Saturday, July 9, 2011

Boehner Is Beginning to Crack on the Budget Compromise

The alleged $4 trillion deal has been trimmed back to $2 trillion.

July 9, 2011

WP — House Speaker John A. Boehner (R-Ohio) abandoned efforts Saturday night to reach a comprehesive debt-reduction deal, telling President Obama that a mid-size package was the only politically possible alternative to avoid a first-ever default on the nation’s mounting national debt.

After speaking with Obama — who is hosting a key meeting Sunday evening on steps forward on the debt issue — Boehner issued the following statement:

“Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes. I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase.”

On the Road to Government Default

"They will kick the can. They will send a ceiling-raising bill to Obama, who will sign it."

July 9, 2011
By Gary North

A great default is behind us. The public is unaware of this. If you read this report, you will no longer be unaware of it.

The ease with which this default took place should serve as a warning: there will be additional, much larger defaults. Again, the public does not understand this. The main one will be Social Security. The program is now in the red: more money going out than comiomng in. But most people still cannot believe that the program really will go belly-up. That’s why I produced a video on this.

What? Would the government really break its retirement promises? Of course. It has already been done. Bear with me. You need to know how the game is played in Washington.

Legally, the Federal government is a month away from bankruptcy. The government, under the direction of Treasury Secretary Geithner, is borrowing money from Federal employees’ pension funds to keep the doors open.

It’s an accounting trick. First, the Federal government funds the pension funds with money. Second, the funds buy Treasury bonds. Third, the government immediately spends the money. It’s like Social Security, whose Trust Fund is a pile of IOUs from the government.  Read More