The Chinese government, the biggest buyer of U.S. debt, expressed concern about American deficits and its impact on U.S. Treasury obligations – a budget that will raise the national deficit to nearly $2 trillion dollars. That’s $2,000,000,000,000.
Bernanke views this intervention strategy as critical and necessary to avert a deeper downturn. But as you know, spending money you don’t have can come with it some dire consequences.
This economic jump start strategy of spending America out of this downturn will need to be repaid one day, hopefully from economic growth and fiscal restraint. But deficits generally spawn higher inflation, higher interest rates and a weaker economy.
Posted in Industry, Interest Rates, Savings
Tagged bernanke, budget, chairman, china, Debt, deficit, economy, fed, federal reserve, government, inflation, interest rate, treasury
I’m not sure if any of you had the pleasure of watching Pete Peterson on CNN this weekend (IOUSA), but his insights were quite astounding.
The special program on the United States federal debt and deficit included noted investor Warren Buffett, former Federal Reserve Chairmen Alan Greenspan and Paul Volcker, former U.S. Treasury Secretaries Paul O’Neill and Robert Rubin, Dave Walker, President and CEO of the Peter G. Peterson Foundation and former U.S. Comptroller General; Alice Rivlin, noted economist and former Director of the Office of Management and Budget; and Concord Coalition Executive Director Bob Bixby.
Peterson noted that overspending still dominates the lives of U.S. citizens. Americans save less than 1 percent, the lowest of any developed country. The Chinese save 35 percent of what they earn. Singapore, Chile and Australia, he notes, have mandatory savings – outside of government control.
He concludes that there should be stronger incentives to save, because without savings America has no future.
watch an abridged version here: IOUSA
Posted in Industry
Tagged Alan Greenspan, Alice Rivlin, Bob Bixby, cnn, Concord Coalition, Dave Walker, Debt, federal reserve, iousa, Paul O’Neill, Paul Volcker, Peter G. Peterson, Robert Rubin, savings defecit, Treasury Secretary, Warren Buffett
That is the message Credit Canada, a Toronto-area non-profit credit counselling service and association established in 1966, is trumpeting with their recent marketing blitz.
Geared toward consumers in advance of the holiday shopping season and given the current economic crisis, Laurie Campbell, executive director of Credit Canada, estimates the budget for the TV part of the campaign at about $250,000. I guess we can assume this was paid for with briefcases full of cash?
In the 30-second spot “Eviction Notice,” a woman embarking on an extensive shopping spree returns home to find she’s evicted.
For much of its existence, Credit Canada has relied primarily on transit and out-of-home advertising. This is their first foray into TV advertising.
According to Campbell, web traffic on CreditCanada.com has increased by between 75% and 100%, while bookings with the agency have increased by about 30% since the spot debuted on Oct. 20.
The TV commercial, which completed a month-long flight in October (the plan calls for another flight in January), is augmented by transit ads showing people carrying shopping bags bearing phrases like “I just won’t eat for a week,” “It’s not my fault. My parents weren’t that good with money either” and “Oops! I did it again.”
Credit Canada estimates that Canadians are currently $1.3 trillion in debt (including mortgages), a figure almost twice as high as the country’s GNP, with the average Canadian household about $80,000 in debt.
Many Canadians will face a financial crisis at some time. Many debt problems are easy to solve. Others need professional assistance. The best way to deal with your financial problems is to admit them and get control before they get out of hand.
This is why The Office of the Superintendent of Bankruptcy Canada, an Agency of Industry Canada created “Dealing with Debt: A Consumer’s Guide” to help you decide whether or not you have a serious debt problem. It also gives some suggestions for solving your difficulties and avoiding them in the future.
Refraining from purchasing another cute, but unnecessary pair of stilettos (especially given winter is coming)… Zero dollars
Eating at home this Saturday night instead of going out… $13.53
Paying off your credit card balance in full… $617.44
Getting out of Debt… Priceless
Ministers used to denounce credit cards from the pulpit.
According to Kathleen Keest of the Center for Responsible Lending, debt has grown from 80% of disposable income in the early 1980s to over 133% today. What happened?
Dean Starkman of The Columbia Journalism Review attributes it to the fact that the credit card industry “has shifted from a lending and underwriting paradigm to a sales paradigm; penalties, fees and default interest rates that were illegal a generation ago are no longer regrettable outcomes to be avoided but central to the business model.”
The bottom line – you’re not alone. The credit card companies are so intent in growing their profits on a quarterly basis that they keep scheming new ways to keep you in debt.
Together we can fight back, and the time is now. By decreasing our credit card balances, we will not only save money, but also stick it to them where it really hurts. Their wallets!