U.S. to pass Saudi Arabia as top oil producer by 2015 … then fade over next decade

Captain Rick: The U.S. will pass Saudi Arabia as the world’s top energy producer by 2015, but will fade over the coming decade, according to a report from the International Energy Agency.

Massive investment in the production of shale gas has driven the U.S. supply boom, thanks in large part to new technologies such as hydraulic fracking, which has made the extraction of oil and gas from shale rock commercially viable.

But limited reserves will cap the surge in shale oil output within the next 10 years. "Shale oil is good news for the U.S, but we do not expect this trend will continue after the 2020s," IEA chief economist Fatih Birol told reporters Tuesday, at the launch of the 2013 World Energy Outlook in London.

That will translate into an increase in OPEC producers’ share of global output since those nations would remain the only large source of relatively low cost oil. "Middle East oil is crucial to the global oil industry today, and also tomorrow," Birol said.

The OPEC oil cartel, which includes Saudi Arabia, the United Arab Emirates and Qatar, controls the vast majority of world oil reserves. As a major exporter, top producer Saudi Arabia is critical to future energy supplies. By contrast, the United States relies on its newfound energy wealth to power domestic consumption.

The Future … in the eyes of the International Energy Agency …

Birol said despite the growth in U.S. energy supplies, the new era isn’t one of "oil abundance," due to demand pressures and declining production from existing crude fields. The IEA also noted that power-hungry Asia will continue to re-shape the global energy landscape. About two-thirds of future world energy demand will come from the region. India will take over from China as the biggest energy demand center around 2020. The Middle East will also have a rising impact on demand. By 2035 the Middle East will consume the same amount of oil as China does today, according to the IEA.

The Future … in the eyes of Captain Rick …

The IEA has things well figured out. However, what is not weighed into their vision is the massive monetary catastrophe that the U.S. faces. How the U.S. handles (or evades, as has been the case) its pending debt crisis will add to the future outlook. If the U.S. stays on is current course of ‘kicking the debt can down the road’, the future outlook as presented by the IEA could change significantly. The IEA is not considering the fact that the U.S. could be well on its way to becoming a third world country a decade from now. 

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Interesting ATRIDIM NEWS JOURNAL Report Categories:

U.S. Debt Crisis

Captain Rick’s Fiscal Cliff Course 101

Captain Rick listens to friends discuss hot topic of defunding Obamacare to prevent U.S. Government Shutdown on Oct. 1, 2013

Captain Rick: An email I sent to my world-wide list of e-friends about defunding Obamacare to prevent U.S. Government shutdown on October 1 went wild. I have never witnessed such an enthusiastic response.

I share the conversation below. I welcome everyone reading this to join in this conversation by placing a comment below.

I am listening to what you have to say…

How this discussion began on September 19, 2013: I shared the following with my email audience in an email publication called ‘Atridim Breaking News’.

ATRIDIM BREAKING NEWS: Rep. Salmon Stands with Senators Cruz and Lee and House Conservatives in Support of Defunding Obamacare

 

Captain Rick: I think this effort in the U.S. House is noble but will fail when it is passed to the ‘dead beat’ U.S. Senate…but I give my Arizona friend Rep Matt Salmon a ‘thumbs up’ for his outstanding efforts to defeat Obamacare…which is on course to help bankrupt America…even more so than it already is.

This is all part of the program to reach an agreement to prevent a U.S. government shutdown on October 1. I have a strong hunch that a shut down will happen…the first since 1995. It should happen. It needs to happen. It must happen to wake up America to realize that our wildly, drunken debt spending to make a sick economy look OK must end to protect America’s future…if one even exists.

The U.S. has been spending stimulus (debt) dollars at the rate of $85 billion per month. It is ‘robbing Peter to pay Paul’. Its making our economy look OK in the short term, but is doing untold damage for our economy in the coming years…setting up a U.S. economic train wreck that will have the magnitude to reduce America to a third world country. If you think I am kidding…stay tuned. It will all unfold before our eyes in the coming years.

I see little hope from the morons in Washington to solve our extremely sad fiscal problems facing America. There are a few good people fighting to save America. My friend Matt Salmon is one of them. Matt, have you considered running for President of the United States of America in 2016? If not, you should! You would receive my vote above all potential candidates. America desperately needs an intelligent mind at the controls to steer America away from the pending train wreck off of the real fiscal cliff…just ahead.

The conversation begins:

Anita of Arizona: We need our top Republican legislators to take out John McCain and Jeff Flake.   Matt would be a perfect candidate.  He’s clearly a principled, conservative Republican fighter!

Captain Rick: I totally agree. Jeff and John once stood tall representing Arizona…but as two of the ‘gang of 8 idiots’ in the U.S. Senate promoting amnesty for illegal immigrants, they appear to have sold out to liberal interests. If I didn’t know better, I would guess both of them are democrats. They fit in well in the democrat U.S. Senate, which is on track to fiscally destroy America. Hopefully America will come to its senses in the next election and do a general house cleaning of fiscal waste in the U.S. Senate by voting in some conservative blood. Short of that, I envision a continuation of America’s fiscal train ride heading at high speed for a monumental dive off of the real fiscal cliff just ahead.

