Obama threatens to freeze gov't spending in 2011

As just announced in the President's 2010 State of the Union Address, as reported on here in an AP video:

www.youtube.com...

a transcription in full of which can be found online in pdf form provided by CSPAN, here:

www.c-span.org...

to quote from both:

"So tonight, I’m proposing specific steps to pay for the $1 trillion that it took to rescue the economy last year. Starting in 2011, we are prepared to freeze government spending for three years. Spending related to our national security, Medicare, Medicaid, and Social Security will
not be affected."

What does this bode?

PEACE.
- Jon

Freeze spending at what level?

For some reason, I think it means at this years levels.

You know, the average increase of 25% from last year, which includes a 25% increase from 2008.

Freeze those levels as a 1.36 Trillion dollar deficit, simply BRILLIANT!

Oh, and it does not go into effect until 2011, until after mid term elections.

He needs this years money for bribery purposes.

Well , I don't think that there is one person alive today that honestly thinks that the U.S will EVER be able to pay off its debt .

But having said that , one has to wonder for how long can they keep making interest payments on that debt ?

One huge problem that the U.S faces is the amount of currency they have in circulation .

The U.S MUST keep there dollar attractive to other nations and the longer the U.S can keep there currency as the currency of the world the longer the U.S can keep impending doom at bay .

For if those dollars that are held by foreign nations and investors are sent back home to the U.S then we will see hyper inflation as the likes of which has not been seen in a very long time . Incidentally enough that is also the time in which we will see many EX federal reserve members as well as a few politicians strung up a pole .

reply to post by benpadiah


That is called soaring rhetoric.
Obama will freeze nothing.

Originally posted by Max_TO
Well , I don't think that there is one person alive today that honestly thinks that the U.S will EVER be able to pay off its debt .

It never was intended to be....
The whole process was to shrink the deficit with economic growth to bring the percentage of the debt to a reasonable amount when compared to the GDP.

GOOD LUCK with that.


[edit on 27-1-2010 by SLAYER69]

reply to post by SLAYER69


Yes as they managed to do just one year before 911 .

But sadly that was long ago and a different world .

Anyone ever run the numbers at current levels ? What would spending have to be caped at and for how long until the government was running defecate free ?

Edit to add.. assuming we could make a reasonable " guess " at GDP growth rates .

[edit on 27-1-2010 by Max_TO]

Originally posted by Max_TO
reply to post by SLAYER69

 

Yes as they managed to do just one year before 911 .

But sadly that was long ago and a different world .

Well it's only been 10 years. The US goes into a recession every 8 to 12 years. I'm surprised you're looking at it so short term. Not "budget" Surpluses but economic growth.

In Theory.
[atsimg]http://files.abovetopsecret.com/images/member/c0c7547c58e1.png[/atsimg]
[atsimg]http://files.abovetopsecret.com/images/member/89bd6f03879b.png[/atsimg]

reply to post by Max_TO


From this site-Federal Budget

In Fiscal Year 2009 (FY09), the Treasury Department spent $383 Billion of your money on interest payments to the holders of the National Debt.

Okay, we would have to run a yearly federal budget surplus at the 383 Billion each year to just maintain a never increasing debt.

At a 483 budget surplus it would take-

Just simple math with no interest accrued yearly. It would take 120 years.

This to payoff existing debt, with nothing else taken into consideration.

[edit on 1/27/2010 by endisnighe]

Originally posted by endisnighe

Okay, we would have to run a yearly federal budget surplus at the 383 Billion each year to just maintain a never increasing debt.

True but...
That's already budgeted in next years budget. I agree we spend all our tax dollars just paying the interest. If we did not "deficit spend" anymore then with the combination of inflation and economic growth when compared to the GDP we should again in "theory" Grow our way out of it.

AGAIN

Good Luck with that anymore.

[edit on 27-1-2010 by SLAYER69]

reply to post by SLAYER69


You are right perhaps , I am focusing to much on the doom and gloom that seems to face the U.S right now .

