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Old 04-15-2010, 07:22 AM   #1
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Default Took them a while to realize this.

http://www.foxnews.com/politics/2010...est=latestnews

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Federal Reserve Chairman Ben Bernanke told Congress on Wednesday that America is facing something approaching a debt Armageddon.

"The deficit will recede somewhat over the next two years as the temporary stimulus measures wind down and as economic recovery leads to higher revenues," he said, testifying before Congress' Joint Economic Committee.

"Thereafter, however, the annual deficit is expected to remain high through 2020, in the neighborhood of 4 to 5 percent of GDP," he said.

The GDP is the combined value of all goods and services that the economy produces. Each deficit requires the Treasury Department to sell bonds to finance the accumulated federal debt. Under the best of scenarios, the ratio of debt to GDP, one indicator of national economic health, would be well over 70 percent.

But that assumes Congress and the White House won't do what they've already promised to do -- extend most Bush-era tax cuts and adjust the alternative minimum tax in a way to protect middle class earners from its heavy levies. Under this more likely scenario, Bernanke warned that annual deficits and accumulated debt would surge to historically high levels.

"The deficit at the end of 2020 would be 9 percent of GDP and the federal debt would balloon to more than 100 percent of GDP," he said.

The last time debt equaled or exceeded the GDP was in the years just after World War II. If Bernanke's prediction comes true, in 2020, taxpayers would have to provide $1 trillion a year in interest to finance the national debt. At the White House, Treasury Secretary Tim Geithner accepted the premise but rejected the prediction.

"Of course that would be unsustainable," Geithner said. "But that's not going to happen if Congress adopts the policies the president has laid out. It will be very important to make sure that we have a strong recovery going forward that Congress demonstrate, that we're able to make some tough choices to bring those deficits down."

Bernanke once again called on lawmakers and the White House to come up with a plan to whittle down record-high budget deficits.

Even though sizable deficits right now are "unavoidable" given the damage wrought by the recession, the persistence of red ink raises risks to the country's long-term economic health, he said.

A credible plan to pare the deficit could provide the economy with benefits in the near term, including lower longer-term interest rates and increased consumer and business confidence, Bernanke told lawmakers.

"Addressing the country's fiscal problems will require difficult choices, but postponing them will only make them more difficult," he warned.

On the economy, Bernanke seemed slightly more optimistic that the fledgling recovery will keep on going after massive government stimulus fades later this year. Incoming economic barometers suggest that growth in demand by consumers and businesses "will be sufficient to promote a moderate economic recovery in coming quarters," he said.

Consumers are spending again after having cut back sharply during the recession. Going forward, consumer spending should be helped by a gradual pick up in jobs, a slow recovery in household wealth from recent lows and some improvement in the ability to get loans, Bernanke said.

That assessment of consumers -- whose spending accounts for 70 percent of national economic activity -- also appeared more upbeat. In recent weeks, Bernanke and other Fed officials have cited a litany of headwinds facing consumers, including high unemployment, rising home foreclosures and sluggish wage growth.

Shoppers boosted retailers' sales by a strong 1.6 percent in March, a better than expected showing, the government reported on Wednesday. That's a promising sign that consumers will do their part to keep the recovery going.

Another government report showed that inflation remains tame. Consumer prices edged up 0.1 percent last month. Low inflation gives the Fed leeway to hold interest rates at rock-bottom levels to support the recovery. Despite a steep run-up in energy prices, inflation is under control, Bernanke said..

Fielding questions from lawmakers, Bernanke repeated the Fed's pledge to keep interest rates at record lows for an "extended period" to aid the recovery. Rates have been at super-low levels since December 2008.

At some point when the recovery is firmly entrenched, the Fed will need to start boosting rates to prevent any inflation problems.

The soonest the Federal Reserve will begin raising short-term interest rates is the fourth quarter, according to 34 of the 44 economists polled in a new AP Economy Survey that debuted on Monday.

