the beginning of hyper-inflation?
who needs secession when Bush selling off the country
the beginning of hyper-inflation
so why aren't the conservatives throwing a fit with the regime? Why are not all "Americans" not up in arms over this?
Here are some articles that were competing with mad cows, "scandalous" football commericial with interracial suggestions, the greatest hits of Britney Spears and the all important e-bay story of the mother of Christ found in a toasted cheese sandwich:
House votes to raise US debt ceiling
[19 Nov 2004]
The US House of Representatives voted to raise the debt ceiling by 800 billion dollars, helping Washington avoid running short of operating funds.
By a party-line vote of 208 to 204, lawmakers agreed to increase the level of the US debt to nearly 8.2 trillion dollars, the third massive debt limit increase in as many years.
The vote comes one day after the US Senate, also on a party-line vote, approved a similar measure.
Democrats in Congress have decried ballooning US debt, which they warned could reach 14.5 trillion dollars in ten years unless drastic action is taken.
"I think there must be some spiritual immorality for children who are yet unborn to come into this world with a debt on their shoulders that their parents have no idea as to how it was accumulated," Charlie Rangel, top Democrat on the House Ways and Means Committee, said this week on the eve of the vote.
"I think it's wrong for ... to have foreigners purchase our debt and then at the same time we're going to tell them what their responsibilities would be as relate to enforcing international law," Rangel continued.
"It is an economic nightmare as to what would happen if all of the people who purchase all of our bonds ever got together on anything and decided the investment just wasn't worth it.
The 800 billion dollar debt level increase is expected to cover federal spending for one year.
News and Observer
11/15/04 1:44 PM PT
U.S. Treasury Secretary John Snow said that while the United States supports a strong dollar, exchange rates should be left to currency markets, suggesting that Washington would not support any intervention by central banks.
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A top European Union official today urged the United States to curb its deficits to help bolster the sagging dollar amid fears a strengthening euro would stifle Europe's fledgling economic recovery.
"It's not good for anyone to have this kind of movement," EU Economic and Monetary Affairs Commissioner Joaquin Almunia said heading into an evening meeting.
Other items on the two-day agenda include the revelation that Greece joined the euro zone using faulty budget data -- in fact, it didn't qualify at all -- as well as a counterterrorism push for common rules on cash movements into the European Union.
The euro hit an all-time high above US$1.30 last week -- a surge European Central Bank President Jean-Claude Trichet has called "brutal" and "not welcome."
Austrian Finance Minister Karl-Heinz Grasser echoed his concern but signaled no action other than additional jawboning.
"I think we must just watch very closely," he told journalists.
"We are all against sharp movements of the euro as was seen in the last weeks," he said, while adding, "Markets are deciding on exchange rates and we should respect this."
That stance was echoed by U.S. Treasury Secretary John Snow at the start of his European tour Monday in Ireland.
Snow said that while the United States supports a strong dollar, exchange rates should be left to currency markets, suggesting that Washington would not support any intervention by central banks.
Need for Action
EU officials said ministers could issue a fresh statement on the euro's rise against the dollar, which threatens to stifle Europe's export-driven growth if the climb continues by pricing European products out of global markets.
The rise comes on top of last week's data showing that growth in the euro-zone economy slowed sharply in the third quarter -- especially in heavyweights Germany and France -- and is expected to remain sluggish in the next six months.
"Policy makers cannot ignore the weakness of euro-area economies anymore," Morgan Stanley economists Eric Chaney and Anna Grimaldi wrote today, predicting that ministers would be "more vocal" about the euro's slide.
French Finance Minister Nicholas Sarkozy already has urged Washington to take action, as has Deputy German Finance Minister Caio Koch-Weser.
Currency traders blame the dollar's chronic slide on expanding budget deficits under U.S. President George W. Bush as well as huge trade deficits. Despite Washington's official position, analysts say a weaker dollar would help correct those imbalances by boosting U.S. exports, thus spurring American economic growth.
Almunia welcomed Snow's reiteration of U.S. support for a strong dollar, but said he was waiting to see what action is taken in Washington to back it up.
"If the imbalances of the U.S. economy are not adjusted in the future, the decision in the market will be as in the past weeks," Almunia said.
Eye on Oil
Also tonight, ministers were looking again at oil prices, which have subsided from last month's record levels. Action on proposals for how to respond was put off until December, however, EU diplomats said.
Ministers also were to examine the budget situation in 10 countries facing excessive red ink, although again no decisions were expected.
Greece was coming in for the most scrutiny after a Eurostat mission found its deficit has breached the 3 percent of gross domestic product cap since 1997 -- meaning it never should have been invited to join the euro club.
But European Commission spokesman Gerassimos Thomas reiterated that Greece's acceptance into the euro zone was not in doubt.
"There is no possibility of going back on that," he said. "There's no legal basis under which that could be questioned."
Tomorrow, finance ministers from all 25 EU countries are to discuss subjects ranging from the ongoing revision of budget deficit rules to proposals for reforming EU sales taxes.
