President Obama this week is expected to ask Congress for a $1.2 trillion increase to the national borrowing limit. The increase would be the third and final allowed under an agreement struck between feuding Democrats and Republicans over the summer.

Speaking of the decision Treasury officials said the increase is necessary since the U.S. will be within $100 billion of the current set limit by Friday.

The debt limit is the amount of money the United States is allowed to borrow in order to finance its operations. The increase will provide the United States with a debt limit of $16.4 trillion.

Under the proposed debt limit increase officials believe the U.S. economy will have enough borrowing power to operate through 2012, just enough time to put the economy on course through the Presidential elections.

While Congress can reject the request President Obama has the power to veto its objection.

If Congress on the other hand doesn’t act by Jan. 14 the measure will automatically go into effect. Although a Congress denial is unlikely since the two sides already agreed in August to raise the limit by $2.1 trillion in three steps with a first going into effect in August for $400 billion, the second in September for $500 billion and now this final increase.

House Republicans did vote against the second increase but it was ultimately allowed to move forward with Senate approval. Each increase is able to take effect if just one chamber agrees with the proposal.

Do you think raising the U.S. debt limit once again is going to help stave off economic collapse or just add to the mounting number of expenses we already have to deal wtih.

[Image via Filip Fuxa / Shutterstock.com]

Obama Administration To Ask For $1.2 Trillion Increase In National Borrowing Limit is a post from: The Inquisitr

The Intelligence world will have to settle for only $80 billion dollars this year. Congress has passed their latest spending bills which, while not actually cutting their budget, only keeps the spy world with the same budget as last year.  While this may not sound like such a big deal, the intelligence services are not so happy about having to postpone new hires and new satellite systems they were hoping to put into play this year. Congress left in the budget money allocated for hiring new cybersecurity teams and money to track the finances of terrorists.

While in tough financial times most levels of government spending get cut, and most agencies fight over who will get hit the hardest.  Even now, with Iran pushing forwards to get the Bomb and more conflicts arising throughout the world the Pentagon is seeing its budget cut.  Usually though the Intelligence services are “recession Proof”.  But not so this year.

Also this year, as part of a compromise between Democrats and Republicans to raise the nation’s sovereign debt limit congress prescribed a series of painful cuts to the defense budget if lawmakers could not find $1.5 Trillion dollars to trim from the deficit over the next ten years.  Congress had until thanksgiving to reach a compromise and failed.  These cuts take place in fiscal year 2013.

America currently is running a deficit of over $1.5 trillion dollars a year and has a national debt of over $15 trillion dollars.  Lawmakers from both parties agree this level of debt in unsustainable.  The real question is how much more can be cut from the budget before America becomes less safe?

Still Loaded with Pork, Congress Puts Spy World on a Diet is a post from: The Inquisitr

Congress’ supercommittee has failed in its bid to cut a government debt that stands at an eye-watering $15 trillion.

With deep-running political divisions over spending and taxation, Republicans and Democrats failed to reach an agreement to cut $1.2 trillion of the national debt on Monday. As a result, U.S. and European stock prices were sent tumbling.

And of course, it goes without saying that both sides were quick to blame the other.

President Barack Obama said that a refusal by the GOP to raise taxes on the rich had formed an impassable obstacle to reaching a deal. Meanwhile, Senate Majority Leader Harry Reid said Republicans had “never found the courage to ignore the tea party extremists” and “never came close to meeting us half way.” Republican Senator Jon Kyl was also accused of wrecking the deal.

The blame game worked both ways, however. GOP Senator Pat Toomey oversaw a Republican offer during the talks, yet said:

“Unfortunately, our Democratic colleagues refused to agree to any meaningful deficit reduction without $1 trillion in job-crushing tax increases.”

And GOP presidential candidate Rick Perry used the result to attack Obama, and by the sounds of it managed a whole sentence without stumbling. Bravo sir:

“It’s amazing to what lengths he (Obama) will go to avoid making tough decisions.”

Just listen to this mob, taking every opportunity to score cheap political points. It’s almost as though there’s some huge election-style event next year or something.

Congress’ public rating was below 20-percent approval in numerous polls before this announcement. Expect that to dip even lower in the coming days.

Supercommittee Fails to Cut $1.2 Trillion Deficit is a post from: The Inquisitr

Netflix on Monday announced that they have raised $400 million by issuing more debt and stock in an attempt to expand their operations while earning back the 800,000 customers they lost after raising subscription costs by 60%.

Stock prices fell sharply on Monday in extended trading before rebounding to lose just 87 cents on the day. Netflix shares were down 1% late Monday with a closing price of $73.60.  Netflix shares were trading at a high of $305 in mid-July, just before Netflix angered their customer base and became the laughing stock of the DVD rental business when they attempted to launch and then quickly ditched their Qwikster program.

Netflix ended September with 23.8 million U.S. subscribers while attempting to expand their business in Latin America and Great Britain.

Despite the company’s recent fund raising they are said to have $366 million in cash-on-hand and short-term investments however the company is also experiencing higher subscription rates from TV and Movie providers. In October the Starz Network announced that they would leave Netflix in February 2012 after the company refused to pay $300 million per year in licensing fees, up from their current $30 million deal.

