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These people in government are out of touch with reality and don't have a clue. Debt is the problem not the answer .
AMAZING this is an example of the people running this country!
Pete Stark Blows Up Over National Debt
Watch Congressman Pete Stark blow up when Jan Helfeld asks him why Stark believes, "the more we owe, the wealthier we are."
Mind Bogelling When you can't dazzle them with brilliance, baffle them with BS. Idiot Harry Reid maintains that paying income tax is voluntary in the U.S.. Harry Reid is the Majority Leader in the U.S. Sena...
America for sale....to China..... I don't know about you, I have a real problem with China buying and being in control of America and politicians thinking this is a good idea. Another sign of weakness this is bad real bad.
Hillary has just successfully persuaded China to buy some more U.S. treasury bonds.
Clinton wraps Asia trip by asking China to buy US debt
Chinese firm to build cars in Mexico China National News
Tuesday 24th February, 2009
China's Changan Auto will set up a factory in Mexico to produce 50,000 vehicles annually in partnership with Mexican firm Autopark, EFE reported.
A framework agreement has been signed in this regard and both firms are negotiating the details of the creation of a joint company, Zhong Ling, head of the Chinese firm's public relations department, said.
Zhong said the Mexican plant would produce three Changan models: the Benben mini, Zhixiang and Yuexiang sedans.
This is the sixth joint venture of the Changan group abroad and the first in Latin America. The company also has plants in the US, Ukraine, Iran, Malaysia and Vietnam.
The spokesman said the company wishes to expand its operations in North America and Europe. It also hopes to set up eight new factories abroad in the next two years. He, however, did not reveal the location of the intended plants.
In 2008, Changan exported 40,000 vehicles, and hopes to raise the figure to 200,000, in the next three years.
Changan has become the third Chinese firm willing to set up bases in Mexico. The other two firms are Geely and the state-run First Auto Works (FAW), which is likely to tie up with Mexico's Elektra group to also produce automobiles.
The FAW would invest $150 million at an automobile plant there to produce around 100,000 vehicles annually. The plant is scheduled to begin its operation in 2010.
China's fourth largest carmaker, Chery, has also announced its plan recently to open a factory in the South African capital of Johannesburg. The company has already sold 2,500 vehicles since it introduced the brand there last May. Chery also has a plant in Uruguay, EFE said Tuesday.
Construction of the Russian-built nuclear reactor in Iran is finished, and will now be tested before generating power. Officials say it is too early to speak about the launch, however.
Simulators of fuel assemblies have been loaded into the reactor on Wednesday.
The date when the Bushehr reactor will be launched depends on the adjustment and testing process, said Sergey Kirienko, the head of Russia’s state nuclear corporation Rosatom.
Russia and Iran are planning to strike a deal on nuclear fuel supply for at least ten years, Kirienko added, and the talks on establishing a joint Bushehr reactor exploitation company have started.
“It is important that the tempo of work does not decrease. We are at the final stage but it is too early to get relaxed,” Kirienko said and added that safety and accuracy is the top priority.
In accordance with the contract, during the first year after the reactor is launched, it will be exploited by the Russian staff.
Kirienko said that preparing the staff for the nuclear reactor is a job no less important than the launch itself.
Rosatom head said the training of the Iranian personnel is under way and “it is successful, but requires time.”
Meanwhile, Iran's nuclear chief says the country has increased the number of centrifuges enriching uranium to 6000, the Associated Press reports.
Vice President for Atomic Energy Gholam Reza Aghazadeh has also said Iran will continue to install more centrifuges and enrich uranium to produce nuclear fuel for future Iranian power plants.
The Bushehr nuclear power plant that cost some one billion dollars, is part of Iran's nuclear programme, which Tehran says is to provide electricity to its 70 million people, but the West views with it suspicion.
“It’s a big step forward. The Iranian people are grateful for Russia’s assistance. It helped Iran at the time when many refused,” recalls political analyst Hussein Rubuan.
