Topic: An Imaginary Budget and Debt Crisis - page 2. (Read 2442 times)

I used to think you were more intelligent than this, but you're obviously a troll. Can you offer proof of this 'record' pace? Try this: http://www.usgovernmentspending.com/

Oh, and remember the 'Grand Bargain'? The GOP refused to raise taxes as part of the compromise.

At least in these subjects:
1. US have developed and sophisticated financial markets with a lot of liquidity
2. US have their federal debt denominated in their own currency while Argentine crisis happened because their debt was denominated in dollars.

It's a simple fact that both the democrats and the republicans are destroying the US. What baffles me is that you idiots buy into their shit and fight eachother instead of turning on them and installing a governing party that will actually try to serve the people.

Republicans refuse to undo the the Bush tax cuts which are largely responsible for our budget deficits as government spending as a percentage of GPD is about what it was under Reagan.

with the US massaging many of their fiscal figures and stats most of the time (usually debt and annually adjusted monthly gdp figures), plus a drop in the strength of € to $ now 1.33, and an emerging housing bubble, the forecast is a bit grim for the next few years ahead

How about in every possible imaginable way? The dollar is the reserve currency. People buy our debt with 0% real return. And people do so in large quantities.

How is the U.S. different from Argentina?

Argentina.

http://online.wsj.com/articles/argen...LEFTTopStories
Argentina Teeters on Default as Talks Collapse
Setback Sends Argentine Shares Down in After-Hours Trading

Argentina teetered on the brink of its second default in 13 years after talks with bondholders collapsed late Wednesday.

The setback, after glimmers of hope in recent days that a last-minute agreement could be reached, immediately sent Argentine stocks plunging in after-hours trading.

Still, there remained the possibility that talks could resume and a deal could eventually be reached.

At a press conference after talks with a court-appointed mediator ended Wednesday, Argentine Economy Minister Axel Kicillof, who had led the country's delegation to New York, said "we won't sign an agreement that would compromise Argentina's future." A spokeswoman later said negotiations would continue, without giving a timetable.

"Default is not a mere 'technical' condition, but rather a real and painful event that will hurt real people," said Daniel Pollack, the mediator, in a statement late Wednesday. He added, "The full consequences of default are not predictable, but they certainly are not positive."

The development is the latest turn in a yearslong battle between Argentina and a small group of hedge funds that have demanded full payment for bonds the country defaulted on in 2001. Argentina has refused to pay, despite an order by a U.S. District Court judge requiring it to pay the hedge funds. The issue came to a head Wednesday as Argentina missed a deadline to make a payment it owed to other bondholders, because the court order had prevented such a move.

Mr. Pollack, who had been trying to broker a deal between the two sides, said the country would "imminently" be in default. Standard & Poor's Ratings Services had earlier Wednesday declared Argentina in default on some of its bonds.

A default would pressure an economy already mired in recession, potentially leading to higher inflation and a weaker currency. The breakdown of negotiations also complicates President Cristina Kirchner's efforts to stabilize the economy ahead of elections next year.

Wednesday marked the end of a 30-day grace period for Argentina to make a $539 million interest payment to the holders of $29 billion of the country's restructured bonds that was due on June 30. A ruling by U.S. District Judge Thomas Griesa prevents Argentina from paying its restructured bondholders until the hedge funds, also known as the holdout creditors, are compensated. The holdout creditors are owed about $1.5 billion.

Mr. Kicillof hinted on Wednesday that a private-sector solution was a possibility, apparently referring to a proposal by a group of Argentine banks to offer a $250 million guarantee to the holdouts. The idea would be to give the hedge funds a financial incentive to ask Judge Griesa to suspend his ruling until the end of the year and allow payment of holders of the other bonds.

A default could shave as much as one percentage point off growth this year, said Martin Redrado, former governor of Argentina's central bank. Analysts said it would also fuel inflation, which some economists already estimate to be close to 40%, and deepen the country's recession. It could roil the country's financial markets, ending a period of relative calm in the peso's exchange rate and Argentine bond prices.

