Thursday, July 18, 2013
By Jerry McConnell
We’ve had some bad presidents over the nearly two and one half centuries of our existence, but never as bad and more troubled as we have seen and continue to see from the likes of Barack Hussein Obama. This plant, quite unexpectedly, came on to our scene with absolutely NO proven background, and no positive credentials of any national significance. His administration since taking over the role of President in a Usurper status, has been the most administratively faulty and scandal plagued, foolish and perilously reckless and profligately doling out our taxpayers’ money in a bankrupting manner outright to openly declared enemies whom he has befriended.
Among these recipients of his grandstanding and our sorrow are the Islamic terrorists, corrupt anti-American United Nations members, as well as to personal friends and family. All this and more while our national debt numbers keep skyrocketing into never before heard of brackets that would embarrass a collective group of ultra rich oil barons.
Sadly for the United States, he is having much fun doing it spending obscene amounts of taxpayer dollars and fueling higher national debt numbers and as reported, he curses revered honorable events such as Independence Day because he could have been playing golf instead. He is making a mockery of our government and thumbing his nose at the very people WHO PAY THE GREATEST BULK OF TAXES FOR OUR GOVERNMENT.
There is no question that he is accomplishing the assassination and demise or our once great nation (circa BO; Before Obama). He is on a mission of national destruction that was neither programmed nor spoken of prior to his ascendency to the power of the presidency, under false pretenses of legal citizenship, ever attempting to hand over our sovereignty to the corrupt and greedy United Nations through personally concocted treaties unwanted by the public.
There is also not much question that he and his personal staff of czars and cabinet members are all working tirelessly to find more and more ways to totally destroy our beloved Constitution, proclaimed all over the world as the best and longest lasting legal document of all similar essays of all the countries in the world. His most recent attack on our staff of support and bible of laws came ironically during this month of birth of our independence from tyranny just as he is now exhibiting.
In the Freedom Outpost on July 11, 2013, Dean Garrison authored “US Citizens Sign Petition For Obama To Repeal Bill of Rights”. Can you believe it, the fundamental underpinnings of the initial rights of our country’s constitution for the people, including freedom of speech and religion, freedom to bear arms, and actually all of the freedoms that we as American enjoy in our daily lives?
Garrison spoke of “a bunch of apathetic Obama-worshippers who probably don’t know what the Bill of Rights is. Make no mistake my friends. If Obama could have 300 million people in America with this mentality he would. This is exactly how really bad people gain power. If you gain control of enough “useful idiots” then you have a power base that is tough to overcome.”
The author cites this quote from one of, if not the most flagrant tyrants in the history of the world, Germany’s Adolph Hitler; this domineering, slick-talking murderer said, “How lucky for those in power, that people don’t think.”
How lucky indeed. To think that after all the egregious mistakes and scandalous events in just Obama’s first half year of his second term, let alone the many scary things from his first term in total, his lemmings, or those so densely imbued with his karma and charisma, and trickery and deceit as to be deaf, dumb and blind to keep his approval record in these, his worst days, still at or near the fifty percent mark. No wonder the man is going for broke and wants the high levels of the United Nations to enshrine him at the head of the entire world.
Then, as if the scandals in Obama’s Departments of the Executive Branch, IRS, NSA, and State, to mention just a few, Obama was not content to quit while his favorable numbers had only slipped a few slots below the 50 percent mark, he decided in his addelpated brain to once again thumb his nose at the taxpayers of the country who support the mining of coal.
in the words of Suzanne Hamner of Freedom Outpost and the Daily Caller, “Obama Will Use $8 Billion Of Taxpayer’s Money To Wage War On Coal, Leaving Thousands Unemployed” online July 10, 2013. In addition to adding MORE unnecessary and unneeded billions to our lofty and unparalleled national debt, his vendetta against 280 coal-fired generating plants could cost the jobs of thousands of the employees at those plants.
Hey, you Obama voters, how’s all that mountainous national debt and the loss of thousands more jobs sitting with you now?
Jerry McConnell is a longtime resident of planet earth with one half century on the seacoast of NH. He is a community activist but promises not to run for President and he feeds ACORN’s to the squirrels. He can be emailed at firstname.lastname@example.org with complaints or the editor at email@example.com with favorables.
By: Peter Schiff Tuesday, July 10, 2012
The media is now fixated on an apparently new feature dominating the economic landscape: a “fiscal cliff” from which the United States will fall in January 2013. They see the danger arising from the simultaneous implementation of the $2 trillion in automatic spending cuts (spread over 10 years) agreed to in last year’s debt ceiling vote and the expiration of the Bush era tax cuts. The economists to whom most reporters listen warn that the combined impact of reduced government spending and higher taxes will slow the “recovery” and perhaps send the economy back into recession. While there is indeed much to worry about in our economy, this particular cliff is not high on the list.
Much of the fear stems from the false premise that government spending generates economic growth (for stories of countries experiencing real growth, see our latest newsletter). People tend to forget that the government can only get money from taxing, borrowing, or printing. Nothing the government spends comes for free. Money taxed or borrowed is taken out of the private sector, where it could have been used more productively. Printed money merely creates inflation. So the automatic spending cuts, to the extent they are actually allowed to go into effect, will promote economic growth not prevent it. Even most Republicans fall for the canard that spending can help the economy in general. But even those who don’t will surely do everything to avoid the political backlash from citizens on the losing end of any specific cuts.