Businesses, meanwhile, have boosted spending on equipment and software at a solid pace and factories are benefiting from stronger demand for U.S. exports, Bernanke noted. Improved financial conditions are also helping out the economy.

However, problems still remain.

Bernanke said weakness in the housing and commercial real-estate sectors is putting "significant restraints" on the pace of the economic recovery. And, the poor fiscal conditions of many state and local governments have led to continuing cutbacks in workers, another force that will hold back the recovery, he said.

On the jobs front, Bernanke was encouraged by the 162,000 jobs added in March, the most in three years. However, the moderate pace of the economic recovery means that the 8 million-plus jobs lost by the recession won't quickly return. Bernanke said it will take a "significant amount of time" to restore those positions. He didn't say how long.

The unemployment rate has been stuck at 9.7 percent for three straight months, close to its highest levels since the early 1980s.

Bernanke said he is especially concerned about that 44 percent of the unemployed in March had been without a job for six months or more. "Long periods without work erode individual's skills and hurt future employment prospects," he said. Younger workers may be particularly hurt if the weak labor market prevents them from finding a first job or from gaining important work experience, Bernanke said.

On other topics Bernanke said:

--China should let the value of its currency rise, a move that would support U.S. exports by making them cheaper to foreign buyers.

--The Fed doesn't see speculative bubbles forming in assets such as stocks, bonds or commodities, at this point but is closely monitoring the situation. Some worry that the Fed's low rates will create another bubble like the one in housing that burst and threw the economy into a recession.

Last edited by JasonInAugusta; 04-15-2010 at 07:24 AM.
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Old 04-15-2010, 07:32 AM   #2
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Shocker....
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Old 04-15-2010, 07:50 AM   #3
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Someone finally crawled out from under their rock.
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Old 04-15-2010, 08:52 AM   #4
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Hmmm, imagine that. You make $1,000.00 a week every week but you spend $10,000.00 in those same weeks, every week and that causes a cumulative dept problem? Who would have thunk....

1 of 2 things will happen. Either the income will be brought up to the level of spending (tax increases), or spending will come down to income level (getting rid of the wasteful government programs). In either case, sh*t is going to hit the fan....
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Old 04-15-2010, 02:49 PM   #5
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I blame the fed.
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Old 04-15-2010, 07:48 PM   #6
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Isn't it weird how Bernanke was running the Fed (like that means anything ) when the financial "crisis" began and spiraled out of control under his stewardship is still holding his position?

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Originally Posted by Duuuuuuuude View Post
I blame the fed.
What did you expect? They want the big bucks, so sink the country into debt and make more $$$, everybody whose anybody wins!

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If Bernanke's prediction comes true, in 2020, taxpayers would have to provide $1 trillion a year in interest to finance the national debt.
I like this one.
Quote:
A credible plan to pare the deficit could provide the economy with benefits in the near term, including lower longer-term interest rates and increased consumer and business confidence, Bernanke told lawmakers.
So give the people 5 months of a decent economy to ease the blow of impending doom that will last for decades.
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Old 04-15-2010, 08:09 PM   #7
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Isn't it weird how Bernanke was running the Fed (like that means anything ) when the financial "crisis" began and spiraled out of control under his stewardship is still holding his position?
Not really. I would be suprised if it weren't that way. They've got us by our collective nutsack and are swinging us around like a little girl with a new dolly.

Not having the Fed involved would be a sign that we are going in the right direction. Like thats ever going to happen.

Here's how fawked up thier thinking is...

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--China should let the value of its currency rise, a move that would support U.S. exports by making them cheaper to foreign buyers.
Thats like taking out a loan from a bank, walking out, walking back in and trying to renegotiate a lower interest rate so you can pay it back more easily. It ain't gonna happen. China owns us. They hold more US currency than all other countries of this world combined.

And if it does, we're doubly screwed because it will effectively lessen the value of our dollar on the global market. So now we may be increasing our GDP, but the interest rates on our loan just went up with it.

