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Rising national debt may be the next economic crisis
USA TODAY
By Tom Raum
The country first got into debt to help pay for the Revolutionary War. Growing ever since, the debt stands today at a staggering $11.4 trillion – equivalent to about $37,000 for each and every American. And it’s expanding by over $1 trillion a year.
The mountain of debt easily could become the next full-fledged economic crisis without firm action from Washington, economists of all stripes warn.
“Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth,” Federal Reserve Chairman Ben Bernanke recently told Congress.
Higher taxes, or reduced federal benefits and services – or a combination of both – may be the inevitable consequences.
The debt is complicating efforts by President Obama and Congress to cope with the worst recession in decades as stimulus and bailout spending combine with lower tax revenues to widen the gap.
Interest payments on the debt alone cost $452 billion last year – the largest federal spending category after Medicare-Medicaid, Social Security and defense. It’s quickly crowding out all other government spending. And the Treasury is finding it harder to find new lenders.
The United States went into the red the first time in 1790 when it assumed $75 million in the war debts of the Continental Congress.
Alexander Hamilton, the first treasury secretary, said, “A national debt, if not excessive, will be to us a national blessing.”
Some blessing.
Since then, the nation has only been free of debt once, in 1834-1835.
The national debt has expanded during times of war and usually contracted in times of peace, while staying on a generally upward trajectory. Over the past several decades, it has climbed sharply – except for a respite from 1998 to 2000, when there were annual budget surpluses, reflecting in large part what turned out to be an overheated economy.
The debt soared with the wars in Iraq and Afghanistan and economic stimulus spending under President George W. Bush and now Obama.
The odometer-style “debt clock” near Times Square – put in place in 1989 when the debt was a mere $2.7 trillion – ran out of numbers and had to be shut down when the debt surged past $10 trillion in 2008.
The clock has since been refurbished so higher numbers fit. There are several debt clocks on websites maintained by public interest groups that let you watch hundreds, thousands, millions zip by in a matter of seconds.
The debt gap is “something that keeps me awake at night,” Obama says.
He pledged to cut the budget “deficit” roughly in half by the end of his first term. But “deficit” just means the difference between government receipts and spending in a single budget year.
This year’s deficit is now estimated at about $1.85 trillion.
Deficits don’t reflect holdover indebtedness from previous years. Some spending items – such as emergency appropriations bills and receipts in the Social Security program – aren’t included, either, although they are part of the national debt.
The national debt is a broader, and more telling, way to look at the government’s balance sheets than glancing at deficits.
According to the Treasury Department, which updates the number “to the penny” every few days, the national debt was $11,518,472,742,288 on Wednesday.
The overall debt is now slightly over 80% of the annual output of the entire U.S. economy, as measured by the gross domestic product.
By historical standards, it’s not proportionately as high as during World War II, when it briefly rose to 120% of GDP. But it’s still a huge liability.
Also, the United States is not the only nation struggling under a huge national debt. Among major countries, Japan, Italy, India, France, Germany and Canada have comparable debts as percentages of their GDPs.
Where does the government borrow all this money from?
The debt is largely financed by the sale of Treasury bonds and bills. Even today, amid global economic turmoil, those still are seen as one of the world’s safest investments.
That’s one of the rare upsides of U.S. government borrowing.
Treasury securities are suitable for individual investors and popular with other countries, especially China, Japan and the Persian Gulf oil exporters, the three top foreign holders of U.S. debt.
But as the U.S. spends trillions to stabilize the recession-wracked economy, helping to force down the value of the dollar, the securities become less attractive as investments. Some major foreign lenders are already paring back on their purchases of U.S. bonds and other securities.
And if major holders of U.S. debt were to flee, it would send shock waves through the global economy – and sharply force up U.S. interest rates.
As time goes by, demographics suggest things will get worse before they get better, even after the recession ends, as more baby boomers retire and begin collecting Social Security and Medicare benefits.
While the president remains personally popular, polls show there is rising public concern over his handling of the economy and the government’s mushrooming debt – and what it might mean for future generations.
If things can’t be turned around, including establishing a more efficient health care system, “We are on an utterly unsustainable fiscal course,” said the White House budget director, Peter Orszag.
Some budget-restraint activists claim even the debt understates the nation’s true liabilities.