I have been of the feeling for a while now that the U.S may be hard pressed to obtain meaningful growth rates for the foreseeable future . As mentioned earlier, I hope I am wrong .

It just seems that there are a number of issues that face the U.S right now , from large defecates , devalued currency , high unemployment rate combined with a lack of manufacturing based jobs to provide a job based growth recovery . Not to mention large personal debt loads , a world considering new currencies for the perching of oil and gold .

There also seems to be a lack in success stories and meaningful national projects that could help untie a people . Seems there are far more reports of pending doom . This is something very new to the people of the U.S

I hope all that I have expressed is a miss guided fear based on my assumptions and I hope that meaningful growth does happen , as you so correctly have pointed out ... we seem to go throw a down turn every 12 or so years .

It is my assumptions that lead me to believe that we may not see the growth that is needed to truly pull ourselves out this time around .

Originally posted by endisnighe
reply to post by Max_TO

 

From this site-Federal Budget

In Fiscal Year 2009 (FY09), the Treasury Department spent $383 Billion of your money on interest payments to the holders of the National Debt.

Okay, we would have to run a yearly federal budget surplus at the 383 Billion each year to just maintain a never increasing debt.

At a 483 budget surplus it would take-

Just simple math with no interest accrued yearly. It would take 120 years.

This to payoff existing debt, with nothing else taken into consideration.
edit on 1/27/2010 by endisnighe]

Those are the types of numbers that make me think that this time around will be much much different then any other economical downturn / recovery that we have ever experienced before .

Originally posted by Max_TO
It is my assumptions that lead me to believe that we may not see the growth that is needed to truly pull ourselves out this time around .

This is exactly what Ron Paul has been screaming about for a few years. Yes the economy will grow. Even if it's at anemic levels it will still grow. The Question is by how much and how fast can we recover.

When the US economy is up and running we generate around 14 Trillion dollars even at a measly 2% GDP growth, that's still 2% of a 14 Trillion GDP. You do the math.

No, we are not China with it's sometimes real and sometimes FAKED [Economic Stimulus spending ] growth rate of 8% but that's 8% of a 4 to 5 Trillion dollar GDP.

reply to post by SLAYER69


Excellent points and very very true . You have brought me hope !

True , a modest growth rate in the U.S based on GDP can rival a great growth rate of a nation with a smaller GDP .

Once again good point and I hope we do see some type of turn around .

You know when they roll back a stock back, so when all is said and done.
They will just say for every 10000.00 you get 100 and they fix the money problem. Or they just print new Money at 100 to 1 and you are left holding the bag.

Something like that.

reply to post by Max_TO


Here is an interesting example. 0.3% growth equals a rise to 168 Billion.
Imagine a 2 or 3 % growth.
US durable goods orders up 0.3%

Orders for big-ticket US manufactured goods in December rose 0.3 percent, the Commerce Department reported Thursday in a sign of steady growth in the industrial sector of the economy.

The report showed new orders for durable goods -- including planes, cars, appliances and other items expected to last three years or more -- rose to 167.9 billion US dollars.

It followed a revised a 0.4 percent decrease in November.

Excluding transportation -- which can be heavily skewed by aircraft demand -- new orders increased 0.9 percent. Excluding defense, new orders rose 0.3 percent.

Still, the overall figure for durable orders was well below the rise of 2.0 percent expected by private economists.

Over the full year 2009, orders fell 20.2 percent, which is the worst since the data series began in 1992.

The December rise was led by machinery orders, up 6.0 percent.

Here is another.

Gain in Orders for U.S. Goods Points to More Spending

“You’re starting to see a good turnaround in equipment spending,” said Michael Feroli, an economist at JPMorgan Chase & Co. in New York who forecast a 1 percent rise in orders excluding transportation. “Generally you do see equipment spending and hiring move together, so this is hopefully a good sign that business are coming out of their shells.” ‘ More Americans than anticipated filed claims for jobless benefits last week, indicating an improvement in the labor market is slowing.