Steven of Wisconsin: I think you are dead wrong on this issue of health care reform.  Obamacare as it is called will prevent health insurance companies from not giving insurance because pre-existing conditions, from spending less than 80% of the insurance premiums on health care, and from not covering dependents under the age of 27.  These things are already helping the common folk like me.  I don’t know why you and your conservative friends constantly undermine the middle class and support things that are not in our best interest.  Where were your friends when we bailed out the big banks, gave huge tax breaks to oil companies, and started two very costly wars?  Those representatives like Cruz do nothing for America but tear down and obstruct.  They restrict voting rights and women’s rights!  They aren’t the patriots and saviors of America.  They are the ones that caused our economic downturn and do nothing to improve America.  Voting 42 times to repeal Obamacare is insane. It doesn’t help my family or my budget.  But history will repeat itself…those same “conservatives” tried to repeal social security a million times and did not succeed because it helped Americans and is still helping us today.  It has very low overhead and is secure.  This is why I continue to support single payer health insurance.  Obamacare is not perfect….neither was social security when it passed.  Your attitude continues to support and promote the upper 1% of this country while the middle class shrinks to almost nothing.  Of course you blamed much of this shrinkage on unions which I did not respond to at the time because I ignored your comment.  But the lower and middle class will rise up along with the unions because they have no choice.  You continue to listen to yourself and Fox News.  The problem is you believe everything the right wing puts out there.  You will wake up after the next election and realize that America has spoken; you will not like what they said. Remember last election how surprised so many of your conservative friends were when Obama won the election!  They really did believe what they were spouting.

Captain Rick: Steven, thanks for your candid and expounded reply.  My voice (‘attitude’ as you refer to it) via ATRIDIM NEWS is designed to be provocative, to draw people in my world-wide audience out of the ‘woodwork’ to say what is ‘on their mind’. Your reply assures me that the design is working. I trust this will help assure my readers that I listen to, respect and report FEEDBACK received from everyone.

Concerning your statements about ‘my conservative friends,’ I must mention that my audience of friends from over 50 countries around the world represent every ‘walk of life’ and ever ‘point of view’. Not all of them share my ‘point of view’. You are one of those friends…and I am pleased you shared your ‘point of view’.

Ken of California:  Steven of Wisconsin, With respect to your comment “You continue to listen to yourself and Fox News.  The problem is you believe everything the right wing puts out there.”

I listen to the voice of reason!

The liberal notion of giving a free lunch to every bum out there only breeds a society of blood sucking leaches.

We live in the land of opportunity, but the opportunities are up to you! They are not for the government to rob from the working class to give to the lazy.

Kendall of California:  Captain Rick – Really like this email format in which you deliver updates and opinions. It could be just me, but there doesn’t seem to be a link to take me to the post so that I may leave a comment. Not quite sure which post its referring to. Or do I simply leave my comment in this email? Could that be the whole point.

If the ladder is this case, here is my two cents: First, Captain Rick, I really support and enjoy your style of allowing all voices to be heard, but still manage to maintain a civil environment. I appreciate that. It allows a reader to enter the fray without running for cover from unwarranted, off-topic deragotory remarks. That being said Ken of California: The points that you pertain to make are missed by shooting generalizations that each person that finds theirself accepting government assistance, are lazy bums. If you follow the same logic through, than following the Enron era and Bernard Madoff regime, all corporate executives are ruthless villians out simply for themselves. Neither is true. Indiviuals taking advantage of good intentions occur at all levels, in each circuit, every single day. I have read and listened to some very convincing arguments, and understand both sides. But even then, a voter has to choose. Unless you truly believe that every student who takes out a government loan, every family that finds theirselves being unable to make ends meet, and that every person who works can afford health insurance, than labeling the millions of honest, hard-working Americans, both Republicans and Democrats alike, as lazy bums, does nothing to educate those on why you cast your vote. Unless, like I said, that is what you believe. In that case, what fact book are you using so that I may have a look too – Kendall of California.

Captain Rick: Kendall, sincere thanks for your words of kindness for ‘my style’ of allowing voices to be heard while maintaining a civil environment … and for your appreciation. You guessed right in simply commenting by reply to this email. I know it seems very ‘old-fashioned’, but you must keep in mind that the e-friends that I have gathered from around the world over many years do not all partake of the social media that many of us do. Many are not on Facebook or WordPress, etc. The one media that they all do have in common is email. And so, I am pleased to present this seemingly ‘old-fashioned’ means of allowing my friends to join our conversation. Perhaps this is a bit like ‘going back to the future’.

PJ of Arizona:  All Steven of Wisconsin needs to know about the fallacy of ObamaCare is contained in this snippet from the most recent Seeing Red Arizona:

 

“In 2008, people in poverty represented 13.2 percent of America’s population. In 2012, the impoverished had risen to 15.0 percent of the population.

An even bleaker picture is painted in the Congressional Budget Office report, which sends an urgent message to Americans, as it says the nation’s debt is on an “unsustainable path.” Implementation of Obamacare will exacerbate the crisis. CBO warns federal debt held by the public will hit 100% of GDP by 2038.

A Fox News report details the results of a new poll showing an overwhelming majority of Americans are concerned about their health care plan under Obamacare. A majority — 68% — want to go back to the 2009 health care system. Concerns are not only shared by Republicans and Independents, but by a 56-percent majority of Democrats.

Gordon of Arizona: I really think that this scare of a shutdown is just another tactic like what happened back in the Bush era. Remember what they said? ”If we do not initiate the stimulus and bail out these large corporations right now, THE SKY IS GOING TO FALL!”. Looking back, we would have been much better off now if we had let them fail. My opinion is: LET THE GOVERNMENT SHUTDOWD! The local people will pick up the pieces (if that is what it comes to) and do a much better job of running things than Washington.

