China may pull Treasures, lead to Dollar collapse & Aftershock Economy, pending BO Economy, ObamaCare, Debt Debacles


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China may pull Treasures, lead to Dollar collapse & Aftershock Economy, pending BO Economy, ObamaCare, Debt  Debacles

 

 

 

 

US $ collapse is a definite possibility. China is closely watching our economy; they may pull the trigger that tanks the $.  What you are about to read is understood by only a very small fraction of all Americans.  Right now, the U.S. dollar is the world’s de facto reserve currency.  Most global trade is conducted in U.S. dollars, and almost all oil is sold for U.S. dollars.  More than 60 percent of all global foreign exchange reserves are held in U.S. dollars, and far more U.S. dollars are actually used outside of the United States than inside of it. 

081113dollar

 

This has allowed the United States tremendous economic advantages. Most  Americans have no idea how much their current standard of living depends on the dollar remaining the reserve currency of the world.  Unfortunately, thanks to reckless money printing by the Federal Reserve and the reckless accumulation of debt by the federal government, the status of the dollar as the reserve currency of the world is now in great jeopardy.

Nations all over the globe use U.S. dollars to trade with one another.  This has created tremendous demand for U.S. dollars and has kept the value of the dollar up.  It also means that Americans can import products that they need much more inexpensively than they otherwise would be able to.

 

The largest exporting nations such as Saudi Arabia and China  end up with massive piles of U.S. dollars.  These exporting nations often reinvest much of that cash into low risk securities that can be rapidly turned back into dollars if necessary.  For a very long time, U.S. Treasury bonds have been considered to be the perfect way to do this.  This has created tremendous demand for U.S. government debt and has helped keep interest rates super low.  So every year, massive amounts of money that gets sent out of the US ends up being loaned back to the U.S. Treasury at super low interest rates.

 

It has been a huge advantage for our federal government to borrow money so cheaply, because the interest rate on 10 year U.S. Treasuries affects thousands upon thousands of other interest rates throughout our financial system.  For example, as the rate on 10 year U.S. Treasuries has risen in recent months, so have the rates on U.S. home mortgages.

 

Our entire way of life in the United States depends upon this game continuing.  We must have the rest of the world use our currency and loan it back to us at ultra low interest rates.  At this point we have painted ourselves into a corner by accumulating so much debt.  We simply cannot afford to have rates rise significantly.

 

For example, if the average rate of interest on U.S. government debt rose to just 6 percent (and it has been much higher than that at various times in the past), we would be paying more than a trillion dollars a year just in interest on the national debt.

 

But it wouldn’t be just the federal government that would suffer.  Just consider what higher rates would do to the real estate market.  About a year ago, the rate on 30 year mortgages was sitting at 3.31 percent.  The monthly payment on a 30 year, $300,000 mortgage at that rate is $1315.52.  If the 30 year rate rises to 8 percent, the monthly payment on a 30 year, $300,000 mortgage would be $2201.29.

 

Unfortunately, the truly bizarre behaviors of the Federal Reserve and the U.S. government fiscal policy under BO the past several years are causing the rest of the world to lose faith in our currency.  In particular, China is leading the call for a “de-Americanized” world.  The following is from a recent article posted in zerohedge.com:

 

For decades the US has benefited to the tune of trillions of dollars-worth of free credit from the greenback’s role as the default global reserve unit.  But as the global economy trembled before the prospect of a US default last month, only averted when Washington reached a deal to raise its debt ceiling, China’s official Xinhua news agency called for a “de-Americanised” world.

It also urged the creation of a “new international reserve currency… to replace the dominant US dollar”.

 

So why should we listen to China?

 

China now accounts for more global trade than anyone else does, including the United States.  China is also now the number one importer of oil in the world.

At this point, China is even importing more oil from Saudi Arabia than the United States is.

China now has an enormous amount of economic power globally, and the Chinese want the rest of the planet to start using less U.S. dollars and to start using more of their own currency.

