Rep. Ted Yoho (R-FL), who said on not raising the debt ceiling, “I think, personally, it would bring stability to the world markets.”
And this: “We need to have that moment where we realize [we're] going broke.” He firmly told the paper, “I’m not going to raise the debt ceiling.” He also characterized the current government shutdown as “the tremor before the tsunami.”
Is this what happens to folks who eat alligator tails for breakfast and smoke palmetto palms in the evenings? Is there some special mind-altering substance in Florida's water? How does someone in Rep. Yoho's position manage to say something as moronic as that?
Oh...wait...he's a TeaPublican.
Nevermind.
Here's what to expect from not raising the debt ceiling, by people with normal firing neurons:
Prepare for a "financial apocalypse," says Yalman Onaran at Bloomberg.
Failure by the world's largest borrower to pay its debt — unprecedented in modern history — will devastate stock markets from Brazil to Zurich, halt a $5 trillion lending mechanism for investors who rely on Treasuries, blow up borrowing costs for billions of people and companies, ravage the dollar and throw the U.S. and world economies into a recession that probably would become a depression. Among the dozens of money managers, economists, bankers, traders, and former government officials interviewed for this story, few view a U.S. default as anything but a financial apocalypse.
Mark my words, says economist Justin Wolfers:
This would plunge the U.S. into a recession. If you hit the debt ceiling, then you can't borrow any more money, which means you've got to bring the budget deficit down to zero immediately. It's currently four percent of GDP. So this would cause a huge fiscal contraction if the debt ceiling limit wasn't raised for a persistent period. Big enough that I can be absolutely confident it would plunge the U.S. into recession. [ABC]
Expect "chaos unlike anything anybody has seen before," warns Arizona State professor Dennis Hoffman.
If U.S. credit faltered, lenders around the world would think twice about making loans, including the ones companies rely on to make payroll every week. "This would be a financial collapse and chaos unlike anything anybody has seen before," Hoffman said. "It's unthinkable." [AZ Central]
Here's the scariest thing, says Derek Thompson at The Atlantic:
No one knows how bad it will be. The truly scary thing about going over the debt cliff isn't what we think will happen — a scramble to prioritize payments, delayed checks to groups like veterans and senior citizens, and angry, confused investors. The truly scary thing is that we actually have no idea what will happen. We don't know if it's even possible for the government to prioritize payments to millions of different clients. Households, businesses, and investors don't know how long they'll have to wait for their money, whether it's a defense contract deal, a doctor's reimbursement, or a Social Security check. And nobody will know how long the nightmare will go on. [The Atlantic]
SOURCE
But yahoo Representative Yoho thinks not raising the debt ceiling will be a good thing for the country and the worldwide community.
And yes, he is a TeaPublican. Q.E.D.
cartoons via Squatlo Rant
AtlanticWire:
"During the impeachment of Bill Clinton, Republicans were pretty unpopular. After eight years of George W. Bush, same. But never in the history of Gallup polling has the party been more unpopular than it is right now. A crucial caveat: that history only goes back to 1992, so it doesn't include, for example, the post-Watergate era. But still, over the past 21 years the Republican Party has never been viewed less favorably by Americans than it is right now."
66 comments:
Scott Galupo of The American Conservative:
"The very nature of Tea Party opposition, whether it issues from the likes of Bazooka Ted and His Gang in the Senate or the unappeasable Jacobins in the House, is to throw weight without consequence. They evince no interest in actually wielding power from the inside, which would require restraint, conciliation, and moderation. They are hysterics on the brink of utter demoralization. The danger they pose to democratic norms, institutional comity, and political functionality is precisely why they can’t be bargained with; they must be marginalized."
Too late to marginalize them. For the damage about to be heaped upon the country, the only word that applies is TREASON!
Continue raising the DC. Continue to increase the ND. Continue to spend like DS.
Someday, perhaps not IOL, the tsunami will arrive.
