President Obama formally notified Congress on Thursday of his intent to raise the nation’s debt ceiling by $1.2 trillion, two weeks after he had postponed the request to give lawmakers more time to consider the action.

Congress will have had 15 days to say no before the nation’s debt ceiling automatically is raised from $15.2 trillion to $16.4 trillion.

In a letter to House Speaker John A. Boehner (R-Ohio), Obama wrote that ”further borrowing is required to meet existing commitments.”

Obama had sought to make the request at the end of last month, when the Treasury came within $100 billion of its borrowing limit. However, with Congress on recess, lawmakers from both parties asked the president to hold off. The House is out of session until Jan. 17, and the Senate until Jan. 23.

Since then Treasury officials have used special revenue and accounting measures to maintain the nation’s solvency. Yet the White House cast the delay as a technicality, saying there is no chance the limit will not be increased, even if Republican lawmakers attempt to object.

Under an agreement reached in August, Congress and the White House moved to raise the debt limit in three increments while also implementing $2.4 trillion in budget cuts. The deal, however, also gave Congress the option of voting to block each of the debt-ceiling increases by passing a “resolution of disapproval.”

Even if such a resolution were passed, Obama could veto it, and he could be overridden only by a two-thirds supermajority in each chamber.

In September, when the first debt-limit hike was scheduled to take effect, the Republican-led House passed a disapproval resolution, but the Democrat-controlled Senate blocked it and the debt ceiling was raised

White House officials said they do not expect the Senate to support a disapproval resolution this time even if the House passes one again.

http://www.washingtonpost.com/blogs/44/post/after-delay-obama-asks-congress-for-debt-limit-hike/2012/01/12/gIQAA3ADuP_blog.html

he is a real Bird!At the same time the FED spending Trillions propping up the Euro,instead of using that Money on the US!

I am sure the FED is helping out their banking buddies that have a large exposure to Euro bonds..

Can't have another MF Global.. haha

What's Another $1.2 Trillion For the Debt Machine?

According to the latest published figures $1.2 T represents ~8.5% of
the US GDP

http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=ny_gdp_mktp_cd&idim=country:USA&dl=en&hl=en&q=us+gdp

whew....

I am glad you clarified that..

I will sleep better knowing this addition to the debt is irrelevant..

I did not say it was irrelevant. You made that leap of assumption.
It is about 8.5% of GDP. That's what it is.

No assumptions..

I have just been around long enough that when someone who supports Obama posts deficit to GDP percentages it is done so with the intention of lessening the impact of the data.

Deficit to GDP is a nice small number compared to what Debt to GDP looks like.. Over 100%..

Well maybe the banks should learn to recognize bad debt when they see it.

What they are doing with the government is exactly the same as what they do with granted credit cards to college students.

If they would stop lending to high risk consumers, then there would be a lot less national debt and a stronger dollar.

Sure it all adds up. It is a serious issue. I'm actually not a bit
Obama supporter nor detractor. I think he is the best candidate at
this point in time though as no one else reasonable has stepped up.

Our deficit is certainly not Obama's fault and we simply have
to do what is best for our country and economy going forward.

Interestingly enough the latest news reports concerned Obama's efforts
at reducing govt spending so the current administration is not at all
opposed to spending cuts. They also want to increase taxes on the
wealthiest in our society which is very reasonable considering the
financial condition.

I say to the Congress. Make a deal and do something! This is why
so many voters are incredibly po'd at the gridlock in DC. Nothing
wrong with raising taxes a little on the wealthiest while cutting
spending. Just get your buttockses in gear for crying out loud!

We need the federal govt.
We need to cut costs.
We need to increase revenue.

I agree with the Alan Simpson interview recently on CNN about it.

=-=-=-=

ZAKARIA: So, you know, one of the central moments in the Republican debates, the candidates were asked, if you get $10 of spending cuts for $1 of tax increases, would you take it?

And not one of them took it. I take it your view is that this is fantasy, that there is simply no way to deal with the budget without raising taxes.

SIMPSON: It's dream world. And I couldn't believe it when I watched that, when they asked that question and nine hands just shot up like robots.

And I thought, how can you get there?

Now, you don't have to raise taxes, which, of course, makes Grover froth at the mouth, and all his minions. You just go into the tax code and you say let's get rid of these tax expenditures. They are one trillion, one-hundred billion a year.

The home mortgage interest deduction, a million bucks? Second homes? No, we said get it down to $500,000 then give a 12.5 percent non-refundable tax credit. That helps the little guy everybody talks about.