 

The following is from a recent article in the Vancouver Sun

Three years after China allowed the yuan to start trading in Hong Kong’s offshore market, banks and investors around the world are positioning themselves to get involved in what Nomura Holdings Inc. calls the biggest revolution in the $5.3 trillion currency market since the creation of the euro in 1999.

 

Over the past few years we have seen the global use of the yuan rise dramatically

International use of the yuan is increasing as the world’s second-largest economy opens up its capital markets. In the first nine months of this year, about 17 percent of China’s global trade was settled in the currency, compared with less than one percent in 2009.

 

China just recently signed a major currency agreement with the European Central Bank

The swap deal will allow more trade and investment between the regions to be conducted in euros and yuan, without having to convert into another currency such as the U.S. dollar first, said Kathleen Brooks, a research director at FOREX.com.

“It’s a way of promoting European and Chinese trade, but not doing it with the U.S. dollar,” said Brooks. “It’s a bit like cutting out the middleman, all of a sudden there’s potentially no U.S. dollar risk.”

 

This last point is extremely critical.  There are now real alternatives to the $.

 

Major factors in China’s investment policies clearly are the explosive growth in US government debt, the weak US economy which results in even more debt, and incredible destructive fiscal polices such as ObamaCare, which, if allowed to continue, will devastate consumer discretionary spending (that is approx 2/3rd of our GDP).  Hence, China is viewing the US as a potentially and ever increasingly poor borrower with decreasing will and ability to repay debt.

 

So far much research for this post has come from the following exceptional analysis from Michael Snyder.  It is an excellent reference on China’s economy and actions in the foreign currency and trade arenas.

 

http://www.infowars.com/how-china-can-cause-the-death-of-the-dollar-and-the-entire-u-s-financial-system/

Michael Snyder
Economic Collapse
November 8, 2013

 

More … one more critical point from Michael Snyder:

 

Right now, the global move away from the U.S. dollar is slow but steady.  At some point, some trigger event will likely cause it to become a stampede.  When that happens, demand for U.S. dollars and U.S. debt will disintegrate and interest rates will absolutely skyrocket.

And if interest rates skyrocket that will throw the entire U.S. financial system into chaos.  At the moment, there are about 441 trillion dollars worth of interest rate derivatives sitting out there.  It is a financial time bomb unlike anything the world has ever seen before. There are four “too big to fail” banks in the United States that each have more than 40 trillion dollars worth of total exposure to derivatives.   The largest chunk of those erivatives is made up of interest rate derivatives.  In case you were wondering , those four banks are JPMorgan Chase, Citibank, Bank of America and Goldman Sachs.  A huge upward surge in interest rates would absolutely devastate those banks and cause a financial crisis that would make 2008 look like a Sunday picnic.

 

Right now, China seems content to use U.S. dollars for most of their international transactions.  China also seems content to hold more than a trillion dollars of U.S. government debt.  If that suddenly changes someday, the consequences for the U.S. economy will be absolutely catastrophic and every single American will feel the pain.

The standard of living that all of us are enjoying today depends largely upon China.  They can bring down the hammer at any moment and they know it.

 

More evidence of China’s role in pursuing a goal of the yuan becoming the world’s #1 currency, with prospect of potential $ collapse, comes from Michael Snyder’s Nov 22 post in http://www.infowars.com/china-announces-that-it-is-going-to-stop-stockpiling-u-s-dollars/

 

 

The central bank of China has decided that it is “no longer in China’s favor to accumulate foreign-exchange reserves”.  During the third quarter of 2013, China’s foreign-exchange reserves were valued at approximately $3.66 trillion

 

Right now, China owns nearly 1.3 trillion dollars of our debt.  Unfortunately, as CNBC is noting, if China is going to quit stockpiling our dollars than it is likely that they will stop stockpiling our debt as well…

 

Russia is also interested in moving away from the $.  This is nicely explained in

 

http://intellihub.com/2013/11/15/russia-tells-the-truth-about-the-decaying-dollar/

 

A Russian lawmaker, Mikhail Degtyarev, said the dollar was like a Ponzi scheme. He warned that the Russian government would have to bail out Russians holding onto dollars in the event of dollar collapse.

