Obama's weekly White House address delivered this morning.
The spending apocalyspe is upon us.
'May God forgive those who dare to slow the growth of government.'
Hail Hail Armageddon! (A Must Read)
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Obama Weekly Address: 'The Pain Will Be Real'
White House: In his weekly address, President Obama tells the
American people that a series of harmful budget cuts—called the
sequester—have taken effect because Congress failed to act. Because
Republicans in Congress refused to compromise to close tax loopholes for
the wealthiest Americans, hundreds of thousands of Americans will lose
their jobs or see their paycheck reduced, and middle class families will
be hurt. Congress must join the President now to replace these cuts
with a balanced approach that reduces our deficit while also making
smart investments in areas that help our economy grow.
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REM - End of the World - Acoustic Version:
It's the end of the world as we know it...and I feel fine.
Lyrics
That's great, it starts with an earthquake, birds and
snakes, an aeroplane and Lenny Bruce is not afraid.
Eye of a hurricane, listen to yourself churn - world
serves its own needs, dummy serve your own needs. Feed
it off an aux speak, grunt, no, strength, Ladder
start to clatter with fear fight down height. Wire
in a fire, representing seven games, a government
for hire and a combat site. Left of west and coming in
a hurry with the furies breathing down your neck. Team
by team reporters baffled, trumped, tethered cropped.
Look at that low playing! Fine, then. Uh oh,
overflow, population, common food, but it'll do. Save
yourself, serve yourself. World serves its own needs,
listen to your heart bleed dummy with the rapture and
the revered and the right, right. You vitriolic,
patriotic, slam, fight, bright light, feeling pretty
psyched.
It's the end of the world as we know it.
It's the end of the world as we know it.
It's the end of the world as we know it and I feel fine.
Six o'clock - TV hour. Don't get caught in foreign
towers. Slash and burn, return, listen to yourself
churn. Locking in, uniforming, book burning, blood
letting. Every motive escalate. Automotive incinerate.
Light a candle, light a votive. Step down, step down.
Watch your heel crush, crushed, uh-oh, this means no
fear cavalier. Renegade steer clear! A tournament,
tournament, a tournament of lies. Offer me solutions,
offer me alternatives and I decline.
It's the end of the world as we know it.
It's the end of the world as we know it.
It's the end of the world as we know it and I feel fine.
The other night I dreamt of knives, continental
drift divide. Mountains sit in a line, Leonard
Bernstein. Leonid Brezhnev, Lenny Bruce and Lester
Bangs. Birthday party, cheesecake, jelly bean, boom! You
symbiotic, patriotic, slam book neck, right? Right.
It's the end of the world as we know it.
It's the end of the world as we know it.
It's the end of the world as we know it and I feel
fine...fine...
(It's time I had some time alone)
Sunday, March 3, 2013
US SPENDING ENTIRE GOLD RESERVES EVERY 6 MONTHS! Jim Rickards: No Way Fed Will Stop Easing, Ron Paul: ‘The Sequester Is A Joke, There Are NO Cuts!’
US SPENDING ENTIRE GOLD RESERVES EVERY 6 MONTHS!
We “purport” to have just over 8.000 tons of Gold. For round numbers this is valued between $400 billion and $500 billion. The Fed has in place (probably clandestinely much more) a plan to purchase $85 billion per month of Treasury bonds that the Treasury must issue but nobody else wants to buy. $85 billion times 12 equals $1 trillion two hundred 60 billion. Numerically it is $1,260,000,000,000. The Gold “reserves” (probably close to mere fumes by now) represented the wealth accumulated by the greatest industrial nation on Earth. It took roughly 170 years to accumulate some 20,000 tons after WWII which was “officially” sold down to just over 8,000 tons by 1971.
Fast forward to present day and what are we doing? We are spending ALL of our Gold every 6 months! And this assumes that we have the Gold! The
real number is probably 500 times over if you use actual debt. The
number is an “infinite” amount of times over if (it is) the Gold is
gone.
- See more at:
http://investmentwatchblog.com/us-spending-entire-gold-reserves-every-6-months-jim-rickards-no-way-fed-will-stop-easing-ron-paul-the-sequester-is-a-joke-there-are-no-cuts/#sthash.yHpTwLAt.dpufA Storm Is Coming: Obama Formerly Orders ‘Deeply Destructive’ Cuts As We’re Heading Toward A Japanese-Style Depression. Peter Schiff: Obama Won’t Finish His Second Term Without The Bottom Dropping Out. - See more at: http://investmentwatchblog.com/a-storm-is-coming-obama-formerly-orders-deeply-destructive-cuts-as-were-heading-toward-a-japanese-style-depression-peter-schiff-warns-of-bottom-dropping-out/#sthash.8UejrAhT.dpuf
As the United States staggered into another fiscal crisis, the White House predicted that the spending cuts triggered by the inability of Obama and lawmakers to forge a broader deficit-reduction agreement would be “deeply destructive” to the nation’s economic and national security.
“Not everyone will feel the pain of these cuts right away. The pain, though, will be real. Beginning this week, many middle-class families will have their lives disrupted in significant ways,” Obama told journalists after his meeting with Republican and Democratic congressional leaders.
President Obama signs order forcing $85B in spending cuts as leaders FAIL to compromise on replacement plan
Peter Schiff: Obama Won’t Finish his Second Term Without the Bottom Dropping Out.
The Downward Spiral – azizonomics
….Instead, we should probably look to Japan where the economy has remained depressed and weak for the past twenty years, and where government debt has through cycles of stimulus and austerity replaced the private deleveraging. Perhaps Japan is an extreme example, and perhaps its demographic woe have prolonged its malaise. Perhaps that means that once the United States private debt level shrinks to a more sustainable level, the United States will enjoy solid new growth, rather than continued depression. Perhaps a new technological or energy revolutionwill result in falling energy and transport costs, providing America with a new growth engine for the next twenty years. Perhaps we can look at the low interest rate environment as an opportunity to invest in transport infrastructure, energy infrastructure and basic research and create a backbone for the post-depressionary economy.On the other hand, perhaps a new crisis —and one that won’t go away just by throwing money at it, like a natural disaster, or a war— will suck America into an even deeper depression.
I am more optimistic than I was five years ago, or even one year ago. I can see a light at the end of the tunnel, but is still possible thatthis crisis may end in war or total systemic failure.
In the long run, the data is clear. The Greenspan-Bernanke era Federal Reserve wilfully built up bubbles and distortions, which grew out of control, and sucked the economy into a black hole. At the very best, this has led to a Japanese-style depression.
ZIMMERMAN: Every Indicator I Follow Shows The Market Is Going To Tank, And There Will Be A New Financial Crisis
Transportation ETF (IYT) about to fall at least 25% in value and take S&P 500 with it?
America Is Officially Freaking Out About Sequestration
Bloomberg Exposes The Myths About The So-Called Sequester cuts – It’s Much Ado About Nothing
Must-read: The real story on Obama
and the “sequester”
…The reductions the sequesters require are reductions in the
rate of increased spending from those originally planned by Obama and
authorized by Congress. Since the federal government has not had a
budget in four years, even though federal law requires it to have one
every year, these are planned expenditures, not budgetary items, on
which the president wants to spend more money.Congress does not feel bound to obey the laws it has written; hence it has disregarded the legal requirement of a budget. Without a budget, the president has great leeway as to how to allocate funds within each department of the executive branch of the federal government.
Nevertheless, even if these sequesters do kick in, the feds will spend more in 2013 than they spent in 2012. That’s because the sequesters are not cuts to spending; rather, they are reductions in planned increases in spending.
The reductions amount to about two cents for every planned dollar of increased spending for every federal department.
The question remains: What part of each federal department (Justice, Defense, Homeland Security, Agriculture, etc.) will suffer these reduced increases? Here is where this sequester experiment gets dicey…
http://lewrockwell.com/napolitano/napolitano89.1.html
All Of This Whining And Crying About The Sequester Shows Why America Is Doomed
Silver Prices Defy the Law of Supply and Demand
Liberty Gold and Silver News Let’s begin with a definition. Investopedia defines the Law of Supply and Demand as follows:
“The effect that the availability of a particular product and the desire (or demand) for that product has on price. Generally, if there is a low supply and a high demand, the price will be high. In contrast, the greater the supply and the lower the demand, the lower the price will be.”
A solid definition, agreed? The Law of Supply and Demand should be the core premise of all economic studies, as it has proved itself to be true historically through the centuries.