Since the Starz deal fell apart Netflix has been attempting to acquire as many new partnerships as possible, racking up $3.5 billion in rights to stream Internet video with higher costs expected in 2012 and beyond.

Under their new financing round Netflix issued $200 million in convertible notes to Technology Crossover Ventures while their debt offering required the sale of another $200 million in shares to be sold by November 28, volume they already reached by selling 2.86 million common shares at $70 each, a 6 percent discount from their $74.47 closing price on Monday.

Under their fundraising effort their convertible notes will mature in December 2018 and will not require an interest payment but will allow Technology Crossover Ventures to convert the notes to stock valued at $85.80.

Do you think Netflix can acquire the relationships necessary to attract new users and continue to expand?

Netflix Issues More Debt And Sells Stock To Raise $400 Million is a post from: The Inquisitr

Before we celebrate the arrival of 2012 American’s will be strapped down with $1 trillion in student loan debt, making those loans the country’s largest source of debt, surpassing credit cards for the first time.

The $1 trillion mark was announced in figures provided by the Federal Reserve Bank of New York and they show that student lending has more than doubled in the last 10 years, even after the number was adjusted for inflation.

In 2010 the report shows that students took out $100 billion in new loans, the first time that lending amount has been reached in a single one year time period.

It shouldn’t come as a surprise that the loans have become a big draw for investors, specifically banks since Congress has made it nearly impossible to write the debts off, for example they can not be forgiven in bankruptcy court.

Speaking about the student loan problem Seeking Alpha blogger Nick Pardini wrote that these loans could be “the next major credit bubble” while calling the current generation of loans a scenario that is going to “create a generation of wage slavery.”

In the meantime some Occupy Wall Street protesters have been gaining support for a petition that would ask the U.S. Government to forgive all current student loans, a scenario likely to fail considering the huge amount of loans that continue to be generated via governmental and private student loan programs.

Student Loan Debt To Surpass $1 Trillion In 2011 is a post from: The Inquisitr

After spending his own money an English 12-year-old figured that his mother’s credit card would be ideal for picking up some more really cool things in FarmVille, a leading <cough>social game</cough> on Facebook. By the time the mother found out her son had spent his own £288.00 and then burned her credit card for £688.00.

To her credit the mother isn’t whiny about the incident and apparently willing to take the bite after her bank, HSBC, said the only way they could reimburse her was if she had her son charged by the police. This was on top of being told by Zynga, the company making a royal fortune from their game’s in-game sales, that maybe she should change the passwords. Facebook in their typical fashion has disabled the son’s account with the social network service.

She does not blame Facebook, Zynga or HSBC, saying that her son was the one using the card and is entirely at fault. But she added: “I do think they need to shoulder some responsibility in this business and put systems in place to stop this happening again. The fact that he was using a card in a different name should bring up some sort of security and the online secure payment filter seems to be bypassed for Facebook payments.”

A spokeswoman for HSBC said that had the credit card been used on a gambling site it would have started alarm bells ringing for “unusual usage”. But because the card had been used to buy Facebook credits HSBC did not consider the transactions to be suspicious, even though £625 was spent in just two weeks.

Source: Guardian

12-year-old racks up $1,200 debt thanks to FarmVille is a post from: The Inquisitr

People like to think that only on the Internet does one need to worry about companies watching everything you do and using that information in some way against you. Well I hate to be the one to break the bad news to you but this isn’t the case as credit cards companies have more data on you than anything found on the web. They can track your purchases, types of things being purchased, when you made the purchases and where you made them all within seconds of you buying something.

Most people don’t get overly concerned about this type of data collection when it comes to credit cards, debit cards, air miles cards or store cards. The problem is that during times of financial hardship that data is possibly being used to make decisions about your credit card worthiness. The idea behind this kind of profiling is that when you buy used clothing at thrift stores or do your shopping at those club superstores the credit card companies see this as a possible indicator of financial distress. Distress that could lead to missed payments or defaults.

These indicators are used by the credit card companies to decide whether to decrease your your credit limit as well as whether to increase your interest rates. American Express has already admitted to doing this kind of profiling but says that it has stopped the practice. This kind of thing has led to a new credit card reform law that has a provision requiring federal regulators to investigate if credit card companies are using the collected data in this type of profiling, leading to increased rates or decreased limits.

Stephens says the database’s purchasing information can provide a pretty clear picture of credit card users. "What do they know about you? Depending on how extensively you use your credit card, they conceivably have a very clear, distinct picture of an individual. It’s not only your retail purchases, but your online purchases. It can really paint a very complete picture. The stores that you shop at can paint a picture. You also may use it at a doctor’s office if you pay for care with a credit card. Some people pay for their utilities with credit cards."

Source: Connie Prater – WalletPop :: What You Buy Affects Your Credit

As they say in the post – cash is really the only privacy protector when it comes to your buying or bill paying habits.

Think twice about using credit cards at thrift or club stores is a post from: The Inquisitr