Doomsday? China claims U.S. already in default

The faces of stock traders tell the story that big trouble is brewing.

(Photo by Scott Olson/Getty Images

As a means of stirring up political opposition to the intention of Congressional conservatives to refuse to raise the debt ceiling, the Obama Administration, Congressional Democrats, and liberals in general have warned that if we do not raise the debt limit the U.S. will 'default on its obligations to its lenders.' Apparently that warning was highly misplaced. One of America's largest creditor nations, China, is claiming today that the U.S. is already defaulting on its loans. Is this the doomsday many have warned about for at least 3 years?

The Obama Administration has pursued a policy of deliberately devaluing the dollar and spending the nation into oblivion with money that is borrowed. Many astute political observers, including this writer, have warned incessantly that such a policy would ultimately lead to economic collapse. The more the Administration spends borrowed money without restraint, the more likely it is that the nation will default, given that it has no money to pay its creditors and its creditors are becoming more convinced by the day that they cannot lend America any more money.

Without the luxury of continuing to borrow money, the vast majority of America's obligations to senior adults and the disabled poor will go unfunded. This will lead to widespread suffering on a scale never before experienced in the United States of America.

Not surprisingly, the stock market plunged again today in response to such news, dipping below 12,000 for the first time in months. Today's plunge represents the worst sustained decline in stocks since 2002, just after the 9/11 attacks.

What does this mean for the average citizen on the street?

t means inflation will necessarily skyrocket. This has already happened in the food and energy sectors, but the government conveniently does not count these two items in its inflation numbers. Further, look for food shortages, energy shortages, and continued skyrocketing costs. Electricity rates will be raised to historic levels, in keeping with a statement Obama made in 2007, "Under my plan, energy costs will necessarily skyrocket."

The nation can also look for civil unrest as citizens grow increasingly outraged that their government has deliberately pursued policies that have brought the nation to the brink of ruin. Even James Carville, former Bill Clinton advisor, confirmed that such a scenario is not mere speculation or fear-mongering but a distinct possibility.

What can the government do to reverse this march into the abyss? Stop spending money. Cut the budget drastically. Don't borrow any more money. The government must live off of only what it takes in from the citizens in the current tax structure. And taxes must not be raised in any shape, form, or fashion. That would merely throw dirt on the grave.

In addition, the nation must lower the tax rate for business, making this country the most business-friendly nation on earth. Only the private sector can get the economy moving again, and a friendly and non-oppressive tax structure would do the trick in getting businesses to invest and hire workers.

Be sure to catch my blog at The Liberty Sphere. Visit my ministry site at Martin Christian Ministries.

Source: Examiner.com

• China ratings house says US defaulting: report

 

German Rating Agency Feri Downgrades US Government Bonds: AAA to AA!

The first Western downgrade of US government bonds is a fact! The German credit rating agency Feri lowered its rating on US debt by a full notch, from AAA to AA.

Here is the German press release: Feri Downgrades US Gov Debt AAA to AA

The English translation:

Homburg, 8 June 2011 - The Bad Homburg Feri EuroRating & Research AG downgraded the first credit rating agency's credit rating for the United States from AAA to AA. Feri analysts justify the downgrade by the continuing deterioration of the creditworthiness of the country due to high public debt, inadequate fiscal measures, and weaker growth prospects.

"The U.S. government has fought the effects of the financial market crisis primarily by an increase in government debt. We do not see that there is sufficient attention being paid to other measures, "said Dr. Tobias Schmidt, CEO of Feri Rating & Research AG. "Our rating system shows a deterioration in economic health, so the downgrading of the credit ratings of U.S. is warranted."

For the third consecutive year the deficit of the United States is in double digit percentages relative to gross domestic product (GDP). "Deficits of such magnitude are not a sustainable fiscal policy. We would reconsider the rating when the U.S. government creates a long-term sustainable budget," said Schmidt.