 

“If the U.S. national debt continues to grow, the collapse of the dollar system will take place in 2017,” said Mr. Degtyarev of the Liberal Democrat Party.

 

Russia is looking to deal with China and other countries directly in their own currencies instead of using dollars as some sort of international standard. Even if it is partly political theatre, partly to artificially raise demand for the ruble and entirely unlikely to happen at this point, it means things are going south for the dollar when politicians of other major gangs (governments) call the dollar out for the dying, overprinted currency of a hopelessly indebted nation-state that it really is. 

 

The weak US Economy:

 

 

The U.S. is running a $17.5 Trillion current account deficit (up from $9.6 Trillion January 2009) well over out annual GDP of approximately $16 Trillion.  We are in “Greece territory”.  Our debt requires foreigners to purchase new Treasuries to afloat.  Better investments for our foreigners are becoming more obvious – such as investing in their own economies.

 

ObamaCare is devastating as most economics well trained in free market vs socialist policies foresaw –  job loss, cancelled insurance, loss of doctors, and increased premiums and deductibles. All of which this president guaranteed would not happen, “period.”

 

Increased premiums and deductibles reduce disposable income and the velocity or turnover rate on the $.  Both are significant factors in economic growth.  Hence, ObamaCare is presently adding further impediments to economic growth.  How the public reacts to further economic slowdown will be critical over the next few months.  At a minimum we must try to shape public opinion to the point where there will be overwhelming outcry to fix this mess before it clobbers our economy greater than 2008-09.

 

 

http://news.investors.com/ibd-editorials/110713-678405-obama-recovery-remains-worst-since-the-depression.htm

 

 

 

Had Obama’s recovery been only as good as the average of the past 10 recoveries, the economy would be $1.3 trillion larger. That’s $4,038 for every person in the U.S., or $10,451 per household. And had job growth been just average, there’d be 7.3 million more people with jobs today. That means 64% of those now looking for work would be employed. Tax hikes, regulations, ObamaCare, the war on coal — that have deadened what should have been a strong rebound from the deep 2007-09 recession.

As long as those remain in place, Obama’s recovery will continue to underperform.
Next Steps

What can we do?

 

We need to have a mindset change where people exercise individuality and self responsibility that lets a free enterprise capitalistic system thrive.  

 

Even if we can wave a magic wand and significantly free up markets with less regulation and taxes, it would take some time for our citizenry to strongly embrace this.  However, it would be a tremendous start and in several years our economy might start growing close to its potential. Therefore, it is critical we defeat the Left’s drive to single payer government health care.  Our political leaders who champion free markets and individual responsibility must immediately present a clear plan as alternative to ObamaCare.  That plan should argue for competitive benefits of choice of private plans across states for consumers.  The next step after that would be to demand that states decrease state regulations on their own insurance companies. However, with choice among states, there would be great incentive for states to lessen regulations on insurance companies.  This would increase subscribers to the states that allow insurance companies more market flexibility.

 

If we win the above health care battle and more true free market capitalist Republicans lead effort to capture the Senate, we will be in stronger state to reverse BO’s destructive economic policies and rein in out debt.  This then may be our only chance to prevent a $ collapse and AfterShock economy.  Spread these points and tweet them to all!