The conversation continues:

I welcome everyone reading this to join in this conversation by placing a comment below. If you do not see the comment box, click the red title to access the individual blog report. Everyone can comment by simply entering any name you choose and your email address. Your email address will never be shared. Information you choose to share yourself and the thoughts you have… is up to you.

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Associated ATRIDIM NEWS JOURNAL Report Categories:

Obamacare

U.S. Debt Crisis

Fed Financial Policy

Captain Rick’s Fiscal Cliff Course 101

Economy

Dow Jones

Captain Rick’s Investment 101

Stock and Bond Market

Mr. President …… I suggest we hire Walmart to fix our broken programs and economy

Captain Rick: Walmart, the world’s largest corporation turns everything it touches into gold, whereas  the U.S. government has succeeded in breaking almost every good program created … and the U.S. economy.

I suggest we hire Walmart to fix the mess that our President and Legislature have demonstrated they are totally incapable of accomplishing.

My email to President Obama:

Mr. President,

I have concluded that you and the 535 members of our legislature are ineffective and incapable of fixing our economy and the many good programs that have been broken. I have a solution, but first I want to remind you of some facts which relate to the many failures of your administration and those that preceded:

a. The U.S. Postal Service was established in 1775. You have had 238 years to get it right and it is broke.

b. Social Security was established in 1935. You have had 78 years to get it right and it is broke.

c. Fannie Mae was established in 1938. You have had 75 years to get it right and it is broke.

d. War on Poverty started in 1964. You have had 49 years to get it right; $1 trillion of our money is confiscated each year and transferred to “the poor” and they only want more…and it is broke.

e. Medicare and Medicaid were established in 1965. You have had 48 years to get it right and they are broke.

f. Freddie Mac was established in 1970. You have had 43 years to get it right and it is broke.

g. The Department of Energy was created in 1977 to lessen our dependence on foreign oil. It has ballooned to 16,000 employees with a budget of $24 billion a year and we import more oil than ever before. You had 36 years to get it right and it is an abysmal failure…and it is broke.

You have failed to fix any of the many government service failures, while overspending our tax dollars to drive America $17 trillion into debt, an amount exceeding the combined debt of all other nations on earth.

AND YOU WANT AMERICANS TO BELIEVE YOU CAN BE TRUSTED WITH A GOVERNMENT-RUN HEALTH CARE SYSTEM?

Lets pause and examine an American corporation that has a track record of turning everything it touches into gold.

Photo above shows Walmart’s current logo used since 2008

Walmart was founded by Sam Walton in 1962…when I was in high school, just before the birth of Medicare and Medicaid. Since then the Walton family transformed it into the world’s largest corporation with $469 Billion in revenue, 8500 stores in 15 countries with 2,200,000 employees.

If Walmart were a country it would have the world’s 26th largest GDP…but more importantly, it would be the world’s most profitable country…unlike the U.S. which goes $1 Trillion farther into debt each year, with all of its programs on ‘death row’.

I love my country and hate to see you and our legislature destroying it. With all sincerity, I respectfully urge you to consider hiring Walmart to manage America’s failing economy and programs. But, I think that if that were to happen, the Walton’s would fire you and most of the legislature.

Captain Rick

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title above)

Associated ATRIDIM NEWS JOURNAL Report Categories:

Economy

U.S. Debt Crisis

Captain Rick’s Fiscal Cliff Course 101

President Obama

Obamacare

Entitlement Reform

Corporations

Eurozone now in longest Recession —Unemployment and Debt at record levels — Is America next ?

Captain Rick: The 17-nation Eurozone economy contracted for a record sixth consecutive quarter, making this the longest period of recession in the Eurozone’s history. The recession has depressed business confidence, sent unemployment to record highs, inflation to record lows and blown attempts to cut government record debt.

Gross domestic product in the Eurozone fell by 0.2% in the first quarter. The GDP estimate was worse than economists were expecting, largely due to disappointing growth in Germany and could increase pressure on the ECB to take further action to try to stimulate activity.

Unemployment continues to hit new record highs. Unemployment broke through 12% for the first time in March, meaning 19.2 million people were without work in the Eurozone, 1.7 million more than a year ago.
Youth unemployment rose sharply, hitting 24% and leaving 3.6 million people under 25 looking for work.

Prices slumped and inflation has fallen way below the central bank’s target. Inflation posted its biggest monthly drop in four years in April. It fell to 1.2% and touched its lowest level since February 2010.

Eurozone debt hit 8.6 trillion euros, a record 90% of GDP, last year and is forecast to rise to 95% in 2013. As bad as this is … in contrast, U.S. debt to GDP ratio is 107%, trumping it as the worlds worst. One has to wonder if America is next in line to experience the hardships facing those in the Eurozone.

Future Concern: Economists are becoming increasingly concerned at the growing divergence between France and Germany, historically the twin motors of the EU economy and political integration.

France: French President Francois Hollande (shown above) who was elected a year ago after campaigning to put growth before austerity and introduce higher taxes on the rich, has seen his approval ratings fall sharply as unemployment continues to climb. In recent months he has begun to reform labor markets and pensions, and announced plans to cut capital gains tax. But he is moving too slowly for some, and his government continues to send mixed messages.

France, the Eurozone’s second-biggest economy, slipped back into recession. Its output fell by 0.2% for a second consecutive quarter as it suffered from weak exports and falling investment.  France faces a heavy financial burden from its labor unions and pension systems.

