The House of Representatives have passed a request from President Obama to increase the amount if days he has to spend money. In attempt to make a deal with the Senate so they pass a budget resolution, which is something they haven’t done in 4 years. But many of the Democrats are still not happy. With new fiscal battles over automatic spending cuts and the expiration of the debt ceiling on March 27th looming round the corner. They are calling for the Republicans to stop creating problem after problem where they will always do a deal in return for spending cuts. They also believe that this ‘strategy’ of the Republican’s is becoming too predictable.
So, Obama has got his own way again. A rise in the days he has left to build up the nation’s debt statue. I don’t think he realizes that he is creating a massive burden for the next generation of America to carry on their shoulders for the rest of their lives. He is also increasing the amount of spending cuts the Republicans will ask him to make to reduce the Deficit figure. Whereas the Republicans are not helping the Democrats much by making them argue out a law for ages meaning that they are resultantly being distracted from the real issues they are facing when they can’t solve them anyway. And when the Democrats do hit the debt ceiling, they will just sit back and let the Democrats take the blame while the public do not realize that they have been making it a hard time for the Democrats.
Still, this is not an excuse for President Obama to carry on ducking out of the problems he faces in his Government. Because eventually he will not be able to go crying to the House to pass a quick fix to massive problems and kicking the can down the alley, because eventually that alleyway will lead to a dead end with no way out for America.
I think that the Republicans need to stop making it hard for the Democrats by not refusing to pass laws for silly reasons and stopping holding them up to decrease the amount of time they have solve problems. My advice for the Democrats is to ask the Republicans for a raise in the Debt Ceiling for 6 months in return for sharp spending cuts and higher taxes on the richest Americans who can afford to pay higher taxes. They also need to increase tax on capital to equal with the tax on income, so that rich Americans cannot escape tax by turning their income into capital. Yes this will make the US economy shrink drastically, but the point is. They will effectively dig up the unstable foundations that America’s economy is built on and build new stable ones where the whole economy is supported by genuine money rather than borrowed money which they cannot afford to pay for. Of course Barack Obama will not do this because he is too scared to face the real problems America has and is too worried about the economic growth of America.
Last Friday night I watched the Sky News Special Born Bankrupt; an insight into the British Economy and the potential future of mine and generations to come. I was stunned at some of the statistics highlighted in the programme.
Britain currently has 1 trillion pounds of national debt which means that if you lined up the National Debt in stacks of 20 pound notes laid side by side from the centre of London, it would reach Dubai. A staggering statistic which can only get worse as the decade goes on. Also, Government spending has increased UK National Debt by 350 billion pounds since the turn of the century. As the debt rises, the bill only gets worse for my generation. Politicians should stop making massive unfunded promises to the public and only promise something when Britain can actually afford it.
Now we turn to the current young generation of voters. University fees have risen to 9,000 pounds a year and average student debt at around 53,000 pounds will take 30 years to pay off. The average first time buyer of a house has risen to 37 years old and with house prices at 10x the amount they were 30 years ago these statistics can only change for the worse. For every child born today, they will leave hospital with 17,000 pounds of inherited National Debt accumulated and spent by previous generations – which is frankly sad. It is safe to say my generation are losing hope.
We know look at the other end of the line. The baby boom generation which on many levels has stolen the future of young people like me, they have lived life to the full, sucking up all of the money from the economy and not investing anything back into it. They are the people who have stolen my future. The people whose bills I will be paying in a few years’ time, and of course their massive pensions and healthcare in their elderly age. These people know what they have done, they know they have stolen the futures of their grandchildren but will not admit it. They need to take a long and hard look at their past and the present young generation whose lives will not be as enjoyable because of their greed.
In the end, when my generation comes to vote, the baby boom generation will eventually be outvoted and my generation I assure you will not vote to pay for healthcare when the baby boom generation needs it most. Simply because we won’t be able to afford it, so in the end it will come back to bite them when they are at their most vulnerable.
Over the last few weeks I have been in Portugal; One of the worst hit countries in the European Economic Crisis. I travelled around the country from Porto to Lisbon and villages in between me and my family were shocked at what we found there.
So, first we visited the Portuguese wine capital, Porto. The city has 4 bridges all within 1 km of each other which were all funded by the European Union. This is the way that the European Union covers itself, by building bridges that nobody really needs and says that it is helping the country’s economy. Meanwhile, alongside the shiny new bridges stand derelict houses, boarded up businesses and people living in what appear to be garden sheds. The real economy is non-existent and the EU funded economy is the only game in town. It can’t go on. If the EU thinks they are helping the country by forcing them to stay in the Euro Zone, I’m afraid that they are sadly mistaken. What Portugal needs is to leave the Euro, default on its debts and chop its over bureaucratic Government dominated economy down to something the country can truly afford.