Now, back to regular programing.
i CARE NOT what R YoHo says....I am waiting for the more definitive analysis from Senator Ding Dong. (R-DogPatch)
It's interesting to read the various hysterical rantings on rightwing blogs, blaming Mr. Obama for the government shut down and threatened default. The TPers shut down the government, their scribes on the con blogs howl like stuck pigs when the government shuts down, and then they blame President Obama for what their Tea Party lunatics caused.
How can there be any way to reason with people who are that removed from reality?
The good news is that the saner folks in this country are on to their trickery, lies, and deceptions; and at this point, the GOP is less popular than the bubonic plague. Actually, the bubonic plague is less of a threat to the well-being of this country than the lunatics in the TP.
Not just my opinion. Conservatives who think with their brains and not their spleens agree that the GOPT has lost all reason.
Anonymous,
Do you actually KNOW what the debt ceiling is? It is not apparent, by your comment, that you do.
I don't know how to read.
MCV,
Tell us something we don't know.
Yes.
Actions have consequences.
Eventually.
Key concept... Balance.
Certainly lacking.
Back to regular programming.
"The fact that we are here today to debate raising America's debt limit is a sign of leadership failure."
http://www.snopes.com/politics/obama/debtlimit.asp#q7bvRpiLE5kmlsqU.99
My how times have changed
If the debt ceiling is not lifted, we will simply watch the Obama administration "stretch" the meaning of law to justify it's continued inaction, while the Fed prints more fake money and the Treasury spends it.
Who needs the "mask" of legality, anymore? The idiots are running the asylum now.
It's long past time that American's took a "look" behind the curtain.
"The idiots are running the asylum now."
Yes. The TeaPublicans have demonstrated that quite clearly.
This statement reveals just how dumb he is:
“We need to have that moment where we realize [we're] going broke.”
Wrong. We are broke, and digging the hole deeper every day.
@ Ms. Kenaw: "The good news is that the saner folks in this country are on to their trickery"
Bravo! It is trickery.
This is a selective shutdown, with much of the government still operating and spending money, including the Congressional Gym.
The reukes are still stupid for picking this fight, but this is not a real fight. Rather, it is staged WWE theater, District of Criminals style. The combatants are faking it, but it's the innocent bystanders getting hurt.
//Conservatives who think with their brains//
yes. and, though a lot of them are 'quiet' there are many. I know quite a few. Like olden days conservatives...they are fiscally conservative...and socially liberal. They believe in good government, clean air, honesty (not raving) and responsible busine
okjimm,
I think you've invented a very fine portmanteau! "busine"
A "busine" is a small business that serves creative, delicious meals.
oops...dumb fingers...sorry
Joe Conservative: "... while the Fed prints more fake money and the Treasury spends it."
Please note: The Fed does not print money, fake or otherwise. The Fed adjusts monetary policy to increase or decrease money supply for purposes of controlling inflation (now at an all-time low of 1.6% which is well below the Fed threshold of 2.0%).
Your statement is an example of ignorance that is no longer laughable given the instability about to be unleashed upon world financial markets. Ignorance that is dangerous, even treasonable in violation Amendment 14, Section 4, of the U.S. Constitution.
ha..! yes indeed. I go there for breakfa all the time. ')
don't be sorry okjimm! I think some clever person should start a magazine called "Busine."
(O)CT(O)PUS, far too many splenetic folks on the right don't care about facts. Don't interrupt their fantasy world with such trivialities. I have been told by more than one conservative that websites like PolitiFact, Fact Check.org, and Snopes are nothing more than left-wing media propagandists reporting biased assumptions.
There is no dealing with people that far gone. They've stopped seeing what is in front of their noses, and no amount of reasoning can help them at this point.
shaw...sounds like a good idea. I will put it in my large stack of good ideas. Right next to my idea of 'instant mayonaise'. Broke a pinky on my right hand last week. typing with a splint is tough. esecially words with a 'P' in them. sheesh
Shaw,
The oft-repeated lie left unchallenged is what concerns me.
)CT(O)PUS said...
Shaw,
The oft-repeated lie left unchallenged is what concerns me.
YES!!!! I am in concurrance! ignorance,in some circles, has become esteemed as a virtue instead of the rank vuce it really is.