The only reason the automatic spending cuts exist at all is that Congress lacked the integrity to identify specifics. Rest assured that Congress will likely engineer yet another escape hatch when it finds itself backed into a corner again. Repealing the cuts before they are even implemented will render laughable any subsequent deficit reduction plans. But politicians would always rather face frustration for inaction than outright anger for actual decisions. In truth though, only an extremely small portion of the cuts are scheduled to occur in 2013 anyway. If it comes to pass that Congress cannot even keep its spending cut promises for one year, how can they be expected to do so for ten?
The impact of the expiring Bush era tax cuts is much harder to assess. The adverse effects of the tax hikes could be offset by the benefits of reduced government borrowing (provided that the taxes actually result in increased revenue). But given the negative incentives created by higher marginal tax rates, particularly as they impact savings and capital investment, increased rates may actually result in less revenue, thereby widening the budget deficit.
In reality, the economy will encounter extremely dangerous terrain whether or not Congress figures out a way to wriggle out of the 2013 budgetary straightjacket. The debt burden that the United Stated will face when interest rates rise presents a much larger “fiscal cliff.” Unfortunately, no one is talking about that one.
The current national debt is about $16 trillion (this is just the funded portion…the unfunded liabilities of the Treasury are much, much larger). The only reason the United States is able to service this staggering level of debt is that the currently low interest rate on government debt (now below 2 per cent) keeps debt service payments to a relatively manageable $300 billion per year.
On the current trajectory the national debt will likely hit $20 trillion in a few years. If by that time interest rates were to return to some semblance of historic normalcy, say 5 per cent, interest payments on the debt would then run $1 trillion per year. This sum could represent almost 40 per cent of total federal revenues in 2012!
In addition to making the debt service unmanageable, higher rates would depress economic activity, thereby slowing tax collection and requiring increased government spending. This would increase the budget deficits further, putting even more upward pressure on interest rates. Higher mortgage rates and increased unemployment will put renewed downward pressure on home prices, perhaps leading to another large wave of foreclosures. My guess is that losses on government insured mortgages alone could add several hundred billion more to annual budget deficits. When all of these factors are taken into account, I believe that annual budget deficits could quickly approach, and exceed, $3 trillion. All this could be in the cards if interest rates were to approach a modest five per cent.
If the sheer enormity of the red ink were to finally worry our creditors, five per cent interest rates could quickly rise to ten. At those rates, the annual cost to pay the interest on the national debt could equal all federal tax revenues combined. If that occurs we will have to either slash federal spending across the board (including cuts to politically sensitive entitlements), raise taxes significantly on the poor and middle class (as well as the rich), default on the debt, or hit everyone with the sustained impact of high inflation. Now that’s a real fiscal cliff!
By foolishly borrowing so heavily when interest rates are low, our government is driving us toward this cliff with its eyes firmly glued to the rear view mirror (much as the new French regime appears to be doing). For years I have warned that a financial crisis would be triggered by the popping of the real estate bubble. My warnings were routinely ignored based on the near universal assumption that real estate prices would never fall. My warnings about the real fiscal cliff are also being ignored because of a similarly false premise that interest rates can never rise. However, if history can be a guide, we should view the current period of ultra-low rates as the exception rather than the rule.
Peter Schiff’s new book, The Real Crash: America’s Coming Bankruptcy – How to Save Yourself and Your Country is now available. Order your copy today.
For in-depth analysis of this and other investment topics, subscribe to Peter Schiff’s Global Investor newsletter. CLICK HERE for your free subscription.
- Democrats to Risk Fiscal Cliff by Targeting Top Earners (bloomberg.com)
- Lawmakers signal deep ‘fiscal cliff’ deadlock in Congress (mercurynews.com)
- Fitch Ratings keeps US at top ‘AAA’ credit rating (seattlepi.com)
The International Swaps and Derivatives Association — responsible for determining when a credit event (that would trigger credit default swap payouts) occurs — just updated its Q&A on Greek sovereign debt to account for the newest changes to the private sector bond swap discussed last night.
Their prognosis? If the swap is indeed voluntary, then there won’t be a credit event, even with haircuts of 50%.
But the likelihood that most bondholders will agree to those kinds of losses without significant coersion is slim. Numbers on participation when that haircut was just 21% were at best around 85%, under the 90% Greece demanded.
The ISDA says it can’t make a final decision on whether or not there will be a credit event until a formal decision is made:
UPDATE OCTOBER 27: The determination of whether the Eurozone deal with regard to Greece is a credit event under CDS documentation will be made by ISDA’s EMEA Determinations Committee when the proposal is formally signed, and if a market participant requests a ruling from the DC. Based on what we know it appears from preliminary news reports that the bond restructuring is voluntary and not binding on all bondholders. As such, it does not appear to be likely that the restructuring will trigger payments under existing CDS contracts. In addition, it is important to note that the restructuring proposal is not yet at the stage at which the ISDA Determinations Committee would be likely to accept a request to determine whether a credit event has occurred.
Read their full Q&A on Greek sovereign debt here.
- How gross and net CDS notionals really work (ftalphaville.ft.com)
- Credit Event Or No Credit Event, This Will Get Messy (zerohedge.com)
- Barclays Explains Why A 50% Greek Haircut “Would Be Considered A Credit Event, Consequently Triggering CDS Contracts” (zerohedge.com)
- So. Many. Bailout questions (ftalphaville.ft.com)
- Farce Is Complete As ISDA Finds 50% “Haircut” Is Not A Credit Event (zerohedge.com)
- Who wants to be a Greek bond holdout? (ftalphaville.ft.com)