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U.S. Debt Situation Worse Than Italy

November 17, 2011 by  

U.S. Debt Situation Worse Than Italy

The European debt crisis has been in the spotlight for a couple of months already.

In recent weeks, the situation has gotten worse and is causing enormous volatility in global financial markets. After Ireland and Greece, two very small countries within the Eurozone, larger countries like Italy and Spain are now also struggling.

Italy has recently issued new government bonds with a five-year lifetime. The price for those new bonds is 6.29 percent. This is the yield that investors demand to get compensated for the investment risk they are taking. Back in October, Italy could still borrow at a rate of 5.3 percent. This represents an increase of almost 20 percent.

The departure of Prime Minister Silvio Berlusconi will not change much for now. It will take years to correct the mistakes of his administration, and structural reforms are desperately needed in many areas. New Prime Minister Mario Monti will have a very challenging job of turning the Italian situation around. Difficult? Very difficult. Impossible? No, but quick action is needed since financial markets are getting very impatient.

The situation in Italy is similar to the one in Greece, but probably not quite as bad. However, the fact that Italy is so much bigger makes the situation a real threat.

Italy has a debt burden of about 1,900 billion (euros) and it looks like they will need about 300 billion more next year. The help from the European Central Bank and the new European Financial Stability Facility (EFSF) will not be enough to save Italy. The country needs to take swift action in order to avoid insolvency.

The Italian parliament has recently accepted a new savings plan, but it will also require further spending cuts and privatization of state-owned enterprises to keep going. The situation looks scary, but it is possible it can be controlled for now and improved in the long run.

Italy is, for the European Union, too big to fail, and therefore a very different situation compared to Greece. Also, most of Italy’s debt is held by domestic investors and a comparably low portion of debt is held by foreign investors. In that sense, Italy’s debt situation is bad but manageable.

The situation with the United State’s sovereign debt is different. Although the U.S. situation has not captured much attention lately due to the European debt crisis, it has not improved at all. And what’s worse, no measures have yet been taken to address the situation. So while there are a lot of discussions in Europe about how to solve the debt problem, nothing has been done in the U.S. It is only a matter of time until world financial markets focus on the U.S. situation again.

How can it be that despite all these problems in Europe, the U.S. Dollar has not been able to gain ground versus the euro? It is still trading at around 1.37 (see chart below), and despite the headlines about the Greek and Italian debt problems, the European currency has not crashed. Actually, it has been able to appreciate against various major currencies of late. Are we missing a point here, or can we blame speculators for this obvious mispricing of currency values?

First of all, I don’t think that the market is mispricing the value of the euro. I also don’t think that the yen is as highly overvalued as many market participants believe.

The euro clearly takes some strength from the fact that countries like Germany and France are still doing relatively well. Germany is, right now, the star economy in Europe, hugely successful in exports despite some structural problems. But looking at debt ratios in most European countries should send an alarming signal and, in combination with the severe structural problems in many countries, one would expect the euro to be much more vulnerable.

Let’s take simplistic look at the sovereign debt problem for a moment.

Sovereign debt is public debt or borrowings that a country has. Simply put, the governments in the past have spent more money than they took in. Governments make their money from taxes, and use tax money to provide public goods and services. A government needs to manage its money in a way that taxes can be kept at moderate levels. However, if a country spends more money than it has available, it has to borrow money in capital markets to finance the shortfall.

This is exactly what the U.S. and many European countries have been doing for many years. For as long as a country’s total wealth is sufficient to cover these borrowings, the country should remain solvent. It might be difficult to raise taxes quickly, but what is important is that any shortfall in the finances of government is sufficiently covered by savings in the private sector.

Also, a government might have a lot of assets that it can liquidate over time to free up cash. This is typically called privatization. Countries like Greece and Italy, for example, still have a lot of government-owned assets that, over time, need to be sold as the countries restructure their economies.

European countries, as well as Japan (or Asian countries in general), are places where people tend to save a lot of money. This is in sharp contrast to the U.S., where the savings rate has been in a long-term downtrend for most of the last 60 years and has only recently started to move back up. This is a clear indication that people in the U.S. are deleveraging by paying down loans and mortgages in the face of uncertain times.

However, the overall wealth of American households is significantly lower than one or even two decades ago. This is mainly driven by stagnant incomes and a crash in housing prices. What makes the situation even worse is the fact that the government is running record levels of debt, which means that the overall wealth of America (private and public wealth) is significantly reduced to the levels seen back in the 1980s.

According to official statistics, Americans’ average household net worth fell by 23 percent between 2007 and 2009 and has not really recovered since. This hasn’t been the case in Europe and Japan, where the public debt levels look even more alarming (as a percentage of gross domestic product).

Compared to the overall wealth of those nations, their debt levels look much more moderate. For example more than 50 percent of Italy’s government debt is financed domestically. In Japan the number is even higher.

How public debt is financed therefore becomes the main question. Preferably, as much as possible should be financed by the country and its citizens. The higher the share of a country’s debt financed by foreigners, the worse the situation becomes. This is, in my opinion, the reason the euro and Japanese yen have outperformed the U.S. dollar recently.

From that point of view, the U.S. debt problem looks even more alarming than the situation in most European countries. When will the focus of financial markets switch back to the U.S. debt crisis?

Daniel Zurbrügg

is the Managing Partner of Alpine Atlantic Global Asset Management, a Swiss-based independent investment management firm. The firm provides clients with independent investment management, asset protection and family office services and is the issuer of the global investment newsletter Echo From The Alps. With a global network of partners, Alpine Atlantic's aim is to provide clients with true "turnkey" solutions for global investing. Prior to setting up Alpine Atlantic, Daniel held various positions with other banks and financial companies. Daniel is a Chartered Financial Analyst and regular guest speaker at international investment conferences.

