Snow calls for still MORE debt


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Sindawe
December 30, 2005, 12:04 PM
Snow urges Congress to raise debt limit

Thu Dec 29, 5:54 PM ET

WASHINGTON (Reuters) - U.S. Treasury Secretary
John Snowwarned lawmakers on Thursday that a legally set limit on the government's ability to borrow will be hit in mid-February and urged Congress to raise it quickly.

Failure to do so potentially risks throwing the country into its first default in history, Snow warned in what has become virtually an annual rite as U.S. borrowing needs spiral.

"The administration now projects that the statutory debt limit, currently $8.184 trillion, will be reached in mid-February 2006," Snow said in a letter to 21 members of the U.S. House of Representatives and Senate released by Treasury after financial markets had closed.

Snow said that Treasury, if the debt limit was not raised by then, would have to take "extraordinary actions" to keep paying its bills for everything from
Social Securityto national defense spending.

Even if Treasury took "all available prudent and legal actions to avoid breaching the statutory debt limit, we anticipate that we can finance government operations no longer than mid-March."

The debt limit was last raised in November 2004 by $800 billion to its current level. The letter to Congress does not specify an amount the Treasury wants the ceiling set at this time.

But he said quick action was needed to preserve the U.S. ability to borrow in global capital markets at the lowest rates possible.

"A failure to increase the debt limit in a timely manner would threaten this unique and important position," Snow said.

The call for an increase in the debt ceiling typically provokes a round of criticism from opposition politicians over excessive government spending and the process is drawn out until nearly the last possible moment.

Treasury officials had said in November it was bracing for hefty borrowing needs in the January-March quarter, likely around a record $171 billion, and that it likely would hit the debt limit in that period.

Among other factors, the Treasury cited increased spending for rebuilding Gulf Coast areas hit hard by hurricanes Katrina and Rita.

Wish I could just raise my debt limits when I run out of money to spend... :banghead:

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dasmi
December 30, 2005, 12:05 PM
Damn it all to hell!
Stop. Spending. Money.

rick_reno
December 30, 2005, 12:17 PM
As long as Senator Ted Stevens gets his bridges in Alaska I don't care what the debt is.

longeyes
December 30, 2005, 12:26 PM
Make enrollment in Debtors Anonymous for Congress MANDATORY.

This is a sickness--and it will end badly.

dasmi
December 30, 2005, 12:27 PM
This is a sickness--and it will end badly.
+1 on that.

ReadyontheRight
December 30, 2005, 01:44 PM
As long as Senator Ted Stevens gets his bridges in Alaska I don't care what the debt is.


Good one.:evil:

rick_reno
December 30, 2005, 02:02 PM
The short term impact of the increasing debt is likely to put additional pressue on the dollar in the world markets. The dollar rose about 15% last year, when all the pundits expected it to fall based on the debt projections. Bush managed to avoid (side step?) the falling dollar in '05 by dramatically cutting taxes on profits remitted to the United States, from 35 percent to 5.5percent which added further stimulus to the dollar. It's unlikely he can pull that rabbit out of his hat again this year and we could see a sell off sometime in '06. The event to watch for is China revaluating it's currency, which should reduce their demand for dollars and result in a collaspe of the dollar.
My bet is they'll tie continued dollar support into a deal for Taiwan - and we'll get to watch Bush dance the Chinese unity dance. It should be entertaining.

ReadyontheRight
December 30, 2005, 02:09 PM
Of course, Federal, State and Local governments could just get out of the way, lower taxes, increase investment and let U.S. business grow - rising all boats.