However the U.S., several European countries and Israel have long doubted its peaceful intentions, questioning why the world's fourth largest oil producer would be facing energy shortages. They suspect Tehran is seeking to develop its own nuclear weapon.
The IAEA has recently fueled these fears. The UN's nuclear watchdog reported Iran has now enriched enough uranium to make a bomb.
France has urged Iran to stop uranium enrichment after the test run of the Bushehr nuclear reactor.
And Israel’s Foreign Ministry has labeled as “bad news” that final adjustments are underway at the Bushehr nuclear power plant.
Meanwhile, Russia has always stressed it opposes nuclear weapons proliferation, and emphasised the Bushehr plant has nothing to do with atomic bombs.
“Russia is supplying fuel for the station and it will be also collecting the nuclear waste. This very fuel could be used for the extraction of plutonium which is required for making nuclear weapons. But this process will be monitored by the IAEA which brings Iran's chances of using waste from this station for the production of a nuclear weapon close to nil,” explains Vladimir Sazhin from Institute of East studies.
Few countries in the world openly do business with Iran, but Russia does and that is something that has never gone down well in the West.
“By the 1990s Russia’s atomic industry was almost non-existent. The Iranian proposal was a lifeline. But no one wanted to see neither Russia’s development nor its success at international levels,” remembers Sazhin.
Analysts say the long awaited start-up of the Bushehr plant is a political and commercial victory for both Moscow and Tehran.
”When China, Indonesia and Vietnam saw that Russia is a reliable partner, they started making cooperation agreements with Moscow in the area of peaceful use of nuclear power. The U.S. was looking for the forced closure of a nuclear program in one country, in Iran, which could allow them, in the future, to reconsider the Nuclear Non-proliferation Treaty. The amendments they are pushing for are very disadvantageous for both Russia and Iran,” concludes Aleksey Fenenko from the World Energy Security Issues Institute, Moscow.
Moscow and Tehran signed a deal on the construction of the Bushehr plant back in 1995, but Iran’s nuclear development started long before.
“In the 1970s the Shah invited some Western companies to build a nuclear plant in Iran. He said the atomic industry can enrich the country and other oil-based monarchies of the Persian Gulf. But the 1979 Islamic revolution and then the Iran-Iraq war haltered the project,” says Aleksey Fenenko.
The atomic idea first floated in the seventies has finally become a reality 30 years later.
TEHRAN -- Iranian President Mahmoud Ahmadinejad presented a bill to the Majlis on Sunday calling for the investigation of international war crimes.
In January, the cabinet approved the bill calling for the prosecution of individuals charged with committing war crimes and crimes against humanity, especially against Muslim people, in any part of the world.
According to the bill, massacring people or depriving them of basic necessities and blocking the supply of humanitarian assistance with the aim of exterminating all or part of a population because they practice a particular religion or inhabit a particular region are all considered genocide and those convicted of such offenses will be sentenced to death or receive a prison sentence ranging from 15 years to life.
Displacing people, racism, rape, and other similar inhumane actions perpetrated against a civilian population on a large scale in order to carry out the policies of an organization or a government are deemed to be crimes against humanity and those convicted of such offenses will be sentenced to 10 to 20 years imprisonment, the bill states.
The bill also defines the deliberate murder of people, illegal confiscation of assets, forcing captives to fight against their own country, taking hostages, using toxic weapons, starving civilians, and recruiting children under 15 year olds for military operations as war crimes.
If the bill is approved by the Majlis and the Guardian Council and becomes a law, the Iranian Judiciary will designate some of its courts in Tehran for holding trials.
What Obama's risking in Afghanistan By JOHNBRUHNS
PRESIDENT Obama's campaign slogan was "Change we can believe in." Americans, desperate for change, gave Mr. Obama a clear victory. Now in power, he's realizing that he can't deliver that change - at least in Iraq and Afghanistan.
Obama said during his campaign: "I will meet with military leaders and the secretary of Defense and give them a new mission - bring our troops home safely and responsibly from Iraq within 16 months."
