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State comptroller: NY government debt tops $63B - (online.wsj.com) The state government's debt
has topped $63.3 billion, with New York on track to approach its borrowing
limit in early 2014, the comptroller's office reported Monday. That debt
burden, averaging $3,253 per resident, is almost three times the national
median, according to the report. New York's state-funded debt is second only to
California's $96.4 billion and 80 percent higher than New Jersey, which is
third. New York paid $6.8 billion on its loans in 2011-12, though borrowing has
continued to outpace payoffs. The $63.3 billion debt as of last March 31 was
$1.6 billion higher than a year earlier.
Blame
flies as Illinois pension plan stalls - (www.chicagotribune.com) The last-minute push to
start fixing Illinois' massively indebted government worker pension system
stalled out Monday when supporters couldn't round up enough votes in the House
as a lame-duck session lumbers to a close. While no issue is ever dead at the
Capitol until the gavel hits the wood block for the final time, the blame game
commenced — a political tradition that continued even as the state's pension
shortfall approaches $96.8 billion. Mistrust ran deep among lawmakers, many of
whom questioned whether any pension fix was calculated to fail as they pointed
to a lack of political will. Many in the House did not want to take up a
controversial issue when the Senate isn't even around to consider it. Some
Democrats refused to commit to voting for the plan when they didn't know how
many Republicans also were willing to stick out their necks.
Rajoy Stealth Order Adds to Off-Balance Sheet Debt: Euro Credit
- (www.bloomberg.com) Spanish Prime Minister Mariano
Rajoy added more than 3 billion euros ($3.9 billion) to his
debt load in the closing hours of 2012 with a New Year’s Eve order removing a
cap on utilities’ government-guaranteed losses. The decision, announced in the
official gazette, added to the snowballing power-tariff debt, which isn’t
included in the public accounts. The shortfall exceeded 20 billion euros at
year end, according to government filings. Spain’s government-controlled
electricity system has raised less revenue from consumers than it pays to power
companies for most of the past decade. Officials have covered the difference
with bonds in the so-called FADE program.
European leaders hail breakthrough in debt crisis - (www.washingtonpost.com) After more than three years
of global market turmoil, political upheaval and nail-biting summits, European
leaders are declaring that the worst of the continent’s debt crisis is behind
them. In New Year’s speeches and congratulatory comments, leaders across the
region are crediting fresh rounds of painful austerity, a hard-fought new role
for the European Central Bank and steps toward deeper integration with
achieving a breakthrough. Borrowing costs for troubled nations, they note, have
come down steadily from last year’s dangerously high levels, pulling a string
of countries back from the brink of imminent financial collapse and defying
naysayers who predicted a quick breakup of the euro zone last year. Yet any
suggestion of victory in Europe may be viewed as the economic equivalent of President George
W. Bush’s “Mission Accomplished” speech on Iraq aboard the USS Abraham Lincoln
in 2003. Though market panic is subsiding, the region appears to be simply
trading a crisis of financial markets for one rooted in its ailing economies.
The
distinction between good debt and evil debt - (www.ochousingnews.com) On the other hand, signatory
debt is slavery. Signatory debt is money given to a borrower simply based on
the borrower’s promise to repay. It has nothing to do with an asset, and if the
borrower chooses not to repay, recovering signatory debt can be very difficult
because it is not backed by tangible collateral. Signatory debt provides no
useful purpose. It provides a short-term economic boost as demand is pulled
forward, but once it is consumed, money that would ordinarily have been spent
by the borrower on consumer goods is instead diverted to the lender for debt
service. It’s only when signatory debt is expanding that the economy is
stimulated. The expansion of signatory debt is a Ponzi scheme.
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