How then can we possibly explain what has been happening recently with the price of silver? In a little over two months, silver has declined from its mid-December price of $33.50 per ounce to its current price of $28.56 as of today’s close (2/28/13). That’s a drop of $4.94, which equates to a decline of over 14% in just sixty days. Any trained economist having a solid grounding in the supply and demand theory, when viewing this decline would have to conclude one of two things. Either the supply of silver had recently rapidly expanded or the demand for the precious metal had substantially decreased over the same period. These could be the only two possible logical explanations for this situation.
However, in the alternate universe of manipulated markets, insane derivatives, massive criminal fraud in both the banking and commodities markets, central bank machinations with currency handouts, and complete dereliction of duty on the part of regulatory bodies, it seems that the basic laws of economic price discovery somehow no longer apply.
We need to ask ourselves at this juncture how it is possible for the price of silver to undergo a substantial draw down in price while simultaneously experiencing extremely tight supplies in addition to burgeoning demand. In order to be able to make a professional inquiry regarding this conundrum, we will have to dispel all the blather from the CNBC crowd that keeps ranting about the precious metals being in a bubble (they are NOT; both gold and silver remain firmly in a ten year upward channel of growth) and adopt an attitude like Dragnet’s Sergeant Friday, “Just the facts, ma’am, just the facts.”
Here are those facts:
In 2012, silver sales soared. The US Mint reported that the sale of American Eagle silver bullion coins topped off at the third highest annual total in the twenty-seven year history of the series. Just past mid-December, the US Mint told its distributors that it had “sold all remaining inventories of 2012 American Eagle Bullion Coins,” adding that “no additional coins will be struck.” Until the sell-out, Silver Eagles were easily on pace to eclipse the second best annual sales in history. Even more amazing was the ratio of sales of Silver versus Gold Eagles – over fifty to one. In total dollar amounts, the sale of Silver Eagles almost matched that of Gold Eagles, nearly 98%.
In January of this year, the sale of Silver Eagles was tremendous. So strong was the demand that the US Mint notified all its distributors shortly past mid-month that it had halted all new orders because it had run out of bullion supply. Despite two production shutdowns in January, the US Mint sold a record breaking 7.13 million Silver Eagles in ONLY TEN BUSINESS DAYS, shattering the previous monthly record set in 2011. Currently, the US Mint is on allocation rationing to its distributors – and we’re into this year only eight weeks!
Another instance of extreme silver shortage that has seen little to no reporting is the near total annihilation of the availability “junk silver” (pre-1965 US silver coins). As of the beginning of this week, almost none could be found anywhere in the country, except in extremely tiny amounts. Nearly every wholesaler and retailer in the nation was completely sold out. Waiting time for orders is at least a month out at best, with six weeks being quoted as a reliable delivery date.
Just a week ago, it was reported that Apple will be delaying its new 21.5 iMacs because of a shortage of silver in China. Silver is used extensively in iMacs. The production delays are already up to three months and counting.
On the demand side of this equation, wholesale premiums over the silver spot price have risen as much as six-fold in the past two months. Retail mark-ups for these coins have never been greater since the 1980 high, when silver topped $50.
What is one to conclude with this incredible contradiction of drum-tight silver supply and record breaking demand weighed against a silver price decline of nearly 15% in the last seven weeks? It is difficult not to conclude that there must be some type of market intervention and/or price manipulation occurring.
As we’ve reported several times over the last few years, the spot price of precious metals is set almost entirely by the bid-ask trading action in the world’s commodity pits, principally the COMEX in New York and the London Bullion Market Association. These exchanges have been notorious for allowing massive short selling by large investment banks such as JPMorgan Chase and Goldman Sachs without these firms having to post either the normally required margin deposits or having adequate silver on deposit with these exchanges to satisfy delivery requirements for those traders who might wish to take physical delivery of the silver upon contract expiration. Both of these activities are violations of the rules of the futures exchanges involved as well as federal requirements that are supposed to be enforced in the US by the Commodities Futures Trading Commission (CFTC). The CFTC itself has been repeatedly accused by the Gold Anti-Trust Action Committee (GATA), and many others, of being derelict, if not outright complicit, in allowing these trading violations to continue. (source:www.zerohedge.com/
article/whistleblower-exposes-jp-morgans-silver-maniuplation-scheme)
In addition, silver prices, to a lesser degree, are also influenced by activity in various exchange traded funds (ETFs). For some time now, rumors have been circulating that these funds may be severely short the billions of dollars of physical silver upon which their share value is based.
(source: silverstockreport.com/silvershortage/).
What we’re seeing here is a big disconnect from silver’s physical paper price and its actual availability. It is not inconceivable to us that what is actually occurring is similar to what happened to markets in the old Soviet Union. The communist ruled markets quoted cheap prices for products that were chronically in short supply. The real market, the “black market,” was where you could purchase real goods with fair price discovery. When this dichotomy completely broke down, so did the Soviet Union. In the same fashion, it is not too hard to foresee that a breakdown and growing distrust in the paper silver markets could well cause a price explosion in physical silver.
We have been warning for years that paper markets in general, and paper precious metalsmarkets specifically, should be viewed with suspicion, as they all contain counter party risk, which cannot be honored. The only sure way to fully protect oneself is to own physical coins and bullion. Do it today while the “paper price” is still low.
To learn more about the rewards of precious metals investing, including how to fund your existing IRA with gold or silver, call Liberty Gold and Silver seven days a week at 888.751.3330. To learn about the most generous referral program in the precious metals industry, please visit the Liberty Gold and Silver Referral Program.
We’re happy to spend as much time as you need to discuss the details with you.
http://www.libertygoldandsilver.com/GoldandSilverBlog/?p=140
$312 million recovered so far in NC Ponzi scheme that attracted more than 1 million investors
(AP) -- Hundreds of millions of dollars has been recovered so far in a massive Ponzi scheme
that attracted more than 1 million investors from the United States and
all over the world, according a court filing in the case.
The case involves Rex Venture Group, a Lexington, N.C.-based company that operated several online ventures, including Zeekster.com, a penny auction site, and ZeekRewards, a business designed to drive traffic to the penny auction.
The Securities and Exchange Commission in August froze the company's assets, and a federal judge appointed a receiver — Charlotte attorney Kenneth Bell — to recoup money for the victims.
The SEC has said the company operated by Paul Burks of Lexington, N.C., was running a $600 million Ponzi scam — where money from new investors is used to pay out old ones. His company, ZeekRewards, was illegally selling securities.
The 66-year-old Burks has agreed to pay a $4 million penalty and cooperate with the SEC in trying to recover money. Though the SEC said Burks siphoned millions for his personal use, he has not been charged.
http://news.yahoo.com/312-million-recovered-far-nc-164002079.html;_...
The case involves Rex Venture Group, a Lexington, N.C.-based company that operated several online ventures, including Zeekster.com, a penny auction site, and ZeekRewards, a business designed to drive traffic to the penny auction.
The Securities and Exchange Commission in August froze the company's assets, and a federal judge appointed a receiver — Charlotte attorney Kenneth Bell — to recoup money for the victims.
The SEC has said the company operated by Paul Burks of Lexington, N.C., was running a $600 million Ponzi scam — where money from new investors is used to pay out old ones. His company, ZeekRewards, was illegally selling securities.
The 66-year-old Burks has agreed to pay a $4 million penalty and cooperate with the SEC in trying to recover money. Though the SEC said Burks siphoned millions for his personal use, he has not been charged.
http://news.yahoo.com/312-million-recovered-far-nc-164002079.html;_...
Europe's Scariest Chart Update: Italy Now Worse Than Portugal
Europe's Scariest Chart Update: Italy Now Worse Than Portugal
1 March 2013, by Tyler Durden (Zero Hedge)
For the first time in two years, Italy's youth unemployment rate is now higher than Portugal's at a staggering 38.7% (which is where Greece was just two years ago).
Apart from Germany (which fell from 8.0% to 7.9%), every other nation saw youth unemployment rates rise with a record 24.2% of European youth unemployed.
Greece (59.4%) and Spain (55.5%) remain the most concerning as we noted in the past, austerity sounds straightforward as a policy, until the consequences bite in terms of social unrest.
1 March 2013, by Tyler Durden (Zero Hedge)
For the first time in two years, Italy's youth unemployment rate is now higher than Portugal's at a staggering 38.7% (which is where Greece was just two years ago).
Apart from Germany (which fell from 8.0% to 7.9%), every other nation saw youth unemployment rates rise with a record 24.2% of European youth unemployed.
Greece (59.4%) and Spain (55.5%) remain the most concerning as we noted in the past, austerity sounds straightforward as a policy, until the consequences bite in terms of social unrest.
http://www.zerohedge.com/news/2013-03-01/europes-scariest-chart-upd...