But there is now no plan to fully withdraw our troops from Iraq within that time frame. After meeting with military leaders, Mr. Obama is considering a 23-month withdrawal.
Violence in Iraq has been in decline. But the situation remains dicey. We're very likely to see a spike in violence at some point in the near future. When that happens, the new 23-month withdrawal plan will be extended.
On the Afghan front, Obama has just ordered 17,000 more troops into the effort. The timing is pertinent. The Pakistanis, our supposed allies, have agreed to a truce with the Taliban, providing them sanctuary in Swat, an area roughly the size of Delaware. The Taliban version of Muslim sharia law has been imposed, and the Pakistanis have suspended all military operations against them. The Pakistani government has denied our troops access to this area. Pakistani troops have even shot at our helicopters flying reconnaissance missions.
Al Qaeda and the Taliban have been in resurgence for years. And this concession by Pakistan will give the Taliban ample time to prepare for our new troops who'll be just walking in the door.
Why just 17,000? Because that's all we can spare due to the number of troops in Iraq and Afghanistan, and the turnaround time needed for those returning from combat.
The Afghan surge is a terribly bad idea. But Obama can initiate it because of his high approval ratings. Sound familiar? George W. Bush's ratings were quite similar before the invasion of Iraq. Imagine if Bush were still in office and pulled this stunt? The crowd I run with on the left would be screaming in protest.
Now it's just me who's screaming, waiting for the rest of the anti-war gang to voice disagreement with this certain fiasco.
Bush bet the farm on Iraq and let Afghanistan fall by the wayside. We missed our window of opportunity to defeat al Qaeda in the early years of the war and nab Bin Laden. So who are we going to be fighting? Obama needs to define the mission.
The Soviets bogged down in Afghanistan with 100,000 boots on the ground. The United States backed the Mujahedeen for Cold War reasons. After we helped the Mujahedeen defeat the Soviets, they turned on us.
Will we now rely on the Northern Alliance in a similar fashion? After all, they're an offspring of the Mujahedeen. They fought the Taliban, but their ideologies are almost identical.
And despite Obama's commitment of troops, Gen. David McKiernan, overseeing the war in Afghanistan, can't ensure success. He has emphasized the difference between the troop surge in Iraq and the one in Afghanistan, saying the Afghanistan surge won't be short-lived - we'll be there for years.
Most U.S. combat troops arriving in this first wave will be sent to southern Afghanistan, an area McKiernan describes as a stalemate, at best.
If our troops get bogged down in the Kandahar area, what will become of the rest of the country? Al Qaeda and the Taliban will surely be enticed to regain ground in other areas. All while war-weary NATO troops work on their plans to extricate themselves from the situation.
I see a dilemma. We have to do something. But 17,000 troops won't make a difference, except to cost more lives and money.
What does Afghani president Hamid Karzai have to contribute? Not a whole lot.
I'm not sure we can trust Karzai, a former member of the Mujahedeen, early supporter of the Taliban and former lobbyist for the U.S. oil company Unocal.
AFTER EIGHT years of U.S. involvement, the Afghan army and defense ministry still rely heavily on U.S. troops for most security operations.
And don't forget the extremely challenging terrain, especially in a war. The country is extremely mountainous, with limited water, with blistering summers, and frigid winters. And don't forget the borders with China, Iran, Russia and Pakistan, creating worries about regional conflict.
Americans are fed up with war. History shows that no war can be won without the support of the people. And the economy is so dire it's hard to understand why Obama would allow such an expensive military commitment.
I know the president is tasked with protecting the American people. But Mr. Obama is moving too quickly without doing his homework. *
John Bruhns is an Iraq veteran. He writes on politics and the Mideast conflict.
How the Economy Was Lost By Paul Craig Roberts
The American economy has gone away. It is not coming back until free trade myths are buried six feet under.
