As of Wednesday there were 13 days until the United States begins to default on its debt, barring a deal in Congress. Such a deal, sadly, continues to be elusive, as it has been for many weeks and months. Our politicians can't seem to muster the courage of their convictions to compromise for the sake of the country.
To help us put all this in perspective and to talk about much more, I invited the former President of Harvard, the former Treasury Secretary, and the former Director of the National Economic Council, Larry Summers, onto the show. Below is an edited transcript of our discussion. To listen to our complete conversation, be sure to check out this week’s podcast.
The meaning of a default
Fareed Zakaria: You were Treasury Secretary. Walk us through what happens if there is an actual default.
Larry Summers: With an actual default, that the United States does not pay back money, principal and interest on its debt. At that point, the country is declared to be in default. Financial instruments that people hold that have been regarded as safe cease to be regarded as safe. A panic begins on money market funds and many other parts of the financial system, and a cascade that makes Lehman Brothers look like a very small event unfolds.
It seems to me that it is an unthinkable financial risk to take. And it seems to me also important to remember that once that threshold has been crossed, there is an uncertainty premium that will continue for a very long time to come.
Fareed Zakaria: In other words, it would take people a long time to get comfortable again.
Larry Summers: A long, long, long – a long, long, long time, and that means that the question cannot be how we will have a default, how we will manage a default, how we will prioritize payments. The question has to be what's the formula going to be for avoiding such a catastrophe.
Fareed Zakaria: If there were a default, some people have said, you can imagine the borrowing costs for the United States would go up by one percentage point, 100 basis points, which would add $150 billion to the deficit every year. Does that strike you as in the range?
Larry Summers: That's a number you could imagine. I am less worried about the borrowing costs and more worried about the disruption, as there were runs on banks, runs on money market funds, exchanges face the prospect of collapse. Institutions that have been built over decades were swept away, and, as they were swept away, the ability to carry on routine financial business, to clear checks, to pay bills, to meet obligations would be – would be lost. It would be a cataclysm, and it would be a totally self-inflicted cataclysm.
There are countries in the world where there's an issue of whether they can meet their obligations. There's no question the United States can meet its obligations. The question is whether we will.
You know, Fareed, the way I liked to say it is, my daughters are in college. We can argue about how much they should spend, we can argue about how much I should pay, we should argue about how much they can pay. The only thing that you can't really argue about is that we do have to pay the Visa bill. Our family does.
And this idea that somehow that we can not pay because we're having a political fight over how to handle the spending and taxing really is an example of democracy functioning in the worst possible way.
The politics behind the budget deal
Fareed Zakaria: So take me through what you think the calculation is, because you were there in the White House. Many of the same characters in the Republican Party you know, let's talk about what they think.
Eric Cantor, John Boehner, Mitch McConnell say, here's the problem. We always get these deals, and the spending cuts never materialize and the tax raises do, and so we don't want a deal that sort of promises cuts in the future. We want something that is rock solid now.
Larry Summers: Well, let's begin with the fact that when a Democrat left the White House, Bill Clinton in 2001, and the Treasury Secretary, me, left the White House, the country was in surplus and was paying back its debt. And then, a set of proposals put forward by a Republican president, enthusiastically supported by a Republican majority in both the Senate and the House were passed, and, as a result -
Fareed Zakaria: These are the tax cuts?
Larry Summers: The tax cuts, the Iraq War, the prescription drug benefits, huge increases in discretionary spending, much larger than anything that took place during the Clinton years. And, as a consequence, the economy was in substantial deficit. And then, the economy was, because of other problems, poised with a bubble for a crash, and it then crashed.
So they're in no position, I would argue, to lecture others about fiscal responsibility.
Where are we in this debate? The president's health care bill contained very substantial cuts in Medicare. The president has even raised the prospect of pushing upwards on the Medicare age, something that was unthinkable to many Democrats. The president has indicated a willingness to consider changes in social security.
A Republican like Alan Simpson, who is of the Budget Commission, has said that it is not the president who is to be faulted for an unwillingness to compromise. There is plenty of movement to entertain spending cuts. The question is whether it's going to be 100 percent spending cuts of one type or whether there's going to be any balance.
It's not that the president and his colleagues have talked about the prospect of raising taxes on middle class families. It's not that they've even talked about raising income tax rates. They've talked about eliminating a special tax break for the owners of corporate jets.
Fareed Zakaria: But those are trivial numbers. You'd have to do a lot more than that.
