATCH - The American Dream (Animated)

Overdose: The Next Financial Crisis

Part I: Eric Janszen interviews Elizabeth Warren for The Postcatastrophe...

The Story of Spending

Again I have learned with my studies that its really not a left or right, Republican or Democrat, all politicians love to spend our money...

Ron Paul : Greece Is Just The Beginning!

Time to sit down and start to really listen...

The Great Con Job: Must Watch

Visit msnbc.com for breaking news, world news, and news about the economy

Jim Rogers on Bailouts

Daily Bell: Do you believe in the bailouts taking place in America?

Jim Rogers: Of course not. This is what the Japanese tried to do in the 1990s and it led to zombie banks, zombie companies, lots of problems generally. And the same thing is going to happen this time too. America already has its zombie companies. We are going deeper and deeper into debt. With Fannie Mae and Freddy Mac, the debt is just staggering. And of course all those derivatives and off balance sheet items are obligations of the US taxpayer. This will continue to get worse and is a horrible disaster.

The way things are supposed to work is, when somebody goes bankrupt or somebody fails, he goes bankrupt. Then competent people come in, take over the assets, reorganize and start over from a sounder base. Just as what happened in Scandinavia, Korea or Mexico or Russia, or many other countries in the past twenty years. Yes it is horrible for two or three years but then things get much better. The Japanese did it the other way round, and they still have not recovered. What America is doing is taking the assets away from the competent people and giving them to the incompetent people - and then saying, "OK now you can compete with the competent people with THEIR ASSETS." I mean it is absurd economics, it's outrageous morally and the politicians don't care about morality of course, and it's a disaster that is being imposed on America and the rest of the world.

See rest of interview at The Daily Bell

The Great American Bubble Machine

1975 New York = 2010 California

Take the time and view this series, it is very scary. I know my generation doesn't know much history, much less situations like this. Especially events that happened before we were born, besides the major wars and the great depression. I ask anyone who was born after 1975 to watch this because this can happen and it will happen if we do not get our fiscal house in order. I believe that California will go first...

Found from iTulip.com TARGET="_blank">a new window

¡El Pueblo Unido Jamás Será Vencido!

More comments from Zerohedge.com this time from a commenter JR - These are well thought out comments that address history and how free people are willing to fight/die for freedom:

The US fiat dollar did not become the global ”reserve currency” until 1944. That is not what built America. But in the hands of the Fed, IMO, it is what is destroying America.

The American Dream was about individualism and the opportunity to achieve success without interference from others. The American Dream was about freedom; its lifeblood was free enterprise.

Its heartbeat was America’s superior patent system. That’s what gave men the incentive to burn the midnight oil--a chance to own a property right in their own invention. A 1997 study of the inventors honored in the National Inventors Hall of Fame in Akron, Ohio, revealed that 91% of the world’s greatest inventors worked in America and only 9% in other countries.

Global fascism or Red China pseudo capitalism can never give the spring to invention that our Founding Fathers gave to Americans when they included in the United States Constitution the provision “to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”

I have faith that men who have known freedom will always, in the end, sacrifice everything to retain that freedom. Americans are close to that point now where they will tap into that thirst for freedom that brings revolution if the few now wielding raw power do not respond to the call for change – real change, not Obama “change.”

“Government exists off surpluses created by the people whom they rule. The ruling classes, i.e., those people who refer to themselves as ‘government,’ do not produce wealth, thus their existence depends upon the expropriation of assets from others.” -- Robert J. Ringer in “Restoring the American Dream.”

It is now a question of opportunity—as things get worse, and they are going to get much worse, and when the government clamps down more and more with no redress, that desire for freedom is going to kick in, and men are going to drop everything to get that freedom back. And they are going to fight: and will kill if they have to kill as they always have, in the cause of freedom.

