US government near to debt limit

http://news.bbc.co.uk/1/hi/business/4780844.stm

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US Treasury Secretary John Snow has told Congress to raise the government's credit limit in order to avoid having some of its operations shut down.

The government needs Congressional authority to borrow and the total accumulated debt is now close to its limit of $8.2 trillion (£4.7 trillion).

If the limit is not increased, the government could find it difficult to pay debts or borrow money.

Congress is expected to agree to an extension, averting any debt crisis.

Massive deficits

In a letter to Congress, Mr Snow said he has already taken "prudent and legal actions" to avoid reaching the debt limit.

These include tapping the civil service pension funds and using the $15bn in the Exchange Stabilisation Fund, a reserve held for smoothing out volatile movements in the value of the dollar in currency markets.

But the Treasury has warned that such measures will only postpone the credit deadline until mid-March, when an extension will be needed.

This is the fourth time George W Bush's administration has asked Congress to raise the government debt limit.

His administration has produced a series of massive deficits, brought on by the post dot-com recession, tax cuts, the September 11 attacks and wars and reconstruction in Afghanistan and Iraq.

The US government has never defaulted on its debts, and to do so would destroy its credit rating and raise the cost of any future borrowing.

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I'm not convinced about the rate of exchange used in the report ( :dry: ) but that is alot of money. :blink:

Indeed.

Republicans should be banned from having credit cards.

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Originally Posted by Barbarossa

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US Treasury Secretary John Snow has told Congress to raise the government's credit limit in order to avoid having some of its operations shut down.

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I rather like that last part; the six concluding words, with the period, of course.

Iran, apparently, is planning on selling Oil in Euro's...

If that caught on, it would really fuck the US economy...

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Originally Posted by Rat Faced

Iran, apparently, is planning on selling Oil in Euro's...

If that caught on, it would really fuck the US economy...

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Yup, old news.

And the stupid American public (I'm American, I can say that) probably thinks the Democrats are responible for the $8.2 TRILLION debt. Bullshit, at least $7 trillion is a direct result of republican goverment & initiatives. OK you jumpin' josahafat righties, go ahead lie your way out of this one too.

On the plus side, you have actually managed the art of building a car that doesnt steer like a brick now... (Cadillac BLS)

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Originally Posted by Rat Faced

On the plus side, you have actually managed the art of building a car that doesnt steer like a brick now... (Cadillac BLS)

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Eh? What would that have to do with whateverthefuck?:blink:

Great news though, that being the first American non-brick-like steering car.

Maybe I'll switch from a LS to a BLS.:mellow:

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Originally Posted by Rat Faced

Iran, apparently, is planning on selling Oil in Euro's...

If that caught on, it would really fuck the US economy...

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That's why they won't let it happen.

Didn't another oil producer already try to trade in Euros.

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Originally Posted by JPaul

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Originally Posted by Rat Faced

Iran, apparently, is planning on selling Oil in Euro's...

If that caught on, it would really fuck the US economy...

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That's why they won't let it happen.

Didn't another oil producer already try to trade in Euros.

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A Mr S Hussein I believe :) Although Iran will be a harder nut to crack.

The US worry is that other states will follow suit and the US will face inflationary pressures on fuel because the price will be determined by the US exchange rate to other currencies (although this could also work in the US's favour, it does take an element of control away). On the plus side such a move might be the final push needed to make US go cold turkey on oil.

Cold turkey on oil?! Nope not with #1 & #2 both oil whores!

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Originally Posted by Biggles

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Originally Posted by JPaul

That's why they won't let it happen.

Didn't another oil producer already try to trade in Euros.

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A Mr S Hussein I believe :) Although Iran will be a harder nut to crack.

The US worry is that other states will follow suit and the US will face inflationary pressures on fuel because the price will be determined by the US exchange rate to other currencies (although this could also work in the US's favour, it does take an element of control away). On the plus side such a move might be the final push needed to make US go cold turkey on oil.

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Iraq moved to Euro's in 2000...