America’s 20th century economic success was based on two things. Free trade was not one of them. America’s economic success was based on protectionism, which was ensured by the Union victory in the Civil War, and on British indebtedness, which destroyed the British pound as world reserve currency. Following World War II, the US dollar took the role as reserve currency, a privilege that allows the US to pay its international bills in its own currency.
World War II and socialism together ensured that the US economy dominated the world at the mid 20th century. The economies of the rest of the world had been destroyed by war or were stifled by socialism.
The ascendant position of the US economy caused the US government to be relaxed about giving away American industries, such as textiles, as bribes to other countries for
cooperating with America’s cold war and foreign policies. For example, Turkey’s US textile quotas were increased in exchange for over-flight rights in the Gulf War, making lost US textile jobs an off-budget war expense.
In contrast, countries such as Japan and Germany used industrial policy to plot their comebacks. By the late 1970s, Japanese auto makers had the once dominant American auto industry on the ropes. The first economic act of the "free market" Reagan administration in 1981 was to put quotas on the import of Japanese cars in order to protect Detroit and the United Auto Workers.
Eamonn Fingleton, Pat Choate, and others have described how negligence in Washington DC aided and abetted the erosion of America’s economic position. What we didn’t give away, we let be taken from us while preaching a "free trade" doctrine at which the rest of the world scoffed.
Fortunately, our adversaries at the time, the Soviet Union and China, had unworkable economic systems that posed no threat to America’s diminishing economic prowess.
The proverbial hit the fan when Soviet, Chinese, and Indian socialism collapsed around 1990, to be followed shortly thereafter by the rise of the high speed Internet. Suddenly, American and other first world corporations discovered that a massive supply of foreign labor was available at practically free wages.
To get Wall Street analysts and shareholder advocacy groups off their backs, and to boost shareholder returns and management bonuses, American corporations began moving their production for American markets offshore. Products that were made in Peoria are now made in China.
As offshoring spread, American cities and states lost tax base, and families and communities lost jobs. The replacement jobs, such as selling the offshored products at Wal-Mart, brought home less pay.
"Free market economists" covered up the damage done to the US economy by preaching a New Economy based on services and innovation. But it wasn’t long before corporations discovered that the high speed Internet let them offshore a wide range of professional service jobs. In America, the hardest hit have been software engineers and information technology (IT) workers.
The American corporations quickly learned that by declaring "shortages" of skilled Americans, they could get from Congress H-1b work visas for lower paid foreigners with whom to replace their American work force. Many US corporations are known for forcing their US employees to train their foreign replacements in exchange for severance pay.
Chasing after shareholder return and "performance bonuses," US corporations deserted their American workforce. The consequences can be seen everywhere. The loss of tax base has threatened the municipal bonds of cities and states and reduced the wealth of individuals who purchased the bonds. The lost jobs with good pay resulted in the expansion of consumer debt in order to maintain consumption. As the offshored goods and services are brought back to America to sell, the US trade deficit has exploded to unimaginable heights, calling into question the US dollar as reserve currency and America’s ability to finance its trade deficit.
As the American economy eroded away bit by bit, "free market" ideologues produced endless reassurances that America had pulled a fast one on China, sending China dirty and grimy manufacturing jobs. Free of these "old economy" jobs, Americans were lulled with promises of riches. In place of dirty fingernails, American efforts would flow into innovation and entrepreneurship. In the meantime, the "service economy" of software and communications would provide a leg up for the work force.
Education was the answer to all challenges. This appeased the academics, and they produced no studies that would contradict the propaganda and, thus, curtail the flow of federal government and corporate grants.
The "free market" economists, who provided the propaganda and disinformation to hide the act of destroying the US economy, were well paid. And as Business Week noted
, "outsourcing’s inner circle has deep roots in GE (General Electric) and McKinsey," a consulting firm. Indeed, one of McKinsey’s main apologists for offshoring of US jobs, Diana Farrell, is now a member of Obama’s White House National Economic Council.