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  • Realist

    Boosh did it all! But have no fear, lord Obama
    with his magic pen will give more hope and change
    to get the US out of trouble.
    He could have done something about it earlier but
    he wants to show the right wingers the real power
    he has when the time is right.
    (hmmm guess he’ll try anyway)

    • BigBadJohn

      Obama/Bush two sides of the same coin.

      Bush tried to stimulate the economy by cutting taxers and encouraging looser mortgages.
      Obama increased spending to stimulate.

      Time to cut spending, and let Bush’s tax cuts expire. Yes there will be hell to pay but better than a default!

      • 45caliber

        If this would solve all our finacial problems, I’d be in favor of it. However, the libs/progressives now in Congress tend to believe a tenth of one percent cut is significant – when it can’t even reduce our spending – while they would consider the increased taxes coming in as a new reason to spend more money. Until ALL acts are corrected, I prefer to leave things as far as the tax cuts as they are.

        • alexa

          I once considered myself a Republican. No more.
          As long as the US government continues to stimulate the economy with war and welfare, it doesn’t matter which of the two parties are in control.

          • 45caliber

            I gave up on both parties years ago.

        • BigBadJohn

          I agree but you can not pin it strictly on Libs and progressives. During the 2000′s conservatives controlled both houses and the presidency. They cut taxes and increased spending at the same time.

          Your choice which do you think is better, tax and spend or borrow and spend? The later is the main reason our national debt is out of control.

          We need a flat tax and balanced budget amendment. If everyone paid say 20% and politicians wanted to increase spending, they would have to raise EVERYONE’S tax, how popular would that be?

          • Alex Frazier

            I agree. That would definitely put an end to the shenanigans in short order.

            But the acceptable rate would need to be considered carefully. People who live paycheck to paycheck will be put out of their homes in no time flat with a 20% tax.

          • DaveH

            Those are not Conservatives, John. They are Neoconservatives.
            True Conservatives advocate obeying the Constitution, which hasn’t been the case for many, many decades. True Conservatives advocate Limited Government.
            I consider Liberals/Progressives to be anybody who advocates Big Government. That includes most of the Republicans as well as almost all the Democrats.

          • s c

            b, an old adage says ‘if you don’t understand the ^&*#$%@^* question, there’s no way you can render an answer that’s not pure ^&*#+@. It’s still true today.
            As it stands today, we have MANY people who are clueless and don’t want any clues and they demand to be seen as ‘experts.’ They think their emotions somehow ‘prove’ that they KNOW. SOME of those scummers are elected.
            Some in the real world dig for answers and try to spread the word. Most of the ‘caring,’ ‘concerned’ “experts” [OWSers] entertaining themselves across America are nation-destroyers who confuse Obummer with God.
            OWSers are a willing part of the problem. They didn’t get it right in the ’60s, and they don’t get it NOW.
            Like it or not, hyper-spending is synonymous with retardation. In 2011, if we’re not surrounded by retards, useful idiots and home-grown revolutionaries, it sure seems that way.
            All it took to bring them out of their closets was a prez who hates America, an incompetent Congress, hundreds of billions of laundered dollars and a whored-out media.
            So, whose side are you on, b?

          • Matt Newell

            The problem as I see it is that most of the people in congress (Republicans, Democrats, and Independents) are actually of the Liberal vain and do not want to give up their perks. They watch out for number one and that is themselves.

      • Old Henry

        The only tax problem we have is too much taxing. We have 47% of the populaton who pay ZERO federal income taxes, and in fact, many get money back that they did not even pay in. That has to stop.

        If Shrub had not gotten us into the Iraq war and had had a plan to quickly win in Afghanistan our debt and the economy would be in much better shape.

        The House needs to cut a bare minumum of ten percent from every fiscal 2011 budget item. fMost should be zeroed out.

        • BigBadJohn

          Funny, better check that rhetoric before repeating it like a minabird. If the bottom 50% paid 50% tax it would raise less than 600 billion dollars, so if they paid a reasonable 25% it would only raise 300 billion. You are not going to be able to balance the budget by taxing the poorest 50% in our country.

          I am in favor of a flat tax, no deductions, no credits, everybody pays the same with the first $25000 exempt for everyone. With that exemption, probably about 30% of the country still would not pay taxes.

          For a better understanding of that 47% see:

          http://www.cbpp.org/cms/index.cfm?fa=view&id=3505

          • vicki

            If you do not control borrowing and spending it matters not what tax rate you place on the heads of your workers. A balanced budget amendment is first and most important.

          • DaveH

            John,
            Everybody (adults that is) should pay the same. Let the people who can’t cut the check fill out the paperwork explaining why they can’t. That is the only truly “Fair” Tax.
            We’re in this mess because a very large portion of the population has no skin in the game, so why should they care to carefully scrutinize their representatives? That same large portion of people are under the delusion that they are voting themselves freebies, because they aren’t educated enough to know that there is no such thing. Only the Politicians and their politically connected pals benefit in the long run.

          • DaveH

            Right off the bat, John, your linked article is making claims I think are equivocation at best:
            “In a more typical year, 35 percent to 40 percent of households owe no federal income tax. In 2007, the figure was 37.9 percent”.
            I think, maybe the use of the term “households” is the key. Households can contain 2 or more adults. At any rate, here are the figures from the IRS posted by the National Taxpayers Union for individual payers:
            http://www.ntu.org/tax-basics/who-pays-income-taxes.html

          • Old Henry

            Well BBJ, they need to pay something no matter how small the amoumt / percentage and that business of getting money back that they did not even pay in has to stop.

            AS Little Barry Soetoro likes to put it: “They need to have a little skin in the game”.

            Actually the entire tax system should be scrapped.

          • Old Henry

            Vicki:

            The BBA MIGHT be a good idea if it was written so that Congress had to have a 2/3 or 3/4 (best option) majority vote to raise taxes to meet the requirements of the BBA.

            Without that restraint those career criminals would simply take the easy way out and raise taxes.