The Peter G. Peterson Foundation, established by a former commerce secretary and investment banker, argues that the $11.4 trillion debt figures does not take into account roughly $45 trillion in unlisted liabilities and unfunded retirement and health care commitments.
That would put the nation’s full obligations at $56 trillion, or roughly $184,000 per American, according to this calculation.
4 Weathermen terrorists declare support for Obama
FROM WND
Call for ‘grassroots effort’ to help boost campaign
By Aaron Klein
The names of four former top leaders of the Weathermen terrorist organization are listed as signatories on an online petition calling for an “independent grassroots effort” to help strengthen Sen. Barack Obama’s campaign.
The petition was initiated by Progressives for Obama, an independent organization acting to ensure the Illinois senator’s election.
Progressives includes among its ranks many former members of the 1960s radical organization Students for a Democratic Society, or SDS, from which the Weathermen splintered, as well as current and former members of other radical organizations, such as the Communist Party USA and the Black Radical Congress.
“We agree that Barack Obama is our best option for president in 2008, and that an independent grassroots effort can help strengthen his campaign,” states the online petition. “It can also strengthen the mandate for his programs for stopping war, promoting global justice and securing our rights, liberties, and economic well-being.”
Among the names signed onto the petition are former Weathermen leaders Howard Machtinger, Jeff Jones, Steve Tappis and Mark Rudd.
Machtinger was a Weathermen founder and was co-author of the terror group’s original mission statement, which called for “revolutionaries within the United States to wage a ‘people’s war’ and attack from within. The government would fall and ‘world communism’ eventually would be instituted.”
Jones, according to his own website, was “elected, along with (Weathermen terrorist) Bill Ayers and Mark Rudd, to the SDS national office. Then, in the spring of 1970, he disappeared. As a leader of the Weather Underground, Jeff evaded an intense FBI manhunt for more than a decade. In 1981, they finally got him. Twenty special agents battered down the door of the Bronx apartment where he was living with his wife and four-year-old son.”
Jones’ site says he traveled to Cambodia in 1966 to meet with high-level leaders of the anti-American National Liberation Front. In 1967 and 1968 he served as an SDS regional organizer for New York City.
Contacted by WND, Jones said he is not involved in any Obama advocacy.
Tappis was one of 11 people who signed the original Weathermen statement, which was infamously titled, “You Don’t Need a Weatherman to Know Which Way the Wind Blows.”
Rudd, a petition supporter as well as a main signatory to the Progressives for Obama group, was one of the main founders of the Weathermen terrorist organization. A biography published on his website explains Rudd worked to form the Weathermen as a radical alternative to the SDS and for white Americans to eject their “white skin privilege” and begin “armed struggle” against the U.S. government.
Rudd went underground in 1970, when a bomb exploded in a townhouse in Greenwich Village in New York City, killing three of his comrades. He lived for seven and a half years in hiding as a fugitive, finally surrendering in 1977, facing only low-level state charges after federal charges against Weathermen leaders had been dropped. He resurfaced as a teacher in New Mexico.
As late as 2005, Rudd wrote an editorial in the Los Angeles Times lamenting the state of the antiwar movement in the U.S.
“What’s hard to understand – given the revelations about the rush to war, the use of torture and the loss of more than 2,000 soldiers – is why the antiwar movement isn’t further along than it is,” he wrote. “Given that President Bush is now talking about Iraq as only one skirmish in an unlimited struggle against a global Islamic enemy, a struggle comparable to the titanic, 40-year Cold War against communism, shouldn’t a massive critique of the global war on terrorism already be underway?”
 Former Weathermen member Mark Rudd |
In the piece, Rudd condemned the Weathermen’s decision to embark on an “armed-struggle,” calling it “stupid” since the violent acts led to the group’s demise. But he didn’t condemn the terrorism itself, only its contribution to the downfall of the Weathermen.
Rudd declined to speak on the record to WND, explaining an interview may spark more Weathermen controversy for Obama.
All former Weathermen leaders who signed the pro-Obama petition worked closely for years with Weathermen terrorist William Ayers, whose association with Obama has generated controversy for the presidential candidate.
The Weathermen took responsibility for bombing U.S. governmental buildings in the 1970s.
Trevor Louden of the New Zeal blog commented, “Clearly Bill Ayers and his wife, Bernardine Dohrn, are not the only former Weathermen backing Obama. Add their old comrades Jeff Jones, Howie Machtinger, Mark Rudd and even Steve Tappis to the mix and you are starting to get beyond coincidence. That former terrorists are working with Marxist groups to elect Barack Obama is beyond doubt.”