The pressure of jobs offshoring, together with massive imports, has destroyed the economic prospects for all Americans, except the CEOs who receive "performance" bonuses for moving American jobs offshore or giving them to H-1b work visa holders. Lowly paid offshored employees, together with H-1b visas, have curtailed employment for older and more experienced American workers. Older workers traditionally receive higher pay. However, when the determining factor is minimizing labor costs for the sake of shareholder returns and management bonuses, older workers are unaffordable. Doing a good job, providing a good service, is no longer the corporation’s function. Instead, the goal is to minimize labor costs at all cost.
Thus, "free trade" has also destroyed the employment prospects of older workers. Forced out of their careers, they seek employment as shelf stockers for Wal-Mart.
I have read endless tributes to Wal-Mart from "libertarian economists," who sing Wal-Mart’s praises for bringing low price goods, 70% of which are made in China, to the American consumer. What these "economists" do not factor into their analysis is the diminution of American family incomes and government tax base from the loss of the goods producing jobs to China. Ladders of upward mobility are being dismantled by offshoring, while California issues IOUs to pay its bills. By shifting production offshore, offshoring reduces US GDP. When the goods and services are brought back to America to be sold, they increase the trade deficit. As the trade deficit is financed by foreigners acquiring ownership of US assets, the change in ownership means that profits, dividends, capital gains, interest, rents, and tolls leave American pockets for foreign ones.
The demise of America’s productive economy left the US economy dependent on finance, in which the US remained dominant because the dollar is the reserve currency. With the departure of factories, finance went in new directions. Mortgages, which were once held in the portfolios of the issuer, were securitized. Individual mortgage debts were combined into a "security." The next step was to strip out the interest payments to the mortgages and sell them as derivatives, thus creating a third debt instrument based on the original mortgages.
In pursuit of ever more profits, financial institutions began betting on the success and failure of various debt instruments and by implication on firms. They bought and sold collateral debt swaps. A buyer pays a premium to a seller for a swap to guarantee an asset’s value. If an asset "insured" by a swap falls in value, the seller of the swap is supposed to make the owner of the swap whole. The purchaser of a swap is not required to own the asset in order to contract for a guarantee of its value. Therefore, as many people could purchase as many swaps as they wished on the same asset. Thus, the total value of the swaps greatly exceeds the value of the assets. (An excellent explanation of swaps can be found here.)
The next step is for holders of the swaps to short the asset in order to drive down its value and collect the guarantee. As the issuers of swaps were not required to reserve against them, and as there is no limit to the number of swaps, the payouts can easily exceed the net worth of the issuer.
This was the most shameful and most mindless form of speculation. Gamblers were betting hands that they could not cover. The US regulators had abandoned their posts. The American financial institutions abandoned all integrity. As a consequence, American financial institutions and rating agencies are trusted nowhere on earth.
The US government should never have used billions of taxpayers’ dollars to pay off swap bets as it did when it bailed out the insurance company AIG. This was a stunning waste of a vast sum of money. The federal government should declare all swap agreements fraudulent contracts, except for a single swap held by the owner of the asset. Simply wiping out these fraudulent contracts would remove the bulk of the vast overhang of "troubled" assets that threaten financial markets.
The billions of taxpayers’ dollars spent buying up subprime derivatives were also wasted. The government did not need to spend one dime. All government needed to do was to suspend the mark-to-market rule. This simple act would have removed the solvency threat to financial institutions by allowing them to keep the derivatives at book value until financial institutions could ascertain their true values and write them down over time.
Taxpayers, equity owners, and the credit standing of the US government are being ruined by financial shysters who are manipulating to their own advantage the government’s commitment to mark-to-market and to the "sanctity of contracts." Multi-trillion dollar "bailouts" and bank nationalization are the result of the government’s inability to respond intelligently.
Two more simple acts would have completed the rescue without costing the taxpayers one dollar: an announcement from the Federal Reserve that it will be lender of last resort to all depository institutions including money market funds, and an announcement reinstating the uptick rule.