The most concrete decision due is a preliminary agreement to set a common level for declaring cash entering or leaving the EU, which currently varies by country. France, for example, sets the threshold at euro 7,000 (US$9,100), while in Germany it's euro 15,000 ($19,500).
A Dutch diplomat, whose country is chairing the meeting, said he expected the final level to be between euro 10,000 and euro 12,000 ($13,000 and $15,600).
The measure, part of a package aimed at combatting terrorist financing and money laundering, would still require approval by the European Parliament.
Conservatives Should Hit The Ceiling Commentary by Jill S. Farrell
November 17, 2004
Congress is about to raise the debt ceiling. In October the Associated Press reported that the government hit the debt ceiling at $7.3 trillion.
The Treasury Department has to be able to sell treasuries to enable the Federal Government to meet its financial responsibilities. This is the odd and uncomfortable situation in which conservatives find themselves.
Total debt is derived by adding deficits plus accumulated surpluses. Deficits require the Treasury to borrow money to raise cash needed to keep the Government operating. We borrow money by selling Treasury securities like T-bills, notes, bonds and savings bonds.
The debt ceiling was enacted in 1917 when the Federal Government encountered the financial difficulties brought on during World War I. Congress enacted the First and Second Liberty Bond Acts, which established the first debt limit, leaving details to the Secretary of the Treasury. It can be argued that Congress delegated its Constitutional authority to borrow money on the credit of the United States to the Treasury Department, though debt ceilings have had little influence over the way in which Congress profligately spends money.
President Bush will start his second term facing a roaring $2.3 trillion minimum in deficits, according to the Congressional Budget Office. At least initially tax cuts, changes to the minimum tax rate and the proposed overhaul of Social Security could add a substantial burden to our existing debt. Might these plans eventually open the throttle on the American economy? Yes, however, it is difficult to imagine the economy growing fast enough to keep up with or exceed our current spending habits.
It is estimated that nearly 40 percent of Federal debt is in foreign hands, which is just about double the percentage from 10 years ago. Foreign interests bought up nearly 70 percent of the $373 billion in Treasury bonds sold in 2003.
There is a co-dependent nature to foreign ownership of our debt. Foreign countries finance a great deal of our debt and also our trade deficit. Since our ability to buy foreign goods depends upon the dollar maintaining some minimum value, foreign Central Banks are unlikely to sell off treasuries and demand instant repayment, which could fatally damage the ailing US dollar.
China's ownership of US debt is nearly a third of the Chinese economy. If the existing trend continues, some experts estimate that the total value of Chinese holdings of US dollars will exceed the total value of China's GDP in a handful of years.
BusinessWeek magazine reports:
"... investors in the Mideast and Asia have gone on a euro buying binge," says Tom Rogers, a currency analyst with Informa Global Markets. "They're concerned that the policies Bush has promised to enact during his second term will worsen an already record federal budget deficit. Left unchecked, investors fear a soaring deficit will lead to higher interests rates, lowering the value of U.S. stocks and bonds."
Which raises the question, if the biggest buyers of US debt are losing faith in our economy, to whom will we sell our debt once the ceiling is raised?
According to Bloomberg, we began this year with a huge deficit equal to nearly 30% of our total GDP. We must attract about $1.8 billion a day to make ends meet and to maintain the dollar's value.
European Central Bank head Jean-Claude Trichet has described the euro's climbing value against the dollar as "brutal." Because other participants in the world economy are not pleased with the dollar's path, and though the dollar continues to slip, Secretary of Treasury John W. Snow told reporters in Dublin on Monday, "We support a strong dollar -- a strong dollar is in America's interest."
A sickly dollar does have a couple of important advantages. A weak dollar makes it possible to export more goods, and the favorable exchange rate with Canada may draw more Canadian shoppers to Minnesota. However, a declining dollar can lead to inflation by making imported goods more expensive.
The fact remains that record Federal deficits are undermining the economy and the value of the dollar is dropping. The burgeoning US deficit is drawing an increasing number of dollars for interest payments. According to the Bureau of Public Debt, we paid $321 billion in interest payments in Fiscal Year 2004. Those payments are bound to grow as are other economic problems as the debt ceiling is raised, or heaven forbid, removed.
It is imperative that Congress promptly begin to exercise spending restraint. We need to call upon Members of Congress to do the responsible, uncomfortable and dangerous job of cutting wasteful and redundant spending. There will be much wailing and gnashing of teeth from special interest groups and entrenched bureaucrats to a willing, and dare we say socialist-leaning, mainstream media. Congressional restraint won't be easy to achieve. A complete overhaul of the appropriations process is preferable but in lieu of that we can hope for common sense spending cuts.
While a drop in Federal deficit spending may temporarily reduce US economic growth by discontinuing overstimulation of the US market, the Federal Reserve would have the room to keep interest rates lower and that would keep demand energized.
The President and Congress will need our encouragement if they are to begin the process needed to turn our country away from the syren song of "charge" and spend and steer us toward the safe harbor of economic stability.
Jill S. Farrell is Director of Communications of the Free Congress Foundation.
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