Archive for the ‘borrowing’ Category

Where Are the Leaders?

March 29, 2009

You wake up in the morning and once again the financial weather report calls for the Apocalypse followed by brief showers of despair. Seeking a ray of hope, you turn on the television and settle in to watch a Capitol Hill hearing. There in the hot seat is the man who holds the entire U.S. economy in his hands. And he looks like Harry Potter.

By David Rothkopf
The Washington Post

You wake up in the morning and once again the financial weather report calls for the Apocalypse followed by brief showers of despair. Seeking a ray of hope, you turn on the television and settle in to watch a Capitol Hill hearing. There in the hot seat is the man who holds the entire U.S. economy in his hands. And he looks like Harry Potter.
US bank chiefs to meet with President Obama

Go online, meanwhile, and you find the HTML version of the French Revolution, with left and right calling for poor Tim to be strung from a lamppost. You actually start feeling sorry for the guy. Arianna Huffington snipes that “the issue isn’t his delivery, it’s what he’s delivering.” Nobel Prize-winning economist Joseph Stiglitz concludes that Geithner’s plan “amounts to robbery of the American people.” Next you find Connie Mack, Republican senator from Florida, fulminating that “quite simply, the Timothy Geithner experience has been a disaster. . . . America needs and deserves a Treasury secretary who can truly lead us forward.”

On that point, at least, he’s right. We do need strong leadership. The world is in chaos. There are riots from Greece to China. Iceland has collapsed, and Mexico teeters on the edge. Pakistan is broke, melting down and awash in nukes. Yes, the stock market soared with Geithner’s toxic asset plan, but didn’t he and Obama dismiss Wall Street’s response when the first version of the bank bailout landed with a thud last month? Don’t we hate Wall Street? Obama and Geithner subsidize hedge funds on Monday and come back with heavy regulations on Thursday. What gives?

In this March 12, 2009, file photo Treasury Secretary Timothy ...

Gradually it becomes clear. This is not just a global economic crisis. It’s a global leadership crisis. Obama is still finding his footing, Gordon Brown is on his way out, Hugo Chávez is nuts and Wall Street management is larcenous. Isn’t there someone somewhere with decent values, a firm hand on the tiller and at least one big new idea? Where have all the leaders gone?

Read the rest:
http://www.washingtonpost.com/wp-dyn/cont
ent/article/2009/03/26/AR20090326034
22.html?hpid=opinionsbox1

Gregg Goes From Bipartisan Symbol to Top Obama Critic

March 28, 2009

Sen. Judd Gregg, who was President Obama’s commerce secretary nominee until withdrawing his name from consideration, has emerged as the toughest critic of the president’s handling of the economy and has helped galvanize Republican opposition to Obama’s policies.

Fox News
At first, the relationship between President Obama and Sen. Judd Gregg looked like love at first sight, proof that opposites do attract.

Obama is a 47-year-old left-leaning Democrat who believes in the power of government to solve people’s problems. Gregg is a 61-year-old New Hampshire Republican who advocated limited government and made millions through business investments.

Their unlikely partnership seemed destined to transcend partisan lines and symbolize the change that Obama promised to bring to Washington.

But Gregg, who was Obama’s commerce secretary nominee until withdrawing his name from consideration, has emerged as the toughest critic of the president’s handling of the economy and has helped galvanize Republican opposition to Obama’s policies.

He warned on Monday that Obama’s $3.6 trillion budget proposal will lead to unsustainable debt levels and send the country on a fiscal path resembling that of a “banana republic.”

Gregg kept up his attacks on Obama’s budget request Saturday in the weekly Republican radio address, saying the path to prosperity is not the excessive spending proposed by the president but limited spending that holds down the growth of government, taxes and debt.

The senator said Obama’s proposals “represent an extraordinary move of our government to the left.”

He said Obama “is not trying to hide this; in fact, he is very forthright in stating that he believes that by greatly expanding the spending, the taxing and the borrowing of our government, this will lead us to prosperity.”