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Old 04-15-2010, 08:23 PM   #8
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Not really. I would be suprised if it weren't that way. They've got us by our collective nutsack and are swinging us around like a little girl with a new dolly.
Not that I'm personally surprised, you'd think with all the liberal nutjobs running loose they'd put the pot aside for a moment and realize that Bernansmuck is largely responsible for the financial hoopla instead of the ol' "Blame Bush Alone "routine. I know they're stupid and delusional but c'mon...

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And if it does, we're doubly screwed because it will effectively lessen the value of our dollar on the global market. So now we may be increasing our GDP, but the interest rates on our loan just went up with it.
The dollar has value? When did this happen?
I'm assuming they'll introduce the Amero as the savior to all our problems right about then.
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Old 04-15-2010, 08:31 PM   #9
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Not that I'm personally surprised, you'd think with all the liberal nutjobs running loose they'd put the pot aside for a moment and realize that Bernansmuck is largely responsible for the financial hoopla instead of the ol' "Blame Bush Alone "routine. I know they're stupid and delusional but c'mon....
The "Blame Bush Alone" routine is a direct response to the "Blame Obama" routine. Neither holds much water. If the Conservative sheeple would unpucker thier asses a bit and pull thier heads out, they'd see that.

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I'm assuming they'll introduce the Amero as the savior to all our problems right about then.
Winner winner chicken dinner.

You can't have a welcomed savior without a pre-emptive catastrophy. Well you can, but you'd have skip the slow decline and gradual acceptance and jump right ahead to revolution and revolt.
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Old 04-15-2010, 08:39 PM   #10
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I'm assuming they'll introduce the Amero as the savior to all our problems right about then.
From 2008:

Anyone else see a problem with this?
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Old 04-15-2010, 08:50 PM   #11
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Yep.

But hey, at least they're willing to give us a backrub first.
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Old 04-15-2010, 09:19 PM   #12
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The "Blame Bush Alone" routine is a direct response to the "Blame Obama" routine. Neither holds much water. If the Conservative sheeple would unpucker thier asses a bit and pull thier heads out, they'd see that.
No, the BBA routine is a direct response to any racist, right wing extremist criticism of Obama. The response to Blame Obama is the "Un-American, anti-homosexual, anti-marijuanua, anti-healthcare, anti-evolution warmonger who is a threat to the Greater Good."

I noticed that you have a habit of mispelling their.

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Ain't that the damn truth. Supposedly this year they start the North American Union or begin something that will lay the ground work for it.
.................
While thinking it over when this does happen, what will the global effect be?
Not that I care about the rest of the world, what does concern me is whenever something affects the US it causes whiplash. I doubt that countries owning large amount of debt, organizations that are dependant and have a vested interest in the US will allow it to happen.

Perhaps this is how Obama will give the UN control of the US. As you all mentioned, what better way to assume and consolidate power under the guise of avoiding catastrophe?

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Old 04-15-2010, 09:37 PM   #13
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No, the BBA routine is a direct response to any racist, right wing extremist criticism of Obama. The response to Blame Obama is the "Un-American, anti-homosexual, anti-marijuanua, anti-healthcare, anti-evolution warmonger who is a threat to the Greater Good."
Could be. I don't claim to belong to either the left or the right, so all I know is what I use the "Blame Bush" thing for. All I'm saying is that someone needs to buy Obama this shirt...



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I noticed that you have a habit of mispelling their.
I know...I tend to spell it both ways. At least I got all the letters in there.

btw, you left out a word in this next quote.

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Ain't that the damn truth. Supposedly this year they start the North American Union or begin something that will lay the ground work for it.
.................
While thinking it over when this does happen, what will the global effect be?
Not that I care about the rest of the world, what does concern me is whenever something affects the US it causes whiplash. I doubt that countries owning large amount of debt, organizations that are dependant and have a vested interest in the US will allow it to happen.