 

Twitter @Economics501

 

References and Blogs ….

http://www.zerohedge.com/news/2013-11-08/623000-full-time-jobs-lost-last-month

 

 

More (nice charts) at ..

http://www.zerohedge.com/news/2013-11-08/whopping-932000-americans-drop-out-labor-force-october-labor-participation-rate-drop

 

http://www.breitbart.com/Big-Government/2013/11/08/720-Americans-Leave-Labor-Force-in-October

exodus pushed the labor force participation rate down to 62.8%, the lowest level since 1978

 

 

http://news.investors.com/newsfeed-ap/110813-477978-us-added-unexpectedly-strong-204000-jobs-in-oct.aspx#ixzz2k4tbJKjo 

 

http://www.infowars.com/obama-secret-service-agent-its-worse-than-people-know-and-im-not-trying-to-scare-you-either/

 

 

http://www.infowars.com/how-china-can-cause-the-death-of-the-dollar-and-the-entire-u-s-financial-system/

 

 

http://www.infowars.com/10-facts-about-the-growing-unemployment-crisis-in-america-that-will-blow-your-mind/

 

 

 

http://news.investors.com/ibd-editorials-obama-care/111113-678781-obama-admits-government-in-charge-of-health-care-is-inept-webhed-obama-admits-inept-govt-now-in-charge-of-health-care.htm#ixzz2kQrrbp00 

 

Great details in 

http://www.infowars.com/how-china-can-cause-the-death-of-the-dollar-and-the-entire-u-s-financial-system/

 

 

http://online.wsj.com/news/articles/SB10001424052702304868404579194101530086112?mod=WSJ_hps_LEFTTopStories

 

http://beforeitsnews.com/economics-and-politics/2013/11/obama-signs-deal-with-china-that-should-we-default-on-our-loans-they-can-take-u-s-property-2458518.html

 

http://www.examiner.com/article/impeachment-time-obama-grants-eminent-domain-rights-to-china-to-secure-debt

 

http://online.wsj.com/news/articles/SB10001424052702303460004579194213036953446?mod=WSJ_hpp_LEFTTopStories

 

 

http://intellihub.com/2013/11/15/russia-tells-the-truth-about-the-decaying-dollar/

 

 

http://news.investors.com/politics-andrew-malcolm/111513-679363-obama-obamacare-fix-affordable-care-act.htm#ixzz2kzrwCp3H 

 

 

http://news.investors.com/politics-andrew-malcolm/110613-678120-obamacare-if-you-like-your-health-plan-you-can-keep-it-not.htm?p=full

 

 

http://news.investors.com/ibd-editorials-obama-care/111513-679530-what-obama-is-trying-to-fix-is-the-constitution.htm#ixzz2kzulPBrX 

 

http://news.investors.com/ibd-editorials-obama-care/111513-679530-what-obama-is-trying-to-fix-is-the-constitution.htm#ixzz2kzv0JoxD 

 

http://www.infowars.com/congressman-warns-of-obamacare-secret-security-force/

 

http://online.wsj.com/news/articles/SB10001424052702304243904579200281204381194?mod=hp_opinion

 

http://beforeitsnews.com/alternative/2013/11/national-call-to-action-the-fate-of-the-country-is-now-in-our-hands-time-for-a-change-of-government-leadership-to-save-the-republic-gen-paul-e-vallely-2826518.html

 

http://www.investors.com/editorial-cartoons/michael-ramirez/679668

 

http://news.investors.com/ibd-editorials-obama-care/111813-679646-now-its-ok-to-talk-about-obamacare-repeal.htm

 

 

 http://www.foxbusiness.com/personal-finance/2013/11/18/wal-mart-criticizes-affordable-care-act-for-impacting-holiday-sales/

 

 

http://news.investors.com/economy/111913-679768-official-unemployment-rate-distorted-by-workforce-exit.htm

 

Today, America is a society where far too many of its members want/expect handouts & do not accept much or any personal responsibility for anything.  The country is deteriorating because there are enough Americans who have a love affair with government that has killed the desire for freedom.  There are too many Americans who want someone else to take care of them – they don’t want freedom, they want security.  We need to have a mindset change where people exercise individuality and self responsibility that lets a free enterprise capitalistic system thrive.