Like most relationships, this one began with mutual admiration, respect and trust, with flowery compliments flowing between each other.

At their first public appearance together a week-and-a-half before Valentine’s Day, Obama called Gregg “a master of reaching across the aisle to get things done. He will be an astounding addition, a trusted voice in my Cabinet and an able and competent ambassador … I can think of no finer steward for our nation’s commerce.”

In turn, Gregg praised Obama’s economic stimulus proposal to stabilize the economic slide and pull the country out of recession as an “extraordinarily bold, aggressive, effective and comprehensive plan.”

Read the rest:
http://www.foxnews.com/politics/first100d
ays/2009/03/28/gregg-goes-bipartisan-sy
mbol-obama-critic/

In his radio address Saturday, Gregg countered each of Obama’s policy principles:

— “It is the individual American who creates prosperity and good jobs, not the government.”

— “We believe that you create energy independence not by sticking Americans with a brand new national sales tax on everyone’s electric bill, but by expanding the production of American energy … while also conserving more.”

–“We also believe you improve everyone’s health care not by nationalizing the health care system and putting the government between you and your doctor, but by assuring that every American has access to quality health insurance and choices in health care.”

The Democratic Congress’s Cover-Up; Our Biggest Danger

March 28, 2009

With a bit of bookkeeping legerdemain borrowed from the Bush administration, the Democratic Congress is about to perform a cover-up on the most serious threat to America’s economic future.

David S. Broder
The Washington Post

That threat is not the severe recession, tough as that is for the families and businesses struggling to make ends meet. In time, the recession will end, and last week’s stock market performance hinted that we may not have to wait years for the recovery to begin.

The real threat is the monstrous debt resulting from the slump in revenue and the staggering sums being committed by Washington to rescuing embattled banks and homeowners — and the absence of any serious strategy for paying it all back.

The Congressional Budget Office sketched the dimensions of the problem on March 20, and Congress reacted with shock. The CBO said that over the next 10 years, current policies would add a staggering $9.3 trillion to the national debt — one-third more than President Obama had estimated by using much more optimistic assumptions about future economic growth.

Read the rest:
http://www.washingtonpost.com/wp-dyn/c
ontent/article/2009/03/27/AR2009032
702507.html?hpid=opinionsbox1

Republicans Respond To Obama Budget

March 28, 2009

Attacking President Barack Obama‘s grand spending plans, a GOP lawmaker who almost joined the Democrat’s Cabinet said Saturday the U.S. must live within its means or risk its tradition of passing a more prosperous country from one generation to the next.

“We believe you create prosperity by having an affordable government that pursues its responsibilities without excessive costs, taxes or debt,” Sen. Judd Gregg said in the Republican radio and Internet address.

By WILL LESTER, Associated Press Writer

Gregg, who accepted the job as commerce secretary but then withdrew his nomination because of “irresolvable conflicts” with Obama’s policies, has become one of the toughest critics of Obama’s handling of the economy.

“In the next five years, President Obama’s budget will double the national debt. In the next 10 years, it will triple the national debt,” said Gregg, R-N.H.

“His budget assumes the deficit will average $1 trillion every year for the next 10 years and will add well over $9 trillion in new debts to our children’s backs,” said Gregg, the top Republican on the Senate Budget Committee. “He also is proposing the largest tax increase in history, much of it aimed at taxing small business people who have been, over the years, the best job creators in our economy.”

Gregg said Obama’s proposals “represent an extraordinary move of our government to the left.”

He acknowledged that Obama “is very forthright in stating that he believes that by greatly expanding the spending, the taxing and the borrowing of our government, this will lead us to prosperity.”

In seeking to make the GOP case, Gregg said:

–“It is the individual American who creates prosperity and good jobs, not the government.”

–“We believe that you create energy independence not by sticking Americans with a brand new national sales tax on everyone’s electric bill, but by expanding the production of American energy … while also conserving more.”

–“We also believe you improve everyone’s health care not by nationalizing the health care system and putting the government between you and your doctor, but by assuring that every American has access to quality health insurance and choices in health care.”