Bloomberg: 'U.S. Can Borrow INFINITE Amount Of Money'
Listen to Bloomberg's controversial debt comments.
'U.S. credit is infinite. Other countries let us get away with borrowing an unlimited amount of money.'
Warning - Starts playing automatically.
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New York Mayor Bloomberg discusses the sequester on his weekly radio show:
"We are spending money we don’t have. When it comes to the United States federal government, people do seem willing to lend us an infinite amount of money. Our debt is so big and so many people own it that it’s preposterous to think that they would stop selling us more. It’s the old story: If you owe the bank $50,000, you got a problem. If you owe the bank $50 million, they got a problem. And that’s a problem for the lenders. They can’t stop lending us more money."
'U.S. credit is infinite. Other countries let us get away with borrowing an unlimited amount of money.'
Warning - Starts playing automatically.
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New York Mayor Bloomberg discusses the sequester on his weekly radio show:
"We are spending money we don’t have. When it comes to the United States federal government, people do seem willing to lend us an infinite amount of money. Our debt is so big and so many people own it that it’s preposterous to think that they would stop selling us more. It’s the old story: If you owe the bank $50,000, you got a problem. If you owe the bank $50 million, they got a problem. And that’s a problem for the lenders. They can’t stop lending us more money."
UK manufacturing shrinks unexpectedly in February, triggers slide in the pound
A shock contraction in British manufacturing last month dragged the pound below the psychologically important $1.50 mark for the first time since June 2010, as tough conditions both at home and abroad indicated that the sector will drag down growth in the first quarter.
The Markit/CIPS Manufacturing
Purchasing Managers' Index (PMI) fell to 47.9 from 50.5 in January, well
below the 50 level that divides growth from contraction, as employment
levels in the sector fell at their sharpest levels in more than three
years. Photo: Alamy
The Markit/CIPS Manufacturing Purchasing Managers' Index (PMI) fell to 47.9
from 50.5 in January, well below the 50 level that divides growth from
contraction, as employment levels in the sector fell at the fastest pace in
more than three years.
The pound sank by one-and-a-half cents against the dollar, which strengthened
on the back of disappointing Canadian GDP data, to $1.4998, and by almost a
cent against the euro to €1.152, as economists described the data as "very
disappointing".
The pound dived by almost a cent against the euro on the back of the data
(source: Bloomberg).
Chris Williamson, chief economist at Markit, said the data represented a "major
set-back to hopes that the UK economy can return to growth in the first
quarter and avoid a triple-dip recession".
"The data so far this year point to manufacturing output falling by as
much as 0.5pc, meaning a strong rebound is needed in March to prevent the
sector from acting as a drag on the economy as a whole in the first quarter,"
he said.
Bad weather at the end of January and a larger than expected disruption caused by the Chinese New Year holiday on global trade flows saw new orders fall for a second successive month, Markit said.
The degree of job shedding was the fastest for 40 months, it added, with large-sized enterprises making the steepest cuts.
Analysts said sterling, which has already fallen around 7.5pc against the dollar this year, could fall further if services PMI data next week also painted a bleak picture of the UK.
“The pound is extremely sensitive to domestic fundamentals right now,” said Kathleen Brooks at forex.com. “If we see a miss in the service sector PMI when it is released on Wednesday, this could be the trigger for a sharper move lower in the pound.”
Kit Juckes, head of foreign exchange at Societe Generale, said that the pound could fall towards the $1.40 level. "There is no other path," he said.
Britain’s services sector powers more than three-quarters of the UK economy, compared with 11pc for manufacturing. Some analysts said the data could persuade Bank of England policymakers to restart the printing presses at their monthly interest rate meeting next Thursday.
David Tinsley at BNP Paribas said that there was "about a 45pc chance of more QE next week".
However, Mr Williamson added that the weaker pound and a rebound in orders following the recent bad weather spell could help exporters recover in March.
Separate data by Markit on Friday showed that the downturn in the eurozone's manufacturing sector continued in February, despite a stronger performance by Germany, Europe's largest economy.
Markit's final eurozone manufacturing PMI came in at 47.9 in Febraury, compared with an initial estimate of 43.8, as business conditions deteriorated for a nineteenth successive month.
Mr Williamson said the data indicated that eurozone GDP would fall for a fourth successive quarter in the first three months of the year, and that the divide in eurozone manufacturing trends continued to "diverge strongly".
"German producers reported the first overall improvement in business conditions for a year, contrasting with steep downturns in France, Spain and Italy," he said.
“The combination of a revival in export orders and resilient domestic demand has helped propel Germany’s growth so far this year, while deteriorating domestic demand is holding back the economies of France, Italy and Spain. “
The unemployment rate in the eurozone also touched a fresh high of 11.9pc in January from 11.8pc in December. More than 19m people are now out of work in the 17-nation bloc, Eurostat said.
Philip Hammond: cut welfare not troops
The Defence Secretary today warns that the Armed Forces cannot sustain further cuts and demands that the welfare bill is reduced to reflect rising levels of employment instead.
Image 1 of 3
The Defence Secretary disclosed that he would strongly resist future cuts to the military Photo: Lee Thompson
In an interview with The
Telegraph, Philip Hammond makes public concerns that will be raised
in forthcoming Cabinet talks on spending cuts due to be implemented by
George Osborne after 2015.
He says the “first priority” must be “defending the country and maintaining
law and order” and that further defence cuts are not possible while meeting
stated security objectives.
Mr Hammond says there is a “body of opinion within Cabinet who believes that
we have to look at the welfare budget again” because a 0.5 per cent saving
from the benefits bill would protect the Armed Forces.
He adds that “we should be seeing welfare spending falling” as a result of
rising levels of employment. The unusually frank public intervention from a
loyal senior Conservative minister is unlikely to be welcomed by Mr Osborne
and the Prime Minister because it lays bare deep divisions over future
spending decisions.
There have been rumours of a “union of ministers” blocking further cuts and Mr
Hammond today indicates that this is the case. His comments are also
expected to add to tensions within the Coalition because the Liberal
Democrats are opposed to more welfare cuts.
His intervention comes after the Conservatives slumped to an embarrassing
third place in the Eastleigh by-election, behind Ukip, leading to demands
for David Cameron to develop a more “Tory” agenda, with issues such as
security and immigration at the fore.
Speaking on a visit to an Arctic training camp for the Royal Marines before the by-election result, the Defence Secretary disclosed that he would strongly resist future cuts to the military, beyond moderate “efficiency savings”.
“I shall go into the spending review fighting the case for the defence budget on the basis that we have made very large cuts to defence, we’ve done that with the collaboration and cooperation of the military,” he said.
“Any further reduction in the defence budget would fall on the level of activity that we were able to carry out — the idea that expensively bought equipment may not be able to be used, expensively employed troops may not be able to be exercised and trained as regularly as they need to be.”
He added: “I am not going into the spending review offering any further reductions in personnel. In my judgment, and I think the Chancellor and the Prime Minister would both agree with this, the Armed Forces are at the smallest level that is appropriate for the kind of defence posture that we have set out in the SDSR [2010’s Strategic Defence and Security Review]. It isn’t clear to me that we could go any smaller while retaining the range of capabilities and commitments that the SDSR requires of us.”
The Chancellor and Danny Alexander, the Chief Secretary to the Treasury, are drawing up plans for the next spending review, covering the year 2015-16.
While budgets for health, education and international development will be protected, the Ministry of Defence could be expected to reduce costs by at least another £500 million. The MoD is still midway through the current round of spending cuts, despite having already made thousands of troops redundant. Some 30,000 will be cut from the number of serving personnel, many thousands of whom will go in the next two years.
Last month, Mr Cameron caused confusion by indicating that he would increase overall defence spending from 2015, only for aides to say later that this would only apply after 2016.
Today, Mr Hammond criticises Nick Clegg for not placing any Liberal Democrats in the MoD. A Conservative source added: “There’s a real concern that the Lib Dems want to protect the benefits culture at the expense of our troops.”
Speaking on a visit to an Arctic training camp for the Royal Marines before the by-election result, the Defence Secretary disclosed that he would strongly resist future cuts to the military, beyond moderate “efficiency savings”.
“I shall go into the spending review fighting the case for the defence budget on the basis that we have made very large cuts to defence, we’ve done that with the collaboration and cooperation of the military,” he said.
“Any further reduction in the defence budget would fall on the level of activity that we were able to carry out — the idea that expensively bought equipment may not be able to be used, expensively employed troops may not be able to be exercised and trained as regularly as they need to be.”