Privatizing Social Security would be an even better long-term fix for all of us.

taliv
December 30, 2005, 02:11 PM
on its own, Snow's statement would be outrageous enough, but taken in the context of delay's statement back in September:

House Majority Leader Tom DeLay said yesterday that Republicans have done so well in cutting spending that he declared an "ongoing victory," and said there is simply no fat left to cut in the federal budget.
Mr. DeLay was defending Republicans' choice to borrow money and add to this year's expected $331 billion deficit to pay for Hurricane Katrina relief. Some Republicans have said Congress should make cuts in other areas, but Mr. DeLay said that doesn't seem possible.
"My answer to those that want to offset the spending is sure, bring me the offsets, I'll be glad to do it. But nobody has been able to come up with any yet," the Texas Republican told reporters at his weekly briefing.
Asked if that meant the government was running at peak efficiency, Mr. DeLay said, "Yes, after 11 years of Republican majority we've pared it down pretty good."

we're left with little choice but to conclude that

a) there are no spending cuts in our future
b) the current relationship between income and expenditures is nowhere close to sustainable


so the real question here... is how would art's grammaw describe this situtation?

armoredman
December 30, 2005, 02:49 PM
I cut "fat" from the budget all the time - I cannot print my own money, nor can I "raise my debt ceiling", nor can I make my boss pay me more by telling him to.
This is why good solid people stay out of politics, and we end up with what we have - lice and fleas sucking the lifeblood out of this country funding NEA, World Bank, and other stupid ideas. Stop forgiving debt, and COLLECT from countries who owe us, either through money or land! Stop lending money to other countries who hate us, and vote against us in the silly UN every time, cut them OFF!
Sell our bases in countries who opposed our actions, and bail. Stop funding THIER lifestyles to oppose US.
Oh, and nationalise WalMart.....:rolleyes: Just kidding!:p

Sindawe
December 30, 2005, 02:57 PM
Asked if that meant the government was running at peak efficiency, Mr. DeLay said, "Yes, after 11 years of Republican majority we've pared it down pretty good."BWAHAHAHAHAHAHAHA :gasp: Yes, and the parrot is merely pining for its native fjords. :banghead:

Lets look at that paring down of government over the past 11 years, in terms of public debt.09/30/2005 $7,932,709,661,723.50
09/30/2004 $7,379,052,696,330.32
09/30/2003 $6,783,231,062,743.62
09/30/2002 $6,228,235,965,597.16
09/28/2001 $5,807,463,412,200.06
09/29/2000 $5,674,178,209,886.86
09/30/1999 $5,656,270,901,615.43
09/30/1998 $5,526,193,008,897.62
09/30/1997 $5,413,146,011,397.34
09/30/1996 $5,224,810,939,135.73
09/29/1995 $4,973,982,900,709.39
09/30/1994 $4,692,749,910,013.32


Source:http://www.publicdebt.treas.gov/opd/opdpenny.htm

And in terms of actual funds spent.
http://www.federalbudget.com/chart.gif

Source: http://www.federalbudget.com/
This is why good solid people stay out of politics, and we end up with what we have - lice and fleas sucking the lifeblood out of this country funding NEA, World Bank, and other stupid ideas. Maybe this country should hire my HOA to run stuff. We've been in the black budgetwise since we started 10 years ago and have a healthy reserve fund for rainy days.

rick_reno
December 30, 2005, 03:16 PM
Sindawe - thanks for posting the numbers. They are really amazing.

All I can say is Hillary Clinton is going to inherit a hell of a mess.

Waitone
December 30, 2005, 03:26 PM
Why is this news? SOP since at least LBJ.

Want evidence they are getting edgy about national finances? Here's something I posted elsewhere that was missed. http://www.thehighroad.org/showthread.php?t=173550He points out that on Nov.10, 2005 - right after White House budget adviser Ben Bernanke was tapped to replace Alan Greenspan - the Fed quietly reported that it would hide M-3 effective March 2006. M-3 is the broadest measure of money, used by economists to estimate the entire supply of money within an economy.

"M-3 has been the main staple of money supply measurement and transparent disclosure since the Fed was founded back in 1913," writes McHugh. "It is the key monetary aggregate that includes Fed Repo transactions, that mechanism whereby the Fed increases reserves."

