U.S. taxpayers' Christmas present: Congress raises debt ceiling to $12.4 trillion

The Senate voted today to raise the ceiling on the government debt to $12.4 trillion, a massive increase over the current limit and a political problem that President Barack Obama has promised to address “next year”.

This one vote raised the ceiling on government debt by $290 Billion.

The current measure was deemed needed as a result of the out-of-control budget deficit, which registered $1.4 trillion for the budget year that ended in September.

The current debt ceiling is $12.1 trillion and is set to be reached by Dec. 31.

Is Sovereign Debt the New Subprime?

Just as many subprime borrowers were unable to make their mortgage payments in 2007 and 2008, investors now fear certain nations will be unable to pay their debts in the year ahead. And sovereign debt defaults are potentially even more catastrophic as they can lead to geopolitical instability, societal unrest and even war. And there will also be economic ramifications for investors worldwide, putting America's (and the globe's) fragile recovery at great risk.

"Sovereign debt" refers to the debt of nations. Just as the U.S. issues Treasuries backed by the "full faith and credit" of the government, other nations sell bonds in order to raise money to pay for programs ranging from armies to public healthcare.

To varying degrees, Greece, Spain, Ukraine, Austria, Latvia, Mexico are just a handful of the nations viewed at risk of defaulting. Meanwhile, Dubai only just avoided a similar fate thanks to a $10 billion bailout from their oil-rich neighbor Abu Dhabi.

Excerpt of a Yahoo article by Aaron Task

The Geography of the U.S. Recession

Watch unemployment spread across the country, the deteriorating transformation of the U.S. economy, beginning January 2007 -- approximately one year before the start of the recession -- to the most recent unemployment data available today.

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Pentagon War Budget to increase an extra $60 Billion

For those of you who hoped — or worried — that the Obama administration would mean a big cut to defense spending, think again.

The Office of Management and Budget has approved a nearly $60 billion increase in the Pentagon’s base budget between fiscal years 2011 and 2015,” InsideDefense.com reports.

That includes an extra $15 billion for the next fiscal year — “a 2.7 percent increase after inflation.