He added: “I am not going into the spending review offering any further reductions in personnel. In my judgment, and I think the Chancellor and the Prime Minister would both agree with this, the Armed Forces are at the smallest level that is appropriate for the kind of defence posture that we have set out in the SDSR [2010’s Strategic Defence and Security Review]. It isn’t clear to me that we could go any smaller while retaining the range of capabilities and commitments that the SDSR requires of us.”
The Chancellor and Danny Alexander, the Chief Secretary to the Treasury, are drawing up plans for the next spending review, covering the year 2015-16.
While budgets for health, education and international development will be protected, the Ministry of Defence could be expected to reduce costs by at least another £500 million. The MoD is still midway through the current round of spending cuts, despite having already made thousands of troops redundant. Some 30,000 will be cut from the number of serving personnel, many thousands of whom will go in the next two years.
Last month, Mr Cameron caused confusion by indicating that he would increase overall defence spending from 2015, only for aides to say later that this would only apply after 2016.
Today, Mr Hammond criticises Nick Clegg for not placing any Liberal Democrats in the MoD. A Conservative source added: “There’s a real concern that the Lib Dems want to protect the benefits culture at the expense of our troops.”
As sequestration nears, federal workers brace for furloughs, vent anger at politicians
On both sides of the National Mall, federal workers are worried about the effects of sequester. | George Bridges/MCT
- Story | Army bracing for budget cuts: Training, child care and more to be impacted by April
- Story | Sequestration may leave some Florida agencies with uncertain future
- Story | WWU pledges to offset potential financial aids cuts from sequester
- Story | Now the parties don’t even agree on when sequester starts
- Story | As Congress wrangles, Obama warns naval shipyard workers of defense cuts
- Story | Democrats pitch budget alternative to avoid pending automatic cuts
- Graphic | Federal workforce
- On the Web | More McClatchy coverage of the nation's capital
By Lindsay Wise | McClatchy Newspapers
WASHINGTON — As a single dad with seven kids living at home, Bill Blevins is used to pinching every penny.
The 48-year-old building engineer at the U.S. Bureau of Engraving and Printing hasn’t had a cost-of-living pay raise in more than two years, even as his rent and insurance premiums went up. Now he and other federal workers in Washington and across the country are bracing for possible unpaid furloughs as part of an $85 billion reduction in federal spending. Known as sequestration, the automatic, across-the-board budget cuts are scheduled to kick in unless Congress and the White House can reach a compromise by Friday.
Although Blevins doesn’t expect furloughs to hit his office right away – so far the bureau says it plans to operate as usual – the uncertainty makes him take his ulcer medicine a little more often these days.
“I’ll have to keep a bottle nearby” if furloughs hit, he joked.
“Rent’s due the first of the month whether I’m furloughed or not,” said Blevins, who commutes from his home in Culpeper, Va., to his night shift job in Washington. “You just really have to squeeze a little more out of each dollar. That’s just what it comes down to.”
All across the D.C. area and the rest of the country, federal workers like Blevins are having tense, belt-tightening conversations with spouses, kids and co-workers. They’re canceling little luxuries such as cable, cellphone service, restaurants and movie nights, putting off long-planned vacations and searching for second jobs. Some are thinking about raiding their 401(k)s for emergency cash.
It’s lost on none of them that they’re being forced to slash their own families’ budgets because politicians can’t agree on how to balance the federal budget.
“They expect us to do our jobs, so we expect them to do their jobs,” said Marsha Hayden, a 61-year-old microbiologist with the Food and Drug Administration from Adelphi, Md.
“I am a registered Republican. However, I blame the Republican Party for this,” said Gregory Russell, a 48-year-old federal firefighter at the U.S. Naval Academy in Annapolis, Md. Russell calculates he’d lose about $1,200 a month – about 20 percent of his pay – if he gets furloughed.
“I’m tired of people being obstinate,” he said. “Sit down at the table, listen to the other side, everybody give a little compromise back and forth and get it resolved. Instead, we spend a lot of time doing showmanship about the other side when they could actually be doing something to resolve it.”
The mounting dread and anger are particularly palpable in the Washington metropolitan area, where federal spending added up to $170 billion last year – 39 percent of the local economy.
The Maryland, Virginia and D.C. region is home to 4.7 percent of the U.S. population but it receives 15 percent of defense spending and 21 percent of federal payroll and procurement dollars, said Stephen Fuller, the director of the Center for Regional Analysis at George Mason University’s School of Public Policy.
“We’re less diversified than the other big metro areas,” Fuller said. “It’s a government town.”
Government money may have shielded the region from the worst of the recession, but that cushion has disappeared, cutting the local economy’s growth rate in half the past two years, Fuller said. Federal spending on contracting has dropped more than 8 percent since its peak in 2010, and the area’s federal workforce shrank by 8,700 in the same period, he said.
But if sequestration has become an angst-ridden buzzword in the Washington area, the awkward term isn’t exactly rolling off people’s tongues elsewhere in the United States.
Only 18 percent of Americans say they understand “very well” what would happen as a consequence of the budget cuts, according to a Washington Post-Pew Research Center poll released this week. Although the topic has seized Washington’s attention for weeks, just one in four Americans say they’re following the debate in the nation’s capital very closely.
Gretchen Carreiro, a 41-year-old program specialist for the Federal Emergency Management Agency, said it felt as if the rest of the country had little sympathy for federal workers’ plight.
“It’s like your job doesn’t even count. It’s like you should be doing it for free because you work for the taxpayers, so you kind of feel like it’s a slap in the face,” she said.
Carreiro said her family already lived paycheck to paycheck, and she worries that she won’t be able to pay the bills if she’s forced to take unpaid days off. “I have no clue what we would do if the mortgage companies didn’t work with us, if our car loan companies didn’t work with us. We’d lose everything,” said Carreiro, who lives with her husband and two children in Manassas, Va. "We’re just praying, you know?”
What really rankles, she said, is that members of Congress don’t face the same pay cuts as federal workers.
“I think it’s ridiculous,” she said. “They’re still going to get their paychecks, and I feel like they’re using us as scapegoat.”
At the L’Enfant Plaza Hotel, not far from the National Mall, the threat of furloughs was the number one topic of discussion Wednesday at a conference of the National Treasury Employees Union, an independent federal union that represents 150,000 employees in 31 government agencies and departments.
In a survey of union members in late February, 82 percent said that if furloughs were implemented they’d have difficulty paying for the basics, such as rent, mortgage, utilities and food. Sixty-three percent expected to take money out of savings or retirement, and 29 percent said they’d have a hard time paying for child care or tuition.
Internal Revenue Service employee Joe Gaston’s family might take a double hit, because his wife works for the Department of Defense. He and other IRS workers were just told to expect five to seven furlough days before September.
“It’s a difficult proposition right now because we don’t know what’s ahead of us,” said Gaston, 56, of Alexandria, Va. “You have a mortgage to pay, and they do not accept that you send 90 percent of the payment.”
Keith McGlawn, an IT technician with U.S. Customs and Border Protection, said he expected 14 days off without pay before Sept. 30, which amounts to a 10 percent pay cut. McGlawn already has started looking for a second, part-time job to make up for the lost income.
“I’m trying to stay ahead of the curve instead of being behind it,” said McGlawn, 46, of Manassas, Va. He described the mood among colleagues at his agency as panic.
The growing anxiety over furloughs isn’t limited to the D.C. area. The vast majority – 85 percent – of federal workers live far outside the Beltway, in states where they work at law enforcement agencies, in food plants, military bases, national parks, veterans’ hospitals and federal branch offices.
In Westminster, Mass., William “Bud” Taylor II woke up at 3 a.m. the other day, thinking, “How the hell am I going to handle this?”
The 56-year-old project manager for the U.S. Army Corps of Engineers said he’d done the math and if he were furloughed as expected for one day a week from April to September, he’d lose 20 percent of his pay. His expenses will exceed his income.
“Over the last couple weeks it has just been sheer terror,” he said.
“I can’t believe this is real and these idiots aren’t going to do anything about it,” he said, referring to Congress. “They’re just going to point fingers at each other.”
The 48-year-old building engineer at the U.S. Bureau of Engraving and Printing hasn’t had a cost-of-living pay raise in more than two years, even as his rent and insurance premiums went up. Now he and other federal workers in Washington and across the country are bracing for possible unpaid furloughs as part of an $85 billion reduction in federal spending. Known as sequestration, the automatic, across-the-board budget cuts are scheduled to kick in unless Congress and the White House can reach a compromise by Friday.
Although Blevins doesn’t expect furloughs to hit his office right away – so far the bureau says it plans to operate as usual – the uncertainty makes him take his ulcer medicine a little more often these days.
“I’ll have to keep a bottle nearby” if furloughs hit, he joked.