McHugh also predicts that officials will start to hide M-3 in the same month that Iran declares economic war against the U.S. dollar by trading its oil in "petro-euros" on its new bourse. and "Fed Presidents are treated like gods. They have enormous power, prestige and presence. Why quit? He is far from alone. Over the past few years no less than six Federal Reserve Regional Bank Presidents have resigned. This is highly unusual." So here we have the FED stopping the publication of a key monetary statistic used since day one AND THE fed's Perfumed Princes are finding greener pastures. Sorta reminds me of the boiler room operators donning a lifevest shortly after a big bump in the night all while the captain tells the passengers they have nothing to worry about. :scrutiny:

DigitalWarrior
December 30, 2005, 03:26 PM
http://money.cnn.com/1999/06/28/economy/clinton/

engineer151515
December 30, 2005, 03:40 PM
On a related note - I was listening to New Orleans am radio this morning. Governor Blanco was talking with the host and discussing rebuilding funds.

The Governor's position was that the $62 billion in relief that Congress approved wasn't nearly enough and the State would spend that money and continue to push for more.


A caller asked the Governor a question. How was the State going to make a person "whole" if the State was going to pay for new homes while I've been making flood insurance payments for 20 years? Are you going to refund me for 20 years payments? Should I just throw out the policy and know the State will take care of us the next time?


It was an excellent question regarding personal responsibility.



The response wasn't an answer but a tap dance where Governor Blanco said a committee would look into it.



Well. US taxpayer. Get ready to borrow a lot more money.

antarti
December 30, 2005, 04:55 PM
Am I the only one who thinks that the debt is unpayable (due to both size and willpower), and that (gasp) we're gonna have to default on it sometime?

McHugh also predicts that officials will start to hide M-3 in the same month that Iran declares economic war against the U.S. dollar by trading its oil in "petro-euros" on its new bourse.

If the petro-euro proves trendy, we're all in for it. Of course, CPI doesn't include food & energy and includes so many "hedonic" tweaks that fedgov will maintain "inflation? what inflation?"

Sindawe
December 30, 2005, 05:06 PM
Am I the only one who thinks that the debt is unpayable (due to both size and willpower), and that (gasp) we're gonna have to default on it sometime?No, you are not. Though personally I think the lacking is in the willpower.Of course, CPI doesn't include food & energy and includes so many "hedonic" tweaks that fedgov will maintain "inflation? what inflation?"Yep, too frelling true.

seansean
December 30, 2005, 08:50 PM
This is gonna end badly, and we the people will get stuck with the tab....buy gold...lots of gold...and get a euro bank account offshore. I have an account here..
http://goldmoney.com/

Crosshair
December 31, 2005, 12:54 AM
I wrote a letter that I plan on Emailing my reps. Even if they don't do squat about this problem I at least voiced my opinion.:cuss: Please correct as you feel needed. I want to send the best to my rep. (I tried to be polite.:mad: )


Mr.

I am writing to you to please take a stand on the rampant spending that our government is enganged in at the present time. As you are probably aware of the statutory debt limit, that only allows our governent to borrow so much, will be reached. As far as I am aware of, this limit is currently set at $8.184 trillion. In a news article on December 29, U.S. Treasury Secretary John Snowwarned asked several Congress members to raise the limit. Personaly I find this revolting. We are the most powerfull country in the world, yet we continue to borrow money like a drunk college student. Secretary Snowwarned's request is the same as a college student saying, "I maxed out all my credit cards, I better get another one." It is simply beyond belief that our government does not see a problem with this method of thinking.

I can't raise my credit limit every few months. I can't print "Monopoly Money" whenever I feel like it. My checkbook has to balance every month. The state budgets have to balance every year. A little borrowing here and there is fine and may very well be nessisary, but year after year we borrow more and more and spend it on "Bridges to nowhere" in Alaska, the Big Dig (AKA, "The Money Pit") in Boston, as well as many other examples of our careless spending.