Italy: The pace of contraction eased. GDP shrank by 0.5% in the quarter.
Italy, the region’s third largest economy, nominated a new prime minister. Enrico Letta is a pro-European from Italy’s center-left. He wants Europe to ease up on austerity.

Spain: The recession deepened in the first quarter. The economy contracted by 2% compared with the same period a year ago, and by 0.5% compared with the final quarter of 2012. Spain has been stuck in recession for 21 months. It has been given two more years to bring its budget deficit to below 3% of gross domestic product. In contrast, the U.S. deficit ratio is 6.5% of GDP … more than twice as bad. One has to wonder if America is next in line to experience the hardships facing those in the Eurozone.

The number of unemployed in Spain broke the 6 million barrier during the first quarter, a new record. The unemployment rate rose to 27.2%, tied with Greece for the Eurozone’s highest. For Spaniards aged 16 to 24, the unemployment rate is 57.2%.

Greece: The jobless rate was 27.2% for January, tied with Spain for the Eurozone’s highest. In Greece, 34.2% individuals aged 25 to 34 are unemployed. It’s even worse for younger workers — 59.3% of Greeks aged 15 to 24 are out of work.

Portugal: Portugal was able to slow the pace of contraction to 0.3% from 1.8% in the fourth quarter.

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title above)

Info from previous reports:

European Debt Crisis: https://atridim.wordpress.com/category/european-debt-crisis/

Europe: https://atridim.wordpress.com/category/europe/

France: https://atridim.wordpress.com/category/france/

Germany: https://atridim.wordpress.com/category/germany/

Greece: https://atridim.wordpress.com/category/greece/

Italy: https://atridim.wordpress.com/category/italy/

Portugal: https://atridim.wordpress.com/category/portugal/

Spain: https://atridim.wordpress.com/category/spain/

Home page (all reports): https://atridim.wordpress.com/

European Debt Crisis: Enrico Letta sworn in as Prime Minister of Italy … Can he solve Italy’s serious economic challenges?

Captain Rick: Center-left Prime Minister Enrico Letta was sworn in Sunday to head a broad coalition of ministers from his own party and members of Silvio Berlusconi’s center-right party. The big question is … can he correct Italy’s current course of economic destruction?

In a speech to parliament Monday, Letta stressed the need to stimulate growth and create jobs, but said Italy couldn’t borrow its way out of trouble. “After more than a decade without growth, we can’t wait any longer for a policy of recovery,” he said. “Without growth and without cohesion, Italy is lost.”

Letta’s appointment ends two months of political stalemate with hope of economic stability, but many doubts remain about the coalition’s durability and uncertainty over how it will achieve its economic goals.

The priorities for Letta’s government mirror those of 87-year old Italian President Giorgio Napolitano, who was persuaded to accept a second term after parliament failed to agree on an alternative. Napolitano established two expert committees to work on overhauling Italy’s convoluted electoral system and political institutions, and making structural reforms to restore competitiveness, boost growth and make a dent in the debt mountain.

Debt Crisis in Italy is severe

Government borrowing totals about two trillion euros, equal to around 127% of gross domestic product, a ratio surpassed in the eurozone only by Greece. The economy hasn’t grown for years, unemployment is near 12% and rising, and living standards for many are tumbling.

The eurozone’s third-biggest economy was brought to the brink of collapse in late 2011 when yields on its huge debt pile climbed to unsustainable levels around 7%. Tax increases and spending cuts by a technocrat government led by Mario Monti reassured investors. But they led to a backlash against austerity in February’s elections, boosting support for comedian Beppe Grillo’s protest movement and leaving no party able to form a government on its own.
Letta wants to adjust Italy’s unpopular austerity drive, and Berlusconi has campaigned for a tax on property to be reversed, but it is unclear how the new government would make up for the revenue shortfall as the economic situation continues to deteriorate.

Captain Rick wishes ‘Best of Luck’ to Enrico Letta, new Prime Minister of Italy

Enrico, I wish you luck in turning around the massive debt problem in Italy. Social greed for welfare is a sure invitation for economic destruction. Italy is one of the largest consumers of welfare spending in Europe. The party you represent loves welfare. I equate it to the Democratic Party in the U.S.

The U.S. debt has not yet reached the percentage of GDP as in Italy, but I see it as just a matter of time before it does. Americans will be watching what happens in Italy … perhaps as a ‘crystal ball’ vision of what awaits America.

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title above)

Info from previous reports:

European Debt Crisis: https://atridim.wordpress.com/category/european-debt-crisis/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

Fiscal Cliff 101: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

Italy: https://atridim.wordpress.com/category/italy/

Federal Grants: Driving America broke … Money from the ‘Black Hole’ … that adds directly to increasing the U.S. National Debt

Captain Rick: Federal grants are a good thing when they are funded by real money … but the fact is many of America’s federal grants come from money that does not exist and adds directly to the U.S. national debt. Many federal grants are robbing the future of our children and grandchildren by burdening them with monumental debt.