      • Bob from SoCal

        I believe that Ron Paul has one of the best solutions to this problem. Default on the phony debt that was created by the Federal Reserve through the fiat money system. This debt was used to enrich NWO elitist bankers, and rip off the American taxpayer. Close the Federal Reserve and give that power back to Congress, where it constitutionally belongs. And to start downsizing the Federal government where the NWO is so deeply entrenched. He will downsize by one trillion the first year. Just so you know how much one trillion is; if you started paying me one dollar every second it would take you 32,000 years to pay me one trillion. 15 trillion would take 480,000 years. This is the only true solution to this problem. Our country is still economically powerful. It would not take long to recover from a default if we can get the feds out of our back pocket.

      • dfinch

        Bush is not the one that loosened mortgages. He tried to rein in Fannie and Freddie in 2004 and 2006 but Franks and Dodd did a good job blocking him.

      • JTB

        obama will never cut spending but he will let tax cuts expire!

  • m

    Surprise Surprise, worse than Italy.
    Italy does not borrow trillions from China to take care of bums here and abroad.

  • Charles

    It’s all worthless paper money anyway. Whenever people, even conservatives, talk about the national debt, the deficit, etc., they’re in reality talking about Monopoly money.

    • PATRIOT 101

      Yes, it is monopoly money, but it has been secured by your net worth.
      “Full faith and Credit” of the USA. The Congress has co-signed this debt with the enslavement of all americans and their personal property. Leagally (so they say) they can guarantee the national debt. In reality they can’t as long as we have some freedoms left, such as a gun and a few bullets.

      • 45caliber

        Patriot:

        Sadly, you are right. They secure the loans by OUR net worth – not their own. And we are the ones who lose everything while they continue to line their pockets. I wish I could take out loans in someone else’s name while spending the money myself.

        • Old Henry

          I pledge allegiance to the debt
          Of Corp U.S.
          And to the foreigners who own the Corp
          One people under the thumb of the Fed
          With taxes and bondage for all.

    • Alex Frazier

      Speaking of Monopoly money, I thought you guys might find it as humorous as I did that in the actual game of Monopoly, it says plainly in the directions that the bank can’t run out of money. If you run out, just write denominations on pieces of scrap paper. lol.

  • s c

    Let Soros, Buffet and Gates pay for thw whole, damned thing. If we knew the whole truth, about half of all the “rich” people in America [Hollywood stooges, Wall Street economic hookers, lobbyists, elected scum, and people from many walks of life] are the main cause of what it took to get to this point.
    I don’t care what your job is, and I don’t care how easy you’ve had it for so many years, if you aren’t interested in freedom in America, you’ve got a LOT of enemies in this country. No matter what happens,
    you elected filth in Washington had damn well better start hearing that clock that’s been silent for so many years. It’s swinging back this way, and it has YOUR names on it.
    If the laws of the land won’t protect the people, forget protection for elected and appointed swine who think they are above the law(s) and are somehow “elite.”

  • Thomas B

    Of course, the obamma administrtion in its’ goals of destroying the U.S. is driving us into as bad a debt as possible. It is all an illusion too. If Romney were to be president, he could just nullify everything obamma has done and we cpould go back on the right track. Everything the liberals do is an act of illusion meant to fool, misinform and cancel out our past. It can all be changed back again.

    • PATRIOT 101

      Thomas,
      You are living in “La-La Land”! Romney is all about big military, interventionism, nation building, and foreign wars. In fact he guaranteed a war against Iran last Sat. night when he pledged Iran would not be permitted to have a nuke.
      Romney would not find ways to roll back Obama’s war on freedom; rather play lip service to patriots while continuing to steal their liberty.

      • Scott in SC

        Patriot you’re right about Romney; he is also a certified gun grabber. Anyone who wants to disarm the civilian population should be considered a threat to our liberty.

      • 45caliber

        And since Romney put in the medical system in Mass. that is almost a duplicate of Oblamacare, I’m certain he wouldn’t repeal it either.

        He is only a Demo dressed in GOP clothing. He isn’t even a GOP lite. Forget him.

  • Tony Newbill

    I watched Morning Joe and they were talking about the Book ” THROW THEM ALL OUT ” and The Loop Hole Congress has to Trade stocks on Insider information is why we have Lobbyism Growing in Washington causing Great economic inequality in the USA !!!
    Talk about a Loop Hole in the Tax Code that Needs Closed !!!!

    http://mojoe.msnbc.msn.com/_news/2011/11/17/8854290-an-excerpt-from-peter-schweizers-book-throw-them-all-out

    When Our Law Makers are drafting Legislation that effects the Economy and the process in which quality of products are realized and the price discovery of a product is driven by its demand due to quality over any other reason then the benefit to humanity and equality will be almost a guaranteed result . The way this Loop Hole at the top of the food chain is designed today by what the Author of this Book is writing about creates a drag on the economies ability to find the very best Innovation from a demand on supply because of the predetermined favoritism for personal gain before the demand from the free market is put to work Proving the quality of the innovation and product line of a supply-side economic system , the FREE market is not able to function right !!!!!
    The way the Economic policies need to be drafted is in the same way the US Patent Office uses the process to determine a Innovations Novel qualities that determine its unique value and benefit to the supply system that is going to Improve the quality of life for humanity !!!!!

    • DaveR

      Tony,

      The US Patent Office when applying US patent statutes (35 USC 101 et seq)does not need to consider economic benefits or if the alleged invention is an improvement. According to the statute, the claimed invention need only be new (not previously known to the public), useful (function, whether or not an improvement over other ways to achieve the same result), and unobvious to a person of ordinary skill in the art (area of technology) to which it pertains. Yes, I used some legalese in my response, because that is inherent and inseparable from the job done by the US Patent Office.

    • johng

      Professor Irwin Corey couldn’t have said it any better.

      • Julius Lohr

        Irwin Corey-Ron Paul=same person!

  • Lino

    The trouble is we have a wrong President and wrong Congress members
    at the wrong time and at the same time.

