The federal deficit may soon cause a “collapse” of the dollar, Stanford University economics professor Scott S. Powell writes. In an opinion piece in The New York Post, Powell notes that the ratings agency Fitch just cut Portugals bond rating to AA negative — a clear sign that the insolvency crisis that began in Greece is far from over. “And dont think its merely a problem for the European Union. In fact, a debt-driven collapse of the dollar may be closer than most Americans realize,” he writes. Before the government bank bailouts, gross federal debt was 70 percent of gross domestic product GDP. “Its now estimated at about 90 percent of GDP. Add in the $1.6 trillion debt liability of Fannie Mae and Freddie Mac, and were already at that 100 percent debt-to-GDP tipping point,” writes Powell. “No, the United States isnt Greece: For a host of reasons, we can probably get away with higher debt. But our problem is about to grow worse.”Right now, low interest rates make federal borrowing seem cheaper than it actually is — because those interest rates wont stay at zero forever.“And when rates head back to normal, Uncle Sams borrowing costs could easily double. We spend 11 percent of the current budget — $382 billion — on debt service; that could rise two- or three-fold to more than $800 billion, warns the CBO,” says Powell. Adding to the pressure on the dollar — inflation related to new job creation once the economy really starts to expand, reports CNNMoney.© Moneynews. All rights reserved.
via Moneynews – Professor: Huge Deficit Will Cause Dollar to Collapse.
Filed under Barack Obama, Budget, Capitalism, Congress, DEFICIT, Deflation, Dollar, Economic Collapse, Economics, Entitlements, Government Spending, Inflation, Jobs, Liberals, National Debt, Organized Labor, Progressives, Sovereign Debt, Stimulus, Taxation, Treasury Bills, Treasury Bonds, United States of America
Like many American entrepreneurs, Peter Benson and his wife invested every dime of their savings into their Kansas
manufacturing company, which employs 55 workers and manufactures and exports steel parts. Over the past 12 years, they tripled their sales and doubled employment – in the face of a market crash and two recessions. Now Mr. Benson wants to expand and hire more workers. However, though he has a perfect track record, his loan, backed by the Small Business Administration (SBA), has reached the $2 million maximum allowed by law. Despite his desire to create more good-paying jobs, he cannot get the additional credit he needs.
Unfortunately, Mr. Benson’s story is not unique. Small businesses traditionally have been our nation’s job creators, with 65 percent of new jobs coming from them. But over the past year, they have suffered from the fiscal downturn – more than 80 percent of the jobs lost came from small businesses. Today, small businesses want to hire new workers, but their ability is just out of reach.
As chairman of the Senate Committee on Small Business and Entrepreneurship, I am working with Democrats and Republicans to ensure that the Small Business Administration is a more muscular agency and that small businesses have the tools they need to continue as our nation’s innovators and job creators.
Read the rest here: LANDRIEU: Creating jobs on Main Street – Washington Times.
Republicans on the House Committee on Oversight and Government Reform, led by Rep. Darrell Issa, have issued a scalding report on ACORN and the SEIU. The main thesis — that ACORN and SEIU are, operationally, in effect the same organization, an organization that illegally channels restricted money into political activity — is argued persuasively, but the authors slopped the report up with tangential complaints and grossly exaggerated claims about ACORN’s role in the housing bubble.
Read the rest here Issa vs. ACORN – Kevin Williamson – National Review Online.
Filed under ACORN, Barack Obama, Big Government, Cronyism, DEFICIT, Economic Collapse, Economics, George Soros, Government Spending, Healthcare Reform, Ideology, Jobs, Liberals, Organized Labor, Progressives, SEIU, Stimulus, United States of America, Welfare