U.S. Budget Facts

U.S. Tax Revenue: $2.5 trillion
U.S. Spending: $3.6 trillion
U.S. Deficit: $1.1 trillion

U.S. Budget Details

Obligated expenses (backed by U.S. law)
Social Security: $781 billion (dedicated funded from the Social Security 6.2% payroll tax)
Medicare: $419 billion (dedicated funding from the Medicare 1.45% payroll tax)
Medicaid: $400 billion (a social welfare program, using money from the federal general fund)
Interest on National Debt: $223 billion (mandatory debt payment to prevent U.S. default)
Federal Pensions: $216 billion (includes civilian and military retirement benefits and veteran benefits)
Sub total: $2 trillion (this leaves only $500 billion for all other expenses before consuming all U.S. tax revenue)

Discretionary expenses:
Defense/Wars: $664 billon
Income Security: $352 billion (incudes unemployment compensation, various welfare programs such as family support and nutrition programs and earned income credits)
Other (including Federal Grants): $500 billion
Grand total: $3.6 trillion (a deficit of $1.1 trillion)

Conclusion: it is obvious that unless America wants to totally eliminate all money spent on defense, wars, unemployment, family welfare, etc. there is no tax revenue left to spend on any federal grant of any kind.

U.S. National Debt

America’s debt is now at a staggering $16.8 trillion and rising at a high rate of speed.
America’s debt represents a debt of $53,277 for every person in America…$148,265 for every tax payer.

Its time for everyone in America realize the seriousness of America’s debt crisis … including local and state politicians who love to accept those federal grant dollars that come from the ‘black hole’ and add directly to the U.S. National Debt.

Federal Grants 101

In the United States, federal grants are economic aid issued by the United States government out of the general federal revenue. A federal grant is an award of financial assistance from a federal agency to a recipient to carry out a public purpose of support or stimulation authorized by a law of the United States.

Some federal grants like those from the U.S. Department of Transportation for roads and transportation projects are partially funded by dedicated fuel and tire taxes, however the balance (about 1/3) comes from the general fund which is supported primarily by federal income taxes via tax returns. On the other hand, federal grants like community development block grants (CDBG) from the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Homeland Security (DHS), have little or no dedicated tax funding and are mostly paid for by money in the general fund. Because the U.S. general fund runs a negative balance of $1.1 trillion each year…in essence, all federal grants not specifically funded by special taxes are adding directly to the U.S. national debt.

Federal grants are defined and governed by the Federal Grant and Cooperative Agreement Act of 1977, as incorporated in Title 31 Section 6304 of the U.S. Code.

A Federal grant is a
legal instrument reflecting the relationship between the United States Government and a State, a local government, or other entity when
1) the principal purpose of the relationship is to transfer a thing of value to the State or local government or other recipient to carry out a public purpose of support or stimulation authorized by a law of the United States instead of acquiring (by purchase, lease, or barter) property or services for the direct benefit or use of the United States Government; and
2) substantial involvement is not expected between the executive agency and the State, local government, or other recipient when carrying out the activity contemplated in the agreement.”

Types of grants
Block grants are large grants provided from the federal government to state or local governments for use in a general purpose.
Project grants are grants given by the government to fund research projects, such as a research project for medical purposes.
Formula grants provide funds as dictated by a law. Categorical grants may be spent only for narrowly defined purposes and recipients often must match a portion of the federal funds.
33% of categorical grants are considered to be formula grants. About 90% of federal aid dollars are spent for categorical grants.
Earmark grants are explicitly specified in appropriations of the U.S. Congress.
They are not competitively awarded and have become highly controversial because of the heavy involvement of paid political lobbyists used in securing them.

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title above)

Info from previous reports:

Federal Grants: https://atridim.wordpress.com/category/federal-grants/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

Fiscal Cliff 101: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Tax Revenue + Spending at record high … How to balance America’s budget using the common sense rule of 20% of GDP

Captain Rick: The U.S. Legislature has failed to balance America’s budget almost forever. If it compromised by using the economic common sense rule of 20% of GDP for both revenue and spending, its budget crisis would end and a much brighter future would await the children of our world.

Record Tax Revenue: I am glad to see we have hit a new record of $2.7T in revenues, just a tick above the previous record of $2.6T in 2007. As population grows, we better hope our tax revenue keeps going up every year. Things went far astray during the ‘Bush War and Tax Cut’ era, the Great Recession that followed and ‘Obamas Record Spending Spree’ to try to fix it, including a reckless 2 point payroll tax cut. Thankfully, it and some other irresponsible tax cuts vanished on Jan 1 as a result of the Fiscal Cliff and helped bring us closer to sanity. Unfortunately this new revenue record leaves America with a very anemic tax revenue of only 16.9% of GDP. The 40 year average is 18%. A healthy economy achieves revenue equal to 20% of GDP…so America is still far short of needed revenue…and part of the reason why America’s finances are in such terrible shape.

Record Spending: The other part of the reason America’s finances are in such terrible shape is because America’s spending is too high. America is currently spending $3.55T or 22.2% of GDP. That percentage is higher than almost every year since 1986. A healthy economy limits  spending equal to 20% of GDP…so America is still far over the limit for spending…the other part of the reason why America’s finances are in such terrible shape.

Republicans, Democrats, Conservatives and Liberals debate: Republicans and conservatives argue that taxes are too high and do not agree to any further increases. They say the entire answer lies in cutting spending. Democrats and liberals argue that spending levels should be held. They say the entire answer lies in tax increases. Its easy for me to see why our legislature is in gridlock. Both sides are stubborn and illogical. Neither side possesses the the solution. The solution resides in compromise. 

Captain Rick’s proposal of compromise: I propose that the U.S. Legislature uses the economical common sense guideline of 20% of GDP as a target for revenue and spending to achieve a balanced budget. 20% has proven to be workable figure for successful governments in the past. The figure can be argued…19 v 21…but 20% is a good starting point. Diminishing America’s national debt is a story for another day. It would require the balance to shift to more revenue and less spending…perhaps 21% of GDP revenue and 19% of GDP spending. Real compromise needs to begin soon … in order to protect the future of our children.  