    • skyraider6

      Short and sweet

    • Cawmun Cents

      The problem is that we havent got our pitchforks and torches out and hunted down the Frankenstein that is our nations debt.
      Only when we burn down the houses that hide the monster,can we be rid of its evil.
      Does this mean I advocate actually setting fire to a building?
      No.
      The monster doesnt hide in a particular building,but any of many.
      The morons who still think that the government knows how to spend my money more efficiently than I do,are still let rife to run amongst us.
      They are the foundation of the building that needs to be burned.

      Their ideals are the ones who are currently bringing us to ruin.

      They point their crooked fingers at those who say no to spending,and accuse them of burdening us with taking away our entitlements.
      Since when has anyone been entitled to anything?
      Never.
      You are not born with any guarantees.
      There is no contract which says you get x amount of something for just living and working like the rest of the world.
      Someone imagined that they could get you to loan them your money by giving you the promise of a return.
      As it so often turns out in the world today,you went for it and they couldnt live up to your expectations,by delivering their promise.
      You lose.
      Life is tough,suck it up.
      Now if you tell them that you arent going to loan them your money,they tell you that they are entitled to borrow your money and give it to someone else.
      So who are the entitled here?
      Is it you or the government?
      And how is it that you are responsible for paying off their debt?
      Do you remember signing a contract to that effect?
      I have not.
      No my fellow Americans,we are not responsible for piling up this debt.
      But those who think they are entitled are.
      They reside in many places.
      They usually frequent places where words like marxism and communism are batted about,as if they have no real meaning to those who wish to impose those words upon us.
      Leave us never forget that these are the very same ones who actually believe that they can make those words work here.
      Despite the fact that historically,nothing but tyranny and dictatorships come from them.
      They want to be your friends while they stroke your egos and enslave your minds.
      Go ahead and fall for it.
      Maybe it will work this time?
      Dont hold your breath.
      You may be in for a long disappointing ride.
      You should probably ask others than your college professors,who may have lived in that environment,just exactly what it is like.
      But you wont.
      So you deserve the hell you will be getting in return for your hard work.
      But dont worry.
      Arbeit macht frei.
      Work will set you free.
      -CC.

  • Joey Biden

    Thank you Obuma and Congress….for nothing.

  • skyraider6

    They must all be held accountable, They just can’t keep screwing up and walking away like nothing has happened.Time for an American people change. Throw them out with our votes next NOV.

    • PATRIOT 101

      It will be nice IF we get the chance to vote!!!

      • PATRIOT 101

        I believe we will only get a chance to vote if the vote really doesn’t matter. Just as Nancy Pelosi once said: She believes “Elections shouldn’t matter so much”!
        Indeed it won’t matter much unless the republicans accept and select consitutional conservative as their nominee.

        • Old Henry

          Yep. Ron Paul

      • 45caliber

        Patriot:

        Or if our votes are counted correctly!

  • Sharon

    Will a candidate please challenge BO’s elgibility to run in 2012?

    • Old Henry

      Sharon:

      I read an article this morning in, I think, WND that a court in NH is going to hear a case brought by Orley Taitz and 2 NH state reps challenging the fraudulent BC and the stolen SS number Little Barry is using. The hearing is at 2 pm Eastern today, 11/17/11.

  • Chris

    What most people don’t know is that America went bust and asked the bank of England for a loan. The bank said what have you got. America said all I got is these people. Fine I take them. We have been incorporated. The people is the booty. Look at your drivers license. Your name is in capital letters. That means a corporation. You do not sign your name with capitals. Your worth is about $1,000,000.00 That is what they borrow on. That creates this debt. Debt is putting you in prison. You are not free. We need to get rid of the federal reserve as it takes all the money. Who else is making the dollar go down? The speaker of the house says that Obama is awol. If I was awol I would be in prison or fired. Well we don’t have anybody to stand up. Obama needs to be fired.

  • Ray

    We have no debt problem that dismantling the Federal Reserve would not correct, that sendng the United Nations, an anti American organization that we have allowed to reside on our soil, and revisisting our foreign aid would not resolve. There is a elite group of individuals that have orchestrated this struggle that we are caught up in and continue to pull the strings that keep the world, to include America is a struggle for economic survival, as they strive to accomplish their goal of a one world government.

    • DTOMNURSE

      You are right on the money. The United States actually the American people is the only thing standing in the way of realizing their dream of The New World Order. They have always known that We the People wil not give up our soverignty without a fight. They are hoping, or should I say banking on, times to get so bad that we will go groveling for their help.

  • Scott in SC

    I just thankful we have enough money to keep police on the street and protect us from all the dangerous criminals.

    http://www.youtube.com/watch?v=t7wlx95Ztsw&feature=related

    • 45caliber

      Great irony! The cops protect us! LOL! The courts have already ruled that the cops are not supposed to protect us.

      If you want to be protected, you have to do it yourself.

      • Scott in SC

        I hear you, and I do plan for my protection. I’ve got a shooting range with targets from 25 to 600 yards and practice regularly. I’m also a big fan of the 1911; you gotta love them.

    • DaveH

      The coercive power of the Biggest Gang in the Land.

  • Alex Frazier

    I have the best solution ever. Let’s invade Iran! That’ll make things better!

  • m_c_hill

    Since these ‘discussions’ invevitably come down to a Ron Paul vs anyone else ‘arguement’…

    Will the Paulista’s answer these question?

    Did not Ron Paul attempt already to run an independent third party contest to represent the USofA as president?

    Did he not already return to the ‘Republican’ party stating that attempting to start a third party had been a mistake because it was just too difficult under the 2-party rules entrenched in a majority of the American States?

    I have no arguement that he IS incorrect in any of his understandings of the facts on the ground. He IS stating that as President he would have enough power to affect any of these facts on the ground. On its face this is disengenuous bordering on dishonesty or total self-dillusion.

    Sen. Paul has been totally consistent for 30years — it begets the question How many senators has he persuaded his policies are the way
    to go? How many endorse his campain? How many in the House? The supreme court?

