Snow calls for still MORE debt

[Sindawe]

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:

 

[dasmi]

Damn it all to hell!
Stop. Spending. Money.

 

[rick_reno]

As long as Senator Ted Stevens gets his bridges in Alaska I don't care what the debt is.

 

[longeyes]

Make enrollment in Debtors Anonymous for Congress MANDATORY.

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

 

[dasmi]

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

+1 on that.

 

[ReadyontheRight]

As long as Senator Ted Stevens gets his bridges in Alaska I don't care what the debt is.

Good one.

 

[rick_reno]

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]

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]

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]

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..... Just kidding!

 

[Sindawe]

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.

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]

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]

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=173550

He 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.

 

[DigitalWarrior]

http://money.cnn.com/1999/06/28/economy/clinton/

 

[engineer151515]

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]

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]

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]

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]

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. Please correct as you feel needed. I want to send the best to my rep. (I tried to be polite. )

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 .

 

[Crosshair]

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]

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.
-----------------------------------------------

http://ussliberty.org
http://ssunitedstates.org

 

[whm1974]

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]

"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]

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

 

[Aguila Blanca]

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.