One party (in fact, essentially one wing of the Republican party), seeking the elimination or delay of Obamacare, precipitated a government shutdown and threatened to force a default on U.S. debt.
Period.
There was no corresponding threat or demand on the Democratic or White House side; having gotten the Affordable Care Act into law three years ago, they are not in the situation of saying, “Pass Obamacare or we shut ‘er down.”
SOURCE
There is no "both sides do it" in the Republican hostage-taking of the U.S. government. The GOP is the only party responsible for the wreckage they've wrought on the American people.
It is up to us to quash any of that rubbish the cons are trying to foist on the public.
The GOP is the only political party that held a gun to the nation's collective heads in order to repeal or defund a settled law. Got that?
The only one.
In answer to Anonymous@10:56:
FAIL
From the same source linked above:
Is the situation ordinary? It’s true that legislators of both parties–like Sen. Obama in 2006–have made grandstanding votes against the debt limit many times in the past. But those were stage-managed protests in which votes were carefully counted and there was no serious fear the U.S. would actually default, unlike in 2011, when the crisis resulted in a downgrade of the U.S. credit rating. That’s another case where “the other side did it too” does not an equivalence make.
So here, “Both sides got us into this mess” sounds neutral, but it’s actually taking a side–or, at least, adopting the framing that one side is counting on using to a political end. Reality doesn’t always have a bias, liberal or otherwise. But when it does, it’s not journalism’s job to rebalance reality.
"The good news is that the saner folks in this country are on to their trickery, lies, and deceptions"
If that were true, we would not be in the mess we are. Americans voted for this garbage and have been for 30 years.
Anonymous, only a small number of Americans voted for the minority of a minority--the Tea Party members of the House--who are the gangsters who are holding the rest of us hostage to their demands.
This is what is so awful about the situation we find ourselves in: A minority is demanding that the president implement their policies--policies that the American people rejected last November. They have demanded that the president defund or delay his signature achievement because they don't like it. And this has been financed by the Koch brothers and other corporatists who did not want universal health care, but who failed to prevent President Obama from being re-elected. So they've resorted to, IMO, gangster tactics.
"According to a New York Times report, President Obama told House Democrats tonight that Republicans are demanding everything up to his presidency in order to end the government shutdown and raise the debt ceiling.
“The only thing not on their list is my own resignation,” Obama told Democrats, a member of Congress who attended the meeting told the Times. The paper also reported that Obama told the group that “if he gives in now, Republican demands would be endless.”
Advice to Mr. Obama: Don't deal with blackmailing thugs. And that's what these craven, destructive insurgents are. I'd call them traitors, because they've betrayed their oaths of office by endangering our country. Osama bin laden couldn't have done as thorough a job of hurting the American people as these seditious snakes have. More advice to Mr. Obama: Welcome their hatred. There is no shame in being hated by destructive traitors to our country.
If taking a side means 1) Accepting the ACA is here to stay, 2) That if granting a delay for business and allowing waivers is is okay then delaying the individual mandate should be okay as well, 3) That insisting on refusing to talk with the House of the people ISN'T okay then...
I stand proudly guilty of taking a stand. To say is a fail is a subjective determination made by a staunch partisan (you in this case) who wishes only to engage in continued gridlock.
Yeah, good mention. But what if they (progressives) are right?
Understand, but I'm talking about voting for trickle down economics that built this debt. No new tax pledges, that bankrupted our effort to fund programs, that are, of course in deep debt and unable to service Americans as laid out. Starve the beast has worked. Even if these nuts had not been elected, Republican policies had already done their damage. Americans voted for 3 Republican presidents, a house Republican majority in the 1990's and again today. These newly elected tea party republicans said while they were running for office, that they were sent here to stop this government from performing its duties under the law. The president is upholding his oath, ACA is law. The Republicans want the president to break the law and his oath. Instead of changing the law, they just make it financially impossible for the law to work; and that started 30 years ago with Reagan and his first in American history multi-trillion dollar debt.
3) That insisting on refusing to talk with the House of the people ISN'T okay then...