    If he carries the Republican Nomination and manages somehow to carry a 50.01 percent win in the National Elections, which is about the best the Republican Party have managed in the last 20years – How will that be a MANDATE for the amount of change he advocates in the short period of time that HE expresses it needs doing in order to be effective?

    If he becomes POTUS and abolishes the fed – Nullifies the Debt (owed to Multinationals and other Soverein Nations) that could be the best thing that ever happened for the American People – IN A DREAM WORLD…What about the rest of the world – He would make the United States a Pariah nation – what country has ever been allowed to nullify its debts without facing sanctions from the rest of the developed world?

    Nobody can declare a ‘Eutopia’ and have it to just happen. The rest of the World is holding the debt created by this nation…they count it as real money, and their Economies are based upon these ‘hard assets’. The instuments may be illegal and unconstitutional but they
    are instruments of good Faith. Telling the rest of the World to go to hell and actually sending them there are two different actions. This would be an act of War…the rest of the world ‘might’ wait for a return to common sense, but S. Paul cannot guarantee that. What concern does he express for the rest of the world?

    If elected he would be impeached in months. Claiming All others are stupid extensions of the status quo is equally obtuse to claiming S.Paul is ‘crazy’. The presentation of ‘common sense’ answers from other candidates needs to be revisited. I use the words ‘common sense’ not to mean any ‘understanding’ of the truth. I use the phrase in its more common vernacular – what makes best sense for all parties involved.

    My nomination is
    Cain – true conservative perspective / decision maker / Top of the ticket…
    Gingrich – true idea man / consensus builder / extremely considerate of what the American People actually want vs what will actually work / VP and Adviser…
    Ron Paul – /Person of honor /Integrity / Head of the Fed where he can orchestrate full disclosure and transparancy and phase the sucker out if it is trully unfixable…
    SaraPalin – Secretary of State
    MittRomney – Official footstool of all the above

    On my ticket each of the above get what they are really after.

    mchill/tampa

    • DaveH

      So, we should just give up and elect a man who makes no pretense about ending the military escapades, and no pretense about ending the futile drugs wars? Yeah, sure, that will get us out of this mess. Dream on.

      • DaveH

        I heard the same kind of crap 30 years ago after Carter had trashed our economy. Those people who thought things would change by electing “sensible” Republicans found out differently.
        It’s time for the “lesser of two evils” Dream State to end. We need to put people in office who will tell it like it is instead of pulling the wool over the voters eyes while the Leaders feather their own nests.
        Ron Paul tells it like it is. Herman Cain tells us what he thinks we want to hear.

      • m_c_hill

        Give up – hell no -

        concentrate on the real problem … eliminate the tax code … control and phase out the fed

        Cain advocates that we can contain Iran without war, or direct involvement…

        Can going to war with china, russia, india, and all of Europe actually be a real alternative?

        • DaveH

          That’s the best you have — a non sequitur?

    • Alex Frazier

      m_c_hill

      Paul ran as a Libertarian. Too many people are party particular, so it’s difficult to get enough votes. Not everyone votes for the person. Many vote for the party. So running on the Republican ticket is more advantageous.

      FYI, he’s not Sen. Paul, he’s Rep. Paul.

      Does it matter how many Senators he has persuaded concerning his policies? Is he now responsible not merely for his own behavior and politics, but for those of others as well?

      He’ll get the changes done as quickly as Congress will allow them to be done. If they don’t get done, don’t blame Paul. We all know what he plans to do.

      No one said Paul would nullify the debt owed to other nations. His plan is to end the Fed, cut spending, reduce taxes, and balance the budget. The only suggestion he ever made about defaulting was to the Fed itself, based on the fact that the Fed bought our bonds with money they didn’t have, so we can pay them back with money WE don’t have. It’s poetic justice if you ask me.

      Paul would not be impeached. The President would have to break the law for that to happen.

      Many are not revisiting the answers of the other candidates because the first visit wasn’t pleasant.

      • DaveH

        Very Good, Alex.

        • Alex Frazier

          Dave, do I correctly remember someone accusing you of being a liberal? You have the occassional comment that raises my brow a tiny bit, but you strike me as being a little too level-headed to be an actual left wing liberal.

          Did I hear wrong, or are you just a wierd variety of the liberal genus?

      • m_c_hill

        is that the best I can do?

        may be, hope not

        “Does it matter how many Senators he has persuaded concerning his policies? Is he now responsible not merely for his own behavior and politics, but for those of others as well?

        He’ll get the changes done as quickly as Congress will allow them to be done. If they don’t get done, don’t blame Paul. We all know what he plans to do”

        If he is Rep Ron Paul my answer would be – Certainly he is only responsible for representing his constituents or at least only responsible for being acountable to them…

        Does that carry the same weight if he is POTUS ? I think that would be a game changer. If he claims he can do all these great things and then can not – where is the benefit to his constituents then – because then his constituents will be all Americans. As far as I know there is no ED medication for an impotent president

        m c h

        • Alex Frazier

          I think you are looking at the potential situation backwards. If Paul is unable to get things done, it won’t be a case of the POTUS having ED and unable to function properly, but more a case of Congress having VD and being unable to function without infecting everything they touch.

          It’s important to remember that the POTUS is not a king. He doesn’t have supreme authority, despite a number of them in the present and past who may have believed they were and did.

          The President is only one part of three, and it takes all three bodies to make things happen. That’s the balance of power to keep things in check.

          Unless you are Obama. Then you really do think you’re a king with unlimited power and authority to be able to make laws by executive order and bypass Congress.