He said the U.S. “has an exceptional history of one generation passing on to the next generation a more prosperous and stronger country, but that tradition is being put at risk.”

Lesson for all Americans? California budget “fixes” meet trouble with voters

March 26, 2009
Five proposals are falling short of the support needed to pass. Only a plan to block pay raises for elected officials when the state is running a deficit has strong support.
By Michael Finnegan
Los Angeles Times
March 25, 2009
Five state ballot measures aimed at solving California’s budget crisis are falling short of the support needed to pass in the May special election, a sign that voters may force lawmakers into another fierce clash over tax hikes and spending cuts, according to a poll released Wednesday.

The state’s dismal economy has already partly unraveled the budget deal that Gov. Arnold Schwarzenegger and the Legislature reached last month, with a drop in tax collections leaving a new $8-billion shortfall. Rejection of the ballot measures would widen the gap to nearly $14 billion.

The least popular measure, Proposition 1C, is also the one that state leaders are counting on most for immediate fiscal relief: It would let the state borrow $5 billion against future lottery revenues. The cost, to be paid over decades, would be billions in new interest obligations, and less lottery money to meet future spending needs.

The poll by the nonpartisan Public Policy Institute of California found that Proposition 1C would lose in a rout if the May 19 election were held today, with 37% of likely voters in favor and 50% opposed.

Faring slightly better, but still decisively rejected, would be Proposition 1A. It would cap state spending while extending billions in temporary tax hikes for an extra two years. The survey found 39% of likely voters for the measure and 46% against it.

So far, Proposition 1A is the measure that has drawn the most attention. Conservatives on talk radio, enraged by the extension of the tax hikes, have made its defeat a top priority. Some labor unions are weighing whether to campaign against the spending cap.

The dynamics of the special election are volatile, and public opinion could swing dramatically once campaign advertising begins. The poll found more than 10% of likely voters are undecided on most of the ballot measures. Also, voter turnout is likely to be low, and it is unclear what mix of Californians will wind up casting ballots in the oddly timed election.

Read the rest:
http://www.latimes.com/news/local/la-me-
poll26-2009mar26,0,3460616.story

In Obama Budget; Interest Payments on Debt Will Surpass Defense Spending

March 24, 2009

Republicans over the past few days have slammed Obama’s blueprint, finding creative ways to express how devastating they say the proposal will be to the nation’s financial standing. 

“They are taking the United States down the road of destruction with the debt and the interest on the debt that our children and our grandchildren are going to have to pay,” Sen. John Ensign, R-Nev., said Tuesday. 

After Sen. Judd Gregg, R-N.H., called the budget akin to “banana republic” fiscal policy on Monday, Republicans argued Tuesday that it would run up deficits so high that the United States would not even qualify for membership in the European Union. 

“This creates for us a higher deficit than Cuba’s,” Senate Minority Leader Mitch McConnell said. “This is not the kind of position we want to put the United States in.” 

Gregg railed on the spending plan over the Congressional Budget Office estimate that the deficits will end up doubling the country’s public debt to 82 percent of its gross domestic product by 2019. 

“To try to put it in a different context, if you take all the presidents since George Washington through George Bush and add up all the debt that they’ve put on the books for the American people, President Obama’s proposal actually equals and exceeds that amount of debt in his first term,” Gregg said Monday. “Staggering numbers when you think about it, just plain staggering numbers.” 

If the borrowing continues as projected, U.S. interest payments will climb rapidly — eventually reaching annual levels comparable to the whopping stimulus package passed last month. 

After three years of deficit spending at projected levels, the interest payments would hit $367 billion in 2013. They would hit more than $500 billion in 2015, soar to $734 billion in 2018, and be more than $800 billion in 2019. 

Sen. Lindsey Graham, R-S.C., noted that the interest costs would total more than what Obama plans to spend on defense. 

Another concern is that China and other nations have been loaning the United States much of the money it needs — and the Chinese recently questioned their investments in U.S. treasury bonds out of concern the U.S. is getting over-extended. 

