USA: Will the World's Richest Country Default on its Debt? UNREAL READ

[forsberg21]

http://news.yahoo.com/s/ap/20110516/ap_on_bi_ge/us_debt_limit

Debt limit reached, US halts 2 pension investments

By MARTIN CRUTSINGER, AP Economics Writer – Mon May 16, 12:39 pm ET

WASHINGTON – Treasury Secretary Timothy Geithner said Monday that he will immediately halt investments in two big government pension plans so the government can continue to borrow money.

Geithner informed Congress of his decision in a letter stating that the government had officially reached its $14.3 trillion borrowing limit. He repeated a warning that if lawmakers do not increase the borrowing limit by August 2, the government is at risk of an unprecedented default on its debt.

The debt limit is the amount of money the government can borrow to help finance its operations. The nation has reached its debt limit because the federal government has grown accustomed to borrowing massive amounts of money. The latest estimate is that it borrows 40 cents for every dollar it spends.

Republicans have said they will not vote to raise the borrowing limit until Congress and the White House agree on a plan to reduce the deficit through spending cuts. House Speaker John Boehner last week those cuts should be larger than any increase in the debt ceiling.

The deficit is the difference between what the government spends and what it takes in through taxes and other revenue. The Congressional Budget Office projects that this year's deficit will total $1.4 trillion. That's would nearly match 2009's record imbalance and mark the third straight year in which the federal deficit has exceeded $1 trillion.

Vice President Joe Biden is holding negotiations with lawmakers over the types of deficit-cutting measures that need to be approved to win congressional approval of a higher debt limit.

Even though the government has reached its official borrowing limit, Geithner said unexpected revenue and bookkeeping maneuvers will allow the Treasury to continue auctioning debt for another 11 weeks.

Geithner has suspended pension payments in the past when Congress has held off raising the debt limit. The money that the two pension funds will lose will be replaced when Congress votes to raise the borrowing limit.

--------

One of the comments posted sums it up best: America's future = Detroit on a national scale

[Pete0]

Holy moly

Its happening ..

[triqy]

wow thats pretty insane...we're going broke

[treece]

this commercial is dead on.

[doublej95]

they will raise the limit just as they have done in the past.

[FuzzyDunlop]

We are the richest country in the same way that the 27 year old asshole in the McMansion driving the Range Rover before the subprime bubble burst was the richest guy in the suburbs.

[RubberKettle]

Interest on the debt is about 6% of tax revenues. We will never default.

[Rod1010]

wow

[ttwarrior1]

who do we owe??? We don't owe anyone anything, if anything other counties owe us?/ National debt is overrated, hell we give the amount of the national debt to help other countries in crisis every year

[sapidoc]

most that read this article will not understand what it means.
take OAK in MLB tonight.

[sapidoc]

that reminds me... why doesn't the government just rig the NBA championship series and shove all that money onto the offshore books and get out of debt.

[unusialsusp5]

china will soon be a knockin for their cash or they want territory..probably will settle for hawaii in return for cancelling debt...

[subs]

so what happens if the whole world decides to default on the same day?

the bankers r screwed and.... nothing.

[chemicalbrother]

china will soon be a knockin for their cash or they want territory..probably will settle for hawaii in return for cancelling debt...

lol.

we can give 'em whatever state you live in too.

[Slim]

What's China gonna do? Invade us if we don't pay?

[doylfish]

who do we owe??? We don't owe anyone anything, if anything other counties owe us?/ National debt is overrated, hell we give the amount of the national debt to help other countries in crisis every year

What's China gonna do? Invade us if we don't pay?

are you two guys for real? who do we owe? try china. they own us by the nutsack, have you even looked at how much of our debt they own? they are converting as much of their holdings in US dollars as fast as they can into other currency and commodities like gold without doing too much to hurt their overall worth by deflating the US dollar too sharply too fast.

and what can china do? china is one of the confirmed nuclear power states, as in they've made in known what they 'have' and who knows how much they're still hiding. granted the US might have more nukes listed on paper, but how many does it take to wipe out major cities? certainly not the difference between our listed nuke caches and theirs, just the thought of that should be enough to make good

china is the next superpower whether we like it or not, as soon as 2016 unless they get knocked back and the US takes a step forward, but even then it's still inevitable in a short amount of time

[Br0nxer]

forsberg worry about america's hat

let us worry about this

[Wiggums5]

irrelevant...we will keep running up debt and it will never be paid..that's the reality

[Extra Innings]

this commercial is dead on.

