Posts Tagged ‘U.S. Debt’

Captain Rick: The Senate and House passed a short-term spending bill that prevented a government shutdown at the end of the week. It has White House backing.

This legislation allows Congress to ‘kick the can down the road’ until after America elects a new President and new members of Congress. With a bunch of ‘lame ducks’ residing in congress at that time, you can bet they will again ‘kick the can down the road’ with another short-term spending bill to fund the government until after a new President and Congress take office in January. That’s when the excitement begins …

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Fights over raising the debt limit broke out between the Obama White House and ruling Republicans in Congress in 2011 and 2013, unsettling Wall Street and foreign investors. The two sides struck a deal in 2015 to suspend the debt limit until Obama left office. The federal debt limit has been suspended since late 2015, but the law is set to be reinstated on March 16, 2017. The current debt limit of $20.1 trillion will be breached and another funding emergency will be at hand to prevent another U.S. government shutdown.

Government shutdowns in the past have become a ‘joke’ in that certain federal employees are told to stay home without pay, until Congress passed legislation to fund the government, which often included increasing the national debt and awarded compensation for all lost pay … meaning their time off was really an extra paid vacation; an insult to hard working employees of ‘Main Street’ America. The ‘Shutdown Game’ can not continue much longer because America is coming ever so close to falling off of the real and pending ‘Fiscal Cliff’. Many federal programs like Obamacare, Medicaid, Medicare and even Social Security are projected to implode in coming years without serious spending/taxation reform.

The U.S. National Debt has more than doubled since President Obama took office; from $9 trillion to $19.5 today. It is exploding at rate of $1.35 trillion each year. More than $10 trillion of ‘red ink debt dollars’ have been spent to keep the federal government functioning during the Obama Administration.

About 15% of money spent by the federal government has no revenue to support the expenditure and thus adds to the national debt. Much of this debt spending goes to states and cities in the form of federal grants. Our states and cities ‘drink up’ the grants like it is ‘free money coming from heaven’. Their philosophy is ‘if we don’t get the grant, some other city or state will’. What an awesomely greedy and fiscally reckless way to think. Shame on every city and state in America for slurping up these slush grants which add to the mushrooming U.S. National Debt. Our cities and states are a main contributors to the growing problem of America’s National Debt … debt which will be placed upon future generations to pay back … including our children and grand children. It’s a serious matter to think about.

I hope the next President and Congress will begin to balance the budget and curtail deficit spending. Saving America from falling off of the real and pending ‘Fiscal Cliff’, will not be easy. It will require ‘belt tightening’ by people, cities and states across America and most importantly by the U.S. Federal Government and our elected representatives in the U.S. Congress.

Captain Rick : Stock markets around the world plummeted into correction territory on Monday, August 24. China’s Shanghai composite plummeted 8.5% followed with an additional 7.6% plunge on Tuesday, accumulating a 16% loss in two days. The Dow took an unprecedented 1,089 point dive at Monday’s opening bell, causing investors to wonder if this was the beginning of a market crash. The Dow has now lost 13% from recent highs. Most major stock markets around the world are down over 10%, considered to be the threshold that signals an official market correction.

This market correction is significant in magnitude. It is almost as big as the 2011 correction, which was the biggest correction since the global market crash of 2008, when the Dow bottomed at a 54% loss. This market correction has caused the average 401K retirement account to loose $10,000 in the past few weeks. It has erased billions of dollars of value from the world’s major corporations. 

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What is triggering this stock market correction?

Primarily, concerns about global economic growth — especially in the world’s No. 2 economy, China, after it unexpectedly devalued its currency. China’s Shanghai Composite suffered its worst loss in more than 8 years, which takes us back in time prior to the 2008 global market crash. This concerns investors because China is one of the biggest financiers of U.S. debt. If China stops funding Americas debt spending, where will Uncle Sam get its money to fund the countless federal grants it dishes out to keep the economy chugging along? Additionally, oil prices are down under $40 a barrel, hitting a 6 1/2-year low. While this is great news for drivers needing to buy fuel, it is taking a heavy toll on profits for the big oil corporations.

What is the long term stock market prognosis?

