April 13, 2012
By Gaye Levy
“If you’re into preparedness, here is a cool article on how to do it with a budget.” –KTRN
This year tax day appears on April 17. For most of you, your return is now filed and you are waiting for a modest refund. For the not so lucky, you have just made another huge donation to the government or, as in my case, have filed an extension to delay the pain of filing (but alas, not the pain of payment.)
Traditionally, this time of year is crappy for retailers for all of the reasons above. So, when it comes to adding to your preparedness supplies, well, all you may have is a buck or two. That does not have to daunt you and, in many cases, may be just the inspiration you need to pick up a few inexpensive odds and ends to fill in until you can afford a bit more.
Are you ready to do some budget prepping?
Welcome to the Dollar Store Prepper Frenzy
I always recommend that you should purchase the very best you can afford. I suppose this comes from my aversion to shopping. Now lets face it: dollar store items will, for the most part, not have the highest quality goods. That said, if you are on a tight budget, there is nothing wrong in purchasing average-quality items from the dollar store. You should purchase the very best you can afford and if all you can afford is a dollar, you should do it. The important thing is to start and to do the best you can.
Buying things from the dollar store – and I do so myself – simply makes good sense for some items. Besides, it is fun to shop there.
Ready to start shopping? Here is a list to get you started prepping on a budget.
February 27, 2012
By Rowena Mason
In a stark warning ahead of next month’s Budget, the Chancellor said there was little the Coalition could do to stimulate the economy.
Mr Osborne made it clear that due to the parlous state of the public finances the best hope for economic growth was to encourage businesses to flourish and hire more workers.
“The British Government has run out of money because all the money was spent in the good years,” the Chancellor said. “The money and the investment and the jobs need to come from the private sector.”
Mr Osborne’s bleak assessment echoes that of Liam Byrne, the former chief secretary to the Treasury, who bluntly joked that Labour had left Britain broke when he exited the Government in 2010.
He left David Laws, his successor, a one-line note saying: “Dear Chief Secretary, I’m afraid to tell you there’s no money left”.
Mr Osborne is under severe pressure to boost growth, amid signs the economy is slipping back into a recession.
The Institute of Fiscal Studies has urged him to consider emergency tax cuts in the Budget to reduce the risk of a prolonged economic slump.
But the Chancellor yesterday said he would stand firm on his effort to balance the books by refusing to borrow money. “Any tax cut would have to be paid for,” Mr Osborne told Sky News. “In other words there would have to be a tax rise somewhere else or a spending reduction.
“In other words what we are not going to do in this Budget is borrow more money to either increase spending or cut taxes.”
The strongest suggestion of help for squeezed family budgets came from the Chancellor’s claim that he was “very seriously and carefully” considering plans to help lower earners by raising the personal allowance for income tax, a proposal that has been championed by Nick Clegg, the Deputy Prime Minister.
But he implied there would be no more help for motorists struggling with record petrol prices this spring. “I have taken action already this year to avoid increases in fuel duty which were planned by the last Labour government,” he said.
The Chancellor’s tough words were echoed by Liberal Democrat Jeremy Browne, the foreign minister, who warned that Britain faced “accelerated decline” without measures to tackle its debt and increase competitiveness.
In an article published today in The Daily Telegraph, he writes that Britain’s market share in the world used to be “dominant” but was now “in freefall” compared with the soaring economies of Asia and South America. “This situation has been becoming more acute for years,” he adds. “It is now staring us in the face. So we need to take action.”
February 17th, 2012
New York Times
By: John H. Cushman Jr. and Robert Pear
With members of both parties expressing distaste at some of the particulars, Congress on Friday voted to extend payroll tax cuts and unemployment benefits and sent the legislation to President Obama, ending a contentious political and policy fight.
The vote in the House was 293 to 132 with Democrats, who are in the minority, carrying the proposal over the top with the acquiescence of almost as many Republicans. The Senate followed within minutes and approved the measure on a vote of 60 to 36.
“One hundred sixty million Americans,” said Senator Max Baucus, the Montana Democrat who, as chairman of the Finance Committee, led negotiations over the measure with the House. “That’s the number of Americans who are helped by this bill.”
President Obama has said he will sign the bill as soon as Congress passed it, with lawmakers seeking to wrap up the legislation before leaving on the Washington’s Birthday break.