Senate Democrats are making key changes to Obama’s budget, trimming spending and dropping some parts entirely, to keep it alive on the Hill. 

See Fox News:
http://www.foxnews.com/politics/firs
t100days/2009/03/24/obama-tries-
break-resistance-budget/

Brawl over Obama budget brews in Congress

March 24, 2009

Barack Obama is preparing for one of the toughest fights of his young presidency as Congress begins work on a budget that may trim his spending plans but back his healthcare, energy and education proposals.

By Richard Cowan
Reuters

Obama will meet fellow Democrats in the Senate on Wednesday to try to shore up support for a budget blueprint that likely would increase the deficit more than initially estimated by the White House — it was forecast at $1.4 trillion for next year.

 

The House Budget Committee will begin a marathon session on Wednesday to write its version of the budget plan, followed a day later by the Senate Budget Committee’s unveiling of its budget plan for fiscal 2010 and the four subsequent years.

 

Republicans say Obama’s budget plan expands government and raises taxes on the rich and small businesses at a time when the country is mired in a deep recession. Obama, for his part, is trying to keep fiscally-conservative Democrats on board.

 

Democrats, who control Congress, are looking for ways to shave some of the spending requests in a bid to persuade enough fiscally-moderate members of their party to support a $3.55 trillion budget next year.

 

“I’m hopeful we can have a majority of the House and Senate support” a budget plan, said a cautious-sounding House Majority Leader Steny Hoyer.

 

Democrats, said Senator Patty Murray of Washington, a senior member of the Senate Budget Committee, want to “put the middle class first and bring the country out of the recession.”

 

To do that, Murray told reporters, Congress must invest more in education, healthcare and alternative energy to create jobs, while shoring up domestic programs that she said were largely ignored in the eight years of the Bush administration.

 

“Now is not the time to sit back and criticize,” Murray said in a open warning to Republicans.

Read the rest:
http://www.reuters.com/article/politicsNews/id
USTRE52G3OX20090324?feedType=RSS&feedN
ame=politicsNews&rpc=22&sp=true

U.S. Ability to Speak Out On Human Rights in China — Tougher Every Day

March 24, 2009

China holds more U.S. debt that any other country — and will soon own more based upon the voracious borrowing of the United States.

This makes it increasingly more difficult for the Obama Administration or anyone else to get what they want from China.

When Hillary Clinton’s State Department admonishes China for any kind of human rights wrongdoing; the Chinese just laugh.

So today China said again it had no idea what restrictions were on the Internet inside China.

Yet YouTube seemed to be blocked.

China’s Foreign Ministry said it was “unafraid” of the Internet — despite a mountain of evidence that China controls the internet more than any other nation. 

U.S. companies like “Google” usually go along with anything China says: the fear of losing 1.3 billion customers is a big incentive to obey China….

The fact is, that China fears the Internet very much.  And this year China has between 20 and 40 million unemployed: an economic situation many fear could spark social unrest.  Add to that many anniversaries in China this year, including one for the uprising in Tiananmen in 1989.  So China is controlling the Internet more than ever this year….

And the West can’t do a thing about that….

Tianasquare.jpg
Tiananmen Square in 1989.

See Michelle Malkin
http://michellemalkin.com/2009/03/24/
china-blocks-youtube-will-google-
bend-again/

Related:
 Inside China’s Fight Against Internet Addiction

China says Internet crackdown to be “long-lasting”

China Extends War on Free Speech Hidden by Fight Against Porn into Cell Phones

Chinese censor parts of Obama speech dealing with dissent, communism

 Internet Limits on Sex, Porn Used to Mask Limits on Freedom, Human Rights?

 Internet: Do You Really Believe China Cares About Porn, Public Morality?
.
“Unafraid” of Internet, China appears to block YouTube

art.hacker1.cnn.jpg

Obama Administration May Not Understand Economy

March 22, 2009

When it comes to our complex economy, President Barack Obama would do well to heed the physician’s ancient commandment to first “do no harm.”

