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Medicare is under the knife. Again! October 5, 2017

Posted by hslu in Congress, Debt and deficit, Democracy, Obamacare, Politics, Taxes, Trump.
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Reid, Pelosi and Obama took $716 billion from Medicare in 2012 to pay for Obamacare. AARP did very little to prevent it becoming the law of the land. Now, the program is blowing up in the market place and is adding trillions to the national debt.

This time around, it’s Republican’s turn to make a deep cut, about $500 billions, to the Medicare budgets because the Republican controls all three branches of the American government. 

Source: Vox

Source: Flipboard

In addition to Medicare, Medicaid is on the chopping blocks too. Budgets for Medicaid will be cut by roughly $1 trillion. 

Source: Flipboard

To get money to pay for Republican’s tax cut, it means that something else from the federal government’s budget has to be slashed to make the tax cut legislature revenue neutral. Budgets for Medicare and Medicaid are just two of the tens, if not hundreds, of federal programs to be cut by the Republican’s tax reform.

Well, more details of the tax reform plan will come out in the next few weeks. No matter what kind of bill the House ends up with, it is a done deal because Democrat is totally out-numbered and out-maneuvered. Democrat in the Senate is hopeless to prevent this from becoming law in the Senate but several Republican senators may be able to make the damage to Medicare budget as little as possible.

We’ll just have to wait to see what happens next in the Congress. Not much we the tax payers can do now because it’s democracy.

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Making sense March 22, 2017

Posted by hslu in Debt and deficit, Taxes, Trump, US Government.
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http://www.foxnews.com/opinion/2017/03/22/john-stossel-is-trumps-budget-draconian-careless-and-counterproductive.html

I enjoy reading John Stossel’s comments and watching his TV shows.

該來的總會來 March 19, 2017

Posted by hslu in Debt and deficit, Economics, Trump.
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如果這個報導如期發生,那就糟糕了。如果你想買房子或,賣房子,趁早。

不過,這是 Goldman Sachs 的推測,不一定會實現。我倒覺得 Yellen 大媽不會貿然行事,最多她也不過是做個樣子,賣個幾十億,開個頭,讓後來的人收拾這個爛攤子。反正 The Fed 欠這麽多錢,也不是她的錯,她勇敢的開始減少QE的行動,也可以沾點光。
再說, Trump 是絕對不會把她留下來的。她明年年初是一定會收到 “You are fired” 的粉紅小單。反正她也風光夠了,下台收政府的退休金,日子好過的很。她在位的這幾年,兢兢業業,守著她從教科書上學到的理論,一步一步慢慢的走,蕭規曹隨,錯不到那裏。黑暗隧道的那一邊已經有光亮出來了。只要熬過這幾個月,成功身退,歷史留名,有什麽不好。搞個大動作,不是 Yellen 大媽的作風。

套一句 Yellen 大媽和 Bernanke 大叔最喜歡說的話來結尾吧:”預知後事如何,請聽下回分解。”

The U.S. national debt limit March 19, 2017

Posted by hslu in Debt and deficit, Economics, Taxes, US Government.
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March 16, 2017 is an important date for U.S. federal government because it can no longer borrow from the public as it has been in the past to fund its operations.

The American national debt will be frozen at its current level: about $20.1 trillion because the mandatory debt level has been reached.

But, that doesn’t mean America is out of cash to pay its bills: principal and interest on the debt, social security benefits, Medicare and Medicaid payments, salary to government workers and soldiers and payments to government contractors for F-35 stealth fighter jets, new Ford class aircraft carrier, M-4 assault rifles and M1 A3 Abrams tanks. 

However, there will be no infrastructure projects. No Trump border wall. no  tax cuts for American citizens and no tax relief for American corporates until the debt limit is raised by the Congress.

As of now, the Treasury Dept has to use extraordinary measures to keep the federal government from shutting down until about October or November 2017. By then, Congress has to raise the debt limit or the U.S. government will be in bankruptcy.