Perhaps the biggest concern of all is the extremely fragile financial structure of the United States. Intelligent investors realize that the U.S. is teetering at the edge of the real ‘fiscal cliff’ with lots of serious fiscal challenges that lie ahead … like uncontrolled spending far beyond its means, causing the U.S. national debt to soar past $18 trillion, dwarfing all other countries debt. And then there are the giant fiscal time bombs that continue to tick … Medicaid via Obamacare, Medicare and Social Security. Who knows what could spook the market to take the big plunge? The only things we can all be sure of is that ‘what goes up, eventually comes down’ and ‘time is of the essence’ because of the extremely ‘shaky fiscal ground’ that the entire world stands on … especially the United States of America.

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Captain Rick : I have watched every presidential debate since 1960 when John F. Kennedy was elected and became one of America’s greatest presidents. I will always remember the day I was eating lunch in the high school cafeteria and those terrifying words came over the school PA system that President Kennedy was shot and killed. It was a day that planet earth stood completely still, frozen in shock. That day had a profound effect on my thinking. It marked the day I became seriously interested in the candidates that run for President of the United States of America. 

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Fox News hosted the first Republican presidential debate on August 6, 2015.  Sadly, it was only broadcast live to cable TV subscribers. Watch the official Fox News video rerun by clicking the image above.

As I have done for most presidential debates for decades, I kept score of how each candidate answered the questions. Each candidate started off each question with 5 points on a scale of 10. As they answered each question, I adjusted their score up or down based on what they said as it related to how I believe the mainstream voter would judge the answer. Their body language and audience reaction factored in. After the debate I averaged the scores for each candidate.

Captain Rick’s Scorecard of 2016 Republican Presidential Debate Contenders:

8.1 Donald Trump

6.7 Rand Paul

6.3 Mike Huckabee

6.2 Ted Cruz

5.7 John Kasich

5.6 Marco Rubio

5.2 Scott Walker

5.1 Ben Carson

5.0 Jeb Bush

4.8 Chris Christie

Donald Trump dominated the debate, in spite of loaded questions thrown at him by Fox News host Meagan Kelly, scoring considerably higher than all other candidates. Rand Paul came in a distant second, weaker than I had expected. Mike Huckabee’s third place performance was a surprise. I have a hunch we will be seeing more press on him in coming weeks. It squeaked Ted Cruz to a close fourth. The rest of the candidates all scored within a point of neutral 5.0. Scott Walker’s drop was a surprise. Ben Carson, with his excellent comment about the ‘brain of congress’ helped him fair a notch above Jeb Bush. Chris Christie came in last. I think he needs to excuse himself from the race.

I recognize that there is lots of commentary on how the candidates faired that is being broadcast across social media. I am honored to be one intelligent voice for your consideration.  

Captain Rick’s Closing Thought … I think America is sick and tired of both parties (Republican and Democrat) because of their poor ability to have a positive effect in the Presidency and Congress of the United States of America … which continues to ‘kick Americas debt can down the road’ for our grandchildren to pay for. They can not afford the bill of debt. Unless America begins to elect an intelligent president and members of Congress, America will soon witness the world’s largest catastrophe … the United States of America becoming a third world country. 

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Captain Rick : Today, if Dorothy met men with no brains, no hearts and no courage, she wouldn’t be in OZ, she would be in the U.S. Congress !

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These are definitely ‘Words of Wisdom’ for Americans who witness the majority of representatives in the U.S. Congress make decisions that continue to spend like drunkards on all kinds of things America can not afford, using dollars printed with red ink that grow America’s world record $18 trillion national debt … with no courage to produce an honest plan to stop it … and no heart to protect our children from inheriting an unsolvable pending fiscal disaster.

The U.S. Congress is today’s ‘OZ’ and President Obama is the ‘wizard’.

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Captain Rick: U.S. Job Growth has crawled upward to pass the break-even rate with with population growth. The trend is in the right direction. The jobs being added are mostly low wage. There is little hope of regaining the 8.7 million medium to high wage jobs lost during the Great Recession any time soon.

The chart below shows the new jobs added during each month of the the past year. 

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GREEN LINE: an average of 214,000 new jobs have been created each month during the past year

BLUE LINE: an average of 185,000 new jobs need to be created each month to keep up with U.S. Population growth of 0.7%

REAL JOB GROWTH: is represented by the difference between the Green and Blue lines … 29,000 new jobs each month that exceed population growth.

How long will it take to recover the 8.7 million jobs lost during the Great Recession: At the ‘Real Job Growth Rate’ of 29,000 new jobs per month, it will require 300 months … or 25 years. That is a long time, during which many other significant concerns will come into play … like the U.S. Debt crisis … on track to explode during the next decade.