  • http://CenturtLink William Barnes

    First of all we are broke! The congress keeps threatening to take from social security. We true legal americans have paid into that system all our working life. But the congress allow illegal aliens to get into the ss systen who vever paid into it. And they(congress) do not intend to stop it. Why is this being allowed? And people like Hillery Clinton are still giving millions and billions to other countrys which we do not have. Why is our government so bent on helping other countrys while they allow our country to fall apart. And why are certain congressmen given so much power,when they are suppose to be elected officials doing our bidding. The spending by congress will not end until there is nothin left and we are totally broke. Obama and Pelosse are determined to ruin us by spending us to death. Obama is the biggest enamey of our country. Where is all the money at that was given to the banks? It was put in rich crocks pockets and is being wasted by them. This was Obamas gift to them for getting him elected. Absolute power will corrupt absolutely!

    • 45caliber

      William:

      Why is our government so bent on helping other countrys?

      The people of the country want everyone to like us. So they are willing. I think, however, the politicians do it because 1) they get paid to do it by the other country’s lobbists and 2) they want a place to run for protection if the Americans ever do decide to do something about them.

      • DTOMNURSE

        The answer is very simple – BECAUSE they profit from it.

  • blevit

    As the time for action to save the country gets shorter the dawning of why becomes more clear. The absolute given is we, the working majority have let this arrogant,pompous government to become a total self serving entity,completely oblivious to the NEEDS of the country they swore to serve. The action must be taken on the head of the snake (congress totally) to stop these imbeciles from spending!

    The number ONE item is to take away their right/ability to take these bribes from big money to make their decisions,after all do we not elect these people to think for themselves rather than base their decisions on their own monetary benefits. This immoral bribery must end as soon as possible.

    Please,Please get over this misguided notion that ANY one party,or individual elected official is better than the other as they come out with the same old rhetoric constantly to keep us off guard “its the other guy/party NOT me/us”. This tired old bull keeps we the people fighting amongst ourselves while they sell our country.
    See them as just one leach without one thought for our country.

    • m_c_hill

      eliminate the Leach-in-chief…

      then eliminate the tax code…this eliminates the power of congress to extort camp pain contributions from business as ‘protection-money’

      Businesses protecting themselves from government intervention, or attempting to buy ‘tax’ advantages over their competition is the root of this ‘culture of corruption’

      Cain, Gingrich,and Paul all advocate a flat tax, with a built in poverty protection policy.

      • DaveH

        Herman Cain has his 999 plan, 9% Personal Flat Tax, 9% Business Flat Tax, and 9% National Sales Tax, with the ultimate goal (he says) of a so-called Fair Tax.
        Beware of Greeks Bearing Gifts. Once they get the people accustomed to both an Income Tax and the National Sales Tax, who wants to bet that the Government will give up either? The Fair Tax talks about eliminating the 16th Amendment, but only sometime after the Fair Tax is fully implemented. Don’t kid yourself. It isn’t going to happen. Once the Government gets their foot in the door, it isn’t going to be easy to push them back out.

        • DaveH

          And for those gullible people who buy into the 16th Amendment being revoked later, I ask what would keep the “Fair Tax” promoters from pushing a Bill that said the Fair Tax would be implemented only after the 16th Amendment was revoked? Nothing.

        • m_c_hill

          Congress can pass any tax at any time and get it past the supreme court, what is capital gains tax? what is Death tax? Luxury taxes have been tried in the past… there is no protection in the 16th amendment- it just provides one stream of income – with no provision
          for limits or progressive tax schedules – with equal protection there is no constitutional provision for taxing the rich and paying EIC to the poor Its a red herring arguement

          The fact of the matter is most taxes are hidden and are paid by the end consumer … its not CALLED a sales tax, but nobody – including RON PAUL is denying it is there already

          Cains proposal is revenue neutral – dollar for dollar each and every one of those dollars is comming out of the bottom line…out of ‘our’ pockets. I am using our to mean every earning and spending American…

          If you are paying a state sales tax and the hidden federal taxes every time you buy a product anyway there is NO net change. The only difference is that the 30percent below poverty are protected by a safety net, and you move the line on people who ‘see’ their actual tax burden move from 47percent who think they are getting a free ride off the wealthy to a more accurate reflection of the reality that people who actual pay tax is closer to 80percent.

          Too long the Rich get to play/pretend that they pay all the taxes, and
          the middleclass will see the real cost of government ineptitude but they will see that the ‘cost shift’ to the rich really doesnt ‘help’.

          If you have to you can avoid buying ‘new’ for quite some time and you can therby increase your spending power, perhaps even initiate savings…saving to buy major purchases is a habit the populace needs to be led back to gently.

          I am not saying that is the whole answer … just that it is a major step in the right direction.

          Personally I think you need to stop jumping to the knee-jerk analyses
          that you will be paying more in federal taxes, and take a closer look at what portion of what you spend now is actually ‘hidden’ federal taxes … the convoluted system of corporate welfare may appear to save the consumer monies on the surface, but these companies still pay substantial monies to the federal government to buy these ‘breaks’,and end up getting protections from competition that are both unfair and unAmerican.

          Most of the resistance to the idea is coming from the left exactly because it eliminates the hidden income streams that the public never sees and are quite use to paying…tax the oil companies and gas prices go up- imagine that…give the major oil companies support to be too big to fail and the price of gas goes up -

          Do not kid yourself that the Fed can do this on its own = What the Fed has done is give the government a credit card with no limit – can they be responsible if the politicians you and I have elected have thus far played that credit card to the limit, when we reward them for doing so by re-electing the same profile professional politicians.

          mc

  • DTOMNURSE

    In come the IMF / World Bank to the rescue and the taxpayers are on the hook for trillions more to bailout other socialist fiasco. Oh yeah, this is my idea of utopia – can’t wait for the next5 shoe to drop.

