So the theatre that is the debt ceiling debate in the United States may be coming to a close as both sides seem poised to reach an agreement.
But as your faithful scribe has noted before, the debt ceiling issue isn't the problem.
And once again it is David Stockman, former federal budget director under President Reagan, making news with a succinct analysis of the issue:
- "The problem is not the ceiling, but the debt. It's the $6 billion a day that we're borrowing day in day out."
Yes... you read that right. The deficit with the United States budget is so great that after all taxes and income are counted, the United States must borrow $6 BILLION per day to function.
Speaking to CNBC last week, Stockman said:
- "The U.S. is not a triple-A credit and is running a fiscal doomsday machine."
Stockman believes that Washington will come to some type of an agreement at the last moment to raise the debt ceiling, but it will only be a short-term fix.
- "We are going to be facing a day of reckoning here, and I don't know whether it's six months from now or a year from now."
And that is the most important point to remember as the political theatre in Washington winds down.
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the ever expanding debt vortex,
ReplyDeletelol
from:
ReplyDeletehttp://www.theglobeandmail.com/news/world/americas/us-lawmakers-line-up-to-vote-on-brokered-debt-ceiling-deal/article2116181/page1/
- more than $2-trillion in spending cuts.
- the agreement was “all spending cuts. The White House bid to raise taxes has been shut down.”
- deficit cuts, probably taken from benefit programs like farm subsidies, Medicare and the Medicaid health care program for the poor and disabled.
from:
http://www.theglobeandmail.com/report-on-business/international-news/global-exchange/spending-cuts-may-salvage-us-credit-rating/article2115598/
- Spending cuts will do little concrete to help an economy that is struggling to maintain momentum two years after a recession that, according to new data, was significantly deeper than previously thought.
- State and local governments, scrambling to live up to balanced-budget laws amid weaker revenue as a result of the economic downturn.
- many of the country’s biggest publicly traded companies have reported strong earnings
down under
ReplyDeleteinteresting take on crashes and at the end of the cycle foreign investment is the only thing left.
Could this be about a flight to safety now as things are changing over in Europe fast.
ReplyDeleteA quiet bank run might be in play. I hope they can control this