Assuming the debt limit is lifted in time, when will this borrowing end? 

Maybe America can use the threat of bankruptcy to re-negotiate with its creditors. Several optionsare available such as forcing creditors to take 60% haircut on all outstanding loans, change the term of existing loans to 100 years and modify interest rates on all loans to negative.

Alternatively, American federal government, maybe all Americans should consider this option too, should cut up every credit card it uses and start living within its means.

Is this likely in the next two decades? Not a chance unless pink pig flies.

Do you know what these federal agencies do March 17, 2017

Posted by hslu in 美國, Debt and deficit, Trump, US Government.
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If Trump gets what he wants, these 19 federal agencies will be eliminated in 2018. Have you heard of them and do you know what they do?

Here is the list of agencies which are on the chopping block and how much each of them costs American tax payers in 2017.

Source: Yahoo news.

http://finance.yahoo.com/news/trump-budget-eliminates-19-federal-220948174.html

  1. African Development Foundation; $28.2 million
  2. Appalachian Regional Commission; $120 million
  3. Chemical Safety Board; $12.4 million
  4. Corporation for National and Community Service; $1.1 billion
  5. Corporation for Public Broadcasting; $445 million
  6. Delta Regional Authority; $15.9 million
  7. Denali Commission; $19 million
  8. Institute of Museum and Library Services; $230 million
  9. Inter-American Foundation; $22.2 million
  10. U.S. Trade and Development Agency; $80.7 million
  11. Legal Services Corporation; $502.7 million
  12. National Endowment for the Arts; $149.8 million
  13. National Endowment for the Humanities; $149.8 million
  14. Neighborhood Reinvestment Corporation; $140 million
  15. Northern Border Regional Commission; $5 million
  16. Overseas Private Investment Corporation; Self-sustaining
  17. U.S. Institute of Peace; $37.9 million
  18. U.S. Interagency Council on Homelessness; $3.6 million
  19. Woodrow Wilson International Center for Scholars; $10.4 million

Total amount eliminated: $3.07 billion.

Is it enough? Hmm…. It’s less than 0.6% of the estimated federal deficit for FY 2018.

Looks like that we need to get rid of a lot more than 19.

  • FY 2016 Federal deficit: $587 billion (actual)
  • FY 2017 Federal deficit: 504 billion (estimate)
  • National debt: $19.9 trillion (estimate)

That will be the biggest deal for sure March 8, 2017

Posted by hslu in Debt and deficit, Economics, jobs.
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Higher interest rates are coming thanks to a tighter Fed.

Prime rate will be higher, mortgage interest rate will rise, U.S. dollar will strengthen and interest payment on national debt will gradually take up more of federal government’s tax revenue after FOMC’s highly anticipated move next week.

If the U.S. economy continue to pick up strength and labor force begin to tighten in the coming months, pretty soon we will see 4% handle on the long bonds. But the biggest deal will happen when the Fed begins to shrink its huge fixed income assets on its balance sheet, currently at $4,458,018 million as of March 1, 2017.

You want to buy or sell your houses before it hits the market. Otherwise, you will see a bear market on housing for as long as eye can see into the future.

Believe me, that will be no fun at all if you are facing a market with 6% to 7% mortgage interest rate.

 

若要人不知 February 15, 2017

Posted by hslu in Cold War, Debt and deficit, Economics, Election, Global Affair, Globlization, Islam, Muslim, Obama, Obamacare, Putin, Russia.
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非常簡單:除非己莫為。

Politicians always blame others first for their own mistakes which was what Trump did in this case. The way it goes around Trump these days, more leaks will definitely come out of Trump’s White House whether Trump likes them or not. 

Every reporter in Washington DC dreams of getting a “Watergate” moment in his or her reporting life. They are waiting. They have time. And they have patience.

Watch out! American government wants your money January 31, 2017

Posted by hslu in Congress, Debt and deficit, US Government.
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http://www.foxnews.com/opinion/2017/01/30/david-asman-your-social-security-checks-arent-safe-from-prying-hands-big-government.html

The big brother is doing everything they can to grab your money when you are most vulnerable and least prepared.