 

 

http://www.newyorker.com/online/blogs/johncassidy/2013/11/inequality-and-growth-what-do-we-know.html

 

 

http://www.infowars.com/the-october-2012-pre-election-jobs-report-was-faked/

 

 

 

http://news.investors.com/ibd-editorials/111913-679856-us-issues-1-trillionin-new-debt-in-just-6-weeks.htm

 

http://online.wsj.com/news/articles/SB10001424052702303985504579206210388287976?mod=hp_opinion

 

http://online.wsj.com/news/articles/SB10001424052702303653004579210172838389630

 

In February 2009, BO got $831 billion of stimulus spending. Not even seismographs can detect the results. Every speech he outputs about “middle-class folks” offers them the same solutions: more public spending on education, on public infrastructure projects and, even now, on alternative energy. As he tirelessly repeats what remain promises, the Labor Department’s monthly unemployment-rate announcement on Friday mornings has become a day of dread.

 

A normal post-recession growth rate of at least 4% would have made it possible for Mr. Obama and his progressive allies to chase virtually any pie-in-the-sky policy they wanted. Instead, the U.S. has fallen far off its normal 3.3% growth rate.

 

A U.S. president, faced with such devastating labor-market problems and persistently weak growth, should do anything—anything—that will give the American workplace more lift. Instead, he’s willing to entertain just one idea: more federal spending.

 

You know the theory here: Spend a public dollar and you get $1.50 of economic output. It hasn’t happened, but Barack Obama is gonna crank his old Keynesian Multiplier, created during the 1930s in the era of the Hupmobile, until it sputters to life.

 

Ponder, though, a partial list of the public-policy decisions that have flowed steadily out of the Obama administration and directly into a job-starved U.S. economy:

 

The no-decision on the Keystone XL pipeline and its union jobs; the 2,000-page regulatory law draped in 2010 across the entire financial sector; the shutdown in 2010 and then the slow-walking of offshore oil drilling; siccing the EPA on the utilities industry and the National Labor Relations Board on all industry; a 2010 FCC decision to regulate Internet growth; a significant tax increase this year; support this month for jacking up the federal minimum wage to over $10, certain to smother new jobs; the Justice Department’s $13 billion looting of J.P. Morgan JPM +2.00%  bank; and of course Hurricane ObamaCare.

 

Barack Obama has the U.S. economy on lockdown. It’s the worst thing this president has done. American resilience, and elections, mean it won’t stay this way forever. But for a lot of poor and middle-class folks, living with mom in the basement is getting old.

 

Write to henninger@wsj.com

 

 

Regarding Harry Reid’s nuclear option (Economics501):

Dems think they are in perpetual power now and wanted to solidify that with the filibuster elimination.  Why?   The demographics favor the Left.  So does huge and growing Dependency on Gov class AKA nanny state.  Those of us who favor free markets and limited gov better make our case plain and clear else we will be 100% socialist soon with an abysmal economy.  A good start will be to hammer the Dems over ObamaCare and convince all that greater the freedom our private markets have the more freedom of choice and prosperity for all.

 

 

http://news.investors.com/ibd-editorials-obama-care/112013-680068-obamas-run-down-america-to-save-obamacare.htm

 

http://news.investors.com/ibd-editorials/112013-680069-obamacare-website-has-major-security-flaws.htm

 

 

http://news.investors.com/ibd-editorials/112113-680266-senate-democrats-destroy-two-centuries-old-right-to-filibuster.htm#ixzz2lKy0IDir 

Follow us: @IBDinvestors on Twitter | InvestorsBusinessDaily on Facebook

 

http://news.investors.com/ibd-editorials/112113-680266-senate-democrats-destroy-two-centuries-old-right-to-filibuster.htm

 

http://nypost.com/2013/11/22/the-war-america-lost/ by William McGurn

 

Obamanomics (from Investors Business Daily – link below) : Amid reports of a spike in welfare spending and millions leaving the labor force comes more troubling news: The number of people on disability has leapt 20% under Obama as the U.S. jobs disaster worsens.