Larry Summers: Even though you would ultimately have to do more, but even corporate jets and hedge fund special treatment is too much revenue increase for the congressional majority.
So I don't think there should be any confusion here about who's willing to walk a mile to compromise so far. The president has shown that in any of a variety of ways, and the president has never said that it's my way or default. The president would be happy to see an agreement to move us past the prospect of default on almost any terms.
It is the House majority, the Republican House majority, that has indicated that they want to use the credit worthiness of the country as a hostage to pursue a particular agenda and to pursue it without compromise. I don't think that's the right way to advance the interests of the country.
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Zacaria has a small penis
What a stupid troll. why can't you STFU?
In a time of potential national crisis, you make a comment about a man's penis size indicates one of two things or both. You are either Gay or a total moron. My guess is both.
Joao is Charly one more thing – human garbage......
I second that notion....now lets all have a vote I say eye! Now come on Congress it's time that you voted on something as well.
HAHAHAHA! Best comment ever.
@joao: Tell us exactly how you know that.
maybe, but his balls are bigger than your whole house
And you, sir, have a very large one, and it sits atop your shoulders.
Joao, you are stupid moron. Fareed is intelligent man and great journalist. Your comment is inappropriate, but it is clearly showing your level of intelligence. I think you are the one with small penis, full of complexes. Get a life LOOOSEERRR.
No. It just seems that way because the space between your teeth is so huge.
Why doesn't Summers admit they have the cash flow to pay the interest in the debt and they can issue new debt as old debt matures. Instead he tells bs stories that we will default in August. Another lie.
QUANDO FALAR DO CORINTHIANS, VÊ SE FALA CERTO! #ChupaCnn #CorinthiansBiggerThanCNN #CorinthiansBiggerThanAll @cnn
The only small thing around is Zacaria's penis...VAI CORINTHIANS
I never seen Zacaria's penis, I can't see small things....VAI CORINTHIANS
What were you doing in Zakaria's pants?
Two idiots talking an Arab and a loser. CNN has nothing better besides that Queen Bill Maher
Zakaria is an American Muslim, originally from India. Just because he is Muslim, he is not Arab. Now, who is the idiot here?
You are so STUPID!!!
One can borrow long to buy long – say a car paid over 5 years that lasts at least 5 years. Or a house. One can borrow short and buy long – buy the car that lasts 5 years, and pay for it in two years. One should not borrow long to spend short. For example, charge ever larger balances on Visa to eat today. That's what the US is doing – borrowing long term bonds to pay today's bills. Not smart. Not smart at all. And a pox on both parties and their finger pointing. Stop spending, and start paying down the debt !
Well said, Emporor Has no Clothes! WE need more intelligent posters like you, up here.
Because we all know that more intelligent posts on CNN will help our debt crisis
@ Whatwhat
No, intelligent posts here are made in the hopes that someone ignorant of the facts displayed will thus be enlightened. The more people enlightened to the facts on a particular issue will begin to affect that issue is perceived, and may even change how it is dealt with.
Change is not instant when you talk, that's why there is war. Change comes faster looking down the barrel of a gun. And even if there is to be a revolution, doing so with uneducated or ignorant people would be folly as people many times flock to change...without understanding what it will bring. Look at the 2008 and 2010 elections.
People unfortunately still believe that there is hope in this oligharical two party system. People are fighting over coke and pepsi when what this country really needs is an enema.
So, if you don't like the status quo either start educating people or start stockpiling ammo. The way things are going, we're probably going to need both.
Good thing we had that article not long back on eating squirrels as most people won't be able to afford a trip to the grocery store soon enough.
_OMG_ ; {}_WTTF_{} ; {?}"_RE: ALL_OF_THE_Above_"{?}
I believe that NOW is the time for the UNITED STATES SUPREME COURT to conduct an EMERGENCY hearing regarding the current Fiscal Situation in Washington, DC due to the fact that the other two branches of the federal gov't are at each others throats. "We the People" have come to accept 'BIG GOVERNMENT' but hereby REJECT all SPECIAL-INTEREST-GROUPS as belonging to 'Bloated GOVERNMENT' which 'we' CAN NO LONGER AFFORD TO TOLERATE !
('An Anonymous PATRIOT' (S3kShuN8)) - note: __NOT__ affiliated with the hacker group "Anonymous"
(However, I will say this: Instead of Jailing the really good hackers, put them on the payroll ! )
( BOTTOM LINE: if a person is capable of hacking the DOMAIN __.gov__ that person is under-appreciated. )
The supreme court is a 5/4 political body.When they installed G.bush ll THAT was all I needed to see to vow I will NEVER spend 1 minute on any political effort again in this life.If you vote you make the government ligit. and as we all now should know it is a gov. of the corps.,by the corps and for the LLC corps.As QE III is poised to ruin your saving big money will slither out the end of this tunnel wealth intact to continue control.BRING ON DEFAULT! Let the second revolution begin!
