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The Super Committee Kicks the can again

The special Congressional committee (Super Committee) charged with the responsiblity of cutting the level of US government debt is on the verge of failure.The committee had been charged with finding $1.2tn in savings by Wednesday. But according to Reuters, that is not happening, and the 12-member committee made up of Republican and Democrat will issue a statement on Monday, saying they have been unable to reach a deal.

How did the US debt get so bad?

 The US had its debt downgraded by the ratings agencyStandard & Poor’s in August after narrowly averting a debt default. The debt problem has not gone away, though, and total US debt is expected to overtake GDP, the total amount of goods and services produced in the country, this year.

On personal debt, many people blame the period of extremely low-interest rates that followed the dotcom bubble bursting and 9/11 for creating the housing market boom, which then led to the sub-prime mortgage crisis. That was followed by the financial crisis that caused the 2008 recession.

The federal government is estimated to have spent about $1.6tn  on its response to the financial crisis, which put a big dent in the public finances. The crisis also meant that the government received less in taxes from companies and people hit by the downturn.

Fighting wars in Iraq and Afghanistan has been another big cost for the public finances in the past 10 years, estimated to have cost about $1.25tn so far. Some people also blamePresident Bush’s tax cuts for the level of debt that the US government now finds itself dealing with.

Among the most serious problems since the financial crisis has been rising unemployment, which increases the amount the government has to pay in benefits as well as reducing the tax take. Most disturbingly, there has been zero net job creation in the US since 2000.

More than half of the annual budget is mandatory spending, which would be difficult to cut. Of the discretionary spending, more than half goes on security, which is also hard to cut. Without tax rises or major economic growth, it would be hard to cut enough to get rid of the deficit.

Read more: http://www.bbc.co.uk/news/business-14760684

Newt Gingrich talks his way into trouble

Former Speaker of the House Newt Gingrich spea...

Image via Wikipedia

Former disgraced Speaker of the House, Newt Gingrich is back in the saddle after falling off his horse at the starting line. At least according to one poll (Public Policy Polling), Gingrich is actually the GOP front-runner. But this sudden surge in his popularity may not last. He was caught lying  about his involvement with mortgage giant, FREDDIE MAC.

Mr. Gingrich has been relentless in his criticism against FANNIE and FREDDIE–in public. But secretly he was a lobbyist for FREDDIE MAC.

According to Bloomberg News: “Newt Gingrich made between $1.6 million and $1.8 million in consulting fees from two contracts with mortgage company Freddie Mac, according to two people familiar with the arrangement.

The total amount is much larger than the $300,000 payment from Freddie Mac that Gingrich was asked about during a Republican presidential debate on Nov. 9 sponsored byCNBC, and more than was disclosed in the middle of congressional investigations into the housing industry collapse.

Gingrich’s business relationship with Freddie Mac spanned  eight years. When asked at the debate what he did to earn a $300,000 payment in 2006, the former speaker said he “offered them advice on precisely what they didn’t do,” and warned the company that its lending practices were “insane.” But former Freddie Mac executives who worked with Gingrich dispute that account.”

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Manny Pacquiao edges Marquez in controversial fight

The legendary Manny Pacquiao, defeated Juan Manuel Marquez, Saturday night at the MGM Grand, in a very close controversial fight.

It was the 15th straight win for Pacquiao, who earned a minimum of $22 million while improving his record to 54-3-2. Marquez, who earned $5 million, fell to 52-6-1.

This was the third bout between the two boxers. The first bout seven years ago at 125 pounds (57 kilograms) was a draw, and Pacquiao won a split decision in their second bout in 2008 at 130 pounds (59 kilograms).

“When the final bell rang, 12 rounds of furious fighting complete, Juan Manuel Marquez confidently lifted his right fist high into the air, as if he was saying: “I did it, I did it,”  turned to the ringside crowd and offered a knowing wink through an eye nearly swollen shut.

Standing in front of him at that very moment, his opponent, Manny Pacquiao, let his head sag as he turned to walk to his corner. Seconds later Marquez was carried around the ring on the shoulders of two of his corner men. Pacquiao was on his knees in prayer.

Somehow, someway, Pacquiao wound up with the majority decision, 116-112, 115-113, 114-114, a result that will be doubted and debated forever.”

Manny Pacquiao vs Juan Manuel Marquez

Image by audiovisualjunkie via Flickr

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Rick Perry’s embarrassing political debate blunder

Perry Event 2/1/2010

Image via Wikipedia

The big political story of the week was a political blunder in the CNBC debate last Wednesday night by GOP nominee hopeful, and Governor of Texas, Rick Perry. He could not remember one of the three federal agencies he would like to eliminate, if he is elected  president.

“Turning to Texas Rep. Ron Paul to boast, Perry said: “I’ll tell you: it’s three agencies of government, when I get there, that are gone: Commerce, education and, the –uh — what’s the third one there? … Commerce, education and the uh, the uh…” before being interrupted by a question. “The third agency of government I would do away with — education, the, uh, commerce, and let’s see — I can’t. The third one, I can’t. Sorry. Oops”

About 15 minutes later in the debate, Perry said he meant to say that the Department of Energy is the third agency he wanted to eliminate.

It was an embarrassing and excruciating moment for Perry, whose poor debate performances have defined his campaign. His poll numbers have declined steadily since his first debate. Critics have noted that his stamina in the two-hour-long debates seems to wane.

PERRY: I will tell you, it is three agencies of government when I get there that are gone. Commerce, Education, and the — What’s the third one there? Let’s see.

(LAUGHTER)

PAUL: Five.

PERRY: Five. Okay. Commerce, Education, and the —

[UNKNOWN]: EPA?

PERRY: EPA. There you go.

Q: Seriously — is EPA one you are talking about?

PERRY: No, sir, no, sir. We are talking about the — agencies of government — EPA needs to be rebuilt.

Q: You can’t — you can’t name the third one?

PERRY: The third agency of government I would — I would do away with Education, the —

Q: Commerce.

PERRY: Commerce and, let’s see. I can’t. The third one, I can’t. Sorry. Oops.

According to Peter Hamby of CNN, Perry showed up at the spin room after the debate and told reporters, “I’m sure glad I had my boots on because I sure stepped in it out there.”

Happy Veterans Day America

Happy Veterans Day!

History of Veterans Day

World War I – known at the time as “The Great War” – officially ended when the Treaty of Versailles was signed on June 28, 1919, in the Palace of Versailles outside the town of Versailles, France. However, fighting ceased seven months earlier when an armistice, or temporary cessation of hostilities, between the Allied nations and Germany went into effect on the eleventh hour of the eleventh day of the eleventh month. For that reason, November 11, 1918, is generally regarded as the end of “the war to end all wars.”

Soldiers of the 353rd Infantry near a church at Stenay, Meuse in France.

Soldiers of the 353rd Infantry near a church at Stenay, Meuse in France, wait for the end of hostilities.  This photo was taken at 10:58 a.m., on November 11, 1918, two minutes before the armistice ending World War I went into effect

Read more here: http://www.va.gov/opa/vetsday/vetdayhistory.asp