A compromise allowing the extension of the tax holiday for the rest of the year came together quickly this week, as Republicans decided it was not politically viable to resist in an election year. It avoided an abrupt increase in payroll taxes that would have taken effect March 1, returning them to the level of 2010. The taxes are withheld from the paychecks of most wage earners and finance the Social Security system.
The legislation also temporarily avoids cuts in payments to doctors under federal health insurance programs.
In the negotiations, which took place during a two-month temporary extension of a popular tax break that had been in place throughout 2011, Republicans gave up on their demands that the tax cuts be paid for. But they won provisions that would pay for the other spending increases in the bill by making cuts in other federal programs involving health care and government pensions.
According to the Congressional Budget Office, the package will increase the budget deficit by $119.5 billion over the next five years, but by a bit less over the longer haul as some of the spending reductions and new revenues are fully realized.
Republicans who said they supported the deal said they had won several important concessions during the talks, like imposing new conditions and limits on unemployment compensation and making a significant cut in the preventive-health spending called for in the health care overhaul that Democrats pushed through Congress in 2010.
Representative Renee Ellmers, Republican of North Carolina, called that cut “the most dramatic blow to Obamacare yet.”
But she said the overall deal was “a very important breakthrough and shows that we can come together and compromise.”
Democrats, some of whom sharply condemned the deal, saw things differently. Even those who voted for the bill, which the White House supported and Democrats considered a major act of economic stimulus to propel the recovery forward, said many of its provisions were misguided.
Two Democratic leaders, Representatives Steny H. Hoyer and Chris Van Hollen, both of whose Maryland districts contain thousands of federal employees, denounced cuts in future pension benefits for government employees, which were used to pay for the extension of unemployment benefits. They would have preferred tax increases on the wealthy, or on corporations, or closing loopholes like the one that lets fund managers treat their income as lightly-taxed “carried interest.”
“Nobody else in this bill, not a millionaire, not a billionaire, not a carried-interest beneficiary, not an oil company, nobody in this bill other than federal employees is asked to pay,” fumed Mr. Hoyer, the Democratic whip, confident that his denunciation of the bill would not endanger its passage.
“It’s time to stop scapegoating federal employees,” Mr. Van Hollen said.
Under the bill, the government would save $15 billion over 10 years by reducing its contribution to federal employee pensions and requiring new workers to contribute more.
But ultimately, the Democrats pronounced themselves satisfied.
“On balance, I come down in favor of supporting what the president asked us to do,” said Representative Nancy Pelosi, the minority leader.
In the Senate, there is considerable support for the bill in both parties, but just enough opposition to stop its passage from being a sure thing until the last moment.
The Congressional Budget Office said the provisions of the bill, taken together, would increase the federal budget deficit by $101 billion this year and by a total of $89 billion from 2012 to 2022. One provision, continuing the payroll tax cut for the next 10 months, will cost $93 billion, the budget office said.
Representative Dave Camp, Republican of Michigan and chairman of the House Ways and Means Committee, said the bill “prevents a tax increase for working Americans and makes the most significant reforms to federal unemployment programs since they were created in the 1930s.”
In addition, Mr. Camp said, the bill “ensures that seniors continue to have access to their doctors.”
Representative Sander M. Levin of Michigan, the senior Democrat on the committee, said the bill “will provide a boost to the economy” and create jobs.
“Unemployment insurance — people spend it,” Mr. Levin said. “That’s good for their subsistence. It’s good for the economy.”
For The Full Report Go To New York Times
January 30, 2012
By Ambrose Evans-Pritchard
A report for the Kiel Institute for the World Economy said Portugal would have to run a primary budget surplus of over 11pc of GDP a year to prevent debt dynamics spiralling out of control, even in a benign scenario of 2pc annual growth.
“Portugal’s debt is unsustainable. That is the only possible conclusion,” said David Bencek, the co-author, warning that no country can achieve a primary budget surplus above 5pc for long.
“We won’t know what the trigger will be but once there is a decision on Greece people are going to start looking closely and realise that Portugal is the same position as Greece was a year ago.”
Yields on Portugal’s five-year bonds surged on Thursday to a record 18.9pc, reflecting fears that the country will need a second rescue from the EU-ECB-IMF Troika. Three-year yields hit 21pc.
Antonio Saraiva, head of the Confederation of Portuguese Industry, said the first loan package of €78bn (£65bn) did not acknowledge the vast liabilities of public companies, which have been shut out of global capital markets.
