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The Closing Bell

The Closing Bell

Debt Ceiling 101

We’re looking ahead to some critical economic issues facing the country. Christen Simeral and Veronica Beebe of The American Prospect explain what the debt ceiling is and why the debate over raising it is shaping up to be the political battle of the year.

In short, the debt ceiling is the maximum amount the government can borrow. The debt ceiling is currently $14.294 trillion. At the current rate of spending, we’re due to hit the wall around May 16, if Congress doesn’t vote to raise it. Usually, raising the debt ceiling is a formality. Congress has voted to raise the debt ceiling 10 times in the last 10 years.

If the debt ceiling isn’t raised, the government can’t take on any new spending commitments. Worse still, the government may not have the cash it needs to pay tax refunds, Social Security payments, and other critical disbursements. Failing to raise the debt ceiling would hurt the U.S.’s credibility in global markets, making it more expensive for us to borrow money in the future.

The war on unions

All across the country, right wingers are trying to turn union workers into scapegoats for the nation’s economic woes.

Right wing media baron Andrew Breitbart tried to frame some labor history instructors at the university of Missouri by deceptively splicing together hours of classroom footage to make it look like the professors were advocating violence and sabotage, Dave Gilson of Mother Jones reports. The unedited video shows that the instructors are discussing the bloody history of the American labor movement, in which violence has overwhelmingly been perpetrated by management against workers.

NAFTA reprise

Multinational corporations are renewing their lobbying push for more NAFTA-like trade deals, Michelle Chen reports for Colorlines.com:

The construction giant Caterpillar is reportedly planning to treat its workers to steaming cups of Colombian coffee in the coming weeks, to warm them to the benefits of doing business with their “partners” in Latin America. While employees enjoy their break, lobbyists will be working hard, in their name, to peddle so-called “open markets” in Colombia, Panama and South Korea.

Chen reports that lobbyists for multinationals are besieging Congress to push for three new accords. The Panama deal is expected to be first on the agenda. Advocates for fair trade have been fighting these deals since the George W. Bush administration.

The push for deregulated international trade is on at the state level, too. The conservative American Legislative Exchange Council (ALEC) is handing out boilerplate resolutions to state representatives urging Congress to approve the trade deals. Chen notes that the Koch Foundation is among the major backers of ALEC.

High gas prices

Gas prices have long been seen as a bellweather of the electorate’s state of mind. When gas is cheap, incumbents rest a little easier. When gas prices rise, challengers start licking their chops. Daniel J. Weiss and Valeri Vasquez report in Campus Progress that rising gas prices are frustrating consumers and enriching speculators:

This year “it’s like déjà vu all over again.” Oil prices are rising to heights not seen since 2008. Oil rose from $85 per barrel to $112 per barrel in a little more than two months — a whopping one-third leap. Gasoline prices have followed along, rising by 70 cents per gallon — or 23 percent — during this same time. As our economy struggles to recover from the Great Recession, Americans are again forced to pinch pennies to afford their commute to work, school, and worship. Meanwhile, oil companies prepare to reap record profits in the first quarter of 2011.

The authors note this combination of rising pump prices and soaring corporate profits looks an awful lot like the oil shock of 2008, which helped push the economy into recession.

Archives from The Weekly Audit can be found here and will remain posted at this site. 

 

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Photo from MoneyBlogNewz via flickr
By Lindsay Beyerstein, Media Consortium blogger

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17 comments

+ add your own
9:24PM PDT on May 4, 2011

Time to get rid of NAFTA / CAFTA type of deals. Bring back tariffs, which did very well by this country for almost 200 years.

I can't believe Caterpillar is treating its workers to Columbian coffee to try to soften them up to the idea of Latin American "business partners". HA HA HA HA it would be funny if it wasn't so disgusting.

That tells you all you need to know about the contempt these multi-national corporations, their lobbyists and their toadies in Congress have for workers - for a $2 cup of coffee, they want to convince workers to support trade agreements that ultimately could lose them their jobs, and certainly will cause their wages and benefits to go down. Too bad there won't be anyone speaking the truth to counteract the propaganda that day - just free coffee at the plant, and slick lobbyists on Capitol Hill.

1:07PM PDT on May 4, 2011

Get a grip people if the GOP was worried about spending they sure as hell did'nt worry about it when they were spending this country into bankruptcy under G..W. Bush. Two unfunded wars, a prescription drug program for seniors, three unpaid for tax cuts for the rich. The GOP is nothing but a front for big spenders like the Koch brothers. Enough said.

12:00PM PDT on May 4, 2011

Chinese economy is already overtaking the American. i wont be surprised if the new seat of power is in the East.

If America continues the war for a couple more years, some believe it may be brought to its knees.

10:59AM PDT on May 4, 2011

Get rid of the Federal Reserve and free our children from the shackles of wage slavery!

9:46AM PDT on May 4, 2011

Debt ceiling raised 10 times in 10 years ... ENOUGH ALREADY!

8:19AM PDT on May 4, 2011

You guys need to realize this is how our government always works. They are not going to run out of money, all the government offices are not going to explode or shut you out and the republicans are playing you by using this because they know most people don't understand. If your worried about the government closing doors on you then worry about that possibility if the republican/t party get their way and sell much of your government out for private contracting. Go try and complain or get your business done when you have no voice at all and all the decisions are made in private boardrooms with no public opinion needed. That is where they are going with this and you need to see it though the lies.

Industry does not care what happens to you but believe it or not many in congress do.

8:05AM PDT on May 4, 2011

It just seems inappropriate to be raising our debt ceiling at the same time our country is being destroyed by spending and debt. Making interest payments does NOT benefit the US Citizen. Is this insane?! Why can't our government stop spending money? I'm not anti-government, but I think it's time for an intervention.

7:40AM PDT on May 4, 2011

The explanation for the coming depression is already being blamed on by the deficit even though we are not taxing the wealthy.

Cutting spending on so called entitlements means cutting spending on the middle class voters. Those that advocate this also advocate that the wealthy and fictional entity corporations not pay taxes. The only explanation for that is for the creation of jobs. But where?

Corporations have over-powered our government which now believes that out-sourcing and off-shoring is inevitable and necessary with expectations that the middle class should just fall on their swords.

The financial collapse borders on national security with the loss of our middle class tax base and yet this nation does nothing, not even protest against out-sourcing and off-shoring and demand it be restricted by whatever method. International businesses are doing the un-American activity of destroying U.S. salaries, U.S. businesses that hire within this country, and destroying the U.S. marketplace as an end result.

Infrastructure spending and tax breaks will not create enough jobs to keep up with out-sourcing and off-shoring.

Neither party will do anything about it and unless we begin grass roots efforts to protest out-sourcing and off-shoring of U.S. jobs we will deserve what we get.

It will have to get a lot worse before it ever gets better.
If nothing is done, it will have to get a lot worse before it gets better.

5:53AM PDT on May 4, 2011

and the biggest debt is because dummie busch and his republicains,not forget his story with his friend of enron,the us lost to many money on lies of the buschclan

5:51AM PDT on May 4, 2011

obama say it like it is,the politics have to work together,we can not play with the people,and obama mean it very good,he is a brave man,i hope the dammed republicains stop this playtime and support the president

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