 

This surge in disability isn’t accidental, pardon the pun. There’s no mass epidemic causing literally hundreds of thousands to declare themselves disabled. It’s a result of the most miserable job creation in this nation’s modern history.

 

 

http://news.investors.com/ibd-editorials-obama-care/112213-680406-rising-disability-payouts-is-sign-of-job-market-distress.htm#ixzz2lQOLak2u 

 

Source for below stats:  socialsecurity.gov

 

No doubt about it: the numbers are alarming. When President Obama entered office, some 7.44 million Americans were receiving federal disability checks, according to data from the Social Security Administration. By October of this year, the number had swollen to 8.94 million Americans, a 20% gain. Total spending on disability has likewise risen by $31.3 billion to $140.3 billion, an increase of 29%.

 

 

Why is this happening? One obvious reason is that going on disability is an obvious and easy choice for many middle-aged and older Americans who can’t find jobs in Obama’s slow-growth economy. Yes, many are truly disabled. But the idea that a 20% jump in disability would take place in just four years strains all credulity.

 

Fact is, with minimal documentation you can go from unemployed and struggling to pay your bills to disabled and, at least, eating and paying for basics with a disability check. For some, that’s their only choice.

 

Evidence suggests hundreds of thousands of workers are doing just that. Add this to the disgraceful number of people on food stamps — 47.7 million, a near 50% gain since Obama took office — and the 46.5 million people now officially declared in poverty, and you have the makings of a social revolution of sorts.

 

With a smaller and smaller share of people paying for it all — 45% of the population pays no federal income tax — this is a recipe for serious social upheaval.

 

Millions of people no longer go to a private-sector job each day, but rather await a government check. As “compassionate” as that might seem, it isn’t. It’s creating a new class of dependents who’ll be more likely to vote for more and bigger government and higher taxes on businesses and those who do work — in short, a perfect voting class for so-called progressive Democrats.

 

Last week, about the same time as the disability data were reported, the Heritage Foundation released its own 2013 Index of Dependence on Government. Its broad-based government welfare index stood at 257 when Obama entered office in 2009. Just three years later, it stood at 332 — up 29% to its highest level on record.

 

These are frightening trends. The combination of soaring debt and growing dependence on government, as evidenced by the surge in disability recipients, endangers the nation, says Heritage, a think tank not prone to hyperbole.

 

“The U.S. has reached the point at which it must reverse the direction of both trends or eventually face economic and social collapse,” Heritage said.

 

The White House keeps touting its “recovery.” But a different picture emerges from the real economy — one where the real unemployment rate is closer to 13% than the official 7.5%, and millions of people have dropped out of the labor force and onto the dole.

 

Government dependency is poison to a republic such as ours. If we don’t break it soon, we’ll live to regret it.

 

 

Read More At Investor’s Business Daily: http://news.investors.com/ibd-editorials-obama-care/112213-680406-rising-disability-payouts-is-sign-of-job-market-distress.htm#ixzz2lQPjOfp6 

Follow us: @IBDinvestors on Twitter | InvestorsBusinessDaily on Facebook

 

 

 

 

…..  more from Investors Business Daily (IBD)

 

Millions of people no longer go to a private-sector job each day, but rather await a government check. As “compassionate” as that might seem, it isn’t. It’s creating a new class of dependents who’ll be more likely to vote for more and bigger government and higher taxes on businesses and those who do work — in short, a perfect voting class for so-called progressive Democrats.

 

Read More At Investor’s Business Daily: http://news.investors.com/ibd-editorials-obama-care/112213-680406-rising-disability-payouts-is-sign-of-job-market-distress.htm#ixzz2lQP82Ieg 

Follow us: @IBDinvestors on Twitter | InvestorsBusinessDaily on Facebook

 

Obamanomics: Amid reports of a spike in welfare spending and millions leaving the labor force comes more troubling news: The number of people on disability has leapt 20% under Obama as the U.S. jobs disaster worsens.