“What is lacking is €30bn. I think we will need a mix of more funds and longer terms to be negotiated with the Troika,” he told Reuters.
As Portugal nears the brink, a chorus of voices exhorted Europe to stop bickering over ideology and grasp the nettle at long last. “It is necessary to bring out the bazooka immediately, before the gunpowder gets wet,” said Mexican president Felipe Calderon.
Mr Calderon said the G20 bloc will have to chip in to ensure that the crisis does not engulf Italy and Spain. “The failure of a containment strategy will mean not only the potential implosion of the euro, but an economic crisis with devastating consequences for the rest of the world. This is a task for all of us in the G-20,” he said.
Olli Rehn, the EU’s economics commissioner, said EU bodies may have to absorb some losses on Greek bonds if Greece’s debt is to stay below the target level of 120pc of GDP by 2020. “There is likely to be some increased need of official sector funding, but not anything dramatic,” he said.
October 19, 2011
By Paul Steinhauser
Republican presidential candidate Ron Paul is proposing to cut $1 trillion from the federal budget in his first year in office and eliminate five cabinet level federal departments, if elected president.
The longtime congressman from Texas unveiled his proposals Monday as part his “Plan to Restore America,” which also pledges to balance the budget over three years, and slashes regulations and taxes.
“A lot of people will say, well, cutting a trillion dollars in one year, that sounds radical. But I have been under the assumption that the radicals have been in charge way too long,” Paul told a receptive audience at a campaign event at the Venetian Hotel and Sands Expo and Convention Center, site of Tuesday’s CNN Western Republican presidential debate.
Paul proposed eliminating the departments of Energy, Housing and Urban Development, Commerce, Interior, and Education, as well as abolishing the Transportation Security Administration and returning responsibility for security to private property owners. Paul also called for reducing the federal workforce by 10%, slashing Congressional pay and perks, and curb what he called excessive federal travel.
“In many of the departments that we cut, there are some important places there that we just don’t close down. Many of those important parts of each of those departments will be held in another department. So nobody gets laid off immediately, they get laid off through attrition,” Paul said.
Paul’s proposals also call for abolishing corporate subsidies, stopping foreign aid, ending foreign wars, and returning most other spending to 2006 levels. In an interview on CNN’s “The Situation Room”, Paul told anchor Wolf Blitzer that he will cut $200 billion from military spending in his first year, if elected, and “over a period of time, drastically lower.”
“I don’t cut anything from defense. I cut from the military. There’s a big difference,” added Paul. “We need a stronger national defense, not a weaker one. Just spending money doesn’t necessarily help us.”
Paul is also pledging that, if elected, he would take a salary of $39,336, approximately equal to the median personal income of the American worker. Paul is proposing to lower the corporate tax rate to 15%, extend all Bush-era tax cuts, abolish the so-called “death tax,” and end taxes on personal savings.
According to his plan, Paul would also repeal two major pieces of legislation passed under Pres. Barack Obama, the president’s health care reform law, known by Republicans as “ObamaCare,” and the Dodd-Frank Wall Street reform law.
Paul, who’s making his third bid for the White House, places third or fourth in most recent national polling in the race for the Republican presidential nomination.
October 18, 2011
By Suzy Khimm
Ever wonder what Ron Paul’s America would look like? Then read the budget outline that Paul released as part of his 2012 presidential bid. It promises to cut $1 trillion during his first year in office, balance the budget by 2015, withdraw us from all foreign wars and eliminate five Cabinet-level agencies in the process. Economists across the political spectrum say the impact of such drastic government spending cuts would be majorly disruptive and harmful to the economy in the short term.
“At the scale he’s talking about, it’s unlikely you could have an immediate reduction in government without hurtling the economy into recession,” says Kevin Hassett, economic policy director for the American Enterprise Institute and chief economic adviser to John McCain’s 2000 presidential campaign. Hassett maintains that Paul’s plan for a limited government “would be really positive” in the long run. But he also believes that there would be better means to achieving that end. “I think that you could achieve his long-run objectives with less short-run disruptions,” he concludes.