I wish it was a scare tactic but it is real....our interest expense is quickly approaching GDP

[Extra Innings]

china will soon be a knockin for their cash or they want territory..probably will settle for hawaii in return for cancelling debt...

It would suck to live in Hawaii

[NYSportsGuy210]

http://news.yahoo.com/s/ap/20110516/.../us_debt_limit

Debt limit reached, US halts 2 pension investments

By MARTIN CRUTSINGER, AP Economics Writer – Mon May 16, 12:39 pm ET

WASHINGTON – Treasury Secretary Timothy Geithner said Monday that he will immediately halt investments in two big government pension plans so the government can continue to borrow money.

Geithner informed Congress of his decision in a letter stating that the government had officially reached its $14.3 trillion borrowing limit. He repeated a warning that if lawmakers do not increase the borrowing limit by August 2, the government is at risk of an unprecedented default on its debt.

The debt limit is the amount of money the government can borrow to help finance its operations. The nation has reached its debt limit because the federal government has grown accustomed to borrowing massive amounts of money. The latest estimate is that it borrows 40 cents for every dollar it spends.

Republicans have said they will not vote to raise the borrowing limit until Congress and the White House agree on a plan to reduce the deficit through spending cuts. House Speaker John Boehner last week those cuts should be larger than any increase in the debt ceiling.

The deficit is the difference between what the government spends and what it takes in through taxes and other revenue. The Congressional Budget Office projects that this year's deficit will total $1.4 trillion. That's would nearly match 2009's record imbalance and mark the third straight year in which the federal deficit has exceeded $1 trillion.

Vice President Joe Biden is holding negotiations with lawmakers over the types of deficit-cutting measures that need to be approved to win congressional approval of a higher debt limit.

Even though the government has reached its official borrowing limit, Geithner said unexpected revenue and bookkeeping maneuvers will allow the Treasury to continue auctioning debt for another 11 weeks.

Geithner has suspended pension payments in the past when Congress has held off raising the debt limit. The money that the two pension funds will lose will be replaced when Congress votes to raise the borrowing limit.

--------

One of the comments posted sums it up best: America's future = Detroit on a national scale

Why is this news? This predicament has been on the horizon since 2005. Most of you fcuks don't care till shit hits the fan and you see stuff in print....

Same goes with global warming.....none of you right wing retards or hermits in general are gonna take notice till its the 25th hour and too late to do anything anyways. That's what you get for a putting a corrupt politicians in power for 8 years.

[NYSportsGuy210]

this commercial is dead on.

Again.....where was this commercial when George Bush was running up a $10 trillion debt on Uncle Sam's CC starting two wars and giving tax breaks to the rich? Too little too late with the "let's get wise after the fact" propaganda....

[forsberg21]

who do we owe??? We don't owe anyone anything, if anything other counties owe us?/ National debt is overrated, hell we give the amount of the national debt to help other countries in crisis every year

LOL, this is the squarest post of them all.

http://finance.yahoo.com/banking-budgeting/article/112189/who-owns-the-us?mod=bb-debtmanagement

1. Mainland China

Amount of U.S. debt: $891.6 billion

Share of total foreign debt: 20.4%

Building on the holdings of its associated territories, China is the undisputed largest holder of U.S. foreign debt in the world. Accounting for 20.4% of the total, mainland China's $891.6 billion in U.S. treasury securities is almost equal to the combined 2009 GDP of Illinois ($630.4 billion) and Indiana ($262.6 billion) in 2009, a shade higher at a combined $893 billion. As President Obama -- who is from Chicago -- wrangles over his proposed budget with Congress he may be wise to remember that his home city may be at stake in the deal.