Perhaps this how Obama will give the UN control of the US. As you all mentioned, what better way to assume and consolidate power under the guise of avoiding catastrophe?
How did it effect the world when Europe consolidated all of their ()currency to the Euro?

Don't forget who's in control here. If the Fed and the World Bank wants the Amero, they'll get it. The US is a consumer nation. If our dollar tanks, it hurts everybody. There will be a global need to restore our purchasing power. Debts may be forgiven or at the very least reduced just to get us buying other nations crap again. Its our only chance to turn the tables on China...kind of like going bankrupt, but starting over will all new money instead of reviving the old.

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Old 04-15-2010, 09:55 PM   #14
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From wikipedia...items of interest are in red...

The World Bank has long been criticized by non-governmental organizations, such as the indigenous rights group Survival International, and academics, including its former Chief Economist Joseph Stiglitz who is equally critical of the International Monetary Fund, the US Treasury Department, US and other developed country trade negotiators.[19] Critics argue that the so-called free market reform policies which the Bank advocates are often harmful to economic development if implemented badly, too quickly ("shock therapy"), in the wrong sequence or in weak, uncompetitive economies.[20][21]
In Masters of Illusion: The World Bank and the Poverty of Nations (1996), Catherine Caufield argued that the assumptions and structure of the World Bank harms southern nations. Caufield criticized its formulaic recipes of "development". To the World Bank, different nations and regions are indistinguishable and ready to receive the "uniform remedy of development". She argued that to attain even modest success, Western practices are adopted and traditional economic structures and values abandoned. A second assumption is that poor countries cannot modernize without money and advice from abroad.
A number of intellectuals in developing countries have argued that the World Bank is deeply implicated in contemporary modes of donor and NGO imperialism, and that its intellectual contributions function to blame the poor for their condition.[22]
One of the strongest criticisms of the World Bank has been the way in which it is governed. While the World Bank represents 186 countries, it is run by a small number of economically powerful countries. These countries choose the leadership and senior management of the World Bank, and so their interests dominate the bank.[23]
The World Bank has dual roles that are contradictory: that of a political organization and that of a practical organization. As a political organization, the World Bank must meet the demands of donor and borrowing governments, private capital markets, and other international organizations. As an action-oriented organization, it must be neutral, specializing in development aid, technical assistance, and loans. The World Bank’s obligations to donor countries and private capital markets have caused it to adopt policies which dictate that poverty is best alleviated by the implementation of "market" policies.[24]
In the 1990s, the World Bank and the IMF forged the Washington Consensus, policies which included deregulation and liberalization of markets, privatization and the downscaling of government. Though the Washington Consensus was conceived as a policy that would best promote development, it was criticized for ignoring equity, employment and how reforms like privatization were carried out. Many now agree[citation needed] that the Washington Consensus placed too much emphasis on the growth of GDP, and not enough on the permanence of growth or on whether growth contributed to better living standards.[25]
Some analysis shows that the World Bank has increased poverty and been detrimental to the environment, public health and cultural diversity.[26] Some critics also claim that the World Bank has consistently pushed a neoliberal agenda, imposing policies on developing countries which have been damaging, destructive and anti-developmental.[27][28]
It has also been suggested that the World Bank is an instrument for the promotion of US or Western interests in certain regions of the world. Even South American nations have established the Bank of the South in order to reduce US influence in the region.[29] Criticism of the bank, that the President is always a citizen of the United States, nominated by the President of the United States (though subject to the "approval" of the other member countries). There have been accusations that the decision-making structure is undemocratic as the US has a veto on some constitutional decisions with just over 16% of the shares in the bank;[30] Decisions can only be passed with votes from countries whose shares total more than 85% of the bank's shares.[31] A further criticism concerns internal management and the manner in which the World Bank is said to lack accountability.[32]
Criticism of the World Bank often takes the form of protesting as seen in recent events such as the World Bank Oslo 2002 Protests,[33] the October Rebellion,[34] and the Battle of Seattle.[35] Such demonstrations have occurred all over the world, even amongst the Brazilian Kayapo people.[36]
In 2008, a World Bank report which found that biofuels had driven food prices up 75% was not published. Officials confided that they believed it was suppressed to avoid embarrassing the then-President of the United States, George W. Bush.[37]
The World Bank has also been criticized for not publishing reports related to the Palestinian economic situation in the West Bank and Gaza. Economists in the region have often written damning reports of the Israeli occupation and its effects on the economy, but these reports remain internal and are not published.
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Old 04-15-2010, 10:08 PM   #15
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btw, you left out a word in this next quote. How did it effect the world when Europe consolidated all of their ()currency to the Euro?
Fixed it.