Instead, Obama’s administration has been prescribing all sorts of multibillion-dollar borrowing remedies without any consistent diagnosis of what is exactly wrong with the weak economy or even how bad things actually are.

By Victor Davis Hanson
The Washington Times

Since becoming president, Mr. Obama has offered numerous bleak economic prognoses. He has told Americans: “The situation we face could not be more serious. We have inherited an economic crisis as deep and as dire as any since the Great Depression.” He has also warned, “Recovery will likely be measured in years, not weeks or months” and “If nothing is done, this recession could linger for years.”

But suddenly last week, physician Barack Obama flipped and issued an entirely new prognosis: “I don’t think things are ever as good as they say, or ever as bad as they say.” He added. “[Things] are not as bad as we think they are now.”

What happened to living through hard times akin to the Great Depression?

Maybe it was the unexpected news that Citibank and Bank of America are starting to show a profit – thanks to the past bailouts of 2008 and new profitable loans. Maybe it was General Motors’ recent decision not to (for now) ask for more federal cash. Maybe it was the reports that consumer spending is not down as much as feared.

Or did Mr. Obama’s change in rhetoric reflect a sort of premeditated strategy: talk down the economy to scare everyone into supporting more government spending and borrowing. Then, once the stimulus bill has passed, talk up the economy to reassure us that it will work?

Or, as seems more likely, does the new government simply not know what is going on – much less what to do about it?

It can’t seem to fill slots at the Treasury Department, and strangely talks about fiscal responsibility and the evils of pork-barrel spending while expanding upon the Bush budget deficit and approving more than 8,000 earmarks.

Mr. Obama – and Congress – should take a deep breath before further expanding the budget with ever-more stimulus spending, borrowing and aggregate debt that will plague our children, who will have to pay back the trillions long after this present recession ends.

Read the rest:
http://www.washingtontimes.com/new
s/2009/mar/22/first-of-all-do-no-harm/

Related:
Public Outrage Could Devour Obama Presidency

Financial Advice, Recovery, Trumped by Obama, Congress, Media, Polls

Protesters At Homes Of AIG Execs

Wall Street Journal: “Geithner Incapacitated;” President Voices Support

Government To Have Bigger Role in All American Lives; Obama Seeks to Increase Oversight of Executive Pay

Dodd Caper, House Vote on 90% Tax, Highlights Founders Hopes; Modern Reality

China cements role as top creditor to US

March 17, 2009

China consolidated its position as the top creditor to the United States, with 739.6 billion dollars in US Treasury bond holdings as of late January, US government data showed.

The US Treasury Department released the monthly figure at a sensitive time, less than a week after Chinese Premier Wen Jiabao expressed concern about the fate of Chinese investments in the United States.

AFP

It marked growth from 727.4 billion dollars of Chinese-held Treasury bonds at the end of December and was up from the 492.6 billion dollars China held in January 2008, according to the Treasury statistics.

While that year-on-year figure represents a sharp increase, much of it was down to big rises in September and October.

China has been the biggest holder of US Treasury bonds since September last year, when it overtook Japan for the first time ever, according to US data.

However, it issued its most high-level note of alarm yet last Friday when Wen admitted to being worried about China’s massive investments in US debt.

“We have lent huge amounts of money to the United States. Of course we are concerned about the safety of our assets,” he told a press conference here.

US President Barack Obama later responded with an assurance that “not just the Chinese government, but every investor can have absolute confidence in the soundness of investments in the United States.”

Lawrence Summers, director of the White House’s National Economic Council, denied Sunday that US Treasury bonds might lose their “AAA” rating from credit agencies because of the economic crisis.

Japan remained the second-largest holder of US debt at the end of January, with 634.8 billion dollars, up from 626.0 billion at the end of December, the Treasury statistics showed.

US Treasury bonds are a preferred investment vehicle for China’s government as it seeks safe and reliable ways to place its nearly two trillion dollars of foreign exchange reserves.