By reducing the deficit from more than $1 trillion to $300 billion in just a year, Paul’s plan would upend the economy at a time when it’s already fragile, says Gus Faucher, director of macroeconomics for Moody’s Analytics. “That much deficit reduction in one year is going to be a huge drag on the economy . . . the reduction in spending is much greater than cuts in taxes,” says Faucher. “We’re seeing that impact in Europe right now, where severe fiscal austerity has caused big problems for the European economy.” While long-term deficit reduction is important, legislators need to make sure that the economy is strong before major cuts take effect, he adds, calling Paul’s plan “much more ambitious” than other Republican proposals to date. By comparison, the Congressional supercommittee is required to cut $1.5 trillion over a ten-year period—a feat Paul wants to accomplish in a little more than one year.
Liberal economists were even more dire in their assessments of the Paul budget. “This is almost having the economy fall off a cliff,” says Dean Baker, co-director of the Center for Economic and Policy Research, estimating that cutting $1 trillion in 2013 would prompt the unemployment rate to jump by 3 percentage points. Even if the $1 trillion in cuts were done over two or three years’ time, there would still be double-digit employment, Baker concludes. “This will make it extremely hard to balance the budget, since if the unemployment rate goes to 11 or 12 percent, then the budget picture will look much worse. If his response is still more cuts, then who knows how high he can get the unemployment rate.”
Michael Ettlinger, vice president for economic policy at the Center for American Progress, said Paul’s cuts would destroy the social safety net, as the plan would turn Medicaid and other low-income entitlement programs into block-granted programs that would depend on discretionary appropriations. “Your kids would be out of school, working or begging,” he concludes.
The Paul campaign rejected such claims as “exactly the opposite” of what would come to pass—“an example of the old Keynesian thinking that got us into our current mess,” according to Jesse Benton, a campaign spokesman. “Deficit spending and debt that are crushing our economy and will destroy our country if we do not take bold action.” Benton added that block-granting entitlement programs would actually save them, not shred them. “We face a bankruptcy and a major financial crisis that will destroy the entire social safety net unless we take action.”
The program would also turn Social Security, veterans’ benefits and Medicare into voluntary programs that would allow younger workers to opt out of the entitlements, while fulfilling promises to present-day seniors and veterans. Both liberals and conservatives such as Baker say such changes could destabilize Social Security. “We will likely see a substantial number of young people take that option, especially if he scares them enough that it won’t be there,” says Baker. What’s more, “you will have high-income earners who opt out, and the people you have left are going to be low-income, which could cause problems” in terms of financing, explains Faucher, of Moody’s. All this could complicate Social Security’s long-term fiscal health, as it could end up losing a lot of revenue.
An opt-out option for Medicare would present similar problems, AEI’s Hassett says. He agrees that Medicare reform is critical to achieving long-term deficit reduction but thinks that an opt-out would destabilize the program. “The system taxes young people to pay for benefits for old people. If young people opt out, who will pay for the benefits?” Hassett says. The Paul campaign insists, however, that the plan provides Medicare with a secure future without harming present-day beneficiaries. “This budget is about priorities, and we have to honor our promises to our seniors. Our goal is to fix our debt crisis to preserve our system and make Medicare work better in the future,” Benton says.
On the whole, though, economists say they aren’t surprised to see the Texas congressman come out with such a plan. “Ron Paul’s role in the campaign so far has been the ideologically pure libertarian, and his proposal meets expectations, I would say,” Hassett says.
August 2nd, 2011
By: Tami Luhby
Social Security is safe…for now.
The debt ceiling deal hammered out on Sunday doesn’t touch the entitlement program in the first round of spending cuts that total more than $900 billion over 10 years.
What happens after that would remain to be seen. A committee of Republicans and Democrats would be tasked with finding another $1.5 trillion in savings, and changes to Social Security could be part of the deal.
If the committee fails to reach agreement, however, automatic cuts kick in and Social Security would be exempt.
Meanwhile, a whole host of safety net programs could also be whacked as part of the debt agreement, which was approved Monday night by the House. The Senate is scheduled to vote Tuesday.
The largest ones, including Medicaid and food stamps, are also protected in the first round of spending cuts. But others, such as housing assistance, child care subsidies, job training and Head Start, could fall under the knife.
Debt ceiling cost to taxpayers: $1.7 billion
Policymakers have not revealed just what cuts are under discussion, other than $391 billion will come from discretionary spending. Other items that could see their spending curtailed include food inspection, worker safety and highway repair, said Craig Jennings, federal fiscal policy director at OMB Watch, which monitors federal spending.