South China Sea or not, China and U.S. are on a collision course January 12, 2017

Posted by hslu in China, Cold War, Debt and deficit, Economics, Global Affair, Middle East, Military, Politics, Taiwan, Trump.
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‘No access’: Rex Tillerson sets collision course with Beijing in South China Sea

http://flip.it/Ru6K4W

South China Sea is merely an excuse for America to “Pivot to Asia.” 

The target of this strategic re-balance from Europe and Middle East to Pacific Rim is China. 

The objective is to maintain (or protect) the world order America built over the past 70 years and the hegemony America enjoyed since the end of WWII. 

The by product of this foreign policy initiative is a weakened China and a damaged Chinese economy.

The hidden agenda is to divert the world attentions from the total failure of America’s democratization effort in the Middle East. However, the U.S. achieved its intention to dominate the world vis a vis a retracted Middle East, a wounded Europe and a crushed Euro.

The beneficiaries are American weapon makers which have a brand new market to sell their military hardware to. They have already made a killing from many countries in the Middle East. 

The U.S. will likely use several tactics to weaken China’seconomy: sanctions, tariff, 35% tax on all imports from China, freeze of Chinese bank assets in the U.S., etc. On the political front, abandoning “one China” policy, recognizing Taiwan as a separate country, establishing formal ties with Taiwan and conducting military exercise with Taiwanese arm forces are merely first steps.

What Beijing plans to do isn’t very clear right now but China will not give in easily to words from people in Trump’s administration.

What can ordinary Chinese people do? How about stop buying everything American: from McDonald’s to Starbucks to Boeing? 

Dangerous conflicts are inevitable but direct military conflict is probably not likely for now. The Cold War against China started by Obama will be carried out by Trump and American presidents after him. In the end, the game will play out in the economic front instead of fighting it over with boots on the ground.

China has $3 trillion in foreign currency reserves. America has $20 trillion national debts and borrows $500 billion a year just to get by.

Whom do you think will be the last one standing after 20 years?

Is time to load up on gold?

Borrow till you drop January 9, 2017

Posted by hslu in China, Debt and deficit, Economics, Global Affair, Military, Putin, Russia, Taxes, US Government.
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As if the U.S. isn’t spending enough on defense, Navy wants to build 355 more ships in the next 30 years. The initiative is the result of Trump’s denand to re-build American’s arm forces to counter the threats from China and Russia.

Since Navy revealed its wish list, Army, Air Force and Marines will send in their’s too. Then there is Coast Guard and Special Ops. Every department wants a piece of the big pie.

America defense spending already accounts for ~45% of the total defense spending by every nation in the world.

But, where will the money come from; Medicare, Medicaid, ObamaCare, education or food stamps? Will the Freedom Caucus go along with this kind of reckless spending? Will Democrats play dead and let Trump have his way? No way.

U.S.national debt is already a whopping $20 trillion right before Obama’s moving vans clear 了the White House gate. With Trump in the WH, it is likely that U.S. annual deficit will explode to the upside and forcing America borrowing 0even more from its foreign credictors. But, will they? If they reduce their purchases, market interest rate of the weekly Treasury auctions will rise.

With the U.S. economy and labor market reportly poised to improve after spending the past 8 years in the out house, the Fed will be forced to raise the overnight lending rates. It will push all lending rates higher which will increase the interest payment on American’s national debt. 

In a rising rate environment, what the Fed should have done is to sell the short term Treasury notes and replace them with long term Bonds to lock in low rates before they go up. But, that’s not what the Fed is doing. As a result, interest payment on U.S. national debt will be out of control in a few years.

Empire comes and empire goes. The first sign of trouble usually shows up in too much debt. The empire of America is still sailing at pretty high speed but the load it carries gets heavier and heavier and the hole under the boat gets bigger and bigger. 

Do you get the picture now?

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