U.S. ECONOMY: U.S. Should 'Live Within Its Means' - China!

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August 6, 2011 7:45 AM / thedailybeast.com.

China, the largest foreign holder of U.S. federal debt, took to its official news outlet to criticize the United State's financial management following the S&P downgrade.

The U.S. needs to “cure its addiction to debts,” said a commentary in the New China News Agency. 

It also called for “substantial” cuts to the “gigantic military expenditure and bloated social welfare costs” in order to prevent future downgrade.

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U.S. DEBT CRISIS: Debt Plan Clears Senate, Goes to Obama!

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BY COREY BOLES, MICHAEL R. CRITTENDEN AND KRISTINA PETERSON / http://online.wsj.com.

WASHINGTON—The Senate voted 74-26 Tuesday to approve sweeping legislation to raise the country's $14.29 trillion debt ceiling and cut the budget deficit by at least $2.1 trillion over the next decade, a major victory for Republicans who have long battled to shrink the size of the U.S. government.

With the vote, the Senate concluded an intense political fight that dominated the agenda of the president, senior congressional leaders, and Washington lobbyists for weeks.

Republican lawmakers who were opposed to the bill said it didn't do enough to tackle federal deficits, while the Democrats who voted no decried the package for ...

Courtesy: http://online.wsj.com/article

U.S. DEBT CRISIS: Putin says U.S. is "parasite" on global economy!

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By Maria Tsvetkova, LAKE SELIGER, Russia / Mon Aug 1, 2011 5:45pm EDT / reuters.com.

Russian Prime Minister Vladimir Putin answers questions from the audience during his visit to the summer camp of the pro-Kremlin youth group ''Nashi'' at lake Seliger, some 400km (248miles) north of Moscow, August 1, 2011.

Credit: Reuters/Mikhail Metzel/Pool.

(Reuters) - Russian Prime Minister Vladimir Putin accused the United States Monday of living beyond its means "like a parasite" on the global economy and said dollar dominance was a threat to the financial markets.

"They are living beyond their means and shifting a part of the weight of their problems to the world economy," Putin told the pro-Kremlin youth group Nashi while touring its lakeside summer camp some five hours drive north of Moscow.

"They are living like parasites off the global economy and their monopoly of the dollar," Putin said at the open-air meeting with admiring young Russians in what looked like early campaigning before parliamentary and presidential polls.

US President Barack Obama earlier announced a last-ditch deal to cut about $2.4 trillion from the U.S. deficit over a decade, avoid a crushing debt default and stave off the risk that the nation's AAA credit rating would be downgraded.

The deal initially soothed anxieties and led Russian stocks to jump to three-month highs, but jitters remained over the possibility of a credit downgrade.

"Thank god," Putin said, "that they had enough common sense and responsibility to make a balanced decision."

But Putin, who has often criticized the United States' foreign exchange policy, noted that Russia holds a large amount of U.S. bonds and treasuries.

"If over there (in America) there is a systemic malfunction,

this will affect everyone," Putin told the young Russians.

"Countries like Russia and China hold a significant part of their reserves in American securities ... There should be other reserve currencies."

U.S.-Russian ties soured during Putin's 2000-2008 presidency but have warmed significantly since his protégé and successor President Dmitry Medvedev responded to Obama's stated desire for a "reset" in bilateral relations.

EARLY CAMPAIGNING?

Casually dressed in khaki trousers and a striped white shirt, Putin flew by helicopter to the tented camp as part of a string of appearances that are being closely watched in the run-up to the elections.

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U.S.DEBT CRISIS: U.S. House approves debt ceiling bill

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PTI / The Hindu / WASHINGTON, August 2, 2011.

House Majority Leader Eric Cantor leaves the House chamber after the House of Representatives passed the emergency legislation to avoid a government default a day before the deadline in Washington on Monday - AP.

The U.S. House of Representatives passed the bipartisan bill to avert a massive debt default and reduce trillions in government spending, paving way for the austerity measure to face a Senate vote.

The Budget Control Act of 2011 was passed by the House of Representatives by 269-161, a day after leaders of both the Republican and Democratic parties and the White House reached an agreement. The voting in the House was marked by the dramatic appearance of Congresswoman, Gabrielle Giffords, who survived an assassination attempt in January.

Ms. Giffords voted yes for the bill, receiving a standing ovation from her colleagues in the House.

The bill is scheduled to be voted by the Senate tomorrow.

Once passed by the Senate, it would go to the White House for U.S. President Barack Obama to sign into law, which would prevent the government from defaulting on its debt.

The measure seeks to raise the debt ceiling from $ 14.3 trillion and cut deficit by $ 2.4 trillion over 10 years.

Following the vote, the House of Representatives went into the long summer recess and is slated to resume again in the first week of September.

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U.S. DEBT CRISIS: Framework for budget deal struck in the U.S.!

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Carl Hulse & Helene Cooper, The Hindu / WASHINGTON, August 1, 2011.

BACK FROM THE BRINK: U.S. President Barack Obama after making a statement on the debt crisis at the White House in Washington - AP.

“I think it’s important as a party to show Americans that we're serious about deficit reduction,” says a Obama administration official.

U.S. President Barack Obama and congressional leaders of the Republican Party and the Democratic Party late on Sunday (local time) agreed to a framework for a budget deal that would cut trillions of dollars in federal spending over the next decade and clear the way for an increase in the government's borrowing limit.