Everything would be on the table for the Congressional committee to consider later this year. Members could slash spending for the poor, the elderly, the unemployed and the disabled. And they’d likely have to reach the required spending cuts without raising taxes, experts said.
“These programs are vulnerable to deep cuts that won’t allow them to meet caseload even as the need grows,” said Melissa Boteach, an anti-poverty specialist with the Center for American Progress Action Fund, a left-leaning group.
Among the changes to Social Security that the committee would likely consider is reducing the cost-of-living adjustments that recipients receive annually.
Some of the more drastic changes, such as raising the retirement age or amount of wages subject to payroll taxes, would probably not come up because it would take longer than 10 years to see the cost-savings, said David John, senior research fellow at The Heritage Foundation. That’s the time-frame the committee would be concerned about.
But other programs would need to be slashed to reach $1.5 trillion in deficit reductions over 10 years. The Social Security change would net only $112 billion, John said.
Federal spending on the 70-plus anti-poverty programs comes to about $700 billion annually, said Robert Rector, a senior research fellow at Heritage. Only a small sliver of it is considered discretionary and thus subject to the initial spending caps.
But all would be up for grabs for the committee. And that means Medicaid, Medicare, food stamps, federal unemployment insurance and other assistance programs could get hit hard.
“You have to start talking about these large programs if you want to get to the numbers on the spending side,” said Christian Weller, senior fellow with the Center for American Progress.
But if the committee failed to agree on the larger deficit reduction plan, Social Security would be protected. Spending would be cut automatically, with half coming from the defense budget.
Safety net programs, including Medicaid, federal unemployment benefits and programs for the poor, would be spared. The impact on Medicare would be limited to hospitals and other health care providers, though some argue patients could feel the ripple effects.
August 2nd, 2011
The US is poised to approve a deal to avoid defaulting on its debt.
The debt ceiling is the legal limit on the total amount of debt the US government can run up in order to pay its bills. Currently it is $14.3tn.
Political wrangling over the debt ceiling has caused much consternation in the financial markets and many will be happy that the deal has been done – even if the outcome pleases nobody.
So how does the deal work?
In the first instance, and perhaps most importantly as far as the markets are concerned, the deal immediately increases the debt ceiling by $400bn.
That gives the US the wiggle room to go on paying its bills – military salaries, interest on existing loans, Medicare, etc – in the short term.
The deal then raises the debt ceiling by another $500bn until February.
In principle, Congress can vote against this increase, but this is designed to be more of a political gesture and a symbolic rejection of the increase by conservatives in Congress.
President Barack Obama is expected to veto any such vote.
Decisions by committee
In the meantime, the deal puts in place measures to cut the US deficit by at least $2.1tn over 10 years.
From October, $917bn worth of spending cuts kicks in.
In November, a special joint committee of 12 people from the House of Representatives and the Senate comes back with its recommendations for up to $1.5tn in deficit reduction actions.
The panel cannot consider increasing taxes, it seems, but it can change the tax code to show additional revenues.
Congressional leaders are hopeful the compromise will win the backing of both houses, but some Republicans and Democrats in the House of Representatives remain opposed for different reasons.
By Christmas, Congress has to vote on the committee’s plan – with no amendments allowed.
The idea is that the recommendations should be accepted.
If Congress rejects the plan, then a series of automatic spending cuts – thrashed out by Democrats and Republicans over the past few days – take effect.
The cuts are designed to make both sides balk – thereby forcing them in advance to consider seriously the committee’s recommendations.
If the recommendations are rejected, cuts begin in January.
About half the spending cuts would come from defence, although Republican negotiators have managed to broaden the definition from just the military to other areas, such as the Department of Homeland Security.
Medicare – the US’s federally-funded system of pensioner healthcare – would face some cuts, though healthcare for the poorest and pension payments would be spared cuts.
The last part of the deal also has to take place before the end of the year.
Both the House and Senate must hold a vote on adding a balanced budget amendment to the constitution – a rule requiring that future federal spending cannot exceed revenues.
To begin, this requires a two-thirds majority in both houses and is again seen as a political gesture on the part of fiscal conservatives ahead of an election year.
If the amendment does somehow pass, then Mr Obama can ask for a further increase in the debt ceiling of $1.5tn.
If the amendment does not pass, Mr Obama can request an increase of $1.2tn.