So, please identify those other two branches of goverment at each other's throats? Because I was not aware the federal judiciary and legislature were? You know there are three branches and the senate and house are not two separate branches, please say yes you know that.
the problem with hack3r5 is that they have a skill that they believe turns them into superheros and ninjas, if not gods. Power corrupts, deludes, gets them discharged with a section 8, but never helps them tame their ego, letting them go on in the belief they have the answers to all things everywhere.
When we default, and the power goes out, you will lose your super powers.
"they (the Republicans) want to use the credit worthiness of the country as a hostage to pursue a particular agenda and to pursue it without compromise." I think the Congress should set up an independent body that has the prerogative power to counteract, if the House majority reaches a consensus that obliterates the country.
It's been around for a long time. It's called the President's Veto.
to Joao
you can suck his penis on regular bases. that will make his penis BIG and your dreams come throuhg. The best home remedy
\problem.posting\
/\_CONTAINMENT_OVERRIDE_ !!!!:!!!!
\problem.posting\
JVH,
FIRST RESPONSE AUTO-CENSORED !!!!!!!!!!!!
/\_CONTAINMENT_OVERRIDE_ !!!!:!!!!
"There's no question the United States can meet its obligations. The question is whether we will."
Whilst the US can no doubt meet its short-term interest repayments there are now real questions in the global market about whether it can meet its longer-term capital repayments as US productivity and balance of payments continues to fall year on year whilst its debts continue to rise.
Raising its own internal legal debt ceiling does not solve the root problem as the outstanding capital owed grows apace yet the means of repaying that capital shrinks due to the US unwillingness to raise sufficient new taxes or make sufficient public spending cuts to reduce that long term capital debt burden.
China will not bankroll the gap for ever and who else can or wishes to?
Paul, you seem to understand the long term predicament of our country.
It is obvious that people want to get their benefits now, to be able to survive because the economy has been brought to its knees by Wall Street and their cronies in government.
We have a very large trade deficit and a very large budget deficit and they are somehow related.
Outsourcing and the free trade policies of all the recent administrations have created close to 25million unemployed workers (Barrons-July 11) . Basically we cannot compete with the five dollar/day oversees labor.
We have people who are unemployed or unemployable because of what has happened and what is happening to our industry, and we have to give all these citizens benefits (welfare, food stamps, unemployment insurance, housing subsidies etc) to survive.
How do we solve the root cause of our problems, needs leadership by the Congress and the Presidency that we somehow lack at this time. Mr. Summers is one of the creators of the mess we are in and he has no credibility to talk about the effects of the deficit in our economy, when he is just looking at the short term effects of a default and not of what is going to happen later if we continue the present economic course.
As we say; he is another one of those wise people who keep on kicking the can down the road until they and the can go down the cliff.
You hit one of the nails on the head – Outsourcing has caused a lot of our problems in this country. Unemployment in this country is a disgrace and shame on all of the US companies that have taken food out of the American mouths by outsourcing OUR JOBS. But you still want tax breaks & loop holes and anything else your greedy hands can get from this country. Your nothing by greedy little enigmas ! Americans must take care of Americans !! Too much goes out of this country and deprives Americans. This country should take care of their own FIRST ! No other country will take care of us. Trillions go out and I sit here a nervous wreck wondering if I'll get my next Social Security check ! This is Not Right !
amarCNN (or "To Whom It May Concern")
I have a post in the clipboard which will NOT post despite NOT violating Terms of Service ...
PLEASE ASSIST !!!!
There should be s special election called to VOTE OUT EVERY ONE of these idiot living on our nickel inside the beltway
\problem.posting\
JVH,
... AS it SITS now, Congress has TOO MUCH Authority .
... It's time for the SUPREME COURT to act SWIFTLY to mitigate between the Executive AND Legislative branches .
/\_CONTAINMENT_OVERRIDE_ !!!!:!!!!
re: issues with posting
It would be extremely helpful to me to provide a list of words which I must refrain from using in order to successfully post on this BLOG site. Apparently the word beginning with "Con" plus "sti" plus "tution" is a BAD WORD ?!?!?