"the House of the people" includes Democrats who are not siding with the insurgent blackmailers and the House also includes a number of moderate, non-Tea Party Republicans who are willing to vote on a clean CR. A minority of one branch of government is causing this--not the entire "House of the people."
Where in our system of government have you ever read "Minority Rules?" When George W. Bush was elected president, did the Democrats get to blackmail him into not passing Medicare Part D? Ever hear of such an absurd situation where a losing party demands that the winning presidential candidate implement their demands? Are you insane or just a run-of-the-mill blind partisan?
"I stand proudly guilty of taking a stand. To say is a fail is a subjective determination made by a staunch partisan (you in this case) who wishes only to engage in continued gridlock."
I'm not engaging in "continued gridlock" as you so inanely put it, since I am not a member of the House of Representative and had no part in the insanity the minority Tea Party has delivered to this country. I'm merely giving my opinion of the situation on my blog.
Sir or Madam, I say this in the kindest way possible, but you are full of pig feathers.
Shaw,
Even his wonderfulness has stated that you never get every thing you want in a negotiation. Is that the reason he will not negotiate because he knows the majority of Americans are against obamadoom and strong arm tactics are the only way to make it stick?
It appears that the big money folks who bankroll the TP fanatics have gotten cold feet...or are finally
coming to their senses .
skud,
The A.C.A. is law. What on earth are you talking about? Negotiate a law that has passed both houses of Congress and was deemed constitutional by the SCOTUS?
BTW, part of the majority you and others like to trot out as being "against it" are Americans who think the ACA doesn't go far enough. They would not like to see it repealed or delayed. So stop your usual trickery and deceptions.
And please stop your double-speak where you imply that when the president doesn't give into blackmail--blackmail delivered by the TeaCons--that is a strong-armed tactics. George Orwell would be proud of you.
Delaying Obamacare for another year would have a deleterious effect on my daughter's health. I have a suggestion. Why don't you call her and tell her how unfair President Obama is being by not giving into the TeaCons blackmail that would force her to go another year without insurance and getting those medical tests she needs.
Please, I'd really love to hear you explain to her how this will be good for her and her young son, and how this will make her life easier.
You really don't either know or care how the destructive behavior of a minority of thugs and gangsters affects innocent people do you.
BobK, did you see this?
Al Arabiya
Taliban militants fighting foreign troops in Afghanistan taunted the U.S. on Wednesday over the recent government shutdown, reported Agence France-Presse.
The fighters accused U.S. politicians of “sucking the blood of their own people.”
A statement issued by the Islamist militants described how U.S. institutions have been “paralyzed” by the shutdown.
Thugs and gangsters (or is it gangstas these days?) are only not okay if they be opposed to progressivism.
Anon (1:08 pm): Americans voted for this garbage and have been for 30 years.
Fortunately, this is a country that grants you NO special authority or privilege to decide who is stupid or not, who has rights of free speech or not, who receives the benefits of citizenship or not, who is the better person based on religious affiliation or the lack thereof, what a person thinks, how people live their lives, or who or how we vote.
As evident in your comment, you have no respect whatsoever for representative democracy, for the will of people, for the rule of law, or for the unwritten courtesies and traditions that lubricate the legislative machinery and keep governance a relatively civil procedure.
If you prefer dictatorship, then try North Korea.
Shaw,
That's great for your daughter and yes ACA is the law. Everyone deserves to have healthcare insurance but no one should be forced to buy it or be fined.
Why not treat everyone fairly and either enact it for everyone or delay mandatory taxing for everyone big business, small business and middle class.
The answer is Big business is big political contributions and small business and middle class is not.
BTW, caring about your children should also mean not leaving the country in such a financial deficit they will never pay it off. Reid wants another 1 trillion to give away, don't you think it has to stop?
Skud, you might as well be p-ssing into the teeth of a typhoon. This group is INDOCTRINATED.
Instead of calling it The HOUSE of TURDS (I'd save that designation for the senate frankly) it would be far more accurate to call the entire government The HOUSE of CARDS.