I hope it doesn't come to this point. We as citizens of this country have to get together and get the government out of our business. Governments, since the beginning of time, have always been oppressive and the bigger and bigger it grows, the harder it is for the people to gain control. This isn't about politics as usual, its about government growing to a point that they want more and more control and power. Once they get drunk off power, they will do whatever it takes, to not lose control, including what are in these videos. They have a strangle hold on the US economy and are a part of almost every aspects of our life...

medicare
medicaid
social security
SSI
extended unemployment benefits
emergency unemployment benefits
socialized medicine
corporate welfare
bailouts
just to name a few..

They tax us to death, and they try to tell us what to spend and not spend our money on, and they claim to know what is best for us. Last time I checked, they are the ones that got us into this problem, why do I believe they are going to get us out of it? I DON'T, it is time for this government to step aside and allow for the free market to get us out of this recession. Wake up America? Demand less involvement of you incompetent government and its policy makers!

Read Atlas Shrugged and open you mind, trust me I know very little, but I have started to open my mind and what I am finding out is scary. At least I know that I am doing my best to wake up the people to be united.

¡El Pueblo Unido Jamás Será Vencido! (The people united will never be defeated!)

What Happens If The Debt Ceiling Is Not Raised?

Yesterday America just got permission to hit 100% Debt/GDP. The Senate approved an amendment increasing the US debt ceiling by $1.9 trillion. for a total of $14.3 Trillion. I was reading Zerohedge when someone asked what would happen if the ceiling wasn't raised? This is what came out of the comments section that I found very interesting.

(The following are from comments by readers on Zerohedge.com)

Short answer: Nothing happens (but you knew that)

Long answer: Current law requires a budget ceiling and a vote to raise it. Violating that law would open up violation of other similar laws. Not too far down the path of similar broken laws, the states start printing their own money. In US dollars. At which point hyperinflation ignites and the USofA ceases to exist as a functioning union. Much hilarity ensues.

The monetary system of the world (not just the USA) is based upon the illusion that there will always be greater fools available to pay the last greater fool.

The only reason people remain in the room that's about to be flooded with poisonous gas is the complete and utter belief (supported by group think and conventional wisdom along with healthy dollops of denial and self interest trumping rationality) that each person can get out before the gas can over come them.

As long as the majority continues to believe in the lie, the lie remains solid and fully formed. Thus the illusion is reality because the belief (and by extension the actions) of the people makes it real. One of the realizations one has when looking at this philosophically is that reality is simply what the majority says it is.

The banks are stable despite horrendously convoluted and distorted balance sheets and non-performing assets simply because the government says they are and people want them to be. Thus they are. If a rule or law threatens to upset the illusion, it's changed to conform to the group think.

What most people don't understand is that this "reality" is extremely fragile and will fail quickly. The Fed, Treasury and the President understand this extremely well. This is why this is considered a National Security issue and every lie, theft, payoff and Ponzi is encouraged and endorsed at the highest levels. Our reality is supported by a lie and thus by extension is a lie. Since there is no more real support under our economic reality, every effort must be extended to support the lie.

Do or Die! Seen from that point of view, everything that's going on is perfectly understandable.

The lie holds until the first person breaks the pact and heads for the exit. It takes no more than one. Then the stampede erupts because while nobody wants to be first, everyone wants to be second.

I think California is that "person" at the sovereign level. As goes Cali, so goes the nation, so goes the world and in rapid fashion. We will see, come summer, if Cali stays within the illusion or bails.

Someone pointed out this video as metaphor for our current situation:

Cunning lions await the herd as it lumbers forward, trustingly, behind their dear leader. If divided, the weak in the herd are slowly picked off, unless...

Anyways, if someone has a better explanation to what would really happen, send it to me!

Ron Paul: "Prepare for Revolutionary Changes in the Not-too distant Future."

“Could it all be a bad dream, or a nightmare? Is it my imagination, or have we lost our minds? It's surreal; it's just not believable. A grand absurdity; a great deception, a delusion of momentous proportions; based on preposterous notions; and on ideas whose time should never have come; simplicity grossly distorted and complicated; insanity passed off as logic; grandiose schemes built on falsehoods with the morality of Ponzi and Madoff; evil described as virtue; ignorance pawned off as wisdom; destruction and impoverishment in the name of humanitarianism; violence, the tool of change; preventive wars used as the road to peace; tolerance delivered by government guns; reactionary views in the guise of progress; an empire replacing the Republic; slavery sold as liberty; excellence and virtue traded for mediocracy; socialism to save capitalism; a government out of control, unrestrained by the Constitution, the rule of law, or morality; bickering over petty politics as we collapse into chaos; the philosophy that destroys us is not even defined.