EVERYONE DUST OFF YOUR HISTORY BOOKS and open to page 1938 !
Mine doesn't go that high
I had to cut back due to the recession.
time to re-read the 'Verfassung'
Why do none of these politicians talk about not raising the debt ceiling? For that matter why is the media sold on the idea of raising it?
I do not think you will be able to understand if someone explained it to you. Every article on this has explained it but you could not understand. I do not think you ever will. Fortunately, there are smarter in this country and I hope they are the majority.
Duh! because the media is bought and paid for by the folks who have stolen from us all. Banks make loans that they know can't be repaid, but 'since they are 'too big to fail' the US 'pays' the loans with digital money. Then they create bundled securities and sell them at leveraged margins of 1:50. Then they insure their own bogus securities and voila, we are where we are now. No value + more currency = diminished monetary value.
And Corinthians ARE small. Deal with it.
Actually, it is Dr. Zakaria, and he is Indian-American, and not, as you baselessly claim, an Arab. The two of you (joao and kleftis1966) smack of the sort of uneducated rubbish pushing economic collapse on the extreme right wing for no other purpose than to see the left wing fail. I find someone posting blatantly inaccurate information about someone and then referring to them as an idiot extremely ironic, as well.
As for Larry summers, who also holds a Ph.D., was president of Harvard college, is from an economically-savvy family (two uncles who are nobel laureates in economics), and is himself considered an economic prodigy in his own right. He also served as US Secretary of the Treasury under President Clinton – which if you have any knowledge of recent history you will know left a budget surplus as opposed to the massive deficits we have had since.
If you have any interest whatsoever in contributing intellectually to the argument you might try making a sensible counterpoint to any of the opinions presented in the article – although judging from penis comments and other crude insults from the both of you I have serious doubts as to your capabilities in that regard.
I love you.
I love your answer, but those two fools should be on fix/tea party (fox) news.
This is the most biased left wing article I have ever read. Summer should be ashamed of himself for pointing fingers. Did you know that the .com bubble burst during the Clinton Administration and its because Clinton himself allowed large Corporations like Worldcom and Enron to fleece millions of dollars from hard working American citizens. Clinotn also failed to take out Bin Laden when he the chance to do so, which could have prevented 9-11. He was also a boorish womanizer, who should have been kicked out of office. The Bush's Tax Cuts, by the way, had bi-partisan support. So shut rhetoric down and pay attention. This is not a hostage negotiiation. The republicans will make a deal and are all ready to compromise if it means for the good of the country. But, the point of all of this is to make sure it's right for the country.
Hear hear, common sense is prevailing. Everyone seems to completely forget the dotcom crash and the fact that our core was shaken by two planes flying into large buildings.
Let's say, just for the sake of argument, that it is already 2012 and the RACE is ON.
With that having been said, the previously proposed alterations to the 'Verfassung' (GERMAN) which are located elsewhere in this BLOGspace would have the effect of curtailing the FEDERAL Gov't in AUTHORITY by rebalancing the equation to FORMALLY include "We the People" into the permanent equaTION __AND__ by rebalancing the scope of Authority available to the THREE-BRANCH-FRAMEWORK supplied presently.
AS A concerned Citizen, I find it deeply disturbing that I am unable to use the word "Con" plus "sti" plus "tut" plus "ion" without first breaking the word into four separate segments just to get around a "Gremlin".
[.SEE?.(.how to process a pentagonal bogey.AND.how to sink an Albatross 'every time'.).]
|_\/_x_\/_|
(360*360)
GENERAL QUERY:
"Do I need to come out of Retirement?"
I don't believe the story. I doubt that more than a hand full of all congressmen has the right stuff to manage the country's finances properly and that goes for Obama too.
Thanks for destroying America, maybe allah will take you, because God and the American public shall never forgive you.
What!, you must be on crack. The was set on a part for destruction by Reagan and Bush.
stupid is as stupid comments...
NEVER have I seen a divide as wide as that between Tea/Repubs and Dems. I say let the SUPREME COURT invoke Chapter Eleven AND hammer out an acceptable compromise between the other two Branches. No need to bump up to ~1.50~ for THAT to happen...
BREAKING NEWS WE HAVE A NEW COUNTRY IN THE WORLD AND WE ARE GOING TO CALL IT THE UNITED STATES OF CHINA
I like that one!
THE CNN AZZHOLES WONT LET ME POST MY COMMENTS. I GUESS THEY ARE SCARED OF THE TRUTH
Go to Fix (fox) news.