 

This surge in disability isn’t accidental, pardon the pun. There’s no mass epidemic causing literally hundreds of thousands to declare themselves disabled. It’s a result of the most miserable job creation in this nation’s modern history.

 

No doubt about it: the numbers are alarming. When President Obama entered office, some 7.44 million Americans were receiving federal disability checks, according to data from the Social Security Administration. By October of this year, the number had swollen to 8.94 million Americans, a 20% gain. Total spending on disability has likewise risen by $31.3 billion to $140.3 billion, an increase of 29%.

 

But this is just one of the many elements of the welfare system that are wreaking havoc on America’s finances.

 

The “trust fund” for disability spending has now been in the red for four straight years. The last time there were even three years in a row of red ink was during the stagflationary Ford-Carter era of the mid-1970s.

 

Why is this happening? One obvious reason is that going on disability is an obvious and easy choice for many middle-aged and older Americans who can’t find jobs in Obama’s slow-growth economy. Yes, many are truly disabled. But the idea that a 20% jump in disability would take place in just four years strains all credulity.

 

http://www.infowars.com/china-announces-that-it-is-going-to-stop-stockpiling-u-s-dollars/

 

http://investingchannel.com/article/266665/The-Great-Disconnect-United-States-Debt-vs-Growth#.UpBFdOKrqSp

 

http://beforeitsnews.com/economy/2013/11/obamacare-the-neutron-bomb-that-will-decimate-the-u-s-economy-2572932.html

 

http://www.ncbi.nlm.nih.gov/pubmed/21993024

 

http://www.zerohedge.com/news/2013-11-23/todays-wealth-destruction-hidden-government-debt

 

 

http://bastiat.mises.org/2013/11/got-the-wrong-right-but-the-right-wrong/

 

Blog by Economics501:

ObamaCare debacle is red herring.  Real battle is Start of BO total war against capitalism. Already insurance companies are blamed. All private companies will be vilified as never before.  This is classic Saul Alinsky tactics.  In crisis of your own making shift claim to your enemy, demonize it, and make it a moral battle – the “haves” vs “have nots”.  In the past with no evidence, the Left created a video with Paul Ryan pushing a granny off cliff. With much evidence, our Saul Alinsky trained, private economy hating BO is now in all out war to replace capitalism with his Alinsky variant of Marxism.  This is right in front of our eyes.  We must all resist peacefully and demand return to principles that made the US greatest nation ever – free markets and limited government.

 

 

From IBD:

The annual deficit for fiscal-year 2013, which ran from Oct. 1 to Sept. 30, totaled $680.28 billion, the Treasury Department said Wednesday, down from $1.089 trillion in the prior year. The latest report, released nearly three weeks late because of the partial government shutdown, arrived as a congressional panel started negotiations on government spending for the rest of the current fiscal year.

 

Despite the drop, the deficit remains high by historical standards.

 

The deficit fell to 4.1% of the country’s gross domestic product, the broadest measure of economic output, down from 6.8% in 2012. This measure, preferred by economists because it offers greater context, also remained historically high. The deficit peaked at 10.1% of GDP in 2009 but from 2002 to 2008 ranged between 1.2% and 3.5%.

 

For the full fiscal year, the Treasury collected $2.774 trillion, up 13% from the prior year and the highest level on record. The Treasury attributed the increase to a stronger economy, increased wages and higher taxes. Revenues equaled 16.7% of GDP in fiscal-year 2013, while spending totaled 20.8%.