A key point for Mr Obama is that the bill would raise the debt ceiling into 2013, meaning he would not face another congressional showdown on spending in the middle of his re-election campaign next year.
All very straightforward, no?
July 14th, 2011
By: Andrei Fedyashin
Budget and debt problems are once again racking America. Barack Obama has failed to persuade the Republican majority in Congress to raise the national debt ceiling. That much is nothing new, and similar attempts will be unlikely to succeed in the future. Since July 10, the White House has been holding daily consultations on raising the ceiling. The current ceiling of $14.3 trillion must be raised by several hundred billion, or the Department of the Treasury will run out of money by August 2.
The Americans raise their debt ceiling on a regular basis. Since 1993, they have come close to defaulting 16 times. In 1995, the government even shut down for a week. In the past, the world perceived these exercises as a matter of course, whereas now the unwritten rule of the U.S. budget is increasingly becoming a sore subject.
The times have changed, and the national debt and deficit have become too astronomical to be treated as an American eccentricity, especially considering the U.S.-bred financial crisis of 2008 and the backdrop of failing finances in Greece, Ireland, and Portugal (likely to be followed by Spain and Italy) and the patently pre-crisis condition of the Euro.
The U.S. Department of the Treasury has not yet announced who will be the hardest hit if worst comes to worst – the secretaries of departments, other officials, congressmen, senators, the Pentagon, intelligence, teachers, transportation workers, the IRS, NASA, museums, or janitors. That much, at least, is of little concern to Europe.
The problem is not salary cuts for specific agencies but U.S. solvency. Nobody is saying that the United States will immediately default on its entire sovereign debt – it remains the most reliable debtor in the world.
The trouble lies elsewhere:
a) The national debt continues to swell (in reality, it exceeded the ceiling of $14.3 trillion in May).
b) The federal government has come too close to being unable to pay interest on its debt too often.
c) Due to the uncertainty surrounding American debt and financial upheaval in parts of Europe, interest rates are growing on all financial markets;
d) Insurance rates on credit are growing.
e) The stock exchanges are getting nervous.
Put together, these factors may constitute a volatile mixture that could flare into another global financial crisis. It may start with minor market convulsions that erupt into something much larger.
The extent of European frustration with American debt is aptly expressed in one telling commentary. The British journal The Economist, a well-known guru of the free market, free trade, and sound conservatism, supports Obama’s position and calls Republican grievances with the budget proposals of a Democratic president “a gamble where you bet your country’s good name.” It considers such conduct shameful and absurd for Republicans who advocate reductions in government spending.
Cuts in social spending and higher taxes are still the only way of reducing budget expenditures and a country’s sovereign debt. This is exactly what Obama suggests, but the Republicans object to any such tax increases. Meanwhile, they are ready to reduce the budget by only $2 trillion instead of the $4 trillion that Obama suggests.
To cut is to heal
In European eyes, these developments in the White House are a farce rather than a tragedy. It is something akin to taking the world’s financial and economic players hostage and making them the captive audience to an American soap opera that has evoked little but bewilderment and confusion.
It is clear that the Republicans do not want to come to Obama’s aid on the eve of the 2012 presidential elections, but it is unclear why they insist on keeping the rest of the world in suspense.
America is far from being a champion of the ratio between its GDP and national debt. That debt amounts to 65% of its GDP and ranks 37th on the list of major global debtors. Yet many European countries fare worse: Greece (144%), Iceland (123%), France (83%), Germany (78%), and Britain (77%).
A look at the information provided by the CIA (or IMF – they are only slightly different) makes it clear that Japan is worst off in terms of debt: 226% of the GDP! Only St. Kitts and Nevis come close with 186%.
The debt section of the CIA’s yearly periodical is the only economic publication in which we are pleased to see Russia in 123rd place (out of 132). We seem to have left everyone behind with a debt of only 9.5% of our GDP.
In fact, we are among the leading creditors of the U.S. government, although we cannot yet afford to talk to Washington or ignore its opinion like China, its biggest creditor. Washington owes $1.154 trillion to Beijing, amounting to 25.8% of U.S. external debt. Japan is the runner-up with $890.3 billion in U.S. treasury bonds. Put together, Tokyo and Beijing account for 45.7% of total U.S. debt. Russia’s share is some $130.5 billion or a mere 2.9%.