As far as I am concerned EVERYONE in CONGRESS should be Fired every single person Democrat, Republican, and Tea Party person.
Not one single person in congress is here to help the normal American the men and woman of congress are all influenced by who has a bigger pocket book and what corporation or group can do for them. I am sick and tired of these bone heads taking this country down a path of financial disaster.
What do these people who were elected in congress say to the 14 million hard working Americans without work Sorry we cannot help you what about the people who are were on unemployment and have lost that life saving check what happened about creating jobs, what happened to helping those who make this county run what happens when everyone on unemployment run out of the checks and cannot find a job what do you say to them.
It’s time for Congress to step up look in the mirror and say “We have failed the American Public” we have failed to do what we vowed to do and fix the sinking ship we agreed to help rebuild.
The CNN site has more trolls than a Tolkien novel. Illustrates how we ended up with a cousin-marryin' House of Reps that is now being run by the Clampetts. America has had it. Maybe it's for the best...
People who have a lot of US Savings Bonds might consider cashing them between now and August first.
Silent Hunter,
I too have been having trouble posting through CNN's Gremlins. It appears that posts containing certain words are automatically weeded out at the time of post, so be sure to maintain a copy in your clipboard and use caution when preparing your comments for posting. For instance, this morning I have discovered that the word comprised of the letters "CON" plus "STI" plus "TUT" plus "ION" will prevent the post from going through as desired...
That's because the word const-itution contains the word t-it. It's a stupid filter for inappropriate words. You can't say the word dr-ape either because it contains r-ape. Plenty of others as well
When you are 14 trillion in debt you are already in default.You just have to be smart enough to make some fool think that you have a rich aunt that is going to pull you out of the pit. Would you not like having the convenience of raising your debt level by just declaring so?
\/ x \/ x \/
(360*360)
GENERAL STATEMENT TO 'Global Public Square' community:
search the older threads for relevant posts pertaining to this Broad Topic ...
Larry Summers is a bozo. Why ask him anything? He's one of the architects of the mess we are in. He fought tooth and nail to prevent ANY regulation of the otc derivatives market. How did that work out Larry???
how come the media never points out the fact that the goverment through its own mismanagement caues the downfall of america not the terrorist or china or the mexicans or the jew or the black or the unions or anyone that the media tries to blame but the. GOVERNMENT.
"The tax cuts, the Iraq War, the prescription drug benefits, huge increases in discretionary spending, much larger than anything that took place during the Clinton years. And, as a consequence, the economy was in substantial deficit. And then, the economy was, because of other problems, poised with a bubble for a crash, and it then crashed.
So they're in no position, I would argue, to lecture others about fiscal responsibility."
ZING!!!!!
Harry you quoting a man who has biased view of the world. This is guy who was directly responsible for the Worldcom and Enron disasters and allowed them to become a plague. Without Bush, there would be no regulation or Sarbanes-Oxley. Summer is no position to make comments either especially since what we are going through right now is partially of his doing.
Larry Summers repealed Glass-Steagal during the Clinton years, directly causing the collapse of 2008. I used to respect Fareed Zakaria. Now he's spreading the venom straight from the snake. Larry Summers would love nothing more than for another collapse to happen, so he and his friends can direct deposit American tax dollars into their piggy banks again. That is exactly what will happen if our current corporatist system isn't completely restructured.
It's saddening that nothing has changed after 2008. It's as if they want it to happen again. Extending the ceiling is just one more missed opportunity to stop a runaway train. I'm starting to think it's deliberate.
A 1000% full proof way to prove this guy is full of crap.
A) THERE NEVER WAS A SURPLUS UNDER CLINTON !!!!
Sweet lord. Go to the treasury site and run your own query. The national debt got larger each and every year under Clinton. You don't go deeper in debt if you have a surplus.
Shame on the news organizations, shame on the democrats and shame on the republicans !!!
Dear MrFoobar, apparently you don't understand the difference between the deficit and debt. Allow me to educate. If the government spends more than it takes in for a single year, it runs a deficit for that year. If it spends less than it takes in, it runs a surplus. The national debt is the total amount of money owed for all the years of deficit spending plus interest. For the sake of easy math let's pretend our country was 10 trillion in debt and we ran a surplus of 500 billion for one year. After that year (discounting interest) we would be 9.5 trillion in debt. Therefore (discounting interest) it would take you 20 years at this rate to pay of 10 trillion dollars of debt. Paying off mortgage debt or credit card debt is a very similar concept.
So yes, we were running a surplus during Clinton's administration and yes we still had a debt. They are not mutually exclusive.