“Rent’s due the first of the month whether I’m furloughed or not,” said Blevins, who commutes from his home in Culpeper, Va., to his night shift job in Washington. “You just really have to squeeze a little more out of each dollar. That’s just what it comes down to.”
All across the D.C. area and the rest of the country, federal workers like Blevins are having tense, belt-tightening conversations with spouses, kids and co-workers. They’re canceling little luxuries such as cable, cellphone service, restaurants and movie nights, putting off long-planned vacations and searching for second jobs. Some are thinking about raiding their 401(k)s for emergency cash.
It’s lost on none of them that they’re being forced to slash their own families’ budgets because politicians can’t agree on how to balance the federal budget.
“They expect us to do our jobs, so we expect them to do their jobs,” said Marsha Hayden, a 61-year-old microbiologist with the Food and Drug Administration from Adelphi, Md.
“I am a registered Republican. However, I blame the Republican Party for this,” said Gregory Russell, a 48-year-old federal firefighter at the U.S. Naval Academy in Annapolis, Md. Russell calculates he’d lose about $1,200 a month – about 20 percent of his pay – if he gets furloughed.
“I’m tired of people being obstinate,” he said. “Sit down at the table, listen to the other side, everybody give a little compromise back and forth and get it resolved. Instead, we spend a lot of time doing showmanship about the other side when they could actually be doing something to resolve it.”
The mounting dread and anger are particularly palpable in the Washington metropolitan area, where federal spending added up to $170 billion last year – 39 percent of the local economy.
The Maryland, Virginia and D.C. region is home to 4.7 percent of the U.S. population but it receives 15 percent of defense spending and 21 percent of federal payroll and procurement dollars, said Stephen Fuller, the director of the Center for Regional Analysis at George Mason University’s School of Public Policy.
“We’re less diversified than the other big metro areas,” Fuller said. “It’s a government town.”
Government money may have shielded the region from the worst of the recession, but that cushion has disappeared, cutting the local economy’s growth rate in half the past two years, Fuller said. Federal spending on contracting has dropped more than 8 percent since its peak in 2010, and the area’s federal workforce shrank by 8,700 in the same period, he said.
But if sequestration has become an angst-ridden buzzword in the Washington area, the awkward term isn’t exactly rolling off people’s tongues elsewhere in the United States.
Only 18 percent of Americans say they understand “very well” what would happen as a consequence of the budget cuts, according to a Washington Post-Pew Research Center poll released this week. Although the topic has seized Washington’s attention for weeks, just one in four Americans say they’re following the debate in the nation’s capital very closely.
Gretchen Carreiro, a 41-year-old program specialist for the Federal Emergency Management Agency, said it felt as if the rest of the country had little sympathy for federal workers’ plight.
“It’s like your job doesn’t even count. It’s like you should be doing it for free because you work for the taxpayers, so you kind of feel like it’s a slap in the face,” she said.
Carreiro said her family already lived paycheck to paycheck, and she worries that she won’t be able to pay the bills if she’s forced to take unpaid days off. “I have no clue what we would do if the mortgage companies didn’t work with us, if our car loan companies didn’t work with us. We’d lose everything,” said Carreiro, who lives with her husband and two children in Manassas, Va. "We’re just praying, you know?”
What really rankles, she said, is that members of Congress don’t face the same pay cuts as federal workers.
“I think it’s ridiculous,” she said. “They’re still going to get their paychecks, and I feel like they’re using us as scapegoat.”
At the L’Enfant Plaza Hotel, not far from the National Mall, the threat of furloughs was the number one topic of discussion Wednesday at a conference of the National Treasury Employees Union, an independent federal union that represents 150,000 employees in 31 government agencies and departments.
In a survey of union members in late February, 82 percent said that if furloughs were implemented they’d have difficulty paying for the basics, such as rent, mortgage, utilities and food. Sixty-three percent expected to take money out of savings or retirement, and 29 percent said they’d have a hard time paying for child care or tuition.
Internal Revenue Service employee Joe Gaston’s family might take a double hit, because his wife works for the Department of Defense. He and other IRS workers were just told to expect five to seven furlough days before September.
“It’s a difficult proposition right now because we don’t know what’s ahead of us,” said Gaston, 56, of Alexandria, Va. “You have a mortgage to pay, and they do not accept that you send 90 percent of the payment.”
Keith McGlawn, an IT technician with U.S. Customs and Border Protection, said he expected 14 days off without pay before Sept. 30, which amounts to a 10 percent pay cut. McGlawn already has started looking for a second, part-time job to make up for the lost income.
“I’m trying to stay ahead of the curve instead of being behind it,” said McGlawn, 46, of Manassas, Va. He described the mood among colleagues at his agency as panic.
The growing anxiety over furloughs isn’t limited to the D.C. area. The vast majority – 85 percent – of federal workers live far outside the Beltway, in states where they work at law enforcement agencies, in food plants, military bases, national parks, veterans’ hospitals and federal branch offices.
In Westminster, Mass., William “Bud” Taylor II woke up at 3 a.m. the other day, thinking, “How the hell am I going to handle this?”
The 56-year-old project manager for the U.S. Army Corps of Engineers said he’d done the math and if he were furloughed as expected for one day a week from April to September, he’d lose 20 percent of his pay. His expenses will exceed his income.
“Over the last couple weeks it has just been sheer terror,” he said.
“I can’t believe this is real and these idiots aren’t going to do anything about it,” he said, referring to Congress. “They’re just going to point fingers at each other.”
China “fully prepared” for currency war: banker
Yi Gang, deputy governor of China’s central bank, issued the call after G20 finance ministers last month moved to calm fears of a looming war on the currency markets at a meeting in Moscow.
Those fears have largely been fuelled by the recent steep decline in the Japanese yen, which critics have accused Tokyo of manipulating to give its manufacturers a competitive edge in key export markets over Asian rivals.
Yi said a currency war could be avoided if major countries observed the G20 consensus that monetary policy should primarily serve as a tool for domestic economy, the Xinhua report said.
But China “is fully prepared”, he added.
“In terms of both monetary policies and other mechanism arrangement, China will take into full account the quantitative easing policies implemented by central banks of foreign countries.”
South Korea’s incoming president Park Geun-Hye has also signalled her willingness to step in to stabilise the won and protect exporters battling a stronger Korean currency and a weaker yen.
Solari Stories: The Fiscal Cliff and Gun Control
Solari Stories #1: The Fiscal Cliff and Gun Control
"There is an absolutely a relationship between the fiscal cliff and gun control and gun control serves several purposes. The leadership has been trying for many years to disarm the population and throughout the English-speaking world we've seen that happen in many other countries and the effort to disarm the population here is very significant. And it is significant coming as it did right upon the fiscal cliff negotiations for two reasons.
"One is, if you look at what has to happen in terms of reducing spending and/or increasing taxes and changing the financial operations of the country given the dependency of the general population, I think that the leadership is very sensitive to the fact that we have not been running the federal finances according to the law and if it came to a real confrontation with citizens over how money was going to be allocated, the citizens are on very strong legal grounds to say, "No, we're not going to pay taxes. We're going to escrow taxes. We're going to assert all sorts of legal authorities over how the money is being managed." I think the leadership is on very shaky legal ground and as a result is very concerned that the population would have the physical ability to prevent all sorts of what I would call illegal enforcement. ... "
Click on the photo to watch:
"... But what I've found, unfortunately, is that in a divide and conquer situation it's relatively easy if you control the fed budget to buy people into opposing camps. So for example, we saw during the fiscal cliff negotiations New York State constantly was turned down on the Hurricane Sandy relief package and yet we come into gun control and suddenly New York passes a gun control law and the next minute Congress passes a $51 billion hurricane relief package. Well, if you can steal $4 trillion and turn around and buy people with $51 billion packages you can buy a lot of people. ..."
Click on the photo to watch:
The Dollar Bubble (Full Version)
2009 – The Dollar Bubble starring Peter Schiff, Ron Paul, Marc Faber,
Gerald Celente, Jim Rogers, and others. Prepare now for the U.S. dollar
collapse.
PENDING MARKET DISASTER: Bernanke Forces Retirees Into Risky Stocks, Obama Tax The U.S. Into Recession, Renowned Manager Warns of A Bigger Crisis Than 2008 Is Coming, US$ Is About To Break Out of A 10-year Falling Channel!!
U.S. Rep. Scott Garrett says Federal Reserve Chairman Ben Bernanke’s ultra-low interest rate policy is hurting senior citizens by forcing them out of the safety of fixed-income investments and into much riskier stocks.
