Portuguese Prime Minister Jose Socrates submitted his resignation Wednesday after parliament rejected his minority Socialist government's latest austerity measures.
Even as the European Union moves this week to finalize its permanent financial rescue fund for struggling member nations, rumors that a government-controlled Irish bank would miss a bond payment stoked fresh fears in European debt markets Tuesday.
Portugal's parliament is expected to vote on austerity measures today. If the measures are rejected, Portugal's government could collapse a day before a key European summit on debt.
The United States is on a fiscal path towards insolvency and policymakers are at a "tipping point," a Federal Reserve official said on Tuesday.
The news abounds with arguments and even riots over so-called austerity measures. Whether in the Middle East, Europe, or even certain US states, the public is realizing just how deep a hole various governments have dug for themselves. In this article I'll outline Uncle Sam's position and then explain why it's such a problem.
Often times eliminating taxes is the best way to raise taxes.
If you charge up your credit cards, you can keep the party going as long as you have enough cash to make the minimum monthly payments.
As Congress begins debating the future of Fannie Mae and Freddie Mac, proponents of keeping the taxpayer on the hook for the mortgage market argue that without such support the 30-year fixed-rate mortgage would disappear. The advantages of the 30-year mortgage have, however, been grossly exaggerated. Subsidizing it should not serve as an excuse for continuing to put the taxpayer at significant risk.
[[wysiwyg_imageupload:1950:]]By Kieran Osborne
Despite the Fed recently surpassing China as the largest owner of U.S. government debt, the U.S. remains heavily reliant on foreigners to fund the government's ongoing fiscal largess. Geithner's Treasury Department has firmly focused new issues at the mid to longer end of the yield curve (since Geithner assumed office, the average length of marketable Treasury debt held publicly has increased by nearly one year). Despite the Treasury taking advantage of the ultra-low interest rate and funding environment, there are substantial refinancing issues over the near term; moreover, many of these maturing issues are foreign owned. Should sovereign fiscal concerns spread to the U.S., in concert with the evermore attractive interest rates offered internationally, refinancing the U.S. debt could become increasingly difficult if foreign investors turn their backs.
It always struck me as odd that Japanese bookstores have not just earthquake sections, but entire aisles of titles devoted to tectonic upheavals. After Friday’s big one, I’m now a believer in quake-ology.