Doing a cross section of your comments,I'll say The America government really needs to work on education, your country is no longer a model to look up to, so many dumb comments here, its really a shame, why on earth will a person say the debt ceiling should not be raised,when expert economist world-wide have given their input and is there any sense in cutting funding in some sort for programmes that benefit millions while another party protects to say the least closing loopholes in tax codes for the rich or even letting the bush tax cuts expire. Honestly weren't they paying that rate when your country had a surplus. Many of your comments are scary and analysis out-right dumb
Expert economist doesn't mean honest economist. At some point people need to stop taking these "analyses" at face value and do some further research to connect the dots. It's only after awakening to the fact that governments have not somehow become intrinsically "good" over the last century and are capable of the same things that they have been throughout history. Control of the global economy and the media is very concentrated these days. Education in America is actually used to put people to sleep not actually educate them. It's a dangerous situation to be in if you look at the past.
Can anybody put "A long, long, long – a long, long, long time" in terms of days or years?
Michael it means forever. Of course the US credit rating will be downgraded regardless UNLESS we make drastic changes immediately. Raising the debt ceiling kicks the can over the cliff. Defaulting isn't the end of the world. The dollar losing status as the world's reserve currency is the end of the world. (Not so) secret money printing of the FED to pay down these ludicrous debts will ensure that this second event will occur. The events are already in motion.
So, no, no one can put this in terms of days or years?
Why is it that people including these so call leaders have such a huge problem understanding basic economics. If the Gov spends 20 billion a year and our debt is 100 billion a year you would think that 80 billion would be used to pay off the debt. This is just an example.. However that is not the case We spend 200 billion a year and our debt is a trillion a year and we pay back millions and then turn around and spend billions more later, So its like you have a credit card with a limit of 3000 dollars and you can not go over that, The company says you have to pay this money back with interest in one year and instead you get another credit card with a 5000 limit and only pay back $2 a month.. Outcome you loose your credit and default on your credit... That is what the US is doing We pay small amounts to our debt that will never go over what we spend a year. They want a solution stop giving free aid to illegals, Stop spending money on useless programs like work for welfare, stop bailing out companies that have poor money management.. Do away with some of these wars. Stop spending money on sending jobs over sees and make it illegal to do so.. Create jobs the more people working the more tax money comes in.. Not rocket science..
Can they really be that dumb or is there something else going on? Is America supposed to go down in favor of a new global government? Elites (ex. Henry Kissinger, but there is soooo many) have been publishing papers and plans to accomplish this for the last century. Watching events unfold through these glasses make things much more clear. Why else would the democratic/republican parties be so diametrically opposed (by design)? To divide and confuse the American people of course. It's painfully clear that the objectives of the new white house are the same as the previous. Waking up to these facts is sad but necessary.
Shocking facts the US Census Bureau:
Social Security Income is going to be the primary source of retirement income for most Americans.
Most Americans are going to have to work in retirement 30 hours/ week to supplement that income.
Many will perhaps skip meals because there is little money left over after basic expenses.
This is not fiction. It will be fact.
Why? Because people are making a choice to live like this.
People who work for the government are living off you, the average taxpayer.
You pay for their retirement, their benefits, yet you can't even retire youself!
Learn the real facts and get prepared!
Google the term "SIMPLE STOCK CASH" and click the very first site. Go right to the penny' stock page to see what the rich do not want you to know.
any debt plan must include replacing obama or he will just go back to his disgraceful spending. obama is looking for any deal that allows him to go on vacation and could care less about a failing america...
The real disgrace is the particular education system you are a product of. The amount of false statements you have made in one short post is mind-boggling.
The first thing we should do to stop spending is get the hell out of Iraq and Afghanistan. We should have never went to Iraq in the first place. We should CUT all military spending down to paying the troops. No more spending $1.8b/week on a war that we shouldn't have started in the first place. Defense spending is out of control. We should immediately disband the Department of Homeland Security and the TSA. We should NOT raise taxes on the middle class, but even as a Conservative, I see zero issue with raising taxes on the rich and on businesses.
Oh yeah and while we're at it, lets invite Al Qaeda to take up residence in the White House. GET REAL !
Congressional Reform Act of 2011
1. No Tenure / No Pension. A Congressman collects a salary while in office and receives no pay when they are out of office.
2. Congress (past, present & future) participates in Social Security..
All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social Security system, and Congress participates with the American people. It may not be used for any other purpose.
3. Congress can purchase their own retirement plan, just as all Americans do..
4. Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%.