2. Japan

Amount of U.S. debt: $883.6 billion

Share of total foreign debt: 20.2%

The runner-up on the list of our most significant international creditors goes to Japan, which accounts for over a fifth of our foreign debt holdings with $883.6 billion in U.S. treasury securities. That astronomical number is just shy of the combined GDP of a significant chunk of the lower 48: Minnesota ($260.7 billion), Wisconsin ($244.4 billion), Iowa ($142.3 billion) and Missouri ($239.8 billion) produced a combined output of $887.2 billion in 2009.

3. United Kingdom

Amount of U.S. debt: $541.3 billion

Share of total foreign debt: 12.4%

At number three on the list is perhaps our closest ally on the world stage, the United Kingdom (which includes the British provinces of England, Scotland, Wales and Northern Ireland, as well as the Channel Islands and the Isle of Man). The U.K. holds $541.3 billion in U.S. foreign debt, which is 12.4% of our total external debt. That amount is equivalent to the combined GDP of two East Coast manufacturing hubs, Delaware ($60.6 billion) and New Jersey ($483 billion) -- which was named, yes, after the island of Jersey in the English Channel. The two states' combined output in 2009 came to $543.6 billion.

[World's Most Innovative Companies]

4. Oil Exporters

Amount of U.S. debt: $218 billion

Share of total foreign debt: 5%

Another grouped entry, the oil exporters form another international bloc with money to burn. The group includes 15 countries as diverse as the regions they represent: Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria. As a group they hold 5% of all American foreign debt, with a combined $218 billion of U.S. treasury securities in their own treasuries. That's roughly equivalent to the combined 2009 GDP of Nebraska ($86.4 billion) and Kansas ($124.9 billion), which seems to be an equal trade: The two states produce a bunch of grain for export, which many of the arid oil producers tend to trade for oil.


©MS Illustration/Public Domain
5. Brazil

Amount of U.S. debt: $180.8 billion

Share of total foreign debt: 4.1%

Rounding out the top five is the largest economy in South America, Brazil. The country known for its beaches, Carnaval and the unbridled hedonism that goes along with both has made a big investment in the U.S., buying up $180.8 billion in American debt up to December. That's almost equal to the $180.5 billion combined GDP of Idaho ($54 billion) and Nevada ($126.5 billion), a state that is no stranger to hedonism itself.

6. Caribbean Banking Centers

Amount of U.S. debt: $155.6 billion

Share of total foreign debt: 3.6%

You have to have cash on hand to buy up U.S. government debt, and offshore banking has given six countries the combined capital needed to make the Caribbean Banking Centers our sixth-largest foreign creditor. The Treasury Department counts the Bahamas, Bermuda, the Cayman Islands, the Netherlands Antilles, Panama and the British Virgin Islands in this designation, which as a group holds $155.6 billion in U.S. treasury securities. That's equivalent to the GDP of landlocked Kentucky ($156.6 billion), whose residents may not actually mind if they were ever to become an extension of some Caribbean island paradise.

[The Top Franchises For the Money]

7. Hong Kong

Amount of U.S. debt: $138.2 billion

Share of total foreign debt: 3.2%

At No. 7 on the list of our foreign creditors is Hong Kong, a formerly British part of China that maintains a separate government and economic ties than the communist mainland. With $138.2 billion in U.S. treasury securities, the capitalist enclave could lay claim to Yellowstone Park and our nation's capital: The combined GDP of Wyoming ($37.5 billion) and Washington D.C. ($99.1 billion) totaled $136.6 billion in 2009.


©MS Illustration/Public Domain
8. Canada

Amount of U.S. debt: $134.6 billion

Share of total foreign debt: 3.1%

They say that a friend in need is a friend indeed, and our neighbor to the north has proven to be a kind and generous creditor in our time of financial need. Canada holds about 3.1% of our foreign debt, or $134.6 billion. If friend were to become enemy and Canada were looking to annex some U.S. land to cover the debt though, the country would have an easy time of it. The combined GDP of Maine ($51.3 billion), New Hampshire ($59.4 billion) and Vermont ($25.4 billion) comes close to Canada's debt holdings at $136.1 billion.