We have broken from reality--a psychotic Nation. Ignorance with a pretense of knowledge replacing wisdom. Money does not grow on trees, nor does prosperity come from a government printing press or escalating deficits.

We're now in the midst of unlimited spending of the people's money, exorbitant taxation, deficits of trillions of dollars--spent on a failed welfare/warfare state; an epidemic of cronyism; unlimited supplies of paper money equated with wealth.

A central bank that deliberately destroys the value of the currency in secrecy, without restraint, without nary a whimper. Yet, cheered on by the pseudo-capitalists of Wall Street, the military industrial complex, and Detroit.

We police our world empire with troops on 700 bases and in 130 countries around the world. A dangerous war now spreads throughout the Middle East and Central Asia. Thousands of innocent people being killed, as we become known as the torturers of the 21st century.

We assume that by keeping the already-known torture pictures from the public's eye, we will be remembered only as a generous and good people. If our enemies want to attack us only because we are free and rich, proof of torture would be irrelevant.

The sad part of all this is that we have forgotten what made America great, good, and prosperous. We need to quickly refresh our memories and once again reinvigorate our love, understanding, and confidence in liberty. The status quo cannot be maintained, considering the current conditions. Violence and lost liberty will result without some revolutionary thinking.

We must escape from the madness of crowds now gathering. The good news is the reversal is achievable through peaceful and intellectual means and, fortunately, the number of those who care are growing exponentially.

Of course, it could all be a bad dream, a nightmare, and that I'm seriously mistaken, overreacting, and that my worries are unfounded. I hope so. But just in case, we ought to prepare ourselves for revolutionary changes in the not-too-distant future.”

Zimbabwe Ben

Gold Thoughts: Arnold Bock

The following is Copyright © 2009 Arnold Bock and can be found over at Financial Sense.

So why am I so optimistic about the eventual price of gold?

It is because an affinity for and an understanding of the political mindset causes me to understand what decision makers will do…and why. Because a politician follows the political calendar, s/he only concerns himself/herself with the time horizon leading to the next election.

Anything requiring decisions beyond the date of the next election will be the responsibility of whoever is on the next watch. If the politician in office today is in office after the next election, a shrug of the shoulder indicates that worries of that kind can be dismissed for now to be dealt with later.

So major and difficult, but necessary, decisions are inevitably deferred. In their place spending money gives the appearance of concern and of doing something to fix the apparent problem. Aren’t those elected officials doing what we elected them to do? It certainly looks as if they are.

More cynical observers would characterize these actions by the political class and their senior bureaucratic minions as buying time hoping that something positive might magically emerge.

Those who are super cynical would even conclude give-away programs are designed simply to bribe the voters in order to curry goodwill for another term at the levers of power.

What all this means is that there is no discipline or inclination to do anything of real value in fixing the core economic and financial problems. That being the case, new programs, more spending stimulus and money creation will always be the order of the day. Hence the currency will devalue and investors will find gold as their best safe-haven refuge.

The dollar will devalue because massive dilution caused by incessant money creation allows future obligations to become more manageable – for government – because it is the only way that it can meet its future obligations for employee pensions, accumulated debt, Medicare and social security.

A nominal dollar which buys much less in the future than it does today is still a dollar. Unfortunately the holders or recipients of those devalued pieces of paper will find they are essentially fraudulent promises.

These realities make gold the closest thing to a sure-bet investment. They are also the reasons why gold will go much higher than most of us allow ourselves to contemplate.

Buckle your seatbelts and enjoy the ride ahead!

I still think Gold is overbought, it is always a good reminder to keep myself honest by reading stuff like this. I have a lot of events coming up this year wedding, honeymoon, trying to buy house, etc...With all these I am going to need liquidity and not sure holding on to bullion is going to be my best option. I am looking to buy some on the dip (if that ever happens) think I might as well get into som Sliver and Oil.

