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DECEMBER  2012

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Krugman: National default
'can't happen'

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by Bill Wilson
NetRightDaily


In the past 30 years, the national debt has increased 1,328 percent from $1.1 trillion to $16.3 trillion.

From 1952 to 1982, it nearly quadrupled, from about $250 billion to $1 trillion. And from its 1922 level of $23 billion, it increased by 967 percent.

See a pattern?

What will the national debt be in 2042? An historically "modest" tripling to $50 trillion? Or perhaps a mind-boggling $100 trillion?

But not to worry, says New York Times pundit Paul Krugman. No matter how large it gets, we can't default on our debt.

"[W]e have our own currency," Krugman reassured the American people in a Nov. 25 column, and the government "literally can't run out of money. After all, it can print the stuff," unlike Greece, whose currency is controlled by the European Union.

Besides, he writes, interest rates are low and there is no sign investors are about to flee from the relative safety of treasuries.

That may be so -- for now. Yet, for all of Krugman's happy talk of investors continuing to buy U.S. bonds, he understates the degree to which the government is already resorting to the printing press to meet its weekly funding obligations.

Some $1.65 trillion of the debt is held by the Federal Reserve. Another $4.84 trillion of debt is held in the Social Security, Medicare, and other trust funds.

That means 39.7 percent of the debt -- some $6.5 trillion -- is held by government agencies. So, yeah, we can print it. But it is hardly a sign of fiscal health or of high demand for treasuries when just to refinance the current level of debt, the government must borrow 40 cents of every dollar from itself.

The share of government debt held by the government itself will only grow this decade. The Office of Management and Budget projects debt held by the trust funds will rise to $6.3 trillion by 2022 alone. As for the Fed, there is no telling how much it will print to finance Washington, D.C.'s insatiable appetite for more spending.

But this is no evidence that a default "can't happen."

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A feel good story to enlighten your Christmas spirit...
New York, New Jersey Hurricane Sandy Victims Get $100 Bills From 'Secret Santa'

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by Verena Dobnik
Huffington Post


A wealthy Missouri man posing as "Secret Santa" stunned New Yorkers on Thursday, handing $100 bills to many in Staten Island who had lost everything to Superstorm Sandy.

The Kansas City businessman is giving away $100,000 this holiday season, and spent the day in New Jersey and New York giving away thousands. But he says money is not the issue.

"The money is not the point at all," said the anonymous benefactor as he walked up to surprised Staten Island residents and thrust crisp bills into their hands. "It's about the random acts of kindness. I'm just setting an example, and if 10 percent of the people who see me emulate what I'm doing, anybody can be a Secret Santa!"

A police motorcade with sirens took him across the borough, passing a church ripped from its foundations and homes surrounded by debris. At a nearby disaster center run by volunteers, a woman quietly collected free food and basic goods.

"Has anyone given you any money?" he asked her.

"No," replied Carol Hefty, a 72-year-old retiree living in a damaged home.

"Here," he said, slipping the money into her hand.

"But this isn't real money!" said Hefty, glancing at the red "Secret Santa" stamped onto the $100.

"It is, and it's for you," he tells her.

She breaks down weeping and hugs him.

And so it went, again and again.

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Do you believe Congress is serious about cutting federal government spending?

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The People News
PO Box 3921
Cleveland TN. 37320
(423) 559-2150  Fax 559-1044

Pete Edwards, Editor - Publisher

Ashley Murphy, Assitant Editor
Copyright 2012 (All rights reserved)

Newest Addition to The People News...
The Grapevine Blog!

The People News is adding something new. We wanted to expand our website in order to give you, the reader, a voice about local happenings. Of course, if your thoughts involve state, national, or international issues then we want to hear those as well!

Thoughts, ideas, questions, concerns, complaints or praises about whatever happens to be on your mindů we want to hear it all!

Simply visit the new feature, a comment blog called The Grapevine
, to start sharing your thoughts about our continuously updated stories. If you don't want to share, feel free to browse to see what others have to say.

Just remember... You Heard It Through The Grapevine!

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