“With regard to seniors, the Fed’s loose monetary policy and basically pegging the interest rates where they are right now keeps them at historically low levels for an extended, protracted period of time,” Garrett told Newsmax TV in an exclusive interview.TRep. Garrett to Moneynews: Bernanke Forces Retirees Into Risky Stockshe low interest rates, designed to spur economic growth, carry with them “huge negatives,” the New Jersey Republican said.
Obama just crushed the U.S. economy
Here’s the question of the day: Did president Obama tax the U.S. into recession?TrimTabs’ Charles Biderman makes that exact claim…
Welcome to the new recession. TrimTabs tracking of real-time wages and salaries shows that the United States has entered into a recession this year. I had been predicting a slowdown after the big bump in December incomes due to the hike in taxes. It has taken a while for us to get a handle on income this year given all the changes in tax rates. But now enough time has passed that I can say I was right. The U.S. economy has slowed enough to enter into recession.
This is how I know we have entered into a recession. After-tax wages and salaries net of inflation have been shrinking year over year since the second week in January. What has been growing dramatically in real time this year is income and employment tax payments. Withheld income and employment taxes have been running about 8.3% higher year over year, comparing the same 33 business days between Tuesday, January 8 and Monday, February 25.
Checking with our favorite official Washington economist, we now know that higher employment taxes accounted for 6% and new soak-the-rich taxes 2% of that 8.3% gain. That means that, before inflation, after-tax wages and salaries grew by only 0.3% for the 135 million Americans that have jobs subject to withholding.
After inflation? Well, what is inflation now? If you believe the Fed, around 2%. Others say higher. Regardless, there is no doubt that the Obama Administration has taxed us into a recession. Congratulations.
Inquiring minds may wish to read the rest of Biderman’s article for some interesting thoughts on insider selling, stock buybacks, and TrimTabs’ employment projections vs. BLS reporting.
Biderman claims the recession started in 2013…
Biderman’sDaily Edge: U.S. Entered Recession in January Yet Fed Fix Keeps Stocks Pumped – Stock Insider Selling is now 50 to 1 and Bailing
Warning: The U.S. dollar hasn’t done this in over 10 years
CLICK ON CHART TO ENLARGE
The U.S. Dollar, on a monthly closing basis, has created a series of higher lows since 2008. Now the US$ is working on doing something it hasn’t done for the past 10-YEARS in the chart above!
…
‘Dilbert’ Creator Alleges Vast Conspiracy — Predicts 20% Market Collapse
Scott Adams, creator of the comic-strip “Dilbert,” believes financial markets are a vast conspiracy and that stocks are set to plunge 20 percent (h/t Josh Brown).In a strange new blog post, Adams says stock movements are controlled by a figurative “network of big players” who lure in small-time investors only to set them up for disaster.
He seems to be dead serious.
Here’s the main part of the post:
When I say there is manipulation and collusion in the financial markets, it doesn’t mean there are actual meetings in which billionaires smoke cigars, drink expensive cognac, and make their evil plans. It might be enough that they are all so aware of each other’s moves that they just play follow-the-leader and do so faster than small investors. The sort of market manipulation I’m describing only requires one billionaire leader who is closely watched by the other billionaires. When he sells, they sell, and they all understand why. The big players who time it right get a 40% gain for the year while the underlying value of their stocks is unchanged at the end of it all. It is the perfect crime.
Diminishing QE Returns And The Coming 40% Correction
Moody's cuts Tunisia to junk; could cut further
Feb 28 (Reuters) - Moody's Investors Service on Thursday cut Tunisia's rating to junk and warned it could slide further, citing political instability and delays in adopting a new constitution.
The rating agency cut Tunisia's government debt rating to Ba1, from Baa3, and put the rating on review for further downgrade, Moody's said in a statement.
Obama formally orders 'deeply destructive' sequestration cuts, blames Congress
Tribune wire report
WASHINGTON -- President Barack Obama formally ordered broad cuts in government spending on Friday night after he and congressional Republicans failed to reach a deal to avert automatic reductions that could dampen economic growth and curb military readiness.
As the United States staggered into another fiscal crisis, the White House predicted that the spending cuts triggered by the inability of Obama and lawmakers to forge a broader deficit-reduction agreement would be "deeply destructive" to the nation's economic and national security.
"Not everyone will feel the pain of these cuts right away. The pain though will be real. Beginning this week, many middle-class families will have their lives disrupted in significant ways," Obama told journalists after his meeting with Republican and Democratic congressional leaders.
Late on Friday, Obama signed an order that put in effect the across-the-board government spending cuts known as "sequestration." Government agencies will now begin to hack a total of $85 billion from their budgets between Saturday and October 1.
Half of the cuts will fall on the Pentagon. Defense Secretary Chuck Hagel said the reductions put at risk "all of our missions.
Congress and Obama could still halt the cuts in the weeks to come, but neither side has expressed any confidence they will do so. Both Democrats and Republicans set the automatic cuts in motion during feverish deficit-reduction efforts in August 2011.
MARKETS SHRUG OFF CRISIS
Friday's events marked the first budget showdown in Washington of many in the past decade that was not somehow resolved at the last minute - often under pressure from rattled financial markets. Markets in New York shrugged off the stalemate in Washington on Friday as they have for months.
Democrats predicted the cuts could soon cause air-traffic delays, meat shortages as food safety inspections slow down, losses to thousands of federal contractors and damage to local economies across the country, particularly in the hardest-hit regions around military installations.
At the heart of Washington's persistent fiscal crises is disagreement over how to slash the budget deficit and the $16 trillion national debt, bloated over the years by wars in Iraq and Afghanistan and government stimulus for the ailing economy.
Obama wants to close the fiscal gap with spending cuts and tax hikes. Republicans do not want to concede again on taxes after doing so in negotiations over the "fiscal cliff" at the New Year.
Public outrage, if it materializes, would be the most likely prod for a resolution as the impact of the spending cuts starts to be felt in the coming weeks and months.
As a percentage of total government spending every year, $3.7 trillion, the actual spending reductions are small. But because safety-net programs such as Social Security and Medicare will be untouched, the brunt falls mostly on federal government employees rather than direct recipients of aid.
The U.S. government is the nation's largest employer, with a workforce of roughly 2.7 million civilians spread across the country. If the cuts stay in place, more than 800,000 of those workers could see reduced work days and smaller paychecks between now and September.
Furlough notices warning employees and their unions started to go out earlier this week and the pace picked up on Friday after it became clear that talks at the White House between Obama and congressional leaders would be fruitless.
While the International Monetary Fund warned that the belt-tightening could slow U.S. economic growth by at least 0.5 of a percentage point this year, that is not a huge drag on an economy that is picking up steam.
'THE SPENDING PROBLEM'
Many Republicans accuse the Obama administration of overstating the effects of the cuts in order to pressure them into agreeing to a solution to the White House's liking.
A deal proved elusive as Obama met at the White House with House of Representatives Speaker John Boehner, the top Republican in Congress, and Senate Republican leader Mitch McConnell, as well as the top two Democrats in Congress, Senate Majority Leader Harry Reid and House Democratic leader Nancy Pelosi.
"The discussion about revenue, in my view, is over. It's about taking on the spending problem," Boehner said after the meeting.
Asked why he did not just refuse to let congressional leaders leave the room until they had a deal, Obama told reporters: "I am not a dictator. I'm the president. So, ultimately, if Mitch McConnell or John Boehner say, 'We need to go to catch a plane,' I can't have Secret Service block the doorway, right?"
The across-the-board cutbacks were mandated by a deficit reduction law, structured to be so disruptive that Congress would ultimately replace them with more targeted savings. But partisan gridlock has prevented agreement on where to save.
The White House budget office sent a report to Congress detailing the spending cuts. Some 115,000 employees of the Department of Justice - including prosecutors and the FBI - were among the first to get the official word of furloughs.
The government also sent letters to several state governors advising them of cuts to services like the Head Start education program in California and military facilities in Virginia.
Canadian Finance Minister Jim Flaherty expressed rare public frustration with the United States for lurching from crisis to crisis.
One reason for the inaction in Washington is that both parties still hope the other will either be blamed by voters for the cuts or cave in before the worst effects predicted by Democrats come into effect.
A Reuters/Ipsos poll released on Friday showed 28 percent of Americans blamed congressional Republicans for the sequestration mess, 18 percent thought Obama was responsible and 4 percent blamed congressional Democrats. Thirty-seven percent blamed them all, according the online poll.
The non-partisan Congressional Budget Office predicts 750,000 jobs could be lost in 2013, and federal employees throughout the country are looking to trim their own costs.
"The kids won't go to the dentist, the kids might not go to the doctor, we won't be spending money in local restaurants, local movie theaters," said Paul O'Connor, president of the Metal Trades Council, which represents 2,500 workers at the Portsmouth Naval Shipyard in Kittery, Maine.