Iran is talking about it in 2005-06.... hmm, guess who the next bad guy in the Middle East is, makes you think.

This time though, the Russians are also talking to the Germans about it and..

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Last year, in a little noticed Opec speech to a Spanish Finance Ministry conference, Javad Yarjani, a senior Iranian oil diplomat, said: 'It is quite possible that as bilateral trade increases between the Middle East and the European Union, it could be feasible to price oil in euros. This would foster further ties between these trading blocs by increasing commercial exchange, and by helping attract much-needed European investment in the Middle East.'

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.... Iranian, but speaking for OPEC.

No wonder Bush is shitting himself over Iran and fauns over Saudi atm... Iraq by itself was limited due to "Oil for Food".

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The oil-dollar nexus is one of the foundations of the world economy that inevitably filters through to geopolitics. Recycling so-called petrodollars, the proceeds of these high oil prices, has helped the United States run its colossal trade deficits. But the past year has seen the quiet emergence of the 'petroeuro'.

Effectively, the normal standards of economics have not applied to the US, because of the international role of the dollar. Some $3 trillion (£1,880 billion) are in circulation around the world helping the US to run virtually permanent trade deficits. Two-thirds of world trade is dollar-denominated. Two-thirds of central banks' official foreign exchange reserves are also dollar-denominated.

Dollarisation of the oil markets is one of the key drivers for this, alongside, in recent years, the performance of the US economy. The majority of countries that require oil imports require dollars to pay for their fuel. Oil exporters similarly hold, as their currency reserve, billions in the currency in which they are paid. Investing these petrodollars straight back into the US economy is possible at zero currency risk.

So the US can carry on printing money - effectively IOUs - to fund tax cuts, increased military spending, and consumer spending on imports without fear of inflation or that these loans will be called in. As keeper of the global currency there is always the last-ditch resort to devaluation, which forces other countries' exporters to pay for US economic distress. It's probably the nearest thing to a 'free lunch' in global economics.

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Oil pricing is just the background to a wider issue. The Bank of China and the Russian Central Bank are both rumoured to be waiting for the best moment to increase the holdings of euros. Only 5 per cent of Chinese reserves are held in euros, but more than 20 per cent of its trade is with Europe. Middle Eastern states hold $700bn of US assets, but comparatively little in Europe.

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Always knew that Saudi owned America :lol:

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Originally Posted by Rat Faced

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Originally Posted by Biggles

A Mr S Hussein I believe :) Although Iran will be a harder nut to crack.

The US worry is that other states will follow suit and the US will face inflationary pressures on fuel because the price will be determined by the US exchange rate to other currencies (although this could also work in the US's favour, it does take an element of control away). On the plus side such a move might be the final push needed to make US go cold turkey on oil.

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Iraq moved to Euro's in 2000...

Iran is talking about it in 2005-06.... hmm, guess who the next bad guy in the Middle East is, makes you think.

This time though, the Russians are also talking to the Germans about it and..

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Last year, in a little noticed Opec speech to a Spanish Finance Ministry conference, Javad Yarjani, a senior Iranian oil diplomat, said: 'It is quite possible that as bilateral trade increases between the Middle East and the European Union, it could be feasible to price oil in euros. This would foster further ties between these trading blocs by increasing commercial exchange, and by helping attract much-needed European investment in the Middle East.'

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.... Iranian, but speaking for OPEC.

No wonder Bush is shitting himself over Iran and fauns over Saudi atm... Iraq by itself was limited due to "Oil for Food".

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The oil-dollar nexus is one of the foundations of the world economy that inevitably filters through to geopolitics. Recycling so-called petrodollars, the proceeds of these high oil prices, has helped the United States run its colossal trade deficits. But the past year has seen the quiet emergence of the 'petroeuro'.

Effectively, the normal standards of economics have not applied to the US, because of the international role of the dollar. Some $3 trillion (£1,880 billion) are in circulation around the world helping the US to run virtually permanent trade deficits. Two-thirds of world trade is dollar-denominated. Two-thirds of central banks' official foreign exchange reserves are also dollar-denominated.