Wages remain stagnated: Federal Reserve Chair Janet Yellen has said she wants to see wages rise faster than inflation so American households will have more buying power. That has yet to happen. I personally think Janet and the entire Fed are living in a ‘dream cloud’.

New poll show majority rating the U.S. economy as ‘Poor’: Many Americans still think the economy is not fully recovered. According to the results of a CNN/ORC International poll released Friday, 41% of people surveyed rate the economy as "good", while 58% rate the economy as "poor."

Perceptions about the U.S. economy will be a key factor in November’s midterm elections: More than a third of the Senate and the entire House are up for grabs. Both sides of the aisle are blaming each other for holding back the recovery. I blame almost all of them. I hope the American voters will exercise their thoughts and register their voices in the upcoming elections and vote out of office the majority of those now in office.

Captain Rick’s Prognosis: America is traveling into uncharted territory, which if not handled properly by the U.S. Congress (which is very unlikely, based on performance in the past decade), has the potential to drive America over the pending ‘real fiscal cliff’ and reduce America to a ‘third world nation’.

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Captain Rick: What should we do with people who rely on government handouts, but are too lazy to work? This cartoon sums it up perfectly. Kick them out of Congress.

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It is no secret that the majority in the U.S. Congress are very lazy and accomplish basically nothing of any benefit for the people in exchange for a very wealthy salary and benefits. I read today that the current US Congress is even more ‘do nothing’ than the record ‘do nothing Congress’ during the President Truman days in the 1940s. Perhaps Obama will go on record with Truman as being the two most ‘do nothing’ presidents (both Democrats) in the past 100 years. I should clarify that…Truman did achieve great destruction overseas. He gave the approval to drop the nuclear bombs on Japan. I have to agree with the cartoon…’Kick them out of Congress’. But then…we are still left with a ‘do nothing’ president…except for his countless ‘executive actions’ which serve his personal agenda at the expense of escalating the US National Debt.

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Captain Rick: President Obama has destroyed a relationship with Russia that the world applauded President Ronald Reagan for building when he stated those famous words “Tear down that wall” at the Brandenburg Gate near the Berlin Wall on June 12, 1987.  This is a sad day…a day Obama has launched a new COLD WAR with Russia, even though he is trying to convince us otherwise.

President Obama announced additional sanctions against Russia today. Earlier Europe announced sanctions that I believe were pressured by Obama. While America is somewhat isolated from Russia, the EU might have set itself up for a huge fall. Obama is forcing President Vladimir Putin into a corner. Putin is a smart person…perhaps smarter than Obama could only hope to be. I caution that Putin’s Russia supplies a major amount of natural gas to Europe.

Something to think about … Supposing this winter when the weather turns cold in Europe, Putin shuts off Russia’s supply of natural gas to Europe? It could paralyze Europe. Its ripple effect could cast America and the entire world into a new recession of monumental magnitude. Lets also remember that Russia sits upon the world’s second largest stock pile of nuclear weapons.  I think Obama needs to exit his dream world, get a refresher course in reality and then learn how to shut is big mouth and mind his own business before he provokes Putin to seek revenge.

President Obama has lit the fuse to a new COLD WAR. All we can do now is watch the aftermath. I have a hunch that it is not going to be pretty. At my age, with some wisdom, I have to wonder what possesses the minds of recent US presidents to make them feel that they have to ‘rule the world’? Wouldn’t things be much better if our president ‘cooled his jets’ and minded his own business…like the monumental $18 Trillion US national debt…which if not brought under control soon…will automatically destroy America as a ‘first world country’?

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Details of the new sanctions:

The new sanctions will restrict Russian state-owned banks from accessing European capital markets, and throw up more red tape to stop or slow the export of oil-related equipment and technology to Russia.

All new contracts for arms imports and exports between the EU and Russia will stop. There will even be a prohibition on exporting goods and technology that can be used for both military and civilian purposes.

The sanctions are part of a coordinated effort by Western nations to punish Russia for its role in annexing Ukraine’s Crimea region and supporting pro-Russian rebels in Eastern Ukraine.

The European Union had previously been reluctant to issue harsher sanctions against Russia because both regions rely on one another for about $500 billion in trade and investment each year. European leaders said they were ready to reverse their sanctions if Russia whole-heartedly worked to stop the crisis in Ukraine.

For now, we wait to see what comes of this new COLD WAR.

Facebook members: Join the active discussion on the UKRAINE CRISIS that is well under way with over 70 comments:
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