Charitable deduction, give a 12.5 percent non-refundable tax credit and then go in and look at the rest of the stuff. You won't believe what's in there - parking for employees, Blue Cross, insurance, oil and gas. You know, I've trampled on my own sacred cows to do that pitch.

But you have to - it has to be self-sacrifice and know that this country is going broke.

ZAKARIA: Are you resigned to the fact that nothing is likely to happen on your proposal and the ideas around it until the election? Or do you think that there's still a possibility, in the next year, something can happen?

SIMPSON: We'll see what happens. But every day that goes by, this is like a stink bomb in a garden party. And as they're eating their tea cookies and saying nothing is going to happen in America, this odor is coming out from under the table because you can't get there by doing waste, fraud and abuse, foreign aid, earmarks, Nancy Pelosi's airplane, Air Force One, all Congressional pensions. Give it up. That's about 4 or 5 percent of what we're in.

You have to go deal with Medicare, Medicaid, the solvency of Social Security and defense. And if you can't raise the retirement age to 68 by the year 2050 without the AARP losing their marbles and Grover slavering at the mouth on every kind of thing you talk about, calling it a tax increase, we won't make it.

If that's the kind of powers out there and making a dysfunctional government, why, pull up your shorts and start running for the exit.

See the whole interview here:

http://globalpublicsquare.blogs.cnn.com/2012/01/09/former-senator-alan-simpson-on-americas-failing-politicians/

You won't see me saying that the overall debt issue is solely at Obama's feet.

It is not.

The point of the OP is that even when we see countries on the brink of default, knowing that the deficits and debt is slowing down our recovery, we don't see any real action being taken to stop it.

This isn't a partisan issue. This a national issue that is going to have long lasting ramifications.

And not just for the US..

This is why many people are clamoring for a return to the gold standard.

Once you switch to a credit based system, currency value is determined by comparing it to GNP and other currencies. So if your economic growth slows, or the GNP shrinks, while other currencies are also falling, the whole system gets thrown a monkeywrench.

It's like a spider web. If you cut one of the radial strands, the whole web begins to weaken, but there are so many strands - and they are difficult to see - so it takes a long time to discover which ones are causing the web to collapse. All the while, the web continues to stretch and weaken as it is exposed to external factors, like wind and weight. If the web is not reinforced or repaired quickly enough, the whole thing will eventually collapse. Economically, that means a global depression.

So this is a huge issue since the U.S. is one of, if not the largest, economy in the world. At the same time, China - another major economy - is playing some shifty games with its own economy. Despite having lent enormous sums of money to other countries, it too is in debt. That debt is affecting its own credit. The U.S. and China are so heavily linked economically right now, that if either one of them collapses, it will have global ramifications.

Good synopsis action!

Ron Pauls logic is looking better and better the more this continues, don't you think?

Have we heard ANYTHING that even remotely hits at the root of this problem from ANY of the other candidates? NO!

Romney would strip our assets and sell us to China!

Owe-Bummer is trying to GIVE us away to his king in Egypt!

I have a book on political history which explains it pretty well. It was a text book from one of my classes 20 years ago.

Plus, I've looked into it more for the past 20 years because of conversations with my dad. Back in the late '60s and early '70s, he was involved with the WTC, the President, the Pentagon, and many large companies. He was a part of some the conversations that led to the U.S. abandoning the gold standard, and he's very knowledgeable about business economics during that time period.

To give you an idea of why I believe my dad...

1) He was one of three men in charge of training all armed forces in the Pacific Rim in the area of radio, t.v., and electronics. He was stationed in Japan during the '50s and early '60s.

2) Coming back to the U.S., he was one of the original contractors hired to wire the WTC through the company he worked for: Chester Electronics, who was later bought out by GTE. The job was too big, so after beginning the job, he eventually had to back out on the Twin Towers. He did, however, work on the AT&T building.

3) He was contracted to, actually did, design the communications system for Air Force One.

I have worked with, and known, people who worked with my dad during this time period. They have corroborated my dad's stories about the projects and his qualifications at the time. His status in the U.S. Army apparently was a big part of why he was brought in on these projects. The corporate world ended up burning my dad out. GTE offered him an executive position at the global h.q. after they cannabalized (they used the company for a few corporate projects then dibanded the company when they were no longer useful) Chestel (the post-buyout name of Chester Electronics).

So, in essence, my dad was proud of his accomplishments and the big jobs he got, but he found the practices of many of the big wigs rather unappealing. It wasn't the kind of life he wanted for himself.

That's why I've listened to what he's told me. It's also why I have studied it further....because I saw our current situation coming 25 years ago, but it all began about 5 years before I was born....almost 50 years in the making.

let's just say Reaganomics and the war on drugs has finally failed and it's time to move on.