I wish to take this time to ask you to not raise the debt limit and force our gevernment to make some tough choices instead of taking the easy way out. Our government needs to live within its means, just as us citizens of this country must live within ours.

I thank you for your time.

/I have more spending responsibility than these :cuss: .

Crosshair
December 31, 2005, 01:09 AM
BTW, is it really a good idea to invest some money in Gold bullion coins? Probably would buy some Canadian Maple Leafs. I of course would not put all my money in them. But with the way things seem to be going i'm not sure of the future. BTW economists call this "Falling consumer confidence".:( I need to get my school loans pain off. *sigh*

LAK
December 31, 2005, 07:22 AM
Failure to do so potentially risks throwing the country into its first default in history, Snow warned in what has become virtually an annual rite as U.S. borrowing needs spiral.

"The administration now projects that the statutory debt limit, currently $8.184 trillion, will be reached in mid-February 2006," Snow said in a letter to 21 members of the U.S. House of Representatives and Senate released by Treasury after financial markets had closed.
Oh yes, default on paying all that interest to a private bank. Must be a tidy annual sum on $8 trillion.

It's long overdue that our public purse be limited to Constitutionally permitted and necessary spending - and a stop to our taxes enriching a private financial enterprize.
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whm1974
December 31, 2005, 02:20 PM
there is simply no fat left to cut in the federal budget.

there is plenty of fat left to be cut. And I'm not talking about cutting "rate increases" either.

-Bill

taliv
December 31, 2005, 03:09 PM
"My answer to those that want to offset the spending is sure, bring me the offsets, I'll be glad to do it. But nobody has been able to come up with any yet," the Texas Republican told reporters at his weekly briefing.


yeah, heh. at the time, i recall sending him a letter listing cuts i'd like to see: about 3/4 of welfare, 1/2 the defense budget, the entire Dept of Energy, Dept of Education, 7/8ths of the Justice dept (particularly the BATFE as you might imagine, and the DEA), all foreign aid, all payments to the UN, etc.

but i guess i'm "nobody"

in fact, i'd be happy raising all of congress' salaries from $160/yr to $20 million/yr each if they'd cut even half of the above. you'd think they'd catch on

redneck2
December 31, 2005, 03:27 PM
in fact, i'd be happy raising all of congress' salaries from $160/yr to $20 million/yr each if they'd cut even half of the above.

Problem is, they'd be taking a pay cut. Why do you think they spend/waste so much?? The money goes somewhere......oh, yeah....to the companies that they own

you'd think they'd catch on

What in the world makes you think they haven't "caught on"??? These guys are anything but stupid fools. They squander away billions, start and end wars, and get people killed by the millions to obtain their goals. Don't think it's true?? I remember the Gulf of Tonkin resolution, the hinge pin that fired off Vietnam, the war we never wanted to win. Funny thing is, the ship that was "attacked" never was attacked. Just an excuse for LBJ to spend billions....kinda like the Alaska bridge to nowhere and thousands of other programs

http://www.abbaswatchman.com

why do you think that suddenly the "Conservatives" are spending money faster than the Dems?? We're getting set up for the big fall

Hawkmoon
December 31, 2005, 03:31 PM
Sindawe, thanks for the graph. It was a surprise. I was under the impression that the interest on the national debt was the single largest item in the national budget. Apparently that's not correct ... or the .gov has lumped some things together to hide that fact.

Even if not THE largest single line item, it's huge. And ALL talk of "deficit reduction" is a meaningless smokescreen. That just means "We'll over spend by less this year than we did last year." Overspending is still overspending, and the debt still increases. And it is the DEBT, not the annual deficits, that is strangling the country and the taxpayers.

If the .gov truly wanted to reduce the load on taxpayers, they would not only require a balanced buget EVERY YEAR, they would also ensure that a chunk of that budget every year goes toward paying off the debt.

taliv
December 31, 2005, 04:28 PM
heh, we should push for a law that says the annual US budget must be approved by dave ramsey before any money is spent

stevelyn
December 31, 2005, 07:47 PM
As long as Senator Ted Stevens gets his bridges in Alaska I don't care what the debt is.