The economic damage from a prolonged default could prove politically costly for Mrs. Kirchner, who is trying to stabilize a shaky economy and win influence for her party ahead of presidential and congressional elections in October 2015.

Even if Argentina reaches a deal with holdouts, it likely won't be enough on its own to right the country's finances, said Roberto Sifon-Arevalo, head of the Latin America sovereign group at S&P.

A deal "would definitely be a good thing. I don't think that it would automatically be a solution, or a dramatic game-changer," he said. "The macroeconomic environment in the country has deteriorated significantly. It's weak and getting weaker. This situation certainly does not help."

The immediate impact to debt markets outside Argentina is expected to be limited. Argentina has been relatively isolated from global financial markets since its default in 2001, and the country's legal battles with its creditors are unprecedented and have dragged on in U.S. courts for years. In 2001, the country's bonds made up 20% of J.P. Morgan Chase & Co.'s widely followed emerging-market debt index. Now, they are only 1.3% of the index, signaling little chance that another default would rattle the global economy.

"I don't think this is going to have much repercussion outside of Argentina," said Clyde Wardle, a senior currency strategist with HSBC Holdings PLC.

However, the case has raised questions about the power of U.S. courts to adjudicate cases involving sovereign nations and their creditors.

The concerns stem from the controversial 2012 ruling made by Judge Griesa, who has presided over disputes between Argentina and its creditors for more than a decade. He ruled that Argentina isn't allowed to pay the bondholders who accepted the country's restructuring offers since its 2001 default, unless it also pays the holdouts, who have refused those offers.

Lawyers said the ruling marked the first time a U.S. judge had issued such an injunction on the so-called "pari passu" clause, which states that all bondholders must be treated equally.

The U.S. government has called Judge Griesa's ruling "impermissibly broad" and said it could undermine U.S. foreign relations. The International Monetary Fund warned that Judge Griesa's ruling could make it easier for a handful of creditors to disrupt other debt restructurings. "There is a cost to the world," IMF Chief Economist Olivier Blanchard said last week.

Analysts say Wednesday's developments will likely rock Argentine markets on Thursday, as the country's stocks and bonds had rallied this week on hopes that the two sides would reach a deal and avert default. Investors said they had been encouraged by marathon talks on Tuesday and Wednesday between Argentine officials and a court-appointed mediator, as well as a proposal by Argentine banks to pay the holdout creditors.

"The market reaction won't be positive," said Brian Joseph, head trader at local brokerage Puente. "There were big expectations of a deal. This isn't good news."

There are many investors who have actually bet on an Argentine default through so-called credit default swaps, but it could be days before those investors find out whether they can collect on their bets. Decisions about CDS payouts are made by a panel convened by the International Swaps and Derivatives Association, a financial trade group. There are $20.7 billion of CDS outstanding on Argentine government debt, according to Depository Trust & Clearing Corp.

The idea of default isn't much of a concern for many Argentines, who have lived through much greater crises over the decades and are adept at adapting to economic setbacks.

"We talk about this as if it's something normal. I'm not losing any sleep over it," said Juan Chamale, 36, who works at a Kodak store in downtown Buenos Aires. "We're very used to this kind of thing and have learned to take it in stride."

Argentina's default in 2001 led to the country's worst economic slump since the Great Depression. At the time, it was the largest sovereign default in history and triggered dozens of lawsuits against Argentina by creditors around the world.

After years of contentious talks, the country persuaded approximately 93% of its bondholders to take heavily discounted restructured bonds in exchanges held in 2005 and 2010. But a small group of investors refused to take the new bonds, with many suing in U.S. courts for full repayment. These included hedge funds led by Elliott Management Corp.'s NML Capital Ltd. and Aurelius Capital Ltd.

U.S. courts had jurisdiction over these lawsuits because Argentina had agreed in some of its bond contracts to resolve any disputes under New York law.

After Argentina denounced several U.S. court rulings awarding judgments to creditors and consistently refused to pay the holdouts, Judge Griesa issued his unprecedented 2012 ruling that barred Argentina from paying its restructured bondholders until it pays the holdouts.