Feri Rating is listed on the Federal Financial Supervisory Authority (BaFin) as an EU credit rating agency approved and created with more than 20 years experience in sovereign ratings. Every month, the Feri analysts evaluate sovereign credit ratings from the perspective of a foreign investor based on the ability and willingness of countries to repay their debts. The credit ratings have eleven possible gradations between "AAA" (best credit) and "Default".

Obama's Jobs Plan Takes a Page From Marx

By Investor's Business Daily

Politics: The president has unveiled a plan to cut joblessness with an industrial policy from the 19th century. In this "new" economy, government will pick winners and losers for industry. It didn't work then, it won't work now.

Taking a cue from classical Marxist theory as well as vintage union organizing doctrine, both discounting the value of service work over manufacturing, we now see President Obama touting training for factory jobs over all others, pushing government spending in that area and calling it a jobs recovery plan.

"I see a future where we train workers who make things here in the United States, and continue a important and honorable tradition of folks working with their hands, creating value, not just shuffling paper," he said Wednesday at Northern Virginia Community College, urging students to pack up and go to ... Detroit.

As he announced his public-private "Skills for America" partnership to train and credential 500,000 students for jobs in industries favored by the Obama administration, it bears looking at how at odds this approach is to both history and economic reality.

"We know it means building the infrastructure, the roads and bridges, and manufacturing new products here ... that create good jobs," Obama said. "Above all, it means training and educating our citizens to out-compete workers from other countries."

The Bill Moyers crowd has been touting manufacturing-era nostalgia for years, claiming the world would go back on its axis if America could just shut its market and put everyone back into blue collars, turning gears and listening for the lunch whistle.

Fact is, the more advanced the economy, the greater percentage of the work force that moves out of manufacturing and into services.

Economists call this the "tertiary progression" of development - from farming and fishing, to the Industrial Revolution, to an advanced service economy. Every rich nation has followed this path - every one.

In the U.S., that move started not last decade but more than 70 years ago. In the U.S. there are six times more service workers than factory workers, boasting higher skills and per capita income. U.S. trade data consistently show U.S. surpluses in service exports across the board because that's America's competitive advantage.

Now the president wants us to "give back" all that white collar development and return to a simpler sort of economy premised on manufacturing - one that's more characteristic of today's China or Peru than a developed economy such as America.

Amazingly, he wants this even though he admits state-directed industrial policy has failed. "We've got a lot of programs out there," he said. "If a program does not work in training people for the jobs of the future and getting them a job, we should eliminate that program."

Which defies belief when one recalls he's holding up job-creating free-trade treaties with Colombia, Panama and South Korea for just such a useless training program called "Trade Adjustment Assistance," or TAA.

That program is so bad a 2008 American University study by Kara Reynolds and John Palatucci declared it "of dubious value in terms of helping displaced workers find new, well-paying employment opportunities." Obama is holding up a proven way to create jobs - trade deals - to expand TAA from $2 billion to $7 billion.

It's as if all the economic knowledge acquired in the course of the 20th century never made it to the Obama White House. Obama wants to pick industrial winners while the economy languishes from high taxes, massive new regulatory burdens and his failure on free trade.

The only logic that can explain this is that Obama means to spend more money on vocational education to prepare kids for work in industries dominated by unions - Obama's main base of political support.

Presumably, if enough community college students can be trained for traditionally unionized manufacturers, employers will have no choice but to hire them. That's a win-win-win-win for educational bureaucrats, unions, jobs and Obama's political prospects.

Too bad the rest of the economy - which accounts for three-quarters of all U.S. output - didn't make Obama's list of industrial winners.

The Day the Dollar Died

Our Future:  If We Don’t Stop Spending and Tighten Our Belts… Everywhere!!

Video:  The Day the Dollar Died

GOP Slams 6,000 Earmarks in Trillion-Dollar Omnibus Spending Bill

By David A. Patten  -  Wednesday, 15 Dec 2010 02:14 PM

Republicans are blasting a last-ditch Democratic effort to pass a massive spending bill laden with about 6,000 earmarks as a “smack in the face to taxpayers.”

Senate Minority Leader Mitch McConnell fired away at the bill from the floor of the Senate, saying it “repeats all the mistakes voters demanded that we put an end to on Election Day.”

