US Debt and British Banking

The Pride of the Power” of the USA will be broken per Leviticus 26:19


There has been a lot of negative news about the US & British economic systems this week.  Here are four stories that suggest problems in that respect:

Obama: Stimulus bill marks a ‘major milestone’

President savors victory in Congress in weekly radio and Internet address

Associated Press, updated 7:50 a.m. PT, Sat., Feb. 14, 2009

WASHINGTON – President Barack Obama, savoring his first major victory in Congress, said Saturday that newly passed $787 billion economic stimulus legislation marks a “major milestone on our road to recovery.”

Speaking in his weekly radio and Internet address, Obama said, “I will sign this legislation into law shortly, and we’ll begin making the immediate investments necessary to put people back to work doing the work America needs done.”

At the same time, he cautioned, “This historic step won’t be the end of what we do to turn our economy around, but rather the beginning. The problems that led us into this crisis are deep and widespread, and our response must be equal to the task.”

Britain: Lloyds Banking Group rocked by shock losses
The Times – Feb 14, 2009

Taxpayers could have to spend billions bailing out the banks again after massive and unexpected losses were disclosed by Britain’s new superbank.

Shares in Lloyds Banking Group fell 32 per cent to 61.4p yesterday after it reported losses of £10 billion in HBOS, making it worth far less than thought when it was taken over in November.

The news, a huge embarrassment for Gordon Brown, who helped to broker the deal, triggered speculation that the bank will have to come back to the Government for more capital.

Federal obligations exceed world GDP

Does $65.5 trillion terrify anyone yet?
WND – Feb 13, 2009

As the Obama administration pushes through Congress its $800 billion deficit-spending economic stimulus plan, the American public is largely unaware that the true deficit of the federal government already is measured in trillions of dollars, and in fact its $65.5 trillion in total obligations exceeds the gross domestic product of the world.

The total U.S. obligations, including Social Security and Medicare benefits to be paid in the future, effectively have placed the U.S. government in bankruptcy, even before new continuing social welfare obligation embedded in the massive spending plan are taken into account.                

The real 2008 federal budget deficit was $5.1 trillion, not the $455 billion previously reported by the Congressional Budget Office, according to the “2008 Financial Report of the United States Government” as released by the U.S. Department of Treasury.

The difference between the $455 billion “official” budget deficit numbers and the $5.1 trillion budget deficit cited by “2008 Financial Report of the United States Government” is that the official budget deficit is calculated on a cash basis, where all tax receipts, including Social Security tax receipts, are used to pay government liabilities as they occur.

But the numbers in the 2008 report are calculated on a GAAP basis (“Generally Accepted Accounting Practices”) that include year-for-year changes in the net present value of unfunded liabilities in social insurance programs such as Social Security and Medicare.

Under cash accounting, the government makes no provision for future Social Security and Medicare benefits in the year in which those benefits accrue.

Nationalization by autumn, bank on it

Reuters – Feb 13, 2009

James Saft is a Reuters columnist. The opinions expressed are his own.

Like it or not the United States will be forced to nationalize large swathes of its banking system by the time the leaves fall from the trees in Washington.

The tragedy is that we will have to wait that long and that the costs will mount.

The plan to rescue the banks, or, er, the people, as enunciated by Treasury Secretary Geithner, is no plan, only an apparent set of contradictory principles: an ideological one not to nationalize and a political one not to subsidize too obviously.

The plan will fail unless the administration comes out in favor of either subsidy or seizure of failing banks. Either the United States will be forced to nationalize when that becomes apparent or perhaps it is waiting until that failure makes nationalization more politically palatable.

In either event, it is a terrible mistake and the cost will only grow, both in direct terms for taxpayers and more broadly for the growing number of people with too little income to pay tax…

Those two points form the crux of the issue; for the banking system to work without widespread failure and nationalization we either have to hand out huge subsidies to banks directly, in the form of cheap capital, or indirectly, by giving a subsidy to investors who will pass on part of it to banks as a condition of getting their share. The first is unfair, the second unfair and inefficient…

And in fairness we don’t know how the stress tests will work or if it is possible to fail one. But President Obama did tell ABC News that nationalization “wouldn’t make sense” because of the scale and complexity of the U.S. economy and capital markets would make it too tough to manage and oversee. He’s right and government will do a terrible job of managing banks, but it will be forced to and may as well get on with it. They seem now to be hoping that the economy turns and bails them and the banks out of their pickle, but that is a dangerous bet.

By the time we figure out that it’s not working, when whatever capital we have injected is swamped by falls in asset prices — and remember deleveraging and asset price falls go hand in hand — things will be that much bleaker and the United States will have less room to maneuver…

And Obama is not FDR coming in after a depression was already entrenched, he is leading a country which is only beginning to wake up and to suffer. It is just possible, though not likely, that the administration realizes it will have to take more drastic steps but needs more time to prepare the ground and make that politically possible.

One factor which may come into play is international pressure not to nationalise. What is just about possible in the United States would be far harder in economies such as Britain’s with larger banking systems relative to their size and borrowing power.

Now although I have a degree in accounting (along with others in other fields) and dislike how the US government handles its books, it needs to be pointed out that the obligations in the third article are future ones, and ones that rely on future workers to pay taxes–so in that respect that article may be slightly overly dramatic–but the USA still has too much debt.  And, while the USA might not take over all its banks, it did take over several more yesterday (

The economic power of the USA in the world is truly being shaken.  At a point, probably next decade, the economic influence of the USA and Britain will be no more.

To learn more of what is ahead for the USA and Britain, please prayerfully read and study the following articles:

Anglo – America in Prophecy & the Lost Tribes of Israel Are the Americans, Canadians, British, Scottish, Welsh, Australians, Anglo-Southern Africans, and New Zealanders descendants of Joseph? Where are the lost ten-tribes of Israel? Who are the lost tribes of Israel? Will God punish the U.S.A., Canada, United Kingdom, and other Anglo nations? Why might God allow them to be punished first?
Does God Have a 6,000 Year Plan? What Year Does the 6,000 Years End? Was a 6000 year time allowed for humans to rule followed by a literal thousand year reign of Christ on Earth taught by the early Christians? When does the six thousand years of human rule end?
Prophecies of Barack Obama? Are there biblical and non-biblical prophecies about Barack Obama. Did Nostradamus predict Barack Obama dealing with the Antichrist?  Might Barack Obama set the stage for the kings of the North and South as his timing and at least one Shiite prophecy suggests?  This is the longest and most detailed of the articles here at COGwriter related to prophecy and Barack Obama.
Barack Obama, Prophecy, and the Destruction of the United States Some claim that Barack Obama is the prophesied “son of Kenya”. Might Bible prophecy be fulfilled since he is to be the USA president?
End of Mayan Calendar 2012–Might 2012 Mean Something? There is a Mayan calendar prediction for change in 2012. 2012 changes were also centuries ago predicted by the Hopi Native Americans (the Hindus may have some predictions for the next decade as well). Do these Mayan/Hindu/Hopi prophecies have any value? Why might Satan have inspired this date? Does the Dresden codex show destruction of the earth by flood? Can the great tribulation start before 2012?
Can the Great Tribulation Begin in 2009, 2010, or 2011? Can the Great Tribulation begin today? When is the earliest that the Great Tribulation can begin? What is the Day of the Lord?

Get news like the above sent to you on a daily basis

Your email will not be shared. You may unsubscribe at anytime.