National Debt

We recently just passed $12 trillion, keep stepping on that gas administration, no one is watching, we are all to busy watching American Idol and enjoying the recovery...

U.S. National Debt Clock : Real Time

Total: $12,030,203,408,433.00

Debt Per Person: $39,058.00

Debt Per Taxpayer: $110,681.00

House Gambles with Economic Future

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Dylan's four (shockingly logical) proposals on how to fix the broken financial system:

Inject transparency, primarily to bring almost $500 trillion in swaps to the forefront.

Capital to back Wall Street's gambling. It is a guarantee that very few firms will have Goldman's trading pattern each and every quarter.

Enact a tax-code to discourage short-term profits. "Fortunes should not be made in minutes but over years through the creation of value to society."

Break up the Too Big To Fail banking institutions. Start with Goldman Sachs. Right Now. Christine Varney, we are still looking at you.

Adding Gold Stocks to Portfolio

So this week I have added some Gold stocks to the mix. Honestly, it is a tad bit scary, as I have only recently been researching gold. Commodities in general kinda freak me out, but this move is something that I truly believe in. I have been following every camp from inflationist, deflationist and stagflationist and even reflationist. I realize that some are calling for a gold bubble and that it could all come crashing down. Personally do see it that way, but I take that into consideration. I think of it more as a hedge against everything. The more I research gold and look into it, I believe I will always keep a percentage of my portfolio as precious metals.

I think that with all the economic turmoil and the continuation of the Fed's total disregard for the dollar that at least I need to protect a certain amount of my cash I have sitting around.

I haven't yet, pulled the trigger on purchasing hard gold or silver. I have been checking it out though.

I like to believe I will always be a saver and that any purchase of hard gold/silver will be the protection of my wealth. As a saver I believe in gold, and the value your wealth has attached to it. Again I would not buy gold as an investment, but more of safe haven of my wealth (which hopefully I will have one day!)

So, I have added a small bit of (AUY, GLD, EGO) and will be showing up in my net worth this coming week.

Your Wealth Being Destroyed Daily

Cash For Clunker Revisited

If you traded in a clunker worth $3500, you get $4500 off for an apparent "savings" of $1000.

However, you have to pay taxes on the $4500 come April 15th (something that no auto dealer will tell you). If you are in the 30% tax bracket, you will pay $1350 on that $4500.

So, rather than save $1000, you actually pay an extra $350 to the feds. In addition, you traded in a car that was most likely paid for. Now you have 4 or 5 years of payments on a car that you did not need, that was costing you less to run than the payments that you will now be making.

But wait, it gets even better: you also got ripped off by the dealer.

For example, most dealers in LA was selling the Ford Focus with all the goodies including A/C, auto transmission, power windows, etc for $12,500 the month before the "cash for clunkers" program started.

When "cash for clunkers" came along, they stopped discounting them and instead sold them at the list price of $15,500. So, you paid $3000 more than you would have the month before. (Honda, Toyota , and Kia played the same list price game that Ford and Chevy did).

So lets do the final tally here:

You traded in a car worth: $3500

You got a discount of: $4500

---------

Net so far +$1000

But you have to pay: $1350 in taxes on the $4500

--------

Net so far: -$350

And you paid: $3000 more than the car was selling for
the month before

----------

Net -$3350

We could also add in the additional taxes (sales tax, state tax, etc.) on the extra $3000 that you paid for the car, along with the 5 years of interest on the car loan but lets just stop here.

So who actually made out on the deal? The feds collected taxes on the car along with taxes on the $4500 they "gave" you. The car dealers made an extra $3000 or more on every car they sold along with the kickbacks from the manufacturers and the loan companies. The manufacturers got to dump lots of cars they could not give away the month before. And the consumer got saddled with even more debt that they cannot afford.

Your government convinced the consumer that he was getting $4500 in "free" money from the "government" when in fact Joe was giving away his $3500 car and paying an additional $3350 for the privilege.

When will we wake up?