And now to Lisbon, the country’s capital city. We saw practically the same thing (with the exception of 4 bridges in the city). Derelict buildings and bankrupt shops but a thin veneer of prosperity with cafes and restaurants apparently busy. Here EU money flows freely through Government hands into civil servant and ministers salaries and lavish Government buildings in the most expensive parts of town. No one with an ordinary job in the Portuguese economy can really afford to live there – only people with an EU funded job.
If you want to see what the real state of the EU is and how the future will look just go and look at the derelict buildings and the boarded up businesses of Portugal, a fantastic country with no hope for the future unless its politicians have the guts to face facts and stop the ever increasing dependency on the EU and Euro Zone.
After all the hype this week over the Greek elections finally the results have been finalized. New Democracy, the pro-bailout party has won with a 29.5% share of the votes; which was closely followed by Syriza with a 27.1% share of the votes. This result means that no party has won an overall majority, so New Democracy will have to try within the next few days to form a coalition with any of the other parties. They are running into some difficulty though.
Pasok has said that it will not enter a coalition unless Syriza are involved but Syriza has rejected the coalition request with New Democracy. So, in essence the Greeks are no better off than they were before the election rerun. So you’re sitting there wondering how this affects the younger generation of voters. Well, more young people showed their interest in Syriza in the result turnout while older voters showed interest in New Democracy. The reason that this is interesting is because the Syriza leader is a young politician so the young people favoured him while the New Democracy candidate is much older and more prominent in Greek politics so he was favoured by older voters as well as the fact of leaving the Euro scared them into voting for the older candidate.
The Greeks have until Thursday to form some sort of agreement or Syriza will have its chance to attempt at forming one. Leaving the Euro or staying in it but cutting austerity is a very tough decision right now so comment on what you think in the comments section below.
Today Chairman of the Federal Reserve, Ben Bernanke has delivered testimony to a congressional panel at Capitol Hill. The financial market was well into its third consecutive rally in hope of more quantitative easing, but began to pare sharply on its gains as Bernanke delivered his speech to the congressional panel.
During his testimonial speech at Capitol Hill, Bernanke mentioned that the Federal Reserve was ready to act if stresses in Europe start to ascend, these were his words. “The situation in Europe poses significant risks to the U.S. financial system and economy and must be monitored closely.” This statement sounds like Bernanke is very worried about Europe and spells out to me a weakness in Bernanke’s speech, as the U.S. sells many products to Europe and if the European Crisis carries on, the U.S. economy will slow down considerably.
Bernanke also mentioned quantitative easing after being questioned about the subject by a Senator; he very much left the door open on this subject, leaving himself some wriggle room if things took a turn for the worst. Though few investors expected him to show all of his cards on this subject until the Fed meets again on June 19-20.
Feel free to leave comments on this story in the comments section below.
After all the drama yesterday where Spain was adamant that it would not be in need of a bailout. It has finally admitted that it will need a bailout from Europe. This morning there was a G7 emergency meeting about the Eurozone crisis.
At the open of the European Markets, the Spanish banks were up, in hope of a bailout. Now their anticipation has payed off and a massive rally in their stocks has occurred. This proves to me that the Spanish were already hoping for a bailout yesterday and were trying to keep it quiet that they wanted one. First they went to the ECB, then they went to the Germans with high hopes, but both rejected them; so the Spanish had to admit to the world that they were looking for a bailout.
As for the G7 meeting, it will be the same outcome with no solution, like every other meeting or summit over the years. Please feel free to post your views on this story in the comments section.
Today, following the crisis with Spain’s fourth largest bank Bankia, the Spanish have called for Bank Aid from the Germans, after the ECB rejected their reguested bailout. Pressure is building on Angela Merkel to make a decision on whether she will proceed with the requested “aid”. As the markets expect Spain’s finance sector to plummet, more pressure is building in Europe.
I feel that in Europe at the moment; too many countries are relying on Germany to provide a bailout for their banks. Germany is effectively juggling Cyprus, Greece and Spain at the moment, and Angela Merkel’s decisions will affect their already falling economies.
I do not see why the Spanish think they will get bailed out by the Germans when they have already been rejected by the ECB. I guess we will find out in the next few days, feel free to post your views on this story in the comments section below.