“Americans told Democrats last month to stop what they’ve been doing: bigger government, 2,000-page bills jammed through on Christmas Eve, wasteful spending.”

Most Democrats are rallying around the bill, however, seeing it as perhaps their last opportunity to get pet spending projects passed before the 112th Congress takes office. In both the House and Senate, incoming Republicans have agreed to ban earmark requests.
Senate Majority Leader Harry Reid of Nevada praised the 1,924-page, $1.1 trillion spending bill Tuesday as “a very good piece of legislation.” Reid hopes to bring the bill up for a vote this week. House Democrats would vote on it on Saturday.

Steve Ellis, vice president of Taxpayers for Common Sense, tells Newsmax that virtually no member of Congress has time to read the massive omnibus legislation. Even worse, he says, is that the joint explanatory statement that explains the specifics of the spending request has not yet been published, he says. That document will be more than 1,000 pages as well.

“That’s how you actually find out how the money have been sliced and diced across the various programs and accounts,” Ellis says. “It’s clearly not going to be made available to the public much before the Senate votes on it, and we’re all being asked to buy a $1.1 trillion pig in a poke.

“They had all year to get this thing done, and done in a manner that was at least partially intelligible to the public and to the budget watchers,” Ellis tells Newsmax. “Instead, we have this enormous sausage that they’re trying to stuff through, really virtually sight unseen.”

Republicans say they will push for a continuing resolution in place of the huge omnibus bill. But the GOP push to stop the bill may fall short because of  defections from within their own caucus.
Republican senators such as Kit Bond of Missouri and Bob Bennett of Utah don’t have to worry about running for re-election. Both sit on the Senate Appropriations Committee that crafted the omnibus.
“This is exactly the kind of secretive, pork-laden, massive spending bill that’s driven approval of Congress to an all-time low, and induced a voter rebellion last month,” Brian Riedl, lead budget analyst for the Heritage Foundation, tells Newsmax.

Legislative experts say the omnibus bill reflects the inability of Congress to fund government operations in an efficient manner.

Because the 111th Congress was unable to pass a spending bill in a timely way, Democratic strategists rolled 12 separate bills into one omnibus measure.

Keeping everything in one bill makes it more difficult to excise specific provisions that legislators find objectionable. But it also results in a mammoth piece of legislation that may go unread until months after the bill becomes law.

Unsatisfied with the simple continuing resolution the House passed that would keep the government running until the next Congress takes over in January, the Senate is proposing the earmark-laden omnibus as one last spending hurrah before legislators leave town. Grass-roots conservatives are particularly angry that the bill includes $1 billion to fund the healthcare bill that may be unconstitutional, based on a judge’s ruling in Virginia this week.

Because the authorization for government spending is expiring, Republicans could be accused of shutting down the government if they are able to block the omnibus bill. But GOP senators say they would be happy to vote for a continuing authorization such as the one already passed by the House.

Among the 6,000 earmarks the media has uncovered so far in the massive legislation the Senate is trying to push through just weeks after Democrats sustained their work landslide of the post-World War II era:

• Literal pork: Almost $350,000 is earmarked to study the management of swine waste in North Carolina.
• $235,000 for the management of invasive weeds in Nevada.
• $300,000 for the Polynesian Voyaging Society in Hawaii. Founded in 1973, the society sails a “voyaging” boat throughout the Pacific, studying how ancient Polynesian people settled far-flung lands.
• Funds are devoted to a variety of agricultural needs, including research of maple syrup in Vermont, control of potato pests in Wisconsin, the development of virus-resistant grapes in Washington state, and peanut cultivation research in Alabama.
• $80 million for states and Indian tribes to pay for preservation of Pacific salmon.
• $13 million for clean-water initiatives in rural villages in Alaska.
• $450,000 for the World Food Prize.
• $500,000 for the Edward M. Kennedy Institute.
• $200,000 to install solar panels at a food bank in Arizona.

If the bill passes Congress, it would be up to the president to decide whether to accept it.

