Brother Can You Spare A Dime? - Mercedes-Benz Forum

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post #1 of 12 (permalink) Old 08-01-2007, 12:54 AM Thread Starter
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Brother Can You Spare A Dime?

In yet another Tax Increase on America, the Bush Administration is again asking for another bump up in its credit limit. Bushie has already given us a $600BILLION per year TAX INCREASE with the INTEREST on his Charge and Spend Economic policies. What's another Trillion among friends, afterall, it is the kids and grandkids that will continue to be paying this tax back.

Tell us again just how positive that little tax cut was over the past 5 years.

+++++++++++++++++++++++++++++++++++++++++++++

By JEANNINE AVERSA,
AP Economics Writer
Mon Jul 30, 4:46 PM ET

WASHINGTON - Treasury Secretary Henry Paulson on Monday said the United States may be unable to pay its bills this fall unless Congress raises the government's borrowing authority, now capped at $8.965 trillion.

Paulson, in a letter to lawmakers, estimated the government is likely to bump into the statutory debt limit in early October.

"Accordingly, I am writing to request that Congress raise the statutory debt limit as soon as possible," Paulson wrote. He did not say how much more borrowing authority the Bush administration needs.

Congress has already boosted the statutory debt limit several times during President Bush's tenure. The last time Congress upped the government's borrowing authority was in March 2006 when it agreed to raise the debt ceiling by $781 billion.

Boosting the debt limit is more a matter of politics than economics.

Economists doubt Congress will refuse to raise the limit. A federal default is considered unimaginable because it would rattle bond markets, force interest rates higher and shake the economy.

Democrats have blasted the administration for ratcheting up the government's borrowing needs, while they deal with bloated budget deficits; they contend the greater borrowing needs show Bush's fiscal mismanagement.

The administration, however, has defended the increases as essential to pay for wars in Iraq and Afghanistan and to cover other costs to keep the United States secure.

In the past, Treasury has resorted to numerous accounting maneuvers to pay its bills while the government waited for Congress to expand its borrowing authority. Paulson argued against being forced to use such measures, saying they "would create unnecessary uncertainty for the financial markets and result in costs to the government." Such actions, he said. "should be reserved only for extraordinary circumstances, and should be avoided."

Separately, the government expects to borrow $73 billion in the July-to-September quarter, which would be more than previously forecast, the Treasury Department said.

The new estimate is $31 billion higher than a projection made in April. The department partly blamed increased government spending for the new, larger quarterly borrowing projection. It comes as the department considers the government's financing needs, which it does on a quarterly basis.

McBear,
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post #2 of 12 (permalink) Old 08-01-2007, 01:26 AM
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One may call the republicans stupid, but they did figure out that yanks won't complain about tax increases so long as they're in the future. They'll complain then. And why should we worry about then, now?
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post #3 of 12 (permalink) Old 08-01-2007, 12:50 PM Thread Starter
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Originally Posted by Marsden
One may call the republicans stupid, but they did figure out that most naive NeoCon yanks won't complain, or understand about tax increases so long as they're in the future. They'll complain then. And why should we worry about then, now?
Fixed that for you.

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post #4 of 12 (permalink) Old 08-01-2007, 12:57 PM
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"..the United States may be unable to pay its bills.."
The sky is falling and the end of the world as we know it is closer than ever..
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post #5 of 12 (permalink) Old 08-01-2007, 04:03 PM
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ha ha...long live the $30 billion arms aid to Israel!!

Fuel economy!! whats that??
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post #6 of 12 (permalink) Old 08-01-2007, 04:21 PM
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ha ha...long live the $30 billion arms aid to Israel!!
heh, heh......naat tu waarry! OIL 'stolen' from Iraq will soon balance the books! heh, heh........
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post #7 of 12 (permalink) Old 08-01-2007, 06:56 PM Thread Starter
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Originally Posted by maine_coon
The sky is falling and the end of the world as we know it is closer than ever..
While I agree the current Sec Treasury is ill equipped to deal with Bush’s Charge and Spend Tax Increases of the past six years [$5TRILLION so far], your edited quote is somewhat incongruous to the point.