After weeks of White House warnings about the cuts causing disruption, Obama acknowledged it might be a while before effects fully kicked in. "We will get through this. This is not going to be an apocalypse," Obama said.
In the absence of any deal at all, the Pentagon will be forced to slice 13 percent of its budget between now and September 30.
In his first Pentagon news conference since he was sworn in on Wednesday, Hagel struck a more moderate tone than many other defense officials who have said the spending reductions would be devastating or could turn the U.S. military into a second-rate power.
"America ... has the best fighting force, the most capable fighting force, the most powerful fighting force in the world," he said. "The management of this institution, starting with the Joint Chiefs, are not going to allow this capacity to erode."
Most non-defense programs, from NASA space exploration to federally backed education and law enforcement, face a 9 percent reduction.
Moving to head off a new budget crisis later this month, Boehner said the Republican-led House would move a "continuing resolution" to fund government through the rest of the fiscal year, thus hopefully averting a government shutdown.
Reuters
WASHINGTON -- President Barack Obama formally ordered broad cuts in government spending on Friday night after he and congressional Republicans failed to reach a deal to avert automatic reductions that could dampen economic growth and curb military readiness.
As the United States staggered into another fiscal crisis, the White House predicted that the spending cuts triggered by the inability of Obama and lawmakers to forge a broader deficit-reduction agreement would be "deeply destructive" to the nation's economic and national security.
"Not everyone will feel the pain of these cuts right away. The pain though will be real. Beginning this week, many middle-class families will have their lives disrupted in significant ways," Obama told journalists after his meeting with Republican and Democratic congressional leaders.
Late on Friday, Obama signed an order that put in effect the across-the-board government spending cuts known as "sequestration." Government agencies will now begin to hack a total of $85 billion from their budgets between Saturday and October 1.
Half of the cuts will fall on the Pentagon. Defense Secretary Chuck Hagel said the reductions put at risk "all of our missions.
Congress and Obama could still halt the cuts in the weeks to come, but neither side has expressed any confidence they will do so. Both Democrats and Republicans set the automatic cuts in motion during feverish deficit-reduction efforts in August 2011.
MARKETS SHRUG OFF CRISIS
Friday's events marked the first budget showdown in Washington of many in the past decade that was not somehow resolved at the last minute - often under pressure from rattled financial markets. Markets in New York shrugged off the stalemate in Washington on Friday as they have for months.
Democrats predicted the cuts could soon cause air-traffic delays, meat shortages as food safety inspections slow down, losses to thousands of federal contractors and damage to local economies across the country, particularly in the hardest-hit regions around military installations.
At the heart of Washington's persistent fiscal crises is disagreement over how to slash the budget deficit and the $16 trillion national debt, bloated over the years by wars in Iraq and Afghanistan and government stimulus for the ailing economy.
Obama wants to close the fiscal gap with spending cuts and tax hikes. Republicans do not want to concede again on taxes after doing so in negotiations over the "fiscal cliff" at the New Year.
Public outrage, if it materializes, would be the most likely prod for a resolution as the impact of the spending cuts starts to be felt in the coming weeks and months.
As a percentage of total government spending every year, $3.7 trillion, the actual spending reductions are small. But because safety-net programs such as Social Security and Medicare will be untouched, the brunt falls mostly on federal government employees rather than direct recipients of aid.
The U.S. government is the nation's largest employer, with a workforce of roughly 2.7 million civilians spread across the country. If the cuts stay in place, more than 800,000 of those workers could see reduced work days and smaller paychecks between now and September.
Furlough notices warning employees and their unions started to go out earlier this week and the pace picked up on Friday after it became clear that talks at the White House between Obama and congressional leaders would be fruitless.
While the International Monetary Fund warned that the belt-tightening could slow U.S. economic growth by at least 0.5 of a percentage point this year, that is not a huge drag on an economy that is picking up steam.
'THE SPENDING PROBLEM'
Many Republicans accuse the Obama administration of overstating the effects of the cuts in order to pressure them into agreeing to a solution to the White House's liking.
A deal proved elusive as Obama met at the White House with House of Representatives Speaker John Boehner, the top Republican in Congress, and Senate Republican leader Mitch McConnell, as well as the top two Democrats in Congress, Senate Majority Leader Harry Reid and House Democratic leader Nancy Pelosi.
"The discussion about revenue, in my view, is over. It's about taking on the spending problem," Boehner said after the meeting.
Asked why he did not just refuse to let congressional leaders leave the room until they had a deal, Obama told reporters: "I am not a dictator. I'm the president. So, ultimately, if Mitch McConnell or John Boehner say, 'We need to go to catch a plane,' I can't have Secret Service block the doorway, right?"
The across-the-board cutbacks were mandated by a deficit reduction law, structured to be so disruptive that Congress would ultimately replace them with more targeted savings. But partisan gridlock has prevented agreement on where to save.
The White House budget office sent a report to Congress detailing the spending cuts. Some 115,000 employees of the Department of Justice - including prosecutors and the FBI - were among the first to get the official word of furloughs.
The government also sent letters to several state governors advising them of cuts to services like the Head Start education program in California and military facilities in Virginia.
Canadian Finance Minister Jim Flaherty expressed rare public frustration with the United States for lurching from crisis to crisis.
One reason for the inaction in Washington is that both parties still hope the other will either be blamed by voters for the cuts or cave in before the worst effects predicted by Democrats come into effect.
A Reuters/Ipsos poll released on Friday showed 28 percent of Americans blamed congressional Republicans for the sequestration mess, 18 percent thought Obama was responsible and 4 percent blamed congressional Democrats. Thirty-seven percent blamed them all, according the online poll.
The non-partisan Congressional Budget Office predicts 750,000 jobs could be lost in 2013, and federal employees throughout the country are looking to trim their own costs.
"The kids won't go to the dentist, the kids might not go to the doctor, we won't be spending money in local restaurants, local movie theaters," said Paul O'Connor, president of the Metal Trades Council, which represents 2,500 workers at the Portsmouth Naval Shipyard in Kittery, Maine.
After weeks of White House warnings about the cuts causing disruption, Obama acknowledged it might be a while before effects fully kicked in. "We will get through this. This is not going to be an apocalypse," Obama said.
In the absence of any deal at all, the Pentagon will be forced to slice 13 percent of its budget between now and September 30.
In his first Pentagon news conference since he was sworn in on Wednesday, Hagel struck a more moderate tone than many other defense officials who have said the spending reductions would be devastating or could turn the U.S. military into a second-rate power.
"America ... has the best fighting force, the most capable fighting force, the most powerful fighting force in the world," he said. "The management of this institution, starting with the Joint Chiefs, are not going to allow this capacity to erode."
Most non-defense programs, from NASA space exploration to federally backed education and law enforcement, face a 9 percent reduction.
Moving to head off a new budget crisis later this month, Boehner said the Republican-led House would move a "continuing resolution" to fund government through the rest of the fiscal year, thus hopefully averting a government shutdown.
Reuters
Bogus beggar makes 100,000 dollars a year!
Gary
Thompson is quite proud of his acting accomplishments. The man has been
portraying a mentally handicapped person on the streets of Lexington, KY
in order to solicit citizens into a cash handout. The gig is up though,
as Kristen Pflum explains. - See more at:
http://investmentwatchblog.com/bogus-beggar-makes-100000-dollars-a-year/#sthash.Hdw3loiw.dpuf
Fukushima cleanup workers break silence: Ordered to dump ‘debris’ into river — Gov’t “appeared not to believe him”
Asahi Shimbun, March 1, 2013: CROOKED CLEANUP: Workers break silence to allege boss ordered corner-cutting
[...] Three laborers involved in radioactive cleanup around the
Fukushima No. 1 nuclear plant have alleged that a supervisor told them
to dump debris in a river [...] At a news conference in the Diet
building on Feb. 28, the men said a foreman ordered them to discard
fallen branches and leaves into a river in an upland forest in Tamura,
Fukushima Prefecture, in November 2012. [...] this is the first time
that decontamination workers have publicly come forward. [...] The third
man, in his 40s, said he related what had happened to officials at the
Environment Ministry. He spoke to them for more than an hour, he said,
but they appeared not to believe him. [...]
Obama signs sweeping US budget cuts into effect
US President Barack Obama has signed into effect a wave of steep spending cuts which he has warned could damage the US economy.
The cuts - known as the sequester and drawn up two years ago - will take $85bn (£56bn) from the US federal budget this year.Last-ditch talks at the White House to avert the reductions before Friday's deadline broke up without agreement.