Residents of the three states in our extreme northeast corner should start practicing their French: They might become Québécois one of these days.

9. Taiwan

Amount of U.S. debt: $131.9 billion

Share of total foreign debt: 3.0%

Taiwan, an island barely 100 miles off the coast of China, is claimed by the People's Republic of China, despite having its own government and economic relations with the outside world. Part of those economic relations includes the island's holding of $131.9 billion of U.S. debt, roughly equivalent to the combined GDP of West Virginia ($63.3 billion) and Hawaii ($66.4 billion), which totals $129.7 billion.

Unless we get our spending in check, we risk losing some of our most visually stunning territory (West Virginia, obviously) to our friendly neighbors on the other side of the Pacific Ocean.

10. Russia

Amount of U.S. debt: $106.2 billion

Share of total foreign debt: 2.4%

Starting off the list of our major foreign creditors is Russia, which holds about 2.4% of the U.S. debt pie that sits on the international dinner table. Its $106.2 billion in treasury securities is equivalent to the 2009 GDP of our sparsely populated North: The combined output of North Dakota ($31.9 billion), South Dakota ($38.3 billion) and Montana ($36 billion) matches up nicely with the Russian holdings, at $106.2 billion.

Let's hope Russian president Dmitry Medvedev doesn't come to collect.

[bettilimbroke999]

Time to nuke China, they're a communist country with WMD anyway, we need to help them become a democracy

[Extra Innings]

Again.....where was this commercial when George Bush was running up a $10 trillion debt on Uncle Sam's CC starting two wars and giving tax breaks to the rich? Too little too late with the "let's get wise after the fact" propaganda....

[gohabsgo]

read an article on the same subject yesterday:

http://www.lefigaro.fr/conjoncture/2011/05/14/04016-20110514ARTFIG00533-les-etats-unis-a-moins-de-trois-mois-de-la-faillite.php

It's pretty serious matter but the biggest risk is that democrats and republicans do not agree on solutions to the debt crisis.
This could be a disaster.

[gohabsgo]

forsberg worry about america's hat

let us worry about this

We all worry cuz if your financial system goes down we will all go down...

[bettilimbroke999]

What's China gonna do? Invade us if we don't pay?

Going to be hard to continue borrowing trillions and trillions and trillions if we default

[rsnnh12]

Again.....where was this commercial when George Bush was running up a $10 trillion debt on Uncle Sam's CC starting two wars and giving tax breaks to the rich? Too little too late with the "let's get wise after the fact" propaganda....

You really think Bush ran up a $10 trillion debt? Lol. Try 4.2, with 2.6 trillion of that under DEMOCRAT control (Reid, Pelosi, etc).

Btw, Obama's own budget projections for the next decade have the lowest federal deficit, in 1 year, at $600 billion. Read that again. The lowest single year deficit for the next 10 years is $600 BILLION, if Obama has his way with the budget. All of this can easily be found on the White House website.

Keep blaming Bush though

[ttwarrior1]

lol at us owning china, we dont' own china shiit, if they don't like it, the ..... can kiss out ass

[King Mayan]

china will soon be a knockin for their cash or they want territory..probably will settle for hawaii in return for cancelling debt...

we got military bases close to china..How many do they have close to us???

[forsberg21]

lol at us owning china, we dont' own china shiit, if they don't like it, the chinks can kiss out ass

LOL warrior, are you drunk? Don't you mean "OWE"? You know the difference between "OWE" and "OWN", right?

Have a look bro:

http://finance.yahoo.com/banking-budgeting/article/112189/who-owns-the-us?mod=bb-debtmanagement

[forsberg21]

we got military bases close to china..How many do they have close to us???

Guys like this and their mentality demonstrate why the US is in the predicament they find themselves in.

[King Mayan]

Guys like this and their mentality demonstrate why the US is in the predicament they find themselves in.

What predicament?? The debt will be payed... Don't get your panties in a bunch.

[forsberg21]

What predicament?? The debt will be payed... Don't get your panties in a bunch.

With the wave of a wand, right?

Another scary set of facts:

http://www.businessinsider.com/new-housing-crash-2011-5?op=1