Progressives for Obama, which initiated the online petition, first published its creed in March in the Nation magazine, explaining the organization descended from the “proud tradition of independent social movements that have made America a more just and democratic country.”
Progressives for Obama stated it can help the Illinois senator’s ascent to highest office by contributing funds, using the Internet to reach “millions of swing voters;” defending Obama against negative attacks and making its agenda known at the Democratic National Convention.
“Progressives can make a difference in close primary races like Pennsylvania, North Carolina, Oregon and Puerto Rico, and in the November general election,” the founders state.
The founders stress it is crucial to form a grassroots leftist movement to ensure Obama does not stray too far to the center, claiming other grassroots liberal movements have successfully pressured U.S. presidents into creating new policy:
It was the industrial strikes and radical organizers in the 1930s who pushed Roosevelt to support the New Deal. It was the civil rights and student movements that brought about voting rights legislation under Lyndon Johnson and propelled Eugene McCarthy and Bobby Kennedy’s antiwar campaigns. It was the original Earth Day that led Richard Nixon to sign environmental laws.
And it will be the Obama movement that will make it necessary and possible to end the war in Iraq, renew our economy with a populist emphasis, and confront the challenge of global warming. We should not only keep the pressure on [Obama] but also connect the issues that Obama has made central to his campaign into an overarching progressive vision.
The group was founded by four individuals with ties to extremist groups:
- Tom Hayden, a former state senator who was a founder and principal organizer of the SDS. Discover the Networks notes Hayden, previously married to actress Jane Fonda, traveled many times to North Vietnam, Czechoslovakia and Paris to strategize with communist North Vietnamese and Viet Cong leaders on how to defeat America’s anti-communist efforts.
- Bill Fletcher, a former Maoist and current leader of Democratic Socialists of America or DSA. The New Zeal blog notes Fletcher was also a founder of the Black Radical Congress, closely linked to the Communist Party USA, which advocated for “progressive social justice, racial equality and economic justice goals within the U.S.
- Barbara Ehenreich, an honorary chairman of DSA who was formerly active in antiwar movements in which some notorious radicals took part.
- Actor Danny Glover, a member of the Black Students Union, who has visited Venezuela, making guest appearances on President Hugo Chavez’s television and radio talk show. He reportedly has accepted loans of about $20 million from the Venezuelan government to make a movie about a Haitian revolutionary leader.
The Progressives for Obama webmaster is Carl Davidson, a former vice president of the Students for a Democratic Society, who has traveled to Cuba to meet with Fidel Castro.
The signatories and endorsers of the Obama activist group, listed on the Progressives website, include scores of well known communist, socialist and anarchist activists and former SDS members.
Do Americans have anything in common with Obama?
FROM WND
Author of book about candidate’s beliefs: ‘Bring it on!’
What is it that today has censors ranging from Catholic newspaper chiefs across the country to Time Warner’s Money and Fortune magazines in a frenzy? Poll results on what U.S. residents believe, and conflict between those results and the positions assumed by Democratic presidential nominee Sen. Barack Obama.
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Author Brad O’Leary, whose hot new book, “The Audacity of Deceit: Barack Obama’s War on American Values,” was ranked No. 281 on Amazon.com today, including No. 2 in elections books, No. 3 in executive branch books and No. 4 in current events, was interviewed on Glenn Beck’s radio show where he talked about his new Barack Obama Test website.
There, O’Leary explained how far adrift Obama is when comparing his views and positions to those of Americans.
“Presently 85 percent of American energy comes from fossil fuels while 7 percent comes from alternative energy sources. Do you support or oppose increasing taxes on fossil fuels in an effort to force our nation to increase its reliance on alternative or renewable energy sources and reduce environmental pollution, even if doing so would mean that there would be times or that … the costs are eventually passed on to the consumer. Obama’s position is he supports the tax on increase on fossil fuels. Thirty-five percent of all Americans say they are in his category. Sixty percent oppose a tax increase on fossil fuels,” Beck said.
“Correct. And that’s what we did was all of the questions out there, all of his positions,” O’Leary said.
After the interview, O’Leary revealed that he’s been attempting to purchase advertising for his book and website, and has run into censorship from a wide range of media organizations, ranging from Money and Fortune to most of the Catholic diocesan newspapers across the nation, simply because he’s comparing Obama’s positions to those of Americans.