For the next two years, Argentina tried every legal avenue to appeal the decision. But the Second Circuit Court of Appeals upheld Judge Griesa's ruling, and the U.S. Supreme Court in June declined to hear Argentina's appeal.

Meanwhile, the holdout hedge funds chased Argentine assets around the globe in an attempt to get paid. NML seized an Argentine navy training vessel in 2012 and this year tried to block the country from launching a pair of satellites. Other creditors attempted to seize the presidential plane in 2007.

Liberals do want to have a lot of laws regulating many industries that they do not like, while giving subsidies to industries that they do like. I agree that they generally believe that there are no consequences to borrowing and spending money that you do not have. 

Article I, Section 8.
The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;

To borrow money on the credit of the United States;

To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;

To establish a uniform rule of naturalization, and uniform laws on the subject of bankruptcies throughout the United States;

To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;

To provide for the punishment of counterfeiting the securities and current coin of the United States;

To establish post offices and post roads;

To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;

To constitute tribunals inferior to the Supreme Court;

To define and punish piracies and felonies committed on the high seas, and offenses against the law of nations;

To declare war, grant letters of marque and reprisal, and make rules concerning captures on land and water;

To raise and support armies, but no appropriation of money to that use shall be for a longer term than two years;

To provide and maintain a navy;

To make rules for the government and regulation of the land and naval forces;

To provide for calling forth the militia to execute the laws of the union, suppress insurrections and repel invasions;

To provide for organizing, arming, and disciplining, the militia, and for governing such part of them as may be employed in the service of the United States, reserving to the states respectively, the appointment of the officers, and the authority of training the militia according to the discipline prescribed by Congress;

To exercise exclusive legislation in all cases whatsoever, over such District (not exceeding ten miles square) as may, by cession of particular states, and the acceptance of Congress, become the seat of the government of the United States, and to exercise like authority over all places purchased by the consent of the legislature of the state in which the same shall be, for the erection of forts, magazines, arsenals, dockyards, and other needful buildings;--And

To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof.

Don't think it will be too long before they include a wealth tax.

"False Alarm" eh?....NY Times is  such Marxist rubbish.  Obama's deficits are being financed by inflationary Fed money printing, which causes prices to rise.

Have you bought meat or milk lately? Coffee? Chocolate? Cereal? Have you noticed the price jumps and shrinking packages?? Or is that a "false alarm?

P.S. You would have DOUBLE the income tax rate to cover Obamas's annual Trillion dollar debts

You are right.  Krugman advocated a "housing bubble" in his column, got one, had it burst, and then claimed he didn't say what he said.  And yet the so-called intellectuals still follow the guy.

Krugman is the worst of the worst, doing anything he can to support the authoritarians and their policies to control everyone so that they throw him a bone once in a while.  He is intellectually dishonest and should be ashamed of himself for selling out freedom for his own power and self-aggrandizement.

Its easy for people to dog him because he's visible.   Like when people say Tom  Cruise can't act.

His trade theory won a prize so thats a pretty remarkable achievement.

I do disagree w his view of money as exogenous

While I am not a fan of his articles, saying the only remarkable thing about him is his ability to hoodwink people rather ignores the actual contributions he has made to trade theory. Hate him if you'd like, but he has helped to advance our understanding of economic trade theory.

if you had another brain it would be lonesome.

"Congress shall make no law"

you are really stupid enough to think there are exceptions to that EXACT WORDING?

Now why would only that amendment be worded in that way and not the other 8 dealing with individual rights?

libtards live in the fantasy liberal world where you never have to pay your debts and money you owe never comes due. You Think the 1st amendment forbids congress from Making any laws.

The other decision used the wording of the law, and the wording of the law does not support that conclusion.

That conclusion came from stringing together text from four or five different areas, liberal use of the words "so it could only mean," and much hand waving.

Do you believe that the U.S. is immune to a situation a la Argentina in 2001?
The Fourth Circuit also issued an opinion today on the same exact issue, but found that the statute was ambiguous and sided with the Obama administration, saying that the statute can be interpreted to authorize subsidies for insurance purchased on federal exchanges. Finding ambiguity in the statute is not a pretty big stretch; it's an outright sham.

Here's the language: