2011 will have record deficit of $1.5 trillion

As President Obama indicated in his State of the Union address last night before Congress, the United States is dealing with the weight of horrible recession with skyrocketing deficits and there is the need to find a rational solution to deal with our escalating mountain of debt.

Today, the Congressional Budget Office reported that they are anticipating a budget shortfall by $1.5 trillion for 2011, making it the largest deficit in our country's history, and representing 9.8% of our gross domestic product. To make matters worse, the bickering that has been contentious between both political parties, has done little to find any form of compromise between tax cuts and federal spending cuts.

Republicans want to repeal Obama's controversial Health Care Reform law, which the CBO insists would only add $230 billion to the nation's deficit by 2021, and Democrats want to raise taxes, which are not favorable among many Americans.

Thus far however, President Obama and Congress have achieved some success on government spending. The President proposed $78 billion to be cut from the Military Defense over the course of the next five years. That would explain why the three Generals sitting in the front row of the State of the Union address last night were not smiling.

In addition to this, one has to consider that even cutting staff in government departments will just add to more unemployment. If a government worker looses their job, this is just one more person unemployed in this country, even though it is no secret that government workers get outrageous salaries and pension funds paid for kindly with tax payer money.

Either way you look at this, there is no easy way out of our nation's escalating financial problems. As one former budget adviser to President Reagan put it: "The United States has reached the point of no return"

Indeed, we have. 

U.S. and China not getting along these days

In case anyone didn't notice, this Wednesday's side show dinner with President Obama and Chinese President Hu, was just that...  a show for the American people. I'm sure that the objective of this little get together between the two leaders was to discuss international relations, the economy and of course, China's support of North Korea.

Well the show has been over for a day now, and it has become clear to just about everyone that the United States and China are not getting along.

For one, China (or as Glenn Beck refers to as our landlord) owns our staggering $14 trillion debt. Treasury Secretary Tim Geithner is begging Congress to raise the debt ceiling limits because he believes if they don't, our economy will dwindle back down into a much worse recession than in 2008. So if the Republican controlled House is going to raise the debt limits, which they vowed never to do, this means Geithner is most likely going to have to go back to China and beg for more money.

Last year, the United States tried unsuccessfully to convince China to revalue its currency, so that jobs would be imported back here. Now, the United States is trying to teach China a lesson (as embarrassing as that sounds, they're only years ahead of us) by putting tariffs on China's exports, which were passed by the House back in September.

Then you have North Korea. Its most generous supporter is of course, China. Ever since North Korea fired artillery on South Korea, China has done little to convince peace talks between the two countries. The United States today said that it will redeploy forces to Asia, if China continue to fail on getting a hold on North Korea's rather rebellious acts as of late.

The United States of course strongly believes North Korea could be a major threat if nothing is done.

So because of a crumbling economy, revaluing currency and dealing with some 4 foot dictator, these are the reasons why China and the United States can't get along lately, and yet both countries think that playing these games will solve our problems.

Thank god that's why we have the Pacific Ocean that separates one from the other. But if we don't meet our debt obligations, I guess China could move in here at any time.

President Obama and Republican Congressional Leaders meet

As the Earmark Ban failed in the Senate today, Republican Congressional leaders met with President Obama to try and resolve differences over the Bush era tax cuts. Both the President and Republicans called the meeting 'very productive'. Maybe the President is trying to make an effort?

While Republican Senate Minority Leader Mitch McConnell specifically stated that they were against any tax increases from when the rates were established in 2001 and 2003 which were set to expire at the end of this year, President Obama went on to say that he would oppose any permanent extension of tax cuts to individuals making more than $200,000, and $250,000 for couples.

While it should be somewhat of a good compliment to President Obama that he is working with Republicans, and even announced yesterday a freeze on pay to Federal Government workers who earn ridiculous salaries and pension funds, Republicans in the House seem to be tied with working on solutions in the coming year ahead, while trying to find a compromise in the Democratic controlled Senate.

Many Republicans would like to see the controversial Health Care Law that was shoved down the throats of every single American repealed, but don't beat on that. Democrats in the Senate have already made their decision on that and are standing firm, not to mention having it vetoed by President Obama, and it is unlikely that Congress would get a 2/3 majority vote to over-ride the President's power.

But obviously, the Health Care Law and future taxes will start coming into fruition and will need to be discussed extensively in Congress, not to mention trillions of dollars in unfunded liabilities including Social Security and Medicare, and let's not forget about our $14 trillion and growing national debt that everyone is also suppose to pay back (at least that is what our Federal Government expects us to do, even though it will never be repaid).

Where is all of this money going to come from?

People are sick and tired of being taxed to death in this country, but somewhere along the line, they'll have to find the money, won't they?