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title above)

Info from previous reports:

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

GDP: https://atridim.wordpress.com/category/gdp/

China: World’s 2nd largest Economy in decline … as GDP and industrial production drop + a real estate bubble ready to explode

Captain Rick: Gross domestic product in China grew 7.7% over the previous year during the first quarter. That is great by U.S. standards, which are hovering near 0%, but a significant loss from the 10% annual GDP that China has averaged during the past three decades, which propelled it to become the the world’s second largest economy. Reports on industrial production and retail sales disappointed. Economists are worried about a rapid expansion in credit and a red-hot housing market.

Fitch ratings agency warned China of excessive debt levels and issued rare local currency downgrade
The ratings agency said it issued the rare downgrade because of three factors: Structural weaknesses in China’s economy, an expansion of easy credit and the rise of an opaque shadow banking system.
Credit in China has expanded quickly in the wake of the global financial crisis, with much of it issued to local governments and used to finance infrastructure projects.
Fitch believes local government debt levels are now so high that Beijing will, at some point, be forced to assume some of the burden.

In response to the global financial crisis in 2008, China moved to stimulate its economy by increasing the amount of available credit.
Banks and other lenders responded, with credit in China growing since 2009 at a quicker pace than gross domestic product. Only one country — Qatar — was issuing credit at a faster rate.
By the end of 2012, credit issued by Chinese banks to the private sector reached 136% of GDP, the third-highest level of any emerging market country rated by Fitch.
Much of the credit was issued to local governments, and used to finance infrastructure projects that helped China sustain rapid economic growth in the wake of the financial crisis.

Beijing has tried to get a handle on credit issuance in recent years, moving to cool the housing market and cut back on local government debt.
But when combined with low wages, Fitch said the persistent nature of the trends has created growing risks for China’s financial stability.

Real Estate Bubble heating up and ripe for explosion

The housing market is heating up, leading some analysts to worry about the development — and possible deflation — of a housing bubble.
China’s central government is already stepping up efforts to cool prices, and Beijing has directed local governments to institute control measures of their own.
Several cities, including Beijing and Shanghai, have responded by announcing higher taxes and fresh restrictions on property purchases.
20% capitol gains tax has been added on home sales as well as higher interest rates and down payments for anyone buying a second home in cities where real estate prices are sharply on the rise.

China is the second largest holder of U.S. debt (Japan is the largest)
China held about $1.15 trillion in U.S. bonds through August, the most recent reading available from the Treasury Department.
China had been buying U.S. Treasuries as a way to keep its currency, the yuan, pegged to the U.S. dollar. That helped lower the value of the yuan and made China’s exports more competitive in markets such as the United States.

Captain Rick’s Words of Caution: Notice I said China ‘had been buying U.S. Treasuries.’ Latest indication is that that has stopped. This could have grave consequences on Americas gigantic thirst for deficit spending. Japan remains the only major purchaser of American debt and those days could be numbered as well due to economic conditions in Japan not being anything to ‘write home about’. Our world is skating on very thin ‘fiscal ice’. Countries of our world, including China, depend on America to be a leader of fiscal responsibility. America has not been setting a very good example with its legislative gridlock on solving its monumental thirst for deficit spending. The world can only hope that America will wake up from its deep sleep and do what is necessary, before its speeding train goes over the ultimate ‘fiscal cliff’ and takes the world with it.

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title above)

Info from previous reports:

China: https://atridim.wordpress.com/category/china/

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

GDP: https://atridim.wordpress.com/category/gdp/

BAMOPOLY … a game we are already playing … but can’t win

Captain Rick: The object of this game is to try and save American capitalism before the government takes over everything. To date, there is no known player who has won. The government wins every time. 

The game board looks interesting. It reminds me of the fun times I had as a kid playing Monopoly for hours and even days before finally taking over everything…or loosing everything.

I don’t think Bamopoly would be very much fun to play…because no one likes to loose all of the time. It also reminds me very much of real life in America. Its people play this game every day to try and get ahead and promote capitalism… but it seems like big government is always there to take over everything.

I have a strong feeling that one of these days, the government is going to loose this game…because of the way it has been cheating its players…the citizens of America. Unfortunately when it looses the game, there will be no winners.

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title above)

Previous reports:

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

U.S. GDP crawls out of ‘recession zone’ to post 2nd worst % since end of Great Recession

Captain Rick: The U.S. managed to crawl out of the GDP recession zone in its ‘final’ report for Q4 2012 to post a dismal 0.4% GDP, second worst since the end of the Great Recession in 2009. The first estimate in January reported –0.1% GDP, in the recession zone. 

GDP (Gross National Product) is the broadest means of quantifying the health of an economy.

In my previous GDP report, I stated: “If Congress gets tough and addresses the debt crisis head on, I suspect it will present a deeper, temporary plunge into negative growth territory. If Congress continues to ‘kick the can down the road’, I suspect we will see less of a dive in GDP early on…but will set the stage for a much deeper dive in a year or two…possibly as deep or deeper than the ‘Great Recession’ of 2008-2009”.

The U.S. Congress passed and President Obama signed legislation to “kick the debt can down the road” AGAIN as reported in my previous post. While these actions have no effect on GDP for Q4 2012, they will effect GDP for Q1 2013 and beyond.