5. Congress loses their current health care system and participates in the same health care system as the American people.
6. Congress must equally abide by all laws they impose on the American people.
7. All contracts with past and present Congressmen are void effective 1/1/12.
The American people did not make this contract with Congressmen. Congressmen made all these contracts for themselves. Serving in Congress is an honor, not a career. The Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work.
I like it.
As a matter of fact, I think ALL members of Congress should immediately be placed on Minimum Wage OR be forced to work for tips like a busboy...
Over 300 billion of TARP bailout money has yet to be repaid. We should raise taxes on Wall Street fat cats who got our country into this mess through their greed and treachery.
It will be repaid with printed money. That's the best way to tax the American people
Not raising the debt limit by August 2nd will not be as bad as Obama feels it will. http://www.freedomworks.org/blog/jborowski/no-debt-ceiling-hike-without-cut-cap-and-balance and http://www.freedomworks.org/blog/dean-clancy/seven-reasons-why-aug-2-isnt-the-end-of-the-world
The article information is also false in that Bill Clinton never left us with a surplus he only increased our national debt. We might not even default on our loans and even if we did it's honestly better then the alternative of raising the debt ceiling and printing more worthless money. We're already in the process of defaulting by printing more and more money which lowers the value of our dollar and makes the value of it go down. Even China who we owe the most money to has openly said that they feel that the American dollar is just not worth as much as it used to be and more country's are working switch from having the US dollar as their reserve currency to other things instead such as stocking up on gold. The answer is not to raise the debt limit or raise taxes but to cut spending and cut taxes. The proposals I've seen so far aside from the cut, cap and balance pledge don't seem to actually guarantee cuts as well either. At least not major cuts.
This talk of default is an utter lie. We pay 40 cents on the dollar for the debt now. You keep raising that number by barrowing more and we will default. SS pays for itself still 100B+ every year extra. The government robs it to pay for waste. Obama will be forced to pay the debt, ss, Military pay and have to cut 860 billion in descretionary, then have to find almost 800 billion more half of which can be done if you bring all our troops home, from the military budget. Tell congress to buy their own health care and take huge pay cuts. If they really want to be servants, it will start with them. CNN, you are spreading lies about default and should be ashamed.
I applaud you John.
Tell me something. If Tarp money was repaid, then where is the 1 trillion dollars a year that Obama spent on top of GWB budget going? It just does not show up in the books. Where it going?
Obama should have already taken drastic action in this crisis. He is the chief executive and has the responsibility to manage the finances of the country. Has he furloughed federal workers? Shut down non-essential services? Ordered parts of the military to stand down? Done anything to conserve money in order to ensure he can pay the nations bills? No, since he is a democrat he only knows how to keep spending no matter the consequences.
As stated after the OBL raid, getting our Public Enemy #1 was Obama's top priority up to that point. Now his focus is on domestic sustainability, which is a larger and loftier goal than simply balancing the country's budget. I honestly believe that he would forego a second term to get something REAL done regarding this issue during what is left of his first term. Tea/Rep's just want to try to turn him into a lame duck when we ALL know he is anything but that.
wow, I am actually suprised that that last message posted. ! ! ! !
Can someone please explain, what is meant by 'panic begins on money market funds' if default happens? If I have invested my 401K in Money Market fund, how that will be affected ? Should I take out my 401K investments out of the Money market fund ?
You should consult a financial adviser. I'm wondering also.
Keywords here are "self-inflicted".. something the GOP says "would be a good thing". The US economy, and then the global economy would crater. Are these the people we all want running the country? If this happens, don't expect me to pay my mortgage or my visa bill(s) - the Sheriff will be met at my door by the muzzle of my shotgun.
This guy lies like all Democrats..................................
Larry Summers: Well, let's begin with the fact that when a Democrat left the White House, Bill Clinton in 2001, and the Treasury Secretary, me, left the White House, the country was in surplus and was paying back its debt.
