I give you the US GDP to US Debt chart. In all it’s glory.

USA GDP to Debt

Not Good Company

In a word, No. Because the US has an economy, whereas as one Greek Poltico put it, “all we have is olives, sun and ruins”.

But we are in very bad company.  Ireland, Italy, Portugal and Spain are known as the PIIGS of Europe, economies so bad they are very likely candidates for European Central Bank bailouts.  Which is what has been happening to Greece.  Essentially the deal forced on the Greeks for getting bailed out, sentences the  Greeks to debt slavery for decades.  The Greek young recognizing the depth of the problem are leaving.  Mostly for Germany and German language lessons are on the rise in Germany.

Yes, the Greeks borrowed their way into this problem, but someone on their own free will lent the Greeks the money, knowning at some point the Greeks would start floating belly up under debt payments.

When your debt is 136% GDP to Debt, nothing good comes of it.  The USA is just at 100% and climbing fast.  So far we have gotten away with it because we are the USA, the largest economy in the world and the dollar is the reserve currency of the world.  As long as this continues we can live on borrowed time.

The largest debt holder of US debt is us, we the American people hold most of our debt, again thanks to being the reserve and large economy in the world.    Other holders are the British, Canadians, Japanese and Chinese.

The graph is by way of Senator Sessions.

Greek Riots

We need to follow Greece because their default and withdrawal from the eurozone would set off major consequences to the European Monetary Union, and thus the EU, that are unforeseeable. A default would impact Greek banks who are major lenders to the government, as well as major German, French, and Belgian banks. These defaults would set off a crisis because these big banks are allowed to use sovereign bonds, such as Greek bonds, as Tier 1 capital. Everyone knows that those values are a fantasy and that these European banks are seriously undercapitalized. Even without a Greek default, these banks are required to come up with an additional $150billion of capital by July 1, 2012. A default would eventually result in major bank bailouts from their host countries and would probably require the European Central Bank to intervene by buying sovereign debt, thus monetizing the debt and flooding the EU with fiat (editor: fiat = paper printed money) money. Greece would just wipe out its debt, go back to the drachma, and stay in perpetual recession/depression. My guess is that there could be a military coup somewhere along the way.

Perhaps everything will be just fine, but my smell-o-meter tells me otherwise:

Today is the first day of massive protests in Athens, Thessalonika and other cities. Five ministers resigned from the coalition cabinet of Lukas Papademos.  Germany’s Finance Minister Wolfgang Schäuble cast a shadow of doubt over the proposed implementation of austerity measures since they haven’t followed through on the conditions from the first bailout. Several members of the “nationalst” Laos party resigned and refused to back the settlement. It’s getting ugly. This, from different sources:………read more at the Daily Capitalist

Biggest question I have, will our Government feel the need to “help out” and buy European Sovereign debt, with our fiat (printed paper) money? The Germans have said no repeatedly.

Judge for yourself.  This is the actual language.
Standard And Poors Report.

Some highlights.  That I think represent the tone and bring out the points the media as usual is missing.

My take, S&P reduced the rating because:

1) Recent events in Washington have left S&P doubtful congress can act effectively to deal with the financial problems facing the country.

2) The recent agreement is not adequate.

3) The timing of the next election makes it unlikely a significant agreement will be reached, the debt issue will be worse and require tougher measures.

4) Political  leaders have shown no intention of tackling Medicare and Medicate or

other entitlements programs.

5) S&P takes no position of what mixture of revenue raising or spending cuts is appropriate.

From the report.

The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective,
and less predictable than what we previously believed.

The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year’s wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently.

Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures.

It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal  sustainability. Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a ‘AAA’ rating and with ‘AAA’ rated sovereign peers.

In our view, the difficulty in framing a consensus on fiscal policy weakens the government’s ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid). A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population’s demographics and other age-related spending drivers closer at hand (see “Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now,” June 21, 2011).

Standard & Poor’s takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.’s finances on a sustainable footing.  The act calls for as much as $2.4 trillion of reductions in expenditure growth over the 10 years through 2021. These cuts will be implemented in two steps: the $917 billion agreed to initially, followed by an additional $1.5 trillion that the newly formed Congressional Joint Select Committee on Deficit Reduction is supposed to recommend by November 2011. The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.

Source: ShadowStats.com

* 6 percent said no, all the tax cuts should be allowed to expire,
* 24 percent said yes, but only for those making less than $250,000 a year,
* 70 percent said that all the tax cuts should be extended.

Despite the continued challenging conditions, 30 out of 48 economists who answered the question said the economy didn’t need any more fiscal or monetary stimulus. Six economists said more fiscal stimulus was necessary, while five want more monetary stimulus from the Federal Reserve and seven said that the economy could use both.

The economists, though, generally didn’t support the idea of ending Bush-era tax cuts, which will expire at the end of this year unless Congress acts. Just three respondents said that the tax cuts on individual income should be allowed to expire for everyone. Thirty-two economists said they should all be extended, while 11 said they should be extended for people making less than $250,000 a year—the policy option backed by the Obama administration.

LA School

LOS ANGELES – Next month’s opening of the Robert F. Kennedy Community Schools will be auspicious for a reason other than its both storied and infamous history as the former Ambassador Hotel, where the Democratic presidential contender was assassinated in 1968.

With an eye-popping price tag of $578 million, it will mark the inauguration of the nation’s most expensive public school ever.

The K-12 complex to house 4,200 students has raised eyebrows across the country as the creme de la creme of “Taj Mahal” schools, $100 million-plus campuses boasting both architectural panache and deluxe amenities.

“There’s no more of the old, windowless cinderblock schools of the ’70s where kids felt, ‘Oh, back to jail,’” said Joe Agron, editor-in-chief of American School & University, a school construction journal. “Districts want a showpiece for the community, a really impressive environment for learning.”

Cost of Government

Every year, the Americans for Tax Reform Foundation and the Center for Fiscal Accountability calculate Cost of Government Day. This is the day on which the average American has earned enough gross income to pay off his or her share of the spending and regulatory burdens imposed by government at the federal, state, and local levels.

In 2010, Cost of Government Day fell yesterday, on August 19. Today is the first day you stopped working for Uncle Sam and began working for yourself. Americans must labor 231 days out of the year just to meet all costs imposed by government – 8 days later than last year and a full 34 days longer than 2008.

In other words, in 2010 the cost of government consumes 63.41 percent of national income.

The Cost of Government Day also details how the states fared – Alaska has the earliest Cost of Government Day this year, falling on July 28, while Connecticut taxpayers will labor until September 17 to pay for the cost of their government.


Cost of Government Day serves as a tangible reminder of the growing burden government places on taxpayers. Click here to read the entire report, which includes case studies on the various policies that have contributed to pushing this year’s Cost of Government day to August 19, 2010.

Onward,
Grover Norquist

PS- Do you have Facebook and/or Twitter? Please consider helping us promote Cost of Government Day by linking to www.costofgovernmentday.com and using the hashtag #cogd10 if you’re on Twitter!

Ct Surplus Deficit, Click For Larger Image

Connecticut has the 5th biggest deficit nationally as a percentage of General Fund for 2009-2010
o NV – 30%
o AZ – 29.8%
o CA – 25.6%
o NY – 24.3%
o CT – 23.1%

Connecticut already has the highest tax burden in the country.

Connecticut’s young leave their home state at the highest rate in the country.


Connecticut is the ONLY state in the country to have fewer businesses now than 20 years ago.

Don’t you think this has to stop? If not now, when? If not by us, who?

Oh by the way, this graph is from the Ct Democrats.