  • JOSEPH FOSTER

    What is needed is change, when you can no longer can afford to be the policeman of the world you discontinue the practice, when you decide to change as Russia and China you will solve America debt crisis, Russia discontinued a bad habit of supporting Eastern Europe that she has now abandon.
    When you eliminate the practice of medicine as a free enterprise system for profit and adopt a simple medical plan as that of Canada you will reduce the fraud in the Medi care system. When you change you will eliminate many of the unnecessary Government agencies that crank up report that many do not read. The list goes on and on. Increase in Taxes without change merely gives the Government more money to spend. By Joseph Foster, Author ‘’Seeing Red’’ to be published worldwide January 15, 2012

  • Helen2

    m_c_hill

    I don’t know what utopia you live in but it must be nice. Gingrich is not a conservative. He’s actually a communist/socialist. In the book “Toward Soviet America” by William Z. Foster, he states that the communists wanted a Department of Education to control the schools and what is taught. Newt voted for the Department of Education. When he was house speaker, there was no roll back of big government at that time and there won’t be any this time either. Newt’s commitment is not to the constitution, like Ron Paul’s is. There is nothing in the constitution that gives the government the right to control education and since the Department of Education came into being, the dumbing down of our schools has gone full speed ahead. In addition Newt also was committed to making 68,000,000 acres of mineral rich land in Alaska to being a federally protected wilderness. The constitution does not give authorization to do that either.

    In addition, he defends the Obamacare mandate. He partnered with Pelosi on the global warming hoax too. He has a long history of liberalism and big government ideology: in the Dept, of energy, education, GATT, NAFTA, and WTO. He is a member of CFR (the purpose of this organization is a one world government) and Tri-lateral commission (which wants to bring about the surrender of our sovereignty). During Newt’s Contract with America,it produced NOTHING!!his promise of a smaller government was ignored. He actually orchestrated further expansion of the government.

    When he became Speaker of the House he recommended several books to the house members to read. None of them was the Constitution. One book was called “The Third Wave’ by Alvin Toffler. He is a communist that things the constitution needs to die and be replaced. Sorry, I don’t agree that the constitution needs to die. He believes in giving illegal immigrants amnesty and he wouldn’t even vote to get a 1% decrease in foreign aid. When Alvin Toffler wrote the book “Creating a New Civilization”, Gingrich wrote the introduction.

    He has said he is a big fan of Woodrow Wilson and Franklin Roosevelt – who I feel did nothing to help us at all.In July of 1995 Gingrich said, “The American challenge in leading the world is compounded by our Constitution. We need to rethink the constitution.” He is also a strong proponent in a strong central government.

    In 1996 when Ron Paul sought to regain his seat, Newt went out of his way to keep Ron Paul from winning. He went to over 50 members of the house and asked them to work for Ron Paul’s opponent. Now if he were a conservative that believed in the constitution, why would he not want Ron Paul in congress?

    I will never vote for Newt Gingrich!! The man is a liar and wants to do away with our constitution and our beloved country. He would be just as bad as Obummer is today! It would be like jumping from the frying pan into the fire.

    Everything I have said here can be verified, by just a little bit of research. If you don’t feel like doing your own research, I can give you website addresses, but why would you depend on my research. You should look it up for yourself.

    As far as I’m concerned, Gingrich doesn’t know what I want and he doesn’t care what I want. He only wants to make a name for himself. We actually need to fight his campaign as hard as we can.

    • DaveH

      Good stuff, Helen. Thank you.

  • dixiesuzan

    Always remember, governments including nations don’t go bankrupt. It is the citizens of them who go bankrupt. The citizens can’t pay the debt. The debt goes beyond the taxing power of the State. It crosses a point where seizure of all assets is inadequate. If the USA demanded seizure of all privately held gold and silver within the USA and used troops to take it could the USA pay off its national debt?
    Governments don’t go bankrupt. The citienry goes under first and then the government formally recognizes it.

  • http://Google maurice

    The answer to the “Debt ceiling debate” is spelled out in detail right there in the Constitution, ARTICLE 1, SECTION 8, which starts out:
    “The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts, and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.
    “To borrow Money on the credit of the United States;”
    Further in Paragraph five, it says:
    “To coin money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures:”
    No where in this Constitution does it authorize Congress the authority to delegate ALL OF THESE POWERS TO A PRIVATE BANKING CARTEL!
    “The Federal Reserve” is no more a part of the Federal Government then “The Federal Express” air courier, or the “Federal Can company” nor the “Federal Trucking” company. All four are in Federal in name only and neither is a part of the Federal Government. Check it out!!
    And the TENTH AMENDMENT of the Constitution forbids them from changing this Article.
    Under Article 1, Section 8, it authorizes only Congress this authority, which creates a “CREDIT MONEY system,” where the U.S. Treasury Coins, or creates, all money, needed for business expansion, and spends it into circulation, Debt free, for all Federal spending. The Government, and not the Banks, loan what money business needs for expansion, not the Federal Reserve banks. Even to the Banks, at a lower interest rate.
    At present, the Federal Reserve System, requires that for every dollar created out of thin air for government spending, We the People owe the FED (this private banking cartel) interest on every dollar. That interest, alone right now amounts to over $1.6 trillion. During the 2008 stimulus give away, we the people got somewhere around $600 where the FED received $1.2 trillion.
    Congress nor the President, have no control over how much money this Cartel creates out of nothing. That money created should belong to the producing people, not to an outlaw banking cartel.
    Through all of this, even the IRS is controled and enforce through this outlaw banking system.

  • JimH

    I read alot of postings about changing the taxation system. That is ONE part of it.
    We aren’t this far in debt because we are under taxed.
    The unsustanable spending and borrowing has to end before we can even begin to dig ourselves out of debt.
    You can’t pay the Visa bill with your Master Card for very long, before it all catches up with you.
    Mama Mia, even the Italians are starting to get it.

  • http://MSN John AZ

    Let the Bush tax cuts expire for EVERYONE!
    How are we going to pay off this Huge Debt without raising taxes?

    Better bite the bullet now and cut the spending AND the entitlements before we end up like the EuroZone.

    We are already bankrupt and were just playing the “dog and pony” show to appease the rest of the world. When the “house of cards” collapses, it will be like nothing we have ever witnessed before.

    GOOD LUCK!