Dollarisation of the oil markets is one of the key drivers for this, alongside, in recent years, the performance of the US economy. The majority of countries that require oil imports require dollars to pay for their fuel. Oil exporters similarly hold, as their currency reserve, billions in the currency in which they are paid. Investing these petrodollars straight back into the US economy is possible at zero currency risk.

So the US can carry on printing money - effectively IOUs - to fund tax cuts, increased military spending, and consumer spending on imports without fear of inflation or that these loans will be called in. As keeper of the global currency there is always the last-ditch resort to devaluation, which forces other countries' exporters to pay for US economic distress. It's probably the nearest thing to a 'free lunch' in global economics.

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Oil pricing is just the background to a wider issue. The Bank of China and the Russian Central Bank are both rumoured to be waiting for the best moment to increase the holdings of euros. Only 5 per cent of Chinese reserves are held in euros, but more than 20 per cent of its trade is with Europe. Middle Eastern states hold $700bn of US assets, but comparatively little in Europe.

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Always knew that Saudi owned America :lol:

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Good info, Rat.

You know what, I almost hope Iran does go to the Euro and force a change in America.

Iran and Iraq are different animals in the who's more dangerous department, however.

I felt Saddam should have been left alone. Can't say the same about Iran.

If Bush was smart, he'd have let them play each other out possibly.

I'm not getting an E85 Flex-Fuel vehicle yet.
For America to switch to something else, the product needs to be non-oil based and have AT LEAST THE SAME FUEL ECONOMY.

Perhaps Americans jumped on board quick enough, the price would drop. Who knows? Greedy executives might see the chance to gouge even more.
If they were smart they'd see that the volume would outweigh them overcharging "per barrel".

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Originally Posted by Busyman

I'm not getting an E85 Flex-Fuel vehicle yet.
For America to switch to something else, the product needs to be non-oil based and have AT LEAST THE SAME FUEL ECONOMY.

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Is it possible to have worse fuel economy than our present engines :unsure:

:lol:

car makers are just so stupid for making hybrids. It still uses oil and electricity. Just less. Why not move onto a new thing such as hydrogen and fuel cells.

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Originally Posted by twisterX

:lol:

car makers are just so stupid for making hybrids. It still uses oil and electricity. Just less. Why not move onto a new thing such as hydrogen and fuel cells.

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They are already doing it.

I watched where a guy put a cup at the exhaust and drank the water.

Folks are just moving slow, trying to milk any new technology advancement they can.

Hybrids are not stupid. A car that gets 60mpg versus 20 has better fuel economy.

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Originally Posted by vidcc

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Originally Posted by Busyman

I'm not getting an E85 Flex-Fuel vehicle yet.
For America to switch to something else, the product needs to be non-oil based and have AT LEAST THE SAME FUEL ECONOMY.

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Is it possible to have worse fuel economy than our present engines :unsure:

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Of course. It seems the only purpose of ethanol is to NOT use oil.

The prez & the legislative & judicial branches of the US government need to declare for the security of the nation. That all patents enabling current vehicles to get vastly more MPG are null & void. And declare that they be used on new cars & retrofitted on old cars. That would cut oil consumption at least by half.

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Originally Posted by zapjb

The prez & the legislative & judicial branches of the US government need to declare for the security of the nation. That all patents enabling current vehicles to get vastly more MPG are null & void. And declare that they be used on new cars & retrofitted on old cars. That would cut oil consumption at least by half.

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What would be the sense?

The current fear is that political pressures and global economics will push the price of all petroleum products to the point they are not widely affordable.

The impact is strictly economic; the various effects stem from that singular fact, correct?

Now, if you impose all the strictures you've outlined, you will create an even greater financial hardship on individuals and businesses, as well as depressing the general economy.

On the other hand, the prospect of profit will provide sufficient impetus for entrepeneurial-types to develop alternatives, and the changeover will be quite a bit easier to manage for everyone.

It won't happen over night, and that is something you should be thankful for.