The red line in the chart above indicates the 3% level that the U.S. GDP must maintain to keep up with population growth. GDP has been far short of that for many years. In spite of the positive hype we are hearing in the mainstream news media, America is traversing extremely dangerous economic waters. Hype does not fix problems… credible action does. Unfortunately the world is seeing ‘zero’ credible action out of the politicians who represent the citizens of the United States of America.

Prognosis for the future…where are we headed?

I see several troubling economic factors that parallel the times leading up to the ‘Great Recession’. The world stock markets have reached a new high, passing those reached just prior to the stock market crash of 2008. Like then, I see no justifiable reason for the market rise. Today’s market reminds me of a bunch of gamblers in Vegas looking for a place to throw all of their dollars to bet it all. The market is again inflating into a balloon ripe for explosion. Real estate prices have been climbing at a fast pace, as is real estate speculation…similar to that witnessed prior to the bursting of the real estate bubble, prior to the Great Recession. I can not predict how much farther things can go before a repeat of 2008 occurs…or perhaps worse, but I feel that a down slide is coming soon. Much will have to do with congress’s handling of the debt crisis (very dismal at this point). It will be further complicated by the multi-trillion dollar cost of Obamacare (the worlds greatest socialized, welfare medical program). In addition, we must remember that multi millions of baby boomers are beginning to collect Social Security from a trust fund that has been totally robbed of funds to finance the U.S. Government and its politician’s thirst for deficit spending. It will all play out in a very ugly scene before the world’s eyes during the next few years.

I welcome your comments, likes and shares!

Info from previous reports:

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

GDP: https://atridim.wordpress.com/category/gdp/

U.S. lawmakers kick the ‘debt can’ down the road again to satisfy their thirst for deficit spending … when will this farce end?

Captain Rick: The March 27 deadline for the U.S. government shutdown has been averted by yet another stunt by U.S. lawmakers to kick the U.S ‘debt can’ down the road AGAIN until the end of the fiscal year in September … when it will all come back to haunt us AGAIN.

U.S lawmakers finally brought the 2013 budget fight to an end on March 21 by approving a bill that ended the threat of a U.S. government shutdown on March 27. It funds the government through the end of the current fiscal year in September. The measure now set to become law reduces the impact of the $85 billion in forced cuts — called sequestration — to only $59 billion.

It establishes stop-gap budgets for targeted departments and programs. It resets priorities and helps better manage the draconian formula as set forth by the sequestration spending cuts. Overall, the legislation locks in $984 billion in non-entitlement program spending — a tiny drop from the $1.043 trillion initially approved before the forced sequestration cuts took effect.

I believe I speak for most Americans and many people around the world when I say … we have had enough of the “U.S. Capital Circus”. Its time for America’s president and lawmakers to unite and figure out a real solution to get America off of the deficit spending binge and balance the budget, followed by a way to pay back America’s monumental national debt of $1.7 trillion, which now exceeds America’s GDP. This is an extremely serious world economic issue … the world’s largest! Nothing else comes close in magnitude. Time is running short. Without real, credible action soon, America will fall over the real ‘Fiscal Cliff’ … a point of ‘no return’. It will take much of the world along for the fall.

I welcome your comments, likes and shares!

Info from previous reports:

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

U.S. Government Shutdown … looms March 27

Captain Rick: That “debt can” that President Obama kicked down the road on January 1 by signing of the American Taxpayer Relief Act of 2012, in an effort to avoid the Fiscal Cliff, revisits on March 27, 2013 when the federal government again faces a shutdown because it has again reached the debt ceiling, now set at $16.4 trillion.

Funding for the U.S. government expires on March 27, 2013 unless Congress acts. If they fail, the federal government will shut down on March 28. All government operations would cease, except for essential services.

Since lawmakers will not agree to a real budget by this date, they will have to agree on temporarily funding the government for a few weeks or a few months … again. The Republicans are presenting a plan on Thursday to extending funding to the end of the fiscal years which ends is September, but it includes a $7 billion restoration of defense funds in exchange for cuts elsewhere. A big question remains…will Democrats go along with this? It will all unfold in coming days.

Boehner’s comments on NBC’s “Meet the Press”

It is evident that the Republicans will allow no more tax increases…made very clear by House Speaker John A. Boehner (R-Ohio) who said on NBC’s “Meet the Press” that he discussed the need to avoid a shutdown with President Obama at a meeting Friday between the president and congressional leaders.

Boehner said the House will vote this week to keep the federal government operating through September, when the fiscal year ends, and avoid a potentially politically damaging shutdown.

The move would be the second time since the election that Boehner has avoided a fight, desired by some House conservatives, in order to keep the GOP from possible blame. He led House Republicans to raise the debt ceiling in January to fend off a repeat of the 2011 conflict that led to the sequester.

“The president this morning agreed that we should not have any talk of a government shutdown,” Boehner said. “So I’m hopeful that the House and Senate will be able to work through this.”

“I’m going to say it one more time,” Boehner said. “The president got his tax hikes on January the first. The issue here is spending. Spending is out of control. There are smarter ways to cut spending than this silly sequester that the president demanded. And so, we need to address the long-term spending problem. But we can’t cut our way to prosperity.”

“We had a very pleasant meeting, but it was also a very frank meeting,” Boehner said. “I made it clear to the president that again, a trillion dollars worth of tax hikes in Obamacare. And you have another $650 billion worth of tax hikes on January the first. You can’t tax our way out of this problem. We’ve got to deal with the spending side, just like every American family has to.”

Listen, every American knows Washington has a spending problem. Every American, in these tough economic times, has to find a way to balance their budget.”