After you folks have abandoned the Constitution altogether, and achieved your longed for FINAL SOLUTION to the CAPITALIST PROBLEM, you'll be SORRY, but by then it will be too late.
I would feel sorry for you, but unfortunately, it is not just YOU who will experience widespread devastation and delolation. All of us are in the same boat, and I, personally, resent your manic determination to steer it straight into the shoals.
And in case you don't know it, I have LOTS and LOTS of company. Not-quite-half the nation feels as I do, but to YOU "we" don't count.
___________ CODA ___________
There's little in taking or giving,
There's little in water or wine;
This living, this living, this living
Was never a project of mine.
Oh, hard is the struggle, and sparse is
The gain of the one at the top,
For art is a form of catharsis,
And love is a permanent flop,
And work is the province of cattle,
And rest's for a clam in a shell,
So I'm thinking of throwing the battle ––
Would you kindly direct me to hell?
~ Dorothy Parker
BUH BYE!
Free Thinke, Well said! Oh so well stated.
The problem being the "other side" (I guess that's us) ain't a whole lot better. If at all.
Most people just refuse to look beyond their long held paradigms.
Wow. President Obama has just out-libertarianed the libertarians and given the families of fallen veterans the shaft all in one stroke:
White House Press Secretary Jay Carney said the legislation wasn't needed because of the Fisher House arrangement, but he wouldn't say directly whether the president would sign or veto the bill.
No federal death benefits for the families of our fallen. Private charity will pick it up.
So, are any Obama fans ready to kick him out of the progressive club yet?
No federal death benefits for the families of our fallen. Private charity will pick it up, BECAUSE OF THE REPUBLICAN GOVERNMENT SHUT DOWN. THEY CAUSED IT; THEY'RE RESPONSIBLE FOR IT.
Skud... let's take the implications of your model and not make coverage mandatory.
How does that work when Steve gets sick, has no insurance, gets rushed to the hospital and cannot in 50 years hope to pay his bill, because he has a real problem.
Who pays? Those of us with insurance, or the tax payer, that's who.
Since we, thankfully, are not going to let him die for lack of coverage, what solution would you propose to make sure the doctor and hospital get paid for taking care of him?
The ball, as they say, is in the president's court.
The house and the senate have passed the bill. Will the president vote present? Will he stand on principle and continue to stiff the families of the fallen soldiers since "everybody knows" he's right?
President Obama is all that stands between these families and the benefits our government promised them.
Dave: Good question!
We should have a well-regulated insurance and health care market where the consumer pays the cost of routine medical expenses.
Establish a catastrophic insurance market than no one can be kicked out of.
If someone is so poor that they can't pay, then the government can pick up the tab.
That would be much simpler and much lest costly that this Soviet-style monstrosity our government is constructing.
Actually anonymous, in a period of growth, spending as a percentage of GDP can decline and the debt limit can still be breached.
It's a lousy economic tool but effective for cheap partisan politics.
Octo,
I have ever right to claim the Republicans are responsible. The facts bare that out.
I'm tired of all this "both sides are responsible" garbage. A check of the facts prove that wrong.
Yes we get the government we deserve (vote for).
"As evident in your comment, you have no respect whatsoever for representative democracy"
What a crock of shit. Go back to your buddy RN who mis one idiot blaming both sides, while for decades he supported Republicans and now that they have wrecked our financial health, RN claims no responsibility. Responsibility is with those who have voted for and supported Republicans for decades. I get it, You are one of those. It is you and your Republican buddies who are dictators. Instead of using leagl means the Constitution gives us, you would underfund programs thus making them unworkable and destroy them without the vote of the majority to vote them out of law.
So go celebrate people suffering because you and yours won't follow the Constitution.
I got news for you dummies who blame Obama; no matter what your ideological differences, the House cuts the checks, so they have shut down the government, not Obama. If he could, he would fully fund the government. Now back to your bunch of extortionists.
Anon: "You are one of those."
Actually, you are preaching to the choir here. I don't disagree with a single point you made, except for your all-inclusive and misdirected blanket statement: "Americans voted for this garbage and have been for 30 years."