:rolleyes:


As long as Bush can start unprovoked and unwarranted imperial wars for oil, I don't care what the debt is.

DesertEagle613
December 31, 2005, 08:19 PM
Just a little perspective:

Go find Bush's proposed budget for 2006 (you can get to it I think from treas.gov) and check out the historical charts for debt relative to GDP (Historical Tables document, table 1.3). Right now we're on track to get a 70% debt in the next few years. Bad? Yes. But at the same time, we have recovered from worse. After WWII, our debt relative to GDP was nearly 120%; yet over the next few decades, that was slowly reduced down to 32%.

We need to stop spending like drunken sailors, or else the debt will never start going down. But there is still hope. We just need to stop moaning and start tightening our belts; because make no mistake, whether taxes go up or payouts go down, people right now have money they won't have, once we get serious.

xd9fan
December 31, 2005, 08:39 PM
and GWB is a conservative :barf:

veto something dubba

LAK
January 1, 2006, 01:19 AM
What in the world makes you think they haven't "caught on"??? These guys are anything but stupid fools. They squander away billions, start and end wars, and get people killed by the millions to obtain their goals. Don't think it's true?? I remember the Gulf of Tonkin resolution, the hinge pin that fired off Vietnam, the war we never wanted to win. Funny thing is, the ship that was "attacked" never was attacked. Just an excuse for LBJ to spend billions....kinda like the Alaska bridge to nowhere and thousands of other programs.

why do you think that suddenly the "Conservatives" are spending money faster than the Dems?? We're getting set up for the big fall
Glad some people have caught on.

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http://ussliberty.org
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Art Eatman
January 1, 2006, 01:14 PM
A key word I'venot seen brought up here is "Entitlements". Programs for social services are set in place, and the structure of the law is that they be funded in perpetuity.

DeLay is correct about paring discretionary funding (other than pork). Some parts of the federal budget MUST be funded; no discretion exists.

When compared to either the total federal budget or to the GDP, the direct spending in Iraq is chump change. (Some of the costs would exist even if we were not involved there, so I don't count them as "direct".) As a percentage of the federal budget, military spending is a lower percentage of the total than at many times in the past.

As an overall group, we the voters have said we want this program, we want that program, all provided by taxing "somebody else". The chickens are coming home to roost, whether at the city, state or federal level. Since a lot of politicians aren't around all that long, they don't suffer from the average fella's "taxitis". They make their loot from political contacts and live quite well, thank you.

The desperation of all levels of government is seen in the rise in fees, or the addition of new fees. These mis-named taxes show in national and state park access, boat launches, and such things a car tags--among numerous examples.

And hunting and fishing license fees, to bring this thread into our particular interest. I sorta wonder how long before there's a federal fee added to other licensing for hunting/fishing on public lands. All levels of wildlife management are desperate for funds.

Art

taliv
January 1, 2006, 03:52 PM
the structure of the law is that they be funded in perpetuity.

unless of course, the "lawmakers" change the law.


but yeah.

i'm torn though, on the public lands stuff. on one hand, theoretically, FED gov shouldn't be in the business of buying and squatting on land. on the other, it would be nice to have a managed preservation effort. but that's another thread, i guess.

glockamolee
January 1, 2006, 03:55 PM
At this point in the game, and it IS a game; it is impossible to reduce the deficit or not raise the debt limit, without the Ponzi Scheme/House of Cards collapsing.

All we are doing is buying (every pun intended) time until the EU or China is ready to take over.