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Originally Posted by j2k4

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Originally Posted by zapjb

The prez & the legislative & judicial branches of the US government need to declare for the security of the nation. That all patents enabling current vehicles to get vastly more MPG are null & void. And declare that they be used on new cars & retrofitted on old cars. That would cut oil consumption at least by half.

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What would be the sense?.....

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:stars:

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Originally Posted by zapjb

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Originally Posted by j2k4

What would be the sense?.....

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:stars:

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That's kinda the sense I had after reading your post, zap.

The development of alternatives will be driven by the capitalist imperative, nothing else.

As to the consumer and his demands, these are also nothing more than "pocketbook" issues, and they cannot be made into something else.

My point is the US needs drastic changes now. The foremost is that our government lookout for the US public (the masses) takes priority. Business as usual should be tossed for the long term benefit of the masses. Part of this entails freedom from petroleum. Building an energy solution that is wholey contained on US soil is the best for the security & standard of living of our citizens. What I suggested in a previous post would only be a compromise.

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Originally Posted by zapjb

My point is the US needs drastic changes now. The foremost is that our government lookout for the US public (the masses) takes priority. Business as usual should be tossed for the long term benefit of the masses. Part of this entails freedom from petroleum. Building an energy solution that is wholey contained on US soil is the best for the security & standard of living of our citizens. What I suggested in a previous post would only be a compromise.

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Such "start-points" cannot be created artificially.

The market is the best indicator of the timeliness of any directional change.

What you propose is bad (1), because it would shock business and the economy unnecessarily and to ill-effect, and (2), because it would get the federal government involved, which is poison.

Google Nixon's "price-freeze".

That'll put the fear of God into you.

The open market will not develope alternate energy sources all the time oil is cheap. just as drug companies spend most of their research money on "profitable" research, governments invest in research in needed but not overly profitable cures. We all know that alternate energy is needed, if not today tomorrow and to be honest government funding worldwide, the research could be private, is essential.

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Originally Posted by j2

because it would get the federal government involved, which is poison.

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THIS federal government I will agree with you. The right people in government and the playing field is altered.

Well I'm open to new ideas. Cause the well being of the masses depends upon something new. This country is slipping into a 3rd world country. And I'm pissed about it. No business as usual will stop this.

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Originally Posted by zapjb

. No business as usual will stop this.

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Yes it will.

Or, rather, it will happen absent government interference.

Autos replaced horse-drawn transportation over a relative few decades; that is to say, in about two generations...less than that, in fact.

It didn't happen because Teddy Roosevelt ordered it done.

Don't worry.

Or, go ahead and worry, and go nuts. :blink:

If you mean the US government not pimping out the American people for big business, then I agree. The US government needs to act in the peoples interest not business. They are very much different since no loyalty or decency from big business exists or hardly exists anymore.

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Originally Posted by zapjb

If you mean the US government not pimping out the American people for big business, then I agree. The US government needs to act in the peoples interest not business. They are very much different since no loyalty or decency from big business exists or hardly exists anymore.

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Alright.

What exactly would you have the government do?

The government at this point I believe is honestly incapable of acting in the best interests of the American masses. What I would propose is too far reaching. But I don't see any return of a US citizens expectation that their prodigy have as good as life economically & socially as them without going to extremes. What I propose spit out all at once seems impossible or outrageous. But I think things have gotten so far out of whack in the last ~30 years. That if one can remember the freedoms & opportunities available to US citizens then. I mean really remember. And see how things are vastly eroded in comparison now. Does what what I'd like the US government to do seem reasonable.

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Originally Posted by zapjb

The government at this point I believe is honestly incapable of acting in the best interests of the American masses. What I would propose is too far reaching. But I don't see any return of a US citizens expectation that their prodigy have as good as life economically & socially as them without going to extremes. What I propose spit out all at once seems impossible or outrageous. But I think things have gotten so far out of whack in the last ~30 years. That if one can remember the freedoms & opportunities available to US citizens then. I mean really remember. And see how things are vastly eroded in comparison now. Does what what I'd like the US government to do seem reasonable.