 

Spending, at $3.454 trillion, was a little lower than a year ago, because of the troop drawdown in Afghanistan, less spending on unemployment benefits and automatic spending cuts known as the sequester. Contributions from mortgage giants Fannie Mae FNMA -8.68%  and Freddie Mac, FMCC -9.40%  the two mortgage-guarantee firms taken over by the government during the financial crisis, also helped lower the deficit.

 

“The nation’s deficit has fallen for the past four years, the fastest pace of decline over a sustained period since World War II,” Treasury Secretary Jacob Lew said in a statement.

 

In 2008 the deficit was $458.55 billion, and in 2007 it was only $160.70 billion. The last time the federal government ran a surplus was 2001.

 

 

http://online.wsj.com/news/articles/SB10001424052702304527504579168021920881270?mod=WSJ_hps_LEFTTopStories

 

http://news.investors.com/ibd-editorials-obama-care/103013-677356-the-phony-keep-your-plan-promise-was-key-to-getting-obamacare-enacted-webhed-obamacare-was-built-on-keep-your-plan-lie.htm

 

Blog by Economics501

 

Myth

Insurance companies were providing many substandard policies and ripping off customers with high proves.  ObamaCare with many more requirements will provide customers with much better prices.

 

Fact

In a free country consumers decide what policies they want.  Many ‘substandard’ policies were fine with consumers and they continued buying them.  After these policies were invalidated by ObamaCare, most consumers are paying much more than they did before and are paying for services they will never use.  This is a loss of freedom and a crime.

 

CNN reports that in September of 2010, in an attempt to let people keep their insurance plans, Senate Republicans tried to block the grandfather rule that is currently resulting in millions of Americans having their insurance policies cancelled. Democrats, including many who are facing re-election next year, unanimously voted to support the rule. The result, as we have seen, is two million already losing the insurance plan Obama repeatedly promised they could keep.

In its report, CNN points out that the whole point of the GOP efforts was to protect millions from losing their insurance. So what we have here is yet more proof that the GOP has been warning for years about this avoidable catastrophe, while the media and Democrats covered their ears and screamed happy talk.  

 

In September 2010, Senate Republicans brought a resolution to the floor to block implementation of the grandfather rule, warning that it would result in canceled policies and violate President Barack Obama’s promise that people could keep their insurance if they liked it. …

On a party line vote, Democrats killed the resolution, which could come back to haunt vulnerable Democrats up for re-election this year.

 

The bad news for Democrats is that every single Senate Democrat facing a tough 2014 reelection — Mary Landrieu, Jeanne Shaheen, Mark Pryor, Kay Hagan and Mark Begich — is now on record voting for a rule that will not only result in up to 20 million losing insurance they were happy with, but doing so after being warned that this would happen.

 

https://docs.google.com/document/d/13fJ6hPyCAJmaqOJ67GdmUXeYfGhQxK6pepkCLMgU_pM/mobilebasic?pli=1&viewopt=127

 

 

 

http://online.wsj.com/news/articles/SB10001424052702304655104579163761182702046?mod=hp_opinion

 

 

 

 

 

 

 

 

About economics501

1 - free market Capitalist; 2 - Fitness Entrepreneur; 56 years old, VP at an Investment Bank in NYC, ex Venture Capitalist, happily married with 2 girls. Education: Rutgers and NYU. I allow Ted Hruzd, my friend to blog at will here. He has many posts here. I have known Ted since we were both students at NYU. Ted also works for an Investment Bank as a VP in Equity Global Markets. ------------------------- I was very very Socialist leaning as a 22 year old. I then strongly believed in Gov role in helping the poor. However, as a USDA Child Nutrition Programs, I personally accounted for millions of fraud, abuse, and waste of tax payer money. I came to believe that the poor would be best served with less Gov programs and more with direct aid via tax system. Then after 5 years I became a free market capitalist, was a venture capitalist in 2007 and helped start 2 high tech companies. I dedicate this site to champion free market capitalism as the best road to Prosperity. Please join in. If you disagree, fine, but please post with dignity and class and be civil. Argue with facts always.
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