Incoming House Speaker John Boehner, a longtime foe of the earmark practice, signed onto a letter last week asking Obama to veto the measure. Boehner issued a statement on Tuesday blasting the bill as a “smack in the face to taxpayers.”

There are two provisions in the bill that Obama may oppose. One would effectively block civilian trials of Guantanamo Bay prisoners in the United States, while another would allocate $450 million for development of a second engine for the F-35 Joint Strike Fighter. Defense Secretary Robert Gates has said he will urge the president to veto any bill that contains money for a second engine, which the Pentagon says it does not want.

In what some saw as a statement suggesting the president would be reluctant to veto the bill, White House press secretary Robert Gibbs said Tuesday:

“Obviously one of the things that has to be done before Congress leaves is how we’re going to pay for the operation of government going forward.”
GOP Sen. Jim DeMint of South Carolina is threatening to mount a filibuster, and may insist that all 1,924 pages of the bill be read into the record before any vote is taken.

U.S. to have Highest Corporate Tax Rate in the World

Posted December 15th, 2010 at 5:00pm in

Most of the time being number one is good. But when it comes to having the highest tax rate in the world, it is much better for a country to be bringing up the rear.

Currently Japan holds the inauspicious distinction of having the highest corporate income tax rate in the world (39.5 percent). The United States is a close second, only a few tenths-of-percentage points behind.

Japan will soon fall from the top spot because it has finally recognized what the rest of the industrialized world realized over a decade ago: A low corporate income tax rate is vital for economic growth in the global marketplace. As such, Japan just announced it will reduce its corporate income tax rate by 5 percentage points down to around 35 percent. This remains far above the 25 percent average rate of other industrialized countries, but for them it is a start.

Japan’s reduction will leave the U.S. in the uncomfortable position of having the highest corporate income tax rate in the industrialized world. Hopefully Congress will finally see fit to lower the rate now that we will hold that disreputable title.

The U.S. ended up at the top because it stood still while the rest of the world was cutting its rates. As the chart below shows, in 1990 the U.S. corporate tax rate was middle of the pack. In fact, it was lower than the global average. The years since have seen every other industrialized country aggressively lower its rate.

The top marginal corporate income tax rate is an important factor influencing economic growth and job creation, because it determines how much the tax will reduce the return the business earns from new investment. As a result, it is a large determinant when businesses decide where to locate their next venture—and where they will hire new employees.

The high rate in the U.S. is driving businesses and jobs to other countries. Those jobs will continue to flow to other countries if the U.S. insists on levying its self-defeating corporate income tax rate. It is long past time forCongress to lower the rate so it is equal or below the 25 percent average of our competitors. If it does not, businesses and jobs will continue their exodus to more friendly locales.

The Heritage Foundation  -  The Foundry

Ron Paul – Federal Reserve is a ‘Cartel’

Thought For The Day - 10.02.08

The New One Dollar Bill

“Statistics and polls can be spun by anyone who wants to or needs to!”

(So, the trick is to find out who is doing the spinning… and what is real!)

 Biden Secret Service Codename: 'Assassination Insurance'

While Gov. Sarah Palin is being grilled on her position on mark-to-market accounting rules, the press can't bother to ask Joe Biden if he could give us a ballpark estimate on when Franklin D. Roosevelt was president -- or maybe take a stab at guessing the decade when televisions were first available to the public.

Being interviewed by Katie Couric on the "CBS Evening News," Biden said: "When the stock market crashed, Franklin D. Roosevelt got on the television and didn't just talk about the, you know, the princes of greed. He said, 'Look, here's what happened.'"

For those of you who aren't hard-core history buffs, Biden not only named the wrong president during the 1929 stock market crash, he also claimed a president who wasn't president during the stock market crash went on TV before Americans had TVs.

Other than that, the statement holds up pretty well. At least Biden managed to avoid mentioning any "clean" Negroes he had met.

Couric was nearly moved to tears by the brilliance of Biden's brain-damaged remark. She was especially intrigued by Biden's claim that FDR had said the new iPhone was the bomb!