    • JimH

      John, How much more revenue will come in if the Bush tax cuts expire?
      No where near enough to cover the wreakless spending and borrowing.
      How much government spending is unnecessary? Most of it.
      We aren’t this deep in debt because we are under taxed.

  • Helen2

    Dave H,

    Thank you and you’re welcome.

  • Thinking About

    When Congress starts doing their job we just might start seeing some solutions. All the members of Congress who took the grover Norquist pledge should immediately resign their office because of conflict of interest since the oath they took as members of Congress was to uphold the Constitution. Now this Congress is controlled by the 1% and to heck with the 99%. The repeal oh Glass-Stegall has allow bankers to disregard all sanity and should be reinstated. Congress needs to work for a change. With 9% approval should explain they are the problem.

  • JC for Freedom

    Don’t you get it guys. END the FED!! The global problem is CENTRAL BANKING and our central bank is the federal reserve. Until you abolish
    that nothing will change. Read about it.Education is critical in the
    elenventh hour. It is later than you think.

  • Danny Liu

    The real reason they don’t want to abandon Afghanistan is, because of the Exxon Mobile’s pipeline pumping oil from Afghanistan, it took them to years to complete, after use troops landed overseas. George Bush Jr. brags he went to Iraq for the oil, to show off to his affluent friends. So instead of half the national deficit, we have it double, they want to build permanent bases in Iraq and Afghanistan, so big oil, and the Republican’s can get rich. So why do they want to make Afghanistan a permanent duty station so they can protect the interest’s of big oil and the pipeline, before they started drilling and pumping oil out of Afghanistan, the country was considered the largest untapped oil resource in the world. They don’t talk much about the pipeline now because the Billionaire’s and corporations have silence everyone. I don’t vote and support neither party. George Bush Jr and the Republican party wanted to control the oil infrastructure of Iraq, and Afghanistan to enrich themselves, Billions traded for the corporations, while America accumulated Trillions in national debt, not such a good trade off, but it was for 1% of the population. The people of Afghanistan live simple lives as farmers and ranchers, living off of mountain goats, and sheep’s, and simple crops, too stupid to realize what they have an abundant source of natural resources that they do not benefit from, while Hamid Karzai hordes over 100 Billion in secret accounts for himself. The people of Afghanistan use horses and donkeys, and pick up trucks, as their main weapons, while military contractor’s keep building new weapon system’s for themselves and get richer, America goes down hill in debt. China owns 11% of the national debt, and Japan owns 10% and they are over 200% over GDP in national debt. So who owns most of the national debt Private Security Firms profiting off the national debt of the U.S. Instead of precision bomb strikes to wipe out Iran’s Nuclear facilities, they want a full scale war to glamorize themselves, and spend 90 billion dollars a year, and go start a 3rd war. Republicans say it is a clutch for woman and their kids to live off food stamps, and they should be cut off from the system, and starve to death, just like people who can’t pay for medical treatments, they should just die. How broke is America, just like when the U.S. was involved with the Tutsi and Rwanda’s fighting the U.S. didn’t do much, but give them U.S. made weapons and they fought it out by themselves, while people guarding the U.S. embassy didn’t do anything to fight people who were getting slaughtered right in front of them.

  • http://gillysrooms.blogspot.com gillysrooms

    Everything looks so easy to fix according to most readers responses. Now let me ask…does anyone know what Asset backing is behind the loan liabilities which the USA owes, or the Italians owe?

    Has anyone added up the value of all the land and buildings they own but dont use and all the buildings they own and do use? What are the other assets and reserves they own overseas. Then what percentage of taxes goes to pay for the interest on loans. How much could the USA raise if it sold its unused land and building assets? Then would it be cheaper to sell all other government assets and rent them back or is it still cheaper to pay interest on the loans vs renting the schools, the local government facilities, the various federal buildings etc….These question are NEVER discussed or information made available for debate. Im sure that the USA has $trillions of dollars in unused assets it could sell to others to repay the debt everyone seems so fearful about. How much gold does your ferderal government own? Could that be sold off to pay debts…considering that gold does not earn income and the sales could be used to repay debt and save billions in interest payments every year. Why does your federal government need to own gold…taxes should not be used for investment gambling purposes waiting for the gold price to rise and fall as it does. I’m sure more gold could be mined in california or some other areas if you really wanted to get more of it by giving tax incentives for prospectors to get their hands dirty again….With all the arm chair experts and politicians writing posts in this forum…surely some of you might have some answers to my questions?
    from Australia

  • jim capy

    All these comments don’t add up to nothing but words of futility as well as mine. The entire system of our government is a big lie, it it corrupt and let’s face it no matter who becomes President nothing will get better. The system doesn’t work because Corruption is the name of the game. They all get in office to get Re-elected and that’s their goal. And the beat goes on!

  • Alaska Walter

    I haven’t heard it said so I will say it. Lets get rid of all of those loosers in congress and work with all new Congress People. If the American voter DID NOT vote for an incumbent, that means the House of Representatives would have all new people. We don’t know how the new people would work out, and we do know how the present congress will continue to steal from us, lie to us and make us feel insecure. Lets turn this around (the insecurity) and show them how it feels. If we do not vote any incumbents back into office, that will send a great message to the Senate. If they don’t start doing things our way, they will be out of a job when there term expires. If no incumbents are elected this will tell the new numbers of congress that they better put forth some honest ideas or they, too, will go down the road.

    The American People are asking what can each of us do to help the present situation. This is something we can all do, and hopefully, this will make a difference. Also, we can talk to our family and friends and convince them that this is the thing to do.

    The American People know more about our congress’s sex lives than we know about their voting record. This has to change. We need to know what they are doing (other than sex) so we can react.

    I did hear a congressman tell the truth. He called another congressman a liar.

    We cannot fix this congress. Greed is rampant within their ranks. They don’t care what happens to the United States of America. They only care about what makes them happy, which is sex and money, and power.

    Lets get rid of these losers and start with new and inexperienced people. Congress #1 didn’t have much experience and look what those magnificent people did.

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