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Disaster Looms as U.S. Federal Debt Nears 100% of GDP
The United States and the world economy is facing disastrous consequences as the U.S. federal debt held by the public (which excludes money the government owes itself) is nearing 100 per cent of gross domestic product — and continuously rising as spending outstrips taxes.
“The deficit increases significantly in relation to gross domestic product over the next 30 years, reaching 8.5 per cent of GDP in 2054,” the Congressional Budget Office (CBO) predicts in “The Long-Term Budget Outlook: 2024 to 2054.”
“Debt held by the public, boosted by the large deficits, reaches its highest level ever in 2029 (measured as a percentage of GDP) and then continues to grow, reaching 166 per cent of GDP in 2054 and remaining on track to increase thereafter. That mounting debt would slow economic growth, push up interest payments to foreign holders of U.S. federal debt and pose significant risks to the fiscal and economic outlook.”
That’s grim stuff, made worse by legal requirements that the CBO base its analyses on a set of unrealistic assumptions. It must, for example, take at face value assurances that Congress will restrain spending and that taxes will come in higher than they ever have. Occasionally, though, the CBO stretches its remit to consider economic predictions that are more realistic.
U.S Federal Debt to Surpass GDP
Last July, it published a collection of alternative scenarios, acknowledging that in its official forecast, “discretionary spending is smaller and revenues are larger, on average, than they have been as a share of GDP over the past 30 years.” Those assumptions result in rosier predictions than the actual numbers justify. The alternative scenarios base spending and revenue projections on “average values they had over the past 30 years,” which is to say, reality.
According to the CBO, if the federal government continues to spend the way it has for the past three decades, and to collect taxes the way it has over the same time period, “debt held by the public would exceed 250 per cent of GDP by the end of the projection period.”
Given that the official forecast sees “significant risks to the fiscal and economic outlook” if debt hits 166 per cent of GDP, we can probably assume debt in excess of 250 per cent of GDP would have much worse consequences for Americans and the world beyond.
But the CBO’s economists hesitate to venture a guess as to how awful things might become should debt continue to soar, noting that, “Because of the significant uncertainty about the effects that such high levels of debt could have on the economy, CBO only reports specific economic or budgetary outcomes when debt is below that threshold.”
U.S. Government spending exceeding revenue
None of the alternative scenarios contemplate balanced budgets, probably because there’s no reason to waste energy on pure fantasy. Instead, they just contemplate fiscal irresponsibility over different time frames, with spending exceeding revenue. In that, the CBO’s expectations echo those of the University of Pennsylvania’s Penn Wharton Budget Model (PWBM).
“Under current policy, the United States has about 20 years for corrective action after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt whether explicitly or implicitly (i.e., debt monetization producing significant inflation),” PWBM, which is unburdened by unrealistic legally mandated assumptions, warned in October 2023.
“Unlike technical defaults where payments are merely delayed, this default would be much larger and would reverberate across the U.S. and world economies.” When PWBM conducted its analysis, debt held by the public was $26.3 trillion; it has since risen a trillion.
“We estimate that the U.S. debt held by the public cannot exceed about 200 per cent of GDP even under today’s generally favourable market conditions,” cautioned PWBM economists Jagadeesh Gokhale and Kent Smetters. “This 200 per cent value is computed as an outer bound using various favourable assumptions: a more plausible value is closer to 175 per cent.”
Separately, PWBM considered three approaches for fixing America’s fiscal mess: increasing taxes on high incomes, Social Security and Medicare reforms that reduce payouts and increase taxes, and a mix of tax increases and spending cuts. Tax hikes alone would still “allow the debt-to-GDP ratio to grow from 100 per cent today to 150 per cent in 2050,” they grant. That means some serious reductions in federal expenditures are required to get debt under control.
That’s especially important given the CBO’s concession in its alternative scenarios that revenues averaged 17.2 per cent of GDP for 30 years no matter who held office, and the Federal Reserve Bank of St. Louis’s records since 1929 of revenues rarely exceeding 19 per cent. Government officials dream of taxing us harder, but history says they have far more control over spending.
If Congress and the White House don’t exercise that control over the budget, deficits and resulting debt really will test just how much ruin there is in the United States.
Source: National Post
(CTN News) – Homebase’s proprietor is currently in discussions with one of the most prominent general goods chains in the United Kingdom regarding the possibility of selling the do-it-yourself retailer.
These discussions are occurring in anticipation of the commencement of a more comprehensive auction of the company that it salvaged six years ago.
The Range, which has discreetly become one of the most successful retail businesses in the country, has extended an offer to Hilco Capital, the company that acquired Homebase in 2018.