What I was rambling on was not the Amero, rather the Debt-Mageddon. Read it again old man and try and keep up.

Edit: It was a pain to edit your second quote, so I gave up. That sounds *gasp* correct. None of that surprised me.

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Old 04-16-2010, 07:25 AM   #16
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What I was rambling on was not the Amero, rather the Debt-Mageddon. Read it again old man and try and keep up.
Old age and treachery will always overcome youth and skill. Remember that.


I stand by what I said. As a nation on the world market the Amero will be our way out. However I do not know what that will mean to the American people...oops, I mean, the good citizens of the NAU.

I do understand what you are saying...what does it mean to the nations that are dependant on the value of our dollar or our mass consumerism? They will go down with us I suppose. And that makes it all the more convinient for the WB to step in and "save the day".

Also, China is a member of the WB. What do you think they'll do?
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Old 04-16-2010, 08:05 AM   #17
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Here's another good read. Skip down to the section titled "Value".

http://en.wikipedia.org/wiki/United_States_dollar
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Old 04-16-2010, 01:41 PM   #18
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Old age and treachery will always overcome youth and skill. Remember that. Also, China is a member of the WB. What do you think they'll do?

Here's another good read. Skip down to the section titled "Value".

http://en.wikipedia.org/wiki/United_States_dollar

True, but old people die eventually. Invade to repossess the country? I feel these summed it quite well.
Quote:
According to the Bureau of Labor Statistics Inflation Calculator, "$1 in 1913 has the same buying power as $21.89 in 2010". In other words, the U.S. dollar has lost about 95% of its value since the establishment of the Federal Reserve System
Quote:
When compared to hard money backed by gold or silver, this debt-based approach has the advantage of making the currency elastic, giving the government a means of expanding or contracting the money supply in response to changing economic conditions. The disadvantage of this approach is inflation.

The money supply must be continually expanded in order to finance interest payments on the debt by which it is issued. This devalues the currency, causing inflation.
Translation: We make crap up to make money despite being up to our gills in debt so we can perpetuate the very debt causing system to pay off the debt.

I really hate, and I mean HATE HATE banks. I can't wait for them to go under.
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Old 04-16-2010, 01:46 PM   #19
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True, but old people die eventually.
So do young people.
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Old 04-16-2010, 02:02 PM   #20
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Translation: We make crap up to make money despite being up to our gills in debt so we can perpetuate the very debt causing system to pay off the debt.

I really hate, and I mean HATE HATE banks. I can't wait for them to go under.
I don't know if you read through the link to the wiki thing on the Fed, but it showed a graph of the value of US currency from before and continuing on untill recent times. It dipped up and down through the decades but still maintianed a repsectable value before the Fed stepped in. Afterwards it has done nothing but maintain a downward fall.

Something else I learned: The Fed is a non-profit.

So where does that money go? The US gov't makes loan payments to the Fed, the Fed then takes the money made from the interest of that loan and pays its employees. Whatever is left is taken by the US gov't and deposited back into the US Treasury to help repay what it owes to the Fed. Now if that isn't a circle jerk, I don't know what is.

This debt system is the most idiotic thing ever conceived.
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