It is not that we won’t be able to pay our bills, it is that we have to sell more bonds and treasury notes, generating more DEBT to pay our bills.

And in the past, when the government has ground to a halt without that supplemental cash infusion, government employees did not get paid, contractors did not get paid, bills did not get paid. Social Security checks do not go out, Medicare checks do not go out, Student loans do not go out. It puts a real strain on everything.

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post #8 of 12 (permalink) Old 08-01-2007, 07:11 PM
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.. government employees did not get paid, contractors did not get paid, bills did not get paid. Social Security checks do not go out, Medicare checks do not go out, Student loans do not go out. It puts a real strain on everything.
Exactly.
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post #9 of 12 (permalink) Old 08-07-2007, 07:18 PM Thread Starter
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For those who kept asking me what the big deal was with running up the National Debt or why we should worry because we are America and don't have to pay it anyway, here you go. I have not been banging this drum just to annoy Jayhawk.

I was always taught it is better to negotiate from a position of strength. Apparently this Administration is going to need to work from its knees.

++++++++++++++++++++++++

China threatens 'nuclear option' of dollar sales
By Ambrose Evans-Pritchard
Last Updated: 1:48am BST 08/08/2007

The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress. Shifts in Chinese policy are often announced through key think tanks and academies.

Described as China's "nuclear option" in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.

It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900bn in a mix of US bonds.

Xia Bin, finance chief at the Development Research Centre (which has cabinet rank), kicked off what now appears to be government policy with a comment last week that Beijing's foreign reserves should be used as a "bargaining chip" in talks with the US.

"Of course, China doesn't want any undesirable phenomenon in the global financial order," he added.

He Fan, an official at the Chinese Academy of Social Sciences, went even further today, letting it be known that Beijing had the power to set off a dollar collapse if it choose to do so.

"China has accumulated a large sum of US dollars. Such a big sum, of which a considerable portion is in US treasury bonds, contributes a great deal to maintaining the position of the dollar as a reserve currency. Russia, Switzerland, and several other countries have reduced the their dollar holdings.

"China is unlikely to follow suit as long as the yuan's exchange rate is stable against the dollar. The Chinese central bank will be forced to sell dollars once the yuan appreciated dramatically, which might lead to a mass depreciation of the dollar," he told China Daily.

The threats play into the presidential electoral campaign of Hillary Clinton, who has called for restrictive legislation to prevent America being "held hostage to economic decicions being made in Beijing, Shanghai, or Tokyo".

She said foreign control over 44pc of the US national debt had left America acutely vulnerable.

Simon Derrick, a currency strategist at the Bank of New York Mellon, said the comments were a message to the US Senate as Capitol Hill prepares legislation for the Autumn session.

"The words are alarming and unambiguous. This carries a clear political threat and could have very serious consequences at a time when the credit markets are already afraid of contagion from the subprime troubles," he said.

A bill drafted by a group of US senators, and backed by the Senate Finance Committee, calls for trade tariffs against Chinese goods as retaliation for alleged currency manipulation.

The yuan has appreciated 9pc against the dollar over the last two years under a crawling peg but it has failed to halt the rise of China's trade surplus, which reached $26.9bn in June.

Henry Paulson, the US Tresury Secretary, said any such sanctions would undermine American authority and "could trigger a global cycle of protectionist legislation".

Mr Paulson is a China expert from his days as head of Goldman Sachs. He has opted for a softer form of diplomacy, but appeared to win few concession from Beijing on a unscheduled trip to China last week aimed at calming the waters.

China threatens 'nuclear option' of dollar sales - Telegraph

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post #10 of 12 (permalink) Old 08-07-2007, 08:54 PM
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China 0wn3s America!!

Fuel economy!! whats that??
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