It was "too late" around the end of the 80's.:( :(

1 old 0311
January 1, 2006, 03:59 PM
If you, or I write a bad check we go to jail. Congress just rolls it over to the next generation.:( :( :( :( :( :( :( :( :( :(

Kevin

LAK
January 1, 2006, 04:59 PM
Then there's the missing trillions; according to Donald Rumsfeld.
I know Dr. Zakheim's been trying to hire CPAs because the financial systems of the department are so snarled up that we can't account for some $2.6 trillion in transactions that exist, if that's believable - Donald H. Rumsfeld, Secretary of Defense, Testimony before the House Appropriations Committee, July 16, 2001http://www.dod.gov/speeches/2001/s20010716-secdef2.html

Yes, I believe it Mr. Rumsfeld. And yes, in any large budget there is going to be an expected fractional percentage of error and omission. But 2.6 trillion? How much was stolen, by whom, and used for what I wonder.
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Waitone
January 1, 2006, 05:22 PM
If we insist on solid accounting practice out of the Pentagon, let's go further and put the same requirements on . . .oh, say, Health and Human Services, or Interior, or State, or bATFE, or. . . . .congress. Yea, that's the ticket. Let's impliment business caliber accounting practice in congress. Then when the bugs are worked out stick it to the rest of the bureaucracy including DoD.

Selective depravity benefits no one. :scrutiny:

xd9fan
January 1, 2006, 09:24 PM
unless of course, the "lawmakers" change the law.


You mean "lawvoters"

I seriously doubt these jokers know what the hell they are voting on half the time. The Road to hell is paved with good intentions.

yucaipa
January 1, 2006, 10:04 PM
I just read a story were the "1 year" deficit was going down "to only" 314 million instead of 430 million. That was the good news.

I guess Snow knows that's just a short term hiccup.

LAK
January 2, 2006, 07:46 AM
If we insist on solid accounting practice out of the Pentagon, let's go further and put the same requirements on . . .oh, say, Health and Human Services, or Interior, or State, or bATFE, or. . . . .congress. Yea, that's the ticket. Let's impliment business caliber accounting practice in congress. Then when the bugs are worked out stick it to the rest of the bureaucracy including DoD.

Selective depravity benefits no one. :scrutiny:
Well, that tax collection agency known as the BATFE needs eliminating altogether for several reasons; among them the enormous waste of public money.

And the Federal government needs drastically paring down overall and reduced to it's Constitutional mandates. That includes axing our money going overseas in "aid" etc.

That done, business standard accounting should not be a problem. When we have no national debt and have consolidated our own house assets, then we can consider giving our nextdoor neighbors a hand now and then with their home improvements and unruly children.
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Kodiaz
January 2, 2006, 08:46 AM
There is a country called Argentina. It had a bunch of debt. It's currency collapsed (it became worthless). That is our future unless a miracle happens. China isn't going to need us forever they have a billion people to drive their economy. I was at work and one secretary was telling another about U.S govt bonds (I bit my tongue so I wouldn't laugh). I kindly informed the women that our currency (the paper in your wallet) is worthless and that we are being held afloat by China. Purchasing bonds was a waste of time. If you want to sit here and argue with me fine just explain to me why an once have gold has gone up 150$ in price over the last 2 years. Nevermind I'll tell you why, the value of our money is going down. When I was leaving the office the parts guy told ne "What happened in Argentina occured because of corruption". My response to this was "What do you call the Halliburton KBR etc etc no bid contracts". If you tell me to adjust my tin foil hat fine go I'll adjust it while you go back to sleep. If this is your first time hearing about this and your concerned. By a lot of ammo. Over on Frugal Squirrel's forums there is a guy in Argentina who has written a very long, very informative and very depressing collection of posts about his life after the currency collapsed.
Specifically how he saves money to buy ammo for his pistol and rifle. How on his commute one day he had to push open a roadblock made by criminals and lay down suppressive fire with his pistol. Because there are no jobs and a good way to make a buck is kidnapping. Imagine having to pay 100$ for a box of ammo imagine 30$ for a gallon of gas. That's where the skyrocketing debt is taking us. Oh well Rant off. To all who think I have to adjust the tinfoil. Back to to bed for you.

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