Initial applications declined to 470,000 in the week ended Jan. 23 from 478,000 the prior week, Labor Department figures showed. The median forecast of economists surveyed by Bloomberg News called for a drop to 450,000.

[edit on 28-1-2010 by SLAYER69]

yo thanks guys and gals for your great replies, I'm glad to see this stimulated some thinking. Thanks to Max_TO and SLAYER69 for breaking down some of the finer statistical data points too.

But what I really don't understand, is exactly WHAT IS THE DEFICIET?

If we reneg on it, what then? Nothing?

Here's my reasoning, and it's the same one for why the "bank bail-out" was, AHEM, "un-popular," all jokes aside. Why not let them fail? Why not reneg on our international debt, and forgive all income taxes ever collected by the Fed? Hear me out:

What is the federal deficiet? As I understand it, it is the national debt owed to foreign banks plus interest. However this debt isn't owed to the foreign (central) banks by the actual federal-level US Gov't. It's owed by the "Independent" (central) Federal Reserve Bank to the foreign (central) banks. If the federal-level US Gov't audits the US (central) Federal Reserve Bank, and liquidates its holdings, then what would be the result?

When the "banks fail" it "threatens the economy" ONLY because banks lend money at interest, and thus they represent a large share-holder of the whole "economy," multinational corporations being another on that same level. But what do banks do? They SAVE your money. They HOLD it for you. They withhold X amount of money from the free-market. Thus, again, like corporations, the more we owe them, the more they own us. On the other hand, liquidate the holdings in the largest private accounts of the central banks, and we could reverse this "second great depression," harness ZPE, and provide universal health care to the whole planet for generations.

And again, please, all of you, feel free to correct my assertion here, but: is Obama not just robbing Peter to pay Paul? He would actually be willing to see Bernanke's compromised Fed audit by the GAO through, on the condition "we, the people" (or are we just the "tax-payers" now?) repay whatever we recover from our "local" (central) bank back to the international, Swiss Banksters (+ interest) in return? It just seems to me he is saying to us, "I'll get the US people back the few billion invested in the bank bail-out, if they promise to kick in on repaying the trillion dollar national debt?"

And am I the only one spooked out that he says he got the money back from the banks already? Where is it? How is it being accounted for? What form is this "money" in? Is it only numbers on paper, credit in computers, a para-political ponzy scheme?

Anyway, just some musings. As I say, thanks for the replies. Anyone who'd like to sort out my world-view on the US financial system is free to do so too! LOL! Good LUCK. LMAO!

PEACE.
- Jon

This is politics, where what is said is nearly as important as what has been avoided. There is a world of difference between "we are prepared to" and "we are going to"

Wouldn't ending the wars in Afghanistan and Iraq solve this problem quite handily?

We could get rid of the deficit by June if we wanted too. Unfortunately, it doesn't serve them to get rid of the debt, just us. And why would a politician ever want to serve us?

Originally posted by endisnighe
Oh, and it does not go into effect until 2011, until after mid term elections.

Yeah, because the budget for 2010 was set in 2009...that's the way the system works.

reply to post by benpadiah

U.S. Economy: Growth Jumps 5.7%, Fastest Pace in Six Years

an. 29 (Bloomberg) -- The U.S. economy expanded in the fourth quarter at the fastest pace in six years as factories cranked up assembly lines, indicating the recovery may be strong enough to be weaned from government support.

The dollar rallied as the data signaled the momentum generated by the world’s largest economy last quarter will carry into the new year. Rising investment in equipment and software is boosting sales at companies including Intel Corp. and may help bring the jobless rate down from close to a 26-year high as employers add staff to meet demand.

“We are getting on to something that is pretty sustainable,” said Bruce Kasman, chief economist at JPMorgan Chase & Co. in New York, who correctly forecast the gain in GDP. “Both consumers and businesses are beginning to increase spending. To get validation, we need to see a return in hiring, which we think we are going to get over the next few months.