All Americans? I didn't vote for this garbage and know a lot of other Americans who didn't either. 30 years? Some of those years were led by Democratic administrations, some Republican.
Democracy is messy, and not a form of government that yields 100% gratification.
And as far as my buddy RN is concerned, I don't agree with him on a lot of things, but I do try to treat him as a good neighbor and human being. I don't demonize or dehumanize people on the basis of partisan affiliation (which is more than I can say about FT).
March Hare: Have some more tea?
Alice: I haven't had any yet, so I can't take more.
March Hare: You mean you can't take less. It is very easy to take more than nothing.
FRANKLY...I have had more tea than I can handle. they want less government...until they decide they want more from it.
ah, yes. Republicans....in the house will not pass, or vote, on a budget that includes a law...some of them do not like. Those few...will hold up everything. Those few, whose hero, Grover Norquist, vowed to "shrink government so small you can drown it in a bathtub", are now clamoring for more of the government they so despise. Shut down the government...except for...a) & b) or c)... and all the things that daily emerge of the government that
WE ALL SEEM TO WANT.
The latest NBC/WSJ poll has worse-than-bad news for Republicans:
53% of respondents blame Republicans more than the President (31%) for the shutdown – a 22-point spread;
Only 24% have a favorable view of the GOP;
Only 21% have a favorable view of the Pee Tardy;
47% prefer a Democratic-controlled Congress (39% for Republicans);
50% oppose de-funding of ObamaCare (up from 46% last month);
70% say Republicans are putting politics first.
Since the shutdown, it appears the GOP is now less popular than diarrhea, bubonic plague, and impotence.
I saw that too, (O)CT(O)PUS over at the HuffPost:
The Republican Party has been "badly damaged" by the government shutdown, according to an NBC/Wall Street Journal poll released Thursday evening, which finds public opinion souring on the GOP and some of its core positions.
Americans blamed Republicans over President Barack Obama for the shutdown by a margin of 22 percentage points, with 53 percent saying the GOP deserved more blame, and 31 percent saying Obama did. Approval ratings for the Republican Party and the tea party were at 24 percent and 21 percent respectively -- both record lows as measured by NBC/WSJ.
The troll who keeps pushing his talking point brought to us by the Koch-a-doodle Brothers that Obama continues to stiff the families of the fallen soldiers is not fooling the American people as much as he's fooling himself.
Those of us who are not buying the doublespeak the TeaParty is selling know very well who is responsible for hurting our military and veterans: The Republican Party and their crazy TeaParty faction.
The polls demonstrate that the American people know this.
The president will not give into the blackmail. Good for him. Many millions of people support his rational decision.
Anon (at 9:48 PM),
My apologies if I hurt your feelings. Now grab your teddy bear and say goodnight.
Found this at HuffPost as well, so the Anon who keeps coming here about the death benefits didn't know what he or she was talking about:
"Congress passed and Obama signed that measure [to continue to allow death benefits] into law before the government shutdown began, and lawmakers insisted that the benefits shouldn't have been affected."
So the question is why did that Anon write this:
"Will he stand on principle and continue to stiff the families of the fallen soldiers since 'everybody knows' he's right?"
I sometimes wonder if these people eat lies for breakfast because most of the time what they post here are falsehoods, deceptions, and misinformation.
Sorry I deleted that Anon@9:48, but it looked like all he wanted to do is pick a fight with you over RN. Trollish behavior on his part.
Expect to hear more from him. Looks like he'll become a fixture.
"Yoho unexpectedly beat incumbent Rep. Cliff Stearns by 1.4 percentage points in a four-man GOP primary, Yoho went on to win office with 64.7 percent of the vote in newly redrawn and Deep South-flavored District 3. It's so conservative that President Obama lost to Mitt Romney by 21.4 points, while he won Florida by .9."
Golly gee and shucks Shaw. You deleted a 9:48 PM comment from Anon? You denied me a good belly laugh no doubt. :-)
I congratulate the president on finally doing the right thing and restoring the death benefits.