The IMF has warned the cuts could slow global economic growth.
The BBC's Mark Mardell in Washington says the cuts were designed to be so brutally painful that politicians would be forced to agree on a better way of balancing the books.
However, as the midnight deadline loomed on Friday, Mr Obama and Republican congressional leaders still failed to agree on a way to avoid them.
The two sides are at odds over the president's insistence on raising taxes as part of any plan for tackling the country's $16.6 trillion (£11tn) debt.
After the White House talks broke up, Mr Obama blamed Republicans for the impasse.
"They've allowed these cuts to happen because they refuse to
budge on closing a single wasteful loophole to help reduce the deficit,"
he said.He warned the cuts - if fully realised - would slow US economic growth by half of 1% and cost 750,000 jobs.
"We shouldn't be making a series of dumb, arbitrary cuts to things that businesses depend on and workers depend on," he said.
Unpaid leave The sequester was drawn up in mid-2011 as Congress and the White House feuded over raising the debt ceiling and how to slash the huge US deficit.
Republicans wanted deep cuts in spending while Democrats insisted on raising taxes.
At the end of 2012 Congress and the White House struck a dramatic deal to avoid what was dubbed the "fiscal cliff", that included expiring tax breaks and the sequester.
About half the cuts will come from the defence budget. Incoming defence secretary Chuck Hagel has warned of "significant impacts" on the military.
He said the cuts "will cause pain, particularly among our civilian workforce and their families".
"Let me make it clear that this uncertainty puts at risk our ability to effectively fulfil all of our missions," Mr Hagel said.
"Later this month, we intend to issue preliminary notifications to thousands of civilian employees who will be furloughed [put on unpaid leave]."
Defence officials say 800,000 civilian employees will have their working week reduced. They say they will also have to scale back flight hours for warplanes and postpone some equipment maintenance.
The deployment of a second aircraft carrier to the Gulf has also been cancelled.
On Friday, Republican House Speaker John Boehner reiterated his party's refusal to allow taxes to rise and challenged the gridlocked US Senate to pass a bill first before the House acted on a plan.
"Let's make it clear that the president got his tax hikes on 1 January," he said as he left the White House. "The discussion about revenue, in my view, is over. It's about taking on the spending problem."
Correspondents say attention will now turn to the next congressional challenge - a possible shutdown of the US government if no funding bill is passed in the next month.
On 27 March a temporary federal budget that has kept the federal government running since 2012 is due to expire.
House Republicans have said they will vote on a bill next week to fund the government through the end of the fiscal year, on 30 September, but keep in place some automatic cuts taking effect on Friday.
Should Massachusetts Tax Candy And Soda?
Are candy and soda food?
Yes, in Massachusetts, candy and soda are considered food and are exempt from the state’s 6.25 percent sales tax. But Gov. Deval Patrick wants to change that. He’s asking the Legislature to start taxing every bag of M&M’s and bottle of Pepsi you buy.
“Half of the people in the commonwealth are overweight or obese,” says Massachusetts Public Health Commissioner Dr. Lauren Smith. “A third of our kids are overweight or obese. Those are pretty daunting statistics, so the idea of adjusting the price of things that we know are associated with [obesity] makes sense.”
Smith says taxing candy and soda would raise about $53 million a year for general state spending. A coalition known as Healthy People, Healthy Economy is working with Rep. Kay Khan, of Newton, on a bill that would put candy and soda tax revenue into the state’s prevention and wellness trust fund.
But will adding roughly a dime to the cost of a soda make kids reach for something healthier instead?
“A small tax will have a small impact, a larger tax will have a larger impact. I mean, there’s just no way around that,” says Lisa Powell, a public health professor at the University of Illinois at Chicago.
Powell says applying the sales tax to soda would cut consumption by 7 to 8 percent, based on what’s happened in 35 other states. She says that’s a small but significant decrease that might be undermined if the state taxes just soda, “because you’re going to have substitution from soda to fruit drinks that have a lot of sugar in them, energy drinks, sports drinks.”
Powell says her research shows that “black children are twice as likely to be heavy fruit drink consumers, and white youth are twice as likely than their black counterparts to be heavy soda consumers. So you’ll miss different groups … if you only tax certain types of drinks.”
“I don’t think the governor should be picking and choosing what people are drinking,” says David Arons, a lawyer from Sharon, who opposes any new taxes. “People should have a certain amount of discretion here and public education efforts would be much more effective than just taxing people if they’re buying a Diet Coke.”
Supporters of the tax say calling soda and candy food means the state is, in a small way, subsidizing an unhealthy option.
“Sugar in particular has led to obesity, which leads to diabetes, which can also lead or does lead in fact to heart disease and stroke,” says Jack Manning, the chairman and CEO at Boston Capital and one of a growing number of employers who support taxing candy and soda.
Manning says sick employees aren’t as happy or as productive as healthy workers and they boost the cost of everyone’s health insurance. “So from all points of view, businesses are better off if there is a tax because we want our employees to be healthy.”
The same proposal from Patrick died in the Legislature last session and it’s not clear if the prospects are any better now.
“The advocates have been loud and vocal on taking the issue up and trying to put it at the forefront of our policy here,” says Jeffrey Sanchez, House chair of the Joint Committee on Public Health. “The challenge is all the other revenue proposals that are before us as well.”
Meaning Patrick’s proposal to raise the income tax and adjust other taxes.
The idea of charging more for foods that aren’t healthy is getting a lot of attention around the country these days. Public health leaders say the connection between higher cigarette taxes and lower rates of smoking makes the case.
Readers, please weigh in the comments section below. Where do you stand? Should candy and soda be taxed and why?
Yes, in Massachusetts, candy and soda are considered food and are exempt from the state’s 6.25 percent sales tax. But Gov. Deval Patrick wants to change that. He’s asking the Legislature to start taxing every bag of M&M’s and bottle of Pepsi you buy.
“Half of the people in the commonwealth are overweight or obese,” says Massachusetts Public Health Commissioner Dr. Lauren Smith. “A third of our kids are overweight or obese. Those are pretty daunting statistics, so the idea of adjusting the price of things that we know are associated with [obesity] makes sense.”
Public Health Commissioner Lauren Smith says taxing soda will discourage consumption. (Martha Bebinger/WBUR)
Smith says taxing candy and soda would raise about $53 million a year for general state spending. A coalition known as Healthy People, Healthy Economy is working with Rep. Kay Khan, of Newton, on a bill that would put candy and soda tax revenue into the state’s prevention and wellness trust fund.
But will adding roughly a dime to the cost of a soda make kids reach for something healthier instead?
“A small tax will have a small impact, a larger tax will have a larger impact. I mean, there’s just no way around that,” says Lisa Powell, a public health professor at the University of Illinois at Chicago.
Powell says applying the sales tax to soda would cut consumption by 7 to 8 percent, based on what’s happened in 35 other states. She says that’s a small but significant decrease that might be undermined if the state taxes just soda, “because you’re going to have substitution from soda to fruit drinks that have a lot of sugar in them, energy drinks, sports drinks.”
Powell says her research shows that “black children are twice as likely to be heavy fruit drink consumers, and white youth are twice as likely than their black counterparts to be heavy soda consumers. So you’ll miss different groups … if you only tax certain types of drinks.”
“I don’t think the governor should be picking and choosing what people are drinking,” says David Arons, a lawyer from Sharon, who opposes any new taxes. “People should have a certain amount of discretion here and public education efforts would be much more effective than just taxing people if they’re buying a Diet Coke.”
Supporters of the tax say calling soda and candy food means the state is, in a small way, subsidizing an unhealthy option.
“Sugar in particular has led to obesity, which leads to diabetes, which can also lead or does lead in fact to heart disease and stroke,” says Jack Manning, the chairman and CEO at Boston Capital and one of a growing number of employers who support taxing candy and soda.
Manning says sick employees aren’t as happy or as productive as healthy workers and they boost the cost of everyone’s health insurance. “So from all points of view, businesses are better off if there is a tax because we want our employees to be healthy.”
The same proposal from Patrick died in the Legislature last session and it’s not clear if the prospects are any better now.
“The advocates have been loud and vocal on taking the issue up and trying to put it at the forefront of our policy here,” says Jeffrey Sanchez, House chair of the Joint Committee on Public Health. “The challenge is all the other revenue proposals that are before us as well.”
Meaning Patrick’s proposal to raise the income tax and adjust other taxes.
The idea of charging more for foods that aren’t healthy is getting a lot of attention around the country these days. Public health leaders say the connection between higher cigarette taxes and lower rates of smoking makes the case.
Readers, please weigh in the comments section below. Where do you stand? Should candy and soda be taxed and why?
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