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Um, perhaps you may wish to think back 30 years and see what exactly was going on. And about the 3rd world remark, perhaps you should move to a better place. Maybe the area you live in is going downhill. To be honest, me and everyone I know and interact with are living better and better year after year, and I have not doubt in my mind that my children will have it better than me. No doubt whatsoever. This is because I am taking a proactive approach to their futures instead of sitting back and teaching them to rely on the government to take care of them.

Perhaps changing jobs would help your situation out. Get a better job, if no necessary education, get it. Begin saving, investing and whatnot, you will notice a great increase in your living conditions. And no you can't use the excuse "why should I invest in big business when big business is the problem?", I have been doing pretty well investing and you know what? I have not put a penny in big business. There's money to be made in those small earth friendly companies.

Some countries, i just cant see what the problem is with "Energy" per se ie: Electricity.

The USA is one country that could be entirely self sufficient in Electricity even without Oil, Gas or Nuclear energy altogether (other than in initial construction and maintainance costs).. if it decided to follow that route (which it wont)..

Despite being a world leader in the technologies in some respects, because some States ARE pro-active, they get little recognition of this.

1,000,000's of square miles that can be used for wind farms, geo-thermal, hydro-electric et nausium...

....and yet some States wont even clean up their old Coal Burning power stations (and even open new ones)... this is the "image" the world gets, and most of your own population.

Its the smaller, more densly populated countries i feel sorry for, they dont even have the option even if they wished to for widespread energy generation in this way... they are stuck with micro-generation.



As to the fuel aspect of Oil... there are a number of substitutes that can be used such as Rape Seed Oil etc...

In 1900 Dr Rudolph Diesel successfully ran an Engine on Peanut Oil for the French Government.. and "Oil Engines" were being successfully manufactured in the UK in 1892. They'd run on just about any type of "vegetable oil".

It was a matter of pure economics in the late 19th/early 20th centuries that made Gaslolene/Petrol engines popular.

The trouble is also partly that Oil is used for a lot more than just fuel/energy... they use it for Plastic, Tarmac..hell, you name it.

I'm not sure they will ever, economically, replace Crude Oils use in everything..

I don't have time to get hip-deep in this at the moment, but has anyone given the least thought to how the relationship of government to business is basically punitive in nature apart from tax breaks or subsidies, which are of a high-saturation/limited distribution status favoring farms, big business, specialized industry-oil, sugar, etc.?

For the most part government does naught but collect taxes from the greater percentage, and penalize them as well, for a full slate of environmental and other regulatory statutes only the government can discern.

Many things are done, or not done, because of the weight of government's thumb, and I will guarantee alternative fuel development is artificially depressed owing to the looming prospect of overwhelming taxation.

When such a substantial part of the cost of a gallon of gasoline to the end consumer is siphoned directly into government coffers (ostensibly to deal with pollution, but actually just because they can), how can you come to any conclusion but that development might be spurred by a cessation of government involvement?

Let's say a non-polluting and totally environmentally-friendly fuel is developed-no emissions, no more smog, no more air quality warnings, etc...do you think the government should tax it as heavily as putrid old petroleum?

I'd bet the government thinks so.

Reagan had a quote about intrusive government:

If it moves, tax it.

If it keeps moving, regulate it.

If it dies, subsidize it.

The difficulty posed by government involvement should be apparent.

I'd venture to say that 90% of businesses that made over $1 billion in the USA in 2005 won't pay any Federal taxes. And as for 2004 all defense companies that made over $1 billion paid zero in Federal taxes.

How is that punitive toward business?

You dont know what taxation of fuel IS j2...

To give the Brits here a laugh at what J2K4 is complaining about here...

I think US tax on Gasoline is around 18 cents a Gallon (about 11p) as opposed to our £2.73 ($4.74 approx) per Gallon...based on 90p/Ltr at pumps.


If the UK doesnt Tax cleaner fuels nearly as much with its love of fuel taxation, why would the US?

LPG, as an example, is half the price of unleaded Petrol at fuel pumps here.