The company was experiencing financial difficulties at the time of acquisition. The offer is being discussed as a potential acquisition. This information was reported by Sky News. Sky News acquired this information.
The city sources asserted that the negotiations were not guaranteed to result in a transaction; however, analysts predicted that The Range would likely demand the majority of Homebase’s approximately 140 stores if an agreement were reached. The headquarters of Homebase are located in the United Kingdom.
It is anticipated that a formal selling procedure, which will involve other potential suitors, will commence in the near future, according to an individual who is knowledgeable about the matter. The individual who disclosed this information provided it.
Homebase was controlled by Wesfarmers for a period of time.
An Australian company, the company experienced losses that totaled hundreds of millions of British pounds. Homebase was acquired by Hilco subsequent to the conclusion of this period.
B&M European Value Retail, a discount retailer that is listed on the London stock exchange, is one of the other retailers that have been considered as potential proposals for Homebase in the past. Another company that has been mentioned is Homebase.
The Do-It-Yourself (DIY) chain, which has been nomadic, has been acquired by Home Retail Group, a joint venture between Argos and Home Retail Group. J. Sainsbury managed the chain at various points in time, and it was subsequently acquired by Home Retail Group.
Hilco, a corporation that has previously owned retail brands such as HMV and Cath Kidston, acquired control of the business as a consequence of Wesfarmers’ entry into the United Kingdom. This event was a complete and absolute disaster. Hilco succeeded in acquiring authority of the organization.
Homebase underwent a business voluntary arrangement in 2018, which resulted in the closure of a significant number of stores, the renegotiation of rent agreements, and the loss of approximately 1500 employment. Concurrently, each of these incidents transpired.
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The outbreak and the crises that accompanied it injured the company’s fortunes in terms of the cost of living, despite the fact that the turnaround investor was successful in stabilizing the company.
The initial increase in sales that transpired subsequent to the COVID-19 pandemic was attributable to the fact that consumers were prioritizing home renovation initiatives. Conversely, the market conditions ultimately manifested with increased volatility.
Homebase lost forty million pounds in 2022, according to Companies House.
Conversely, there is a general agreement that the performance of the previous year was significantly better.
Homebase has a presence in Ireland in addition to its operations in the United Kingdom. Nevertheless, it is conceivable that the two divisions could be sold separately at a later date.
Chris Dawson, one of the most successful businesspeople in the world, is the owner and operator of CDS Superstores, which incorporates The Range as a subsidiary. The Range is situated in Devon.
The business paid a sum of seven million pounds to acquire the brand and intellectual property assets of Wilko, which had been placed under administration.
Mr. Dawson has since established numerous Wilko establishments in a variety of locations throughout the region.
The Range, a retailer with over 200 retail locations in the United Kingdom, offers a diverse selection of products, such as homewares, furnishings, and items for do-it-yourself projects.
Mr. Dawson established its inaugural store in Plymouth in 1989.
Due to the distinctive number plate that is prominently displayed on his Rolls-Royce Wraith, he is frequently referred to as “the Del Boy billionaire.” He has become one of the most successful retail business proprietors in the United Kingdom as a result of his unwavering determination and hard work.
Despite an attempt to obtain a statement from Hilco and Homebase, The Range has been unable to be contacted for any further information.
SOURCE: SN
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(CTN News) – A substantial number of individuals from all over the United Kingdom have reported issues with the National Lottery’s mobile app and website. A sizeable number of individuals have brought these issues to the attention of the authorities.
It is clear that a significant number of individuals have reported experiencing difficulties accessing the application, as evidenced by the fact that over one thousand five hundred complaints were registered at roughly 6:30 this morning.
There was a second surge in the amount of complaints that were received at approximately eleven o’clock last night. Downdetector UK received approximately two thousand reports of outages during this time period.
For the second time in a row, National Lottery complaints were up.
It was as a result of an increase in the percentage of complaints that were received that this phenomenon came about. The application is responsible for National Lottery around 53 percent of the disturbances that have been observed, as indicated by the conclusions of the inquiry.
On the other hand, the website and the login were connected to respectively 41% and 6% of the disruptions that occurred.
Glasgow, Manchester, and London were selected as the regions that were experiencing the most major challenges. This was the case despite the fact that a number of problems were recorded in each and every location in the United Kingdom.
The National Lottery’s mobile application and website have been the subject of a number of complaints from users who have said that they have been unable to successfully log in to either of these platforms.
The National Lottery attracted many people to X.
It was once known as Twitter, where they broadcast complaints and expressed their displeasure with the apparent outage. Their actions were intended to convey their dissatisfaction with the current situation. The following comment was provided by a certain individual:
“Come on, @TNLUK, your app and website have been down since last night at nine o’clock.” These issues have been ongoing for a considerable period