Boehner said Republicans were done raising taxes after agreeing to the “fiscal cliff” deal in January that raised more than $600 billion in revenue. Any new revenue gained from closing tax loopholes, he said, should be put into lowering tax rates.

“The president got $650 billion of higher taxes on the American people on January the 1st,” Boehner said. “How much more does he want? When is the president going to address the spending side of this?”

Captain Rick’s closing thoughts …  will Washington avert shutdown again”?

I think most Americans are with me in expecting that Washington will pull off a circus act just prior to the closing curtain as it always manages to do. However, this showdown is not a done deal…especially concerning the defense appropriations. I think the Defense Department should endure the same cuts as as all others. I don’t think it needs special treatment. I believe many Americans believe the U.S. Defense Department could easily be cut without sacrificing America’s safety. I think many will agree that it is time for America to stop playing “Police of the World” …at American taxpayer expense.

I welcome your comments, likes and shares!

Info from previous reports:

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

Fiscal Cliff Cartoon Break: the Sequester

Captain Rick: Its time to take a breather from America’s fiscal calamities to enjoy a Fiscal Cliff…Sequester  “Cartoon Break”.

I welcome your comments, likes and shares!

On the serious side … info from previous reports:

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

Sequester Cuts … tiny in comparison to America’s giant thirst for debt spending

Captain Rick: The U.S. Federal Budget has grown 40% larger since Obama became president. America’s thirst for deficit spending has has quadrupled since. Deficit spending has grown from under 6% of the Federal Budget in 2007 to a whopping almost 24% in 2013. At the rate President Obama is increasing the U.S. National Debt, deficit spending will consume nearly 50% of the Federal Budget by the time he leaves office. It is obvious he is leading America on a suicide journey to the edge of the Fiscal Cliff.

The Sequester Cuts, that begin to go into effect today, represent only a tiny reduction of America’s deficit spending as demonstrated by the pie crumbs left after a nearly quarter-sized hunk of pie was removed. The Sequester cuts represent only 2% of the Federal Budget and less than 10% of deficit spending.

The Sequester Cuts are tiny contribution to begin to harness President Obama’s debt spending binge. Actually, the cuts will achieve little if deficit spending keep increasing during the next year at the same rate as the past four. A year from now deficit spending will have gone up by a much larger percentage than the tiny reduction realized from the Sequester Cuts. America is in serious fiscal trouble. The Sequester cuts are a start. Far more needs to be done to save America from fiscal destruction in a few short years.

It would have been better if Congress and the President could have agreed on which cuts should be made, but they could not, thus the previously agreed Sequester, signed by President Obama, went into effect today. I believe I speak for many Americans when I say that President Obama’s choice to free thousands of illegal aliens under the guise of Sequester cuts was politically motivated and used very poor judgment.

When will the Washington Circus end?

Americans are getting sick and tired of it … but then they are the ones responsible for electing the incompetents representing us in Washington. Perhaps the real problem lies on the shoulders of our voters … but then again … we often face ‘crappy’ choices at the poll. Intelligent voters in America are becoming a minority. I am doing my very best to help reverse that trend! I hope you will follow my blog and share it with your friends via the many social network buttons I have provided for you below. And please…don’t be bashful…share your comment with ANJ’s rapidly growing audience across America and around the world. Your voice is important!

I welcome your comments, likes and shares … below!

More info from previous reports:

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

Blogosphere is on fire over Obama’s mass release of illegal aliens under guise of Sequester cuts … It smells like a political rat

Captain Rick: Blogs across America have exploded in the past few hours as they “smell a political rat” by President Obama’s mass release of illegal aliens in advance of and under the disguise of Sequester spending cuts. I have seen big political moves, but this one “takes the cake”. 

This appears to be a political move by President Obama to pressure Republicans to cave on automatic Sequester spending cuts which go into effect on on Friday. Those reading my previous reports, know that these cuts are necessary as a result of a total breakdown of Washington being able to legislate fiscal responsibility. It is a shame that our President has to resort to dirty politics by scaring Americans in order to continue his obsession for spending trillions of dollars beyond America’s means.

The Immigration and Customs Enforcement agency (ICE) confirmed that it has released hundreds of immigrants awaiting deportation trials over the past few days to prepare for the sequestration slated to kick in March 1.

House Speaker John Boehner (R-Ohio) told CBS News it is "very hard for me to believe that they can’t find cuts elsewhere in their agency."

My state of Arizona contains the most porous corridor for illegal aliens entering the U.S. It’s a very important issue for the citizens of Arizona. I received an email from Jan Brewer, Governor of Arizona. She sums up this political move with excellence. I share her words with you below.

Message from Jan Brewer, Governor of the great state of Arizona

I’m appalled to learn the U.S. Department of Homeland Security has begun to release hundreds of illegal aliens from custody, the first of potentially thousands to soon be freed under the guise of federal budget cuts. This is pure political posturing and the height of absurdity given that the releases are being granted before the federal ‘sequestration’ cuts have even gone into effect.

This represents a return to exactly the kind of catch-and-release procedures that have long made a mockery of our country’s immigration system. The news is especially concerning when coupled with DHS’ acknowledgment that it may not be able to maintain operation of 34,000 immigration jail beds, as mandated by Congress.

Everyone knows the federal government must get a handle on spending, and it is well past time that the President begins working with Congress to find real budget solutions. But we cannot let public safety and the rule of law be collateral damage of the President’s failed leadership to pass a budget.

My very best,

Jan Brewer

More info from previous reports:

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/