Verifying this is as simple as accessing the U.S. Treasury (see note about this link below) website where the national debt is updated daily and a history of the debt since January 1993 can be obtained. Considering the government's fiscal year ends on the last day of September each year, and considering Clinton's budget proposal in 1993 took effect in October 1993 and concluded September 1994 (FY1994), here's the national debt at the end of each year of Clinton Budgets:
Fiscal
Year Year
Ending National Debt Deficit
FY1993 09/30/1993 $4.411488 trillion
FY1994 09/30/1994 $4.692749 trillion $281.26 billion
FY1995 09/29/1995 $4.973982 trillion $281.23 billion
FY1996 09/30/1996 $5.224810 trillion $250.83 billion
FY1997 09/30/1997 $5.413146 trillion $188.34 billion
FY1998 09/30/1998 $5.526193 trillion $113.05 billion
FY1999 09/30/1999 $5.656270 trillion $130.08 billion
FY2000 09/29/2000 $5.674178 trillion $17.91 billion
FY2001 09/28/2001 $5.807463 trillion $133.29 billion
As can clearly be seen, in no year did the national debt go down, nor did Clinton leave President Bush with a surplus that Bush subsequently turned into a deficit. Yes, the deficit was almost eliminated in FY2000 (ending in September 2000 with a deficit of "only" $17.9 billion), but it never reached zero–let alone a positive surplus number. And Clinton's last budget proposal for FY2001, which ended in September 2001, generated a $133.29 billion deficit. The growing deficits started in the year of the last Clinton budget, not in the first year of the Bush administration.
Sorry, to tell you this, but Clinton was not in office in September of 2001. Bush had taken office in January of 2001 and the budget for 133B was passed under him.
As far as the surplus goes, you are correct. The only reason there could be claimed a surplus was that Clinton applied the Social Security balance against that $17B deficit. This was misleading, however, it was a practice continued throughout the Bush presidency to play down the amounts of the budget deficit.
This is just another article spewing half truths and misinformation. So according to Larry boy if the us defaults there will be a run on the money markets and other financial markets now there is an explanation not. Then freed passes him another softball and guess what you have obama's points so who is doing whos bidding. Interest rates are determined by auction not rating agencies. If less people are interested in lending money to us that might be a good thing. In any event this article neither gives a full picture of the issues nor a reputable account of how it might go bad.
I work in the banking industry, but not economics related, however I do have a MA in Economics...
Seriously, if the U.S. doesn't get the debt ceiling raised, it'll be fun times for the U.S. and much of the world for quite a while.
If they are not going to pay out SS why should I pay in??
But even before that will we stop aid payments to other countries and take care of our own people first?
It would mean all these fat ass government workers would have to get a real job- fat fks
If the default won't be a big deal, explain why it won't. There isn't a single well-respected economist that says the result would be anything less than devastating. Yet you want to trust your own beliefs over the knowledge of experts? How can the ignorant and uneducated think they know more than people who make a living on the subject?
You mean the same well-respected economists that said the economy was fine before the whole system collapsed back in 08?
It would mean Obama won.
They need to start putting a warning label on junk food. Warning: May cause (picture of Chris Christie).
The fact that we can't pay our bills if we don't borrow more money every month just shows our government is running a ponzi scheme just like Bernie Madoff was.
Based on the conversations here I am assuming most of you graduated from State schools.
We are playing right into their hands. This all started back with the Federal Reserve Act. The day that passed made this day inevitable. Meanwhile, the 'haves' (google rothchild, bilderberg, etc) have successfully managed to divide us on social issues into 'right' and 'left' – We argue over whether gay people should have rights, or whether a fetus is a person while they sit back and raid the world of it's wealth. The US govt. is almost completely sold out to this great conspiracy. The few who are willing to speak up (M. Gravel, Ron Paul, etc) are labeled as nut jobs and irrelevant.
When we have 25% unemployment and people killing each other over a loaf of bread, maybe things will change. Until then, we will continue to argue about things that really don't matter in the big picture until it's too late...
Obama sucks.
No worries, America, you will never starve, as long as you are living in that continent. Just teach your children to excel and excel with honesty.
Stop blaming presidents and governments. It's all because of laziness and unwillingness to work hard. Period.
would it mean obama would have to stop wasting money?
This article is ridiculously partisan!
Default would mean that the Indians (aka HINDUBANS) can kiss the behind of Americans. No money to spread around as charity for them to do the dirty work in South Asia. Hare Ram Hare Krishna!!
Well,
I think you all are morons!
I feel that this is all bad.
It is so unfair to have this so called congress and the so called PRESIDENT
to do this to all pf the people.
I was a Dme up until here about 10 years. And the darn Dem's fall dam short.
I have never liked Obama from day one and I cant stand him even now.
Three kids of mine two like this so called unlikeable man.
My God he is not doing any of us any good.
And You all think that this man can and will do good,THINK Again all we are in Hell.
I didnt want to see this go on but GOD HELP US ALL!
I hope and pray that he wont be back in.
At riches our buddys fully understand us; when it comes to adversity damage our buddys.
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