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Originally Posted by Rat Faced

You dont know what taxation of fuel IS j2...

To give the Brits here a laugh at what J2K4 is complaining about here...

I think US tax on Gasoline is around 18 cents a Gallon (about 11p) as opposed to our £2.73 ($4.74 approx) per Gallon...based on 90p/Ltr at pumps.


If the UK doesnt Tax cleaner fuels nearly as much with its love of fuel taxation, why would the US?

LPG, as an example, is half the price of unleaded Petrol at fuel pumps here.

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WTF?

Are you bragging?

All that means is your fuel taxes are even worse than ours.

BTW-Ours are much higher than you've been given to believe, but it's difficult to tell exactly how much because of the state, municipal and sundry other taxes on gasoline tends to dilute the focus on precisely who is taking what.

That's how it works here; my sister just had an overnight in hospital, and got billed about $5 apiece from 500 different providers.

Now she owes $25,000, and can't figure out who to bitch at.

Our government taxes "clean" fuels much less than petrol, as well as taxing "cleaner" cars less too.

You seemed to give the impression that no government would ever do that.

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Originally Posted by j2k4

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Originally Posted by Rat Faced

You dont know what taxation of fuel IS j2...

To give the Brits here a laugh at what J2K4 is complaining about here...

I think US tax on Gasoline is around 18 cents a Gallon (about 11p) as opposed to our £2.73 ($4.74 approx) per Gallon...based on 90p/Ltr at pumps.


If the UK doesnt Tax cleaner fuels nearly as much with its love of fuel taxation, why would the US?

LPG, as an example, is half the price of unleaded Petrol at fuel pumps here.

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WTF?

Are you bragging?

All that means is your fuel taxes are even worse than ours.

BTW-Ours are much higher than you've been given to believe, but it's difficult to tell exactly how much because of the state, municipal and sundry other taxes on gasoline tends to dilute the focus on precisely who is taking what.

That's how it works here; my sister just had an overnight in hospital, and got billed about $5 apiece from 500 different providers.

Now she owes $25,000, and can't figure out who to bitch at.

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You should watch the 60 Minutes from 2 weeks ago.

It describes how those without health insurance get billed sometimes 10x more by a hospital than those with.

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Originally Posted by Busyman

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Originally Posted by j2k4

WTF?

Are you bragging?

All that means is your fuel taxes are even worse than ours.

BTW-Ours are much higher than you've been given to believe, but it's difficult to tell exactly how much because of the state, municipal and sundry other taxes on gasoline tends to dilute the focus on precisely who is taking what.

That's how it works here; my sister just had an overnight in hospital, and got billed about $5 apiece from 500 different providers.

Now she owes $25,000, and can't figure out who to bitch at.

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You should watch the 60 Minutes from 2 weeks ago.

It describes how those without health insurance get billed sometimes 10x more by a hospital than those with.

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That should be a criminal offence. Besides, surely it would make more sense to send the higher bill to those who can actually pay (insurance companies) to people that can't.

Still, perhaps they count on those who bankrupt themselves to pay and live to subsidise those that die before they are able to pay.

Or am I off the mark here?

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Originally Posted by Busyman

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Originally Posted by j2k4

WTF?

Are you bragging?

All that means is your fuel taxes are even worse than ours.

BTW-Ours are much higher than you've been given to believe, but it's difficult to tell exactly how much because of the state, municipal and sundry other taxes on gasoline tends to dilute the focus on precisely who is taking what.

That's how it works here; my sister just had an overnight in hospital, and got billed about $5 apiece from 500 different providers.

Now she owes $25,000, and can't figure out who to bitch at.

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You should watch the 60 Minutes from 2 weeks ago.

It describes how those without health insurance get billed sometimes 10x more by a hospital than those with.

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Thanks, but I didn't need to.

I am well aware their strategy is to force bankruptcy in order to wipe their books.

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Originally Posted by Skillian

Our government taxes "clean" fuels much less than petrol, as well as taxing "cleaner" cars less too.

You seemed to give the impression that no government would ever do that.

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Not talking about your government.