The uptick rule was suspended or repealed a couple of years ago in order to permit hedge funds and shyster speculators to rip-off American equity owners. The rule prevented short-selling any stock that did not move up in price during the previous day. In other words, speculators could not make money at others’ expense by ganging up on a stock and short-selling it day after day.
As a former Treasury official, I am amazed that the US government, in the midst of the worst financial crises ever, is content for short-selling to drive down the asset prices that the government is trying to support. No bailout or stimulus plan has any hope until the uptick rule is reinstated.
The bald fact is that the combination of ignorance, negligence, and ideology that permitted the crisis to happen is still present and is blocking any remedy. Either the people in power in Washington and the financial community are total dimwits or they are manipulating an opportunity to redistribute wealth from taxpayers, equity owners and pension funds to the financial sector.
The Bush and Obama plans total 1.6 trillion dollars, every one of which will have to be borrowed, and no one knows from where. This huge sum will compromise the value of the US dollar, its role as reserve currency, the ability of the US government to service its debt, and the price level. These massive costs are pointless and are to no avail as not one step has been taken that would alleviate the crisis.
If we add to my simple menu of remedies a ban, punishable by instant death, for short selling any national currency, the world can be rescued from the current crisis without years of suffering, violent upheavals and, perhaps, wars.
According to its hopeful but economically ignorant proponents, globalism was supposed to balance risks across national economies and to offset downturns in one part of the world with upturns in other parts. A global portfolio was a protection against loss, claimed globalism’s purveyors. In fact, globalism has concentrated the risks, resulting in Wall Street’s greed endangering all the economies of the world. The greed of Wall Street and the negligence of the US government have wrecked the prospects of many nations. Street riots are already occurring in parts of the world. On Sunday February 22, the right-wing TV station, Fox "News," presented aprogram that predicted riots and disarray in the United States by 2014.
How long will Americans permit "their" government to rip them off for the sake of the financial interests that caused the problem? Obama’s cabinet and National Economic Council are filled with representatives of the interest groups that caused the problem. The Obama administration is not a government capable of preventing a catastrophe.
If truth be known, the "banking problem" is the least of our worries. Our economy faces two much more serious problems. One is that offshoring and H-1b visas have stopped the growth of family incomes, except, of course, for the super rich. To keep the economy going, consumers have gone deeper into debt, maxing out their credit cards and refinancing their homes and spending the equity. Consumers are now so indebted that they cannot increase their spending by taking on more debt. Thus, whether or not the banks resume lending is beside the point.
The other serious problem is the status of the US dollar as reserve currency. This status has allowed the US, now a country heavily dependent on imports just like a third world or lesser-developed country, to pay its international bills in its own currency. We are able to import $800 billion annually more than we produce, because the foreign countries from whom we import are willing to accept paper for their goods and services.
If the dollar loses its reserve currency role, foreigners will not accept dollars in exchange for real things. This event would be immensely disruptive to an economy dependent on imports for its energy, its clothes, its shoes, its manufactured products, and its advanced technology products.
If incompetence in Washington, the type of incompetence that produced the current economic crisis, destroys the dollar as reserve currency, the "unipower" will overnight become a third world country, unable to pay for its imports or to sustain its standard of living.
How long can the US government protect the dollar’s value by leasing its gold to bullion dealers who sell it, thereby holding down the gold price? Given the incompetence in Washington and on Wall Street, our best hope is that the rest of the world is even less competent and even in deeper trouble. In this event, the US dollar might survive as the least valueless of the world’s fiat currencies.
Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University. He was awarded the Legion of Honor by French President Francois Mitterrand. He is the author of Supply-Side Revolution : An Insider's Account of Policymaking in Washington; Alienation and the Soviet Economy and Meltdown: Inside the Soviet Economy, and is the co-author with Lawrence M. Stratton of The Tyranny of Good Intentions : How Prosecutors and Bureaucrats Are Trampling the Constitution in the Name of Justice. Click here for Peter Brimelow’s Forbes Magazine interview with Roberts about the recent epidemic of prosecutorial misconduct.