American debts are still considered the most reliable in the world. U.S. bonds have almost the same liquidity as dollars on the debt security markets. But Moody’s has already hinted that if the United States delays payment on its debt, there will be consequences for its credit rating. Moody’s Spokesman Steven A. Hess put it succinctly when he said that if a debtor delays interest payments once, it may do so again, adding that it will automatically remove the debtor from the top category of the credit rankings.
There is still hope that these problems will dissipate by the August 2 deadline. The world is counting on the fact that a new and massive “Greek dilemma” is not on the horizon. But the longer this situation lasts, the greater the risk that America’s debt problems will cause a chain reaction. If so, the storm clouds of a new crisis will form again in earnest and on an unprecedented scale.
The views expressed in this article are the author’s and do not necessarily represent those of RIA Novosti.
Click here for the full report from Ria Novosti
June 2nd, 2011
By: Statehouse Bureau Staff
Facing broad criticism for flying by helicopter to watch his son’s high school baseball game in Bergen County, Gov. Chris Christie refused today to refund the state for Tuesday’s $2,500-an-hour flight.
“The governor does not reimburse for security and travel,” a spokesman for the governor, Kevin Roberts, said in an e-mail message. “The use of air travel has been extremely limited and appropriate.”
The State Police said the flight taken by Christie and his wife, Mary Pat, had presented “no additional cost to taxpayers.”
That didn’t stop a horde of Democratic legislators — and even some conservative commentators — from denouncing the use of the helicopter by a governor who has become widely admired for his insistence on fiscal austerity.
Christie flew from downtown Trenton to Montvale, where his son Andrew was playing baseball for Delbarton, his high school team. He stayed five innings before getting back into the helicopter, accompanied by his wife. From there they flew to Princeton, the police said, for a dinner at Drumthwacket, the governor’s mansion, with a group of wealthy Republican donors from Iowa who were in New Jersey to try to persuade Christie to run for president.
Assemblywoman Valerie Vainieri Huttle (D-Bergen) chided the governor today for what she called his “do as I say, not as I do” attitude.
“I can’t remember how many times I had to skip political events because my children had games or school activities,” Vainieri Huttle said. “Leaving in the fifth inning to meet with wealthy Iowa political donors says something about the governor’s priorities. Perhaps his presidential courters can help him foot the bill so our taxpayers aren’t on the hook for such perks when he is calling for sacrifice.”
Even a conservative talk show host from Fox News, Greta Van Susteren, added to the stream of criticism. She took to her blog to question why the governor had used the helicopter.
“In these very, very difficult times for most Americans, it looks really bad when a politician is spending (or appearing to be spending) taxpayer money in lavish ways,” Van Susteren wrote.
Amid the flak, State Police Supt. Rick Fuentes issued a statement saying the pilots would have been in the air training even had they not been ferrying the governor and his wife in the new $12.5 million helicopter.
“Therefore, there is no additional cost to taxpayers or the State Police budget, nor is there any interference with our daily mission by adding the state’s chief executive to any of these trips,” Fuentes said.
The use of state helicopters by governors of both parties has been a flashpoint for decades. But the practice has been to reimburse the state for flights not related to official business. In 2002, the Democratic Party paid the state $18,200 for 14 flights by Gov. Jim McGreevey that were deemed political or personal, including one to a wedding.
Gov. Christie Whitman repaid the state when she took a police helicopter to a New Jersey Devils game at the Meadowlands.
According to Fuentes, Christie has traveled on the state’s helicopter 35 times since taking office in January 2010 — far less than previous governors — including trips to survey flood and storm damage. The dates and locations of those trips were not made public.
“As part of our long-standing security protocol, the EPU (Executive Protection Unit) provides secure, protected travel by vehicle in the overwhelming majority of the governor’s business and personal travel, except in those rare instances when the governor’s schedule warrants use of air travel,” Fuentes said.
A State Police spokesman, Sgt. Stephen Jones, emphasized that pilots are constantly logging hours in the new helicopters and would probably have been flying even if the governor had not been aboard.
“The destinations might be different,” Jones said. “But they’d be logging flight hours — flying over rail systems or transportation hubs or ports or chemical or nuclear facilities.”
As for Christie’s use of a car to get the 100 yards from the landing site to the ball park, which was ridiculed by Van Susteren and others, Jones said the cars were there for the governor’s safety.
“If the helicopter got called away for a higher priority mission, then the governor would be transported to his next location on the ground,” Jones said.