Here is Couric's full response to Biden's bizarre outburst about FDR (a) being president and (b) going on TV in 1929: "Relating to the fears of the average American is one of Biden's strong suits."

But when our beauteous Sarah said that John McCain was a better leader on the economy than Barack Obama, Couric relentlessly badgered her for evidence. "Why do you say that?" Couric demanded. "Why are they waiting for John McCain and not Barack Obama? ... Can you give us any more examples of his leading the charge for more oversight?"

The beauteous Sarah had cited McCain's prescient warnings about Fannie Mae and Freddie Mac. But Couric, the crackerjack journalist who didn't know FDR wasn't president in 1929, demanded more examples from Palin.

We are currently in the middle of a massive financial crisis brought on by Fannie Mae. McCain was right on Fannie Mae; Obama was wrong. That's not enough?

Not for the affable Eva Braun of evening TV! "I'm just going to ask you one more time," Couric snipped, "not to belabor the point. Specific examples in his 26 years of pushing for more regulation?" 

This would be like responding to someone who predicted the 9/11 attacks by saying: OK, you got one thing right. Not to belabor the point, but what else?

Obama was not merely wrong on Fannie Mae: He is owned by Fannie Mae. Somehow Obama managed to become the second biggest all-time recipient of Fannie Mae political money after only three years in the Senate. The biggest beneficiary, Democratic Sen. Chris Dodd, had a 30-year head start on receiving loot from Fannie Mae -- the government-backed institution behind our current crisis.

How does the Democratic ticket stack up on other major issues facing the nation, say, gas prices?

Shockingly, Sen. Joe Biden was one of only five senators to vote against the first Alaskan pipeline bill in 1973. This is like having been a Nazi sympathizer during World War II. If Sarah Palin does nothing else, she has got to tie that idiotic pipeline vote around Biden's neck.

The Senate passed the 1973 Alaskan pipeline bill by an overwhelming 80-5 vote. Only five senators voted against the pipeline on final passage. Sen. Biden is the only one who is still in the Senate -- the other four having been confined to mental institutions long ago.

The stakes were clear: This was in the midst of the first Arab oil embargo. Liberal Democrats, such as senators Robert Byrd, Mike Mansfield, Frank Church and Hubert Humphrey, all voted for the pipeline.

But Biden cast one of only five votes against the pipeline that has produced more than 15 billion barrels of oil, supplied nearly 20 percent of this nation's oil, created tens of thousands of jobs, added hundreds of billions of dollars to the U.S. economy and reduced money transfers to the nation's enemies by about the same amount.

The only argument against the pipeline was that it would harm the caribou, an argument that was both trivial and wrong. The caribou population near the pipeline increased from 5,000 in the 1970s to 32,000 by 2002.

It would have been bad enough to vote against the pipeline bill even if it had hurt the caribou. A sane person would still say: Our enemies have us in a vice grip. Sorry, caribou, you've got to take one for the team. But when the pipeline goes through and the caribou population sextuples in the next 20 years, you really look like a moron.

We couldn't possibly expect Couric to ask Biden about a vote that is the equivalent of voting against the invention of the wheel. But couldn't she have come up with just one follow-up question for Biden on FDR's magnificent handling of the 1929 stock market crash?

Or here's a question the public is dying to know: "If Obama wanted a historically delusional vice president, why not Lyndon LaRouche?" At least LaRouche didn't vote against the Alaskan pipeline.

The media also keeps telling us that Obama is ahead in the polls by as much as 9 percentage points, because of his ‘handling’ of the present economic crisis… Handling???  He is nowhere around!!  And as we all know, statistics and polls can be interpreted and spun by anyone who wants to and needs to… The fact is that only one poll, that interviewed Democrats to Republicans 2 to 1, shows Obama ahead of McCain by more than 3 percentage points… while others show them from 3 percentage points apart to being in a dead heat, even with all the media spin for Obama and with McCain being off the campaign trail and doing his job in Washington.

By Ann Coulter for NewsMax

“McCain wants to ‘put his country first’. The best way is simple: Get aggressive and win the election!” …Larry Elder, who says McCain needs to take off the gloves!