He must have been feeling the political heat.
The Fed adjusts monetary policy to increase or decrease money supply for purposes of controlling inflation (now at an all-time low of 1.6% which is well below the Fed threshold of 2.0%).
---
The Fed’s historic bond buying binge has left it holding a huge pile of debt. Since the global financial system melted down in September 2008, the Fed has more than tripled its holdings of Treasury debt and mortgage bonds to more than $2.8 trillion.
They don't print money? Then where did the money come from to buy $2.8 trillion in Treasuries? Placing a few electrons on a hard disk representing $2.8 trillion may not be "printing" in the "gutenberg" sense of the word, but the effect is the exact same.
And ps - That additional $2 trillion represents "future inflation" already entered into the ledger.
Thanks, Ben. Your relief, with all her "helicopter money", is on the way!
...and as long as we're book=keeping FUTURE inflation on the Federal Reserves books... don't forget to include THESE numbers (from the aforelinked article)
Does anyone doubt that if the $20 trillion or so dollars the Federal Reserve has given to the banks in the 2008-09 bailout, the virtually no interest loans for 3 years and the subsequent QE’s (Qualitative Easings) had been given directly to the people (except, of course, the 1 percent) the economy would be better off today?
Joe Conservative:
Fed Profit of $88.9 Billion Sent to Treasury in 2012 (New York Times):
WASHINGTON — The Federal Reserve said on Thursday that it sent $88.9 billion in profit to the Treasury Department in 2012, a record that reflected the vast expansion of the central bank’s investment portfolio.
The Fed is required by law to hand over a large majority of its profits, a long-standing provision that has become a lot more lucrative in recent years …
As part of its campaign to stimulate the economy, the Fed over the last five years has amassed $2.7 trillion in Treasury securities and mortgage-backed securities. And the central bank is still expanding its holdings by $85 billion a month.
The interest payments on those securities are the primary source of the Fed’s profits. The Fed has transferred a total of $335 billion to the Treasury since 2009, compared with $147 billion in the previous five years, adjusted for inflation. The Fed has transferred at least some profit to the Treasury every year since 1934.
Because the Fed mostly holds debt issued by the federal government, its profits — which totaled $91 billion in 2012 — are largely payments from the government. By returning that money to the government, the central bank in effect is letting the government borrow at no cost [my bold].
Some conservative politicians say this back-and-forth — and the Fed’s broader efforts to reduce interest rates — are worsening the government’s fiscal problems by making debt seem less onerous and spending cuts seem less necessary.
The Fed’s chairman, Ben S. Bernanke, has acknowledged the benefit, jokingly describing the savings as “interest that the Treasury doesn’t have to pay to the Chinese” [my bold]. ” But Mr. Bernanke and other Fed officials note that the purchases have their own purpose, to stimulate the economy, and will not continue indefinitely. They also note that Congress is responsible for its own behavior.
----------------------------
Yo Joe, is this more knowledge than you can handle?
GM paid most of its debt in stock.
Uncle Sam bought high and sold low, so the GM payback, while official, is another phony baloney Government-Corporate screw job on the American Taxpayer
"As I write this, GM stock is trading for a little over $28. If it sold all of its remaining stock at that price, the Treasury would still be about $12 billion short."
http://www.fool.com/investing/general/2013/03/23/why-government-motors-still-owes-you.aspx
Bewarer, Joe, you are arguing with a Progressive Statist whose duty is to apologize for Big Government.
But she is correct, in her own way when Octo talks about the fed.
US treasuries are the least dirty shirt, and "negative interest" is only one of the intellectual fictions that must be created when corporatist-government entities are busy destroying wealth while still enriching the plutocrats.
What the fed is really doing (what all central banks must do to keep the bunko game alive) is the equivalent of shrinking the inch and handing out new measuring tapes so everyone else can feel taller.
It works on the rubes who don't know any better and also on those naifs who worship at the false idol of the Progressive State.
- Hermann Wahrheit
Banks are the ones who create money every time they take in $100 in deposits and then lend out $1000 based on those deposits.
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