With the fragile economy poised precariously and financial markets watching closely, the leaders said they would present the compromise to their caucuses on Monday, hoping to enact it before a Tuesday deadline to avert default.

Even as the President was speaking from the White House on Sunday night, Speaker John A. Boehner was on a conference call with House Republicans, trying to sell them on the proposal he had signed off on only minutes before.

Since he is likely to lose the most conservative elements of the caucus, Mr. Boehner faces the task of framing the pact as friendly enough to Republican principles to win over a significant group of his rank-and-file without alienating Democrats who he will need to push it over the top.

Mr. Obama, in a hurriedly called appearance with the media that ended a day of uncertainty, said the compromise would “allow us to avoid default and end the crisis that Washington imposed on the rest of America.”

“It ensures also that we will not face this same kind of crisis again in six months, or eight months, or 12 months,” he said. “And it will begin to lift the cloud of debt and the cloud of uncertainty that hangs over our economy.”

Just before Mr. Obama spoke on television, Harry Reid and Mitch McConnell, the two Senate leaders, took the floor to endorse the pact as well. “I'm relieved to say that leaders from both parties have come together for the sake of our economy to reach a historic, bipartisan compromise that ends this dangerous standoff,” said Mr. Reid, the majority leader.

The tentative agreement calls for at least $2.4 trillion in spending cuts over 10 years, a new congressional committee to recommend a deficit-reduction proposal by Thanksgiving (November 24), and a two-step increase in the debt ceiling.

The announcement ended a tumultuous 24 hours that saw hopes rising on Saturday night over the prospects of a deal that might have concluded the budget stalemate. By Sunday, worry set in again as lawmakers and White House officials struggled to hammer out the fine points of an agreement that must clear a Senate controlled by Democrats as well as by the Republican House.

If the deal clears Congress, with its new special joint committee to explore deficit reduction, it will ensure that the size and scope of the federal government and the tension between spending and taxes will remain front and centre in the Washington debate headed into the 2012 election.

Markets up

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U.S. CRISIS: House rejects Senate Democrats’ debt-limit Bill

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AP / The Hindu / WASHINGTON, July 31, 2011.

Senate Majority Leader Harry Reid speaks during a news conference on debt-ceiling legislation on Capitol Hill on Saturday, in Washington - AP.

The Republican-led House on Saturday rejected a Senate Democratic Bill to raise the nation’s debt limit just three days before the deadline to avert a first-ever default on U.S. financial obligations. President Barack Obama and legislators remained at an impasse on any possible compromise.

With tensions high at a rare weekend session, the legislation failed on a 246-173 House vote that was largely symbolic. The Senate has yet to vote on the Bill.

Saturday’s result, however, could pave the way for negotiations on a compromise with Tuesday’s deadline on the government’s ability to pay its bills fast approaching.

Shortly after the House vote, Mr. Obama stepped back into the debt-ceiling talks, calling Congress’ top two Democrats, Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, to the White House for a meeting on Saturday afternoon.

Top congressional leaders and the White House now have little time to work out a deal that can pass both chambers of Congress and be signed by Mr. Obama before a Tuesday deadline to avoid default.

Both the House and Senate debated through the afternoon in unusual weekend sessions at the Capitol as tourists sampled the sights on the National Mall outside. The temperature rose to the 90°F (mid-30°C) on a sunny day.

Tuesday is when the government says it will run out of money to meet its financial obligations. It needs Congress to approve an increase in its borrowing authority, known as the debt ceiling. Past increases have been routine, but Republicans, citing the giant U.S. deficit, have demanded huge spending cuts as a condition for approving the increase.

“There is very little time” Mr. Obama said on Saturday in his weekly radio and Internet address. He called for an end to political gamesmanship, saying “the time for compromise on behalf of the American people is now.”

Setting the stage for the high-stakes weekend, Senate Democrats late Friday killed a House-passed debt-limit increase and budget-cutting Bill less than two hours after it squeaked through the House of Representatives. Senate Majority Leader Harry Reid set up a test procedural vote for the wee hours of Sunday morning on his own legislation.

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U.S. hits $14.3-trillion debt ceiling!

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The U.S. government hit its $14.3-trillion debt ceiling on Monday, triggering a series of “extraordinary measures” to stave off a default while politicians argue over raising the borrowing limit.

Treasury Secretary Tim Geithner announced he was suspending payments into two federal pension funds, after the government reached its maximum legal borrowing limit. Mr. Geithner said the suspension should allow the U.S. to avoid a default before August 2 and urged Congress to agree to raise the debt ceiling before this 11-week deadline expires.

“I have written to Congress on previous occasions regarding the importance of timely action to increase the debt limit in order to protect the full faith and credit of the United States and avoid catastrophic economic consequences for citizens,” said Mr. Geithner in a letter to Congress. “I again urge Congress to act to increase the statutory debt limit as soon as possible.” Under Mr. Geithner's plan, the U.S. government will temporarily stop payments into the civil service retirement and disability fund and cut payments into the federal employees retirement system. Both funds provide retirement benefits to federal employees.

Mr. Geithner pledged to repay the lost funds once Congress has approved a higher debt ceiling. But there has been little progress in recent weeks over this issue.

Under the circumstances, US Administration should conserve every dollar of its tax payers money and ensure while the 'war on terror' along with war against job-losses and stagnant economic growth should continue, not one dollar of its foreign aid is spent on sheltering, arming, training and exporting terror.

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