“My print ads to promote the book have been censored by the editors of 192 of 194 Catholic diocesan newspapers,” he said. “Only two small diocese [papers] in Wisconsin and Massachusetts would run the ads. This ad only talked about public polling and Catholic responses,” he said. “My ad talking about the 30 percent of Americans who pay no federal income tax was censored by Time Warner’s Money and Fortune magazines.”
Recent polling by Zogby International shows that Americans think that the actions of the Catholic newspapers and Time Warner is censorship.
The ad for the Catholic newspapers started out “Life: It’s above my pay grade,” referring to Obama’s response to a question about his perspective on the beginning of life. He dodged, saying the issue was above his pay grade.
It suggests Obama’s positions, such as his support for unlimited abortions, are in conflict to what Catholics believe. A snapshot of part of the ad is here:
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The other advertisement focused on economic issues, specifically taxes.
It is headlined: “30% of American voters don’t pay income taxes… and they vote differently from the 70% who do.” It then raises questions about Obama’s support for a 55 percent tax rate and higher taxes on small companies, among many other issues. A portion can be seen here:
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O’Leary, however, wasn’t backing down.
He said he has one thing to say to Obama’s “fawning acolytes.”
“Bring it on!” he said.
“That Barack Obama’s handlers would tacitly encourage supporters to censor criticism is no surprise,” said O’Leary, a noted political consultant, “because there is a lot to censor.”
He said it is crucial that the truth about Obama be revealed before it’s too late and people have voted. He described how he started on the project.
“Like young people all over the country, my grandchildren expressed enthusiasm for Obama without understanding what he stands for, which is the destruction of everything I hold dear, including their futures,” O’Leary said.
“The Audacity of Deceit” began as a letter to O’Leary’s grandkids, one in which he detailed Obama’s “perfidy, flip-flops and deceptions.” Then he went public with his work.
Now O’Leary also has added Barack Obama Test website to reveal to voters what Americans have told the nation’s most reputable pollsters, including Zogby, International, Rasmussen, Gallup and others, and how that stands in stark contrast to Obama’s positions.
“Even I was shocked to see just how much Obama’s positions on vital issues diverge from those of the vast majority of Americans. Too many people dazzled by Obama’s oratorical style are simply not hearing his message – that American must be brought to its knees, and that he’s just the man to do it,” O’Leary said.
“The Audacity of Deceit”, released by WND Books, recently hit the nation’s largest bookstores in a head-to-head clash with Obama’s release of his campaign book, “Change We Can Believe In.”
“Brad O’Leary has written a book that will shed new light on a public figure who’s enjoyed a meteoric rise with little scrutiny,” says Eric M. Jackson, president of WND Books. “We’re thrilled that it will debut head-to-head against Senator Obama’s own book. When the dust settles, we think ‘The Audacity of Deceit’ will be the defining book on his candidacy.”
O’Leary, former president of the American Association of Political Consultants, is the author of 11 books, a former talk radio host with millions of listeners and the award-winning television producer of “Ronald Reagan: An American President.”
O’Leary’s book, recently ranked No. 86 on Barnes and Noble, suggests Obama’s vision for change, if exposed, would not come close to what Americans hope for.
The book also has been getting rave reviews from Amazon.com readers.
Says one reviewer, “I am so grateful for this book. I’m an independent and I had a lot of questions…I sense there is a great danger if there is a Democratic Congress and a radical leftist like Barack in the White House.”
Another notes, “This book is a political reader’s dream in terms of structure, readability, and sheer information. In my opinion it blows the other Obama books out of the water on many counts.”
And then there’s this one: “This may be the best book on Barack Obama that you haven’t read…This book doesn’t waste time with moonbat accusations, although it devotes a very few, well documented pages to Obama’s Muslim connections. O’Leary wisely concentrates on policy issues.”
Concludes one reviewer, “‘The Audacity of Deceit,’ more than the other books taking a look at this fatally flawed candidate, summarizes what is known to date about Obama, his policies, plans and associates – and it’s not pretty for anyone who cares about this country.”
Will Israel join the European Union?
Feb 10
Posted by Chris Thomas
Italy’s Prime Minister Berlusconi makes proposal in state visit to Jerusalem
Editor’s Note: The following report is excerpted from Jerome Corsi’s Red Alert, the premium online newsletter published by the current No. 1 best-selling author, WND staff writer and columnist. Red Alert subscriptions are $99 a year or $9.95 per month for credit card users. Annual subscribers will receive a free autographed copy of “The Late Great USA,” a book about the careful deceptions of a powerful elite who want to undermine our nation’s sovereignty.
While in Israel, Italy’s president of the Council of Ministers, Silvio Berlusconi, proved once again that Italy is one of Israel’s most committed allies by suggesting that he would like to see Israel invited to join the European Union, Jerome Corsi’s Red Alert reports.
“At first glance the proposal did not seem to have been made seriously, except that the EU is considering extending membership to Turkey, so why not extend membership to Israel?” Corsi wrote.
Clearly, Berlusconi’s envisioned measures that might prevent Middle East violence from extending into Europe.
If the proposal were to advance within the EU, Islamic states would almost certainly respond by launching anti-Italy demonstrations and boycotting Italian-made goods, Red Alert reported.
“With the requirement that EU countries not occupy territory that is not recognized as part of its own, Berlusconi could respond that a condition of Israel joining the EU would be for Israel to completely turn over the West Bank as well as the Gaza to the administration of the Palestinian Authority,” Corsi noted. “Moreover, with the EU nations of Greece, Spain and Portugal about to experience economic collapse over continued high levels of unemployment and unsustainable levels of public debt, the EU could use among its members right now a strong economy such as Israel’s.”
In his visit to Yad Vashim, Jerusalem’s Holocaust museum, Berlusconi left an emotional hand-written message saying: “Our soul cries out that ‘it is not true, it cannot be true,’ and then, facing reality, shouts ‘never, never again.”
The Italian newspapers also pointed out that Israel is considering the purchase of 40 of Italy’s most advanced M-346 fighter jets at a cost of over 1 billion pounds ($1.365 billion).
Israel’s Prime Minister Benjamin Netanyahu responded in kind, stating, “Israel has no greater friend than Italy.
Berlusconi is also pursuing the sale of 48 M-346 fighter jets to the United Arab Emirates at a cost of 1.4 billion pounds (or $1.9 billion), but so far Italy has refrained from proposing that the UAE should be allowed to join the EU.
During his visit to Israel, Berlusconi also delivered an obvious message to Iran’s President Ahmadinejad, saying, “We will not close our eyes before a state that wishes to destroy a country that is our friend.”
Still, Italy remains Iran’s second trading partner, behind Germany.
In 2008, Italy was responsible for approximately 6.1 billion pounds (or $8.4 billion) in trade with Iran, approximately 25 percent of the total trade conducted between the EU and Tehran.
Red Alert noted, Berlusconi won no friends among the Palestinians after his speech to the Knesset in which he claimed Israel was justified in launching rocket attacks in the Hamas-controlled Gaza during December 2008 that killed 1,400 Palestinians.
Berlusconi recalled Italy’s vote against the United Nations report on Israel’s December 2008 Operation Cast Lead against Hamas in the Gaza, in which Israel rejected the report presented to the U.N. Human Rights Council by an independent fact-finding committee headed by the South African prosecutor Richard Gladstone.
The so-called “Goldstone Report” sought to criminalize Israel for responding with military force to the Hamas-launched rocket attacks on Israel from the Gaza.
Red Alert’s author, whose books “The Obama Nation” and “Unfit for Command” have topped the New York Times best-sellers list, received his Ph.D. from Harvard University in political science in 1972. For nearly 25 years, beginning in 1981, he worked with banks throughout the U.S. and around the world to develop financial services marketing companies to assist banks in establishing broker/dealers and insurance subsidiaries to provide financial planning products and services to their retail customers. In this career, Corsi developed three different third-party financial services marketing firms that reached gross sales levels of $1 billion in annuities and equal volume in mutual funds. In 1999, he began developing Internet-based financial marketing firms, also adapted to work in conjunction with banks.
In his 25-year financial services career, Corsi has been a noted financial services speaker and writer, publishing three books and numerous articles in professional financial services journals and magazines.
For financial guidance during difficult times, read Jerome Corsi’s Red Alert, the premium, online intelligence news source by the WND staff writer, columnist and author of the New York Times No. 1 best-seller, “The Obama Nation.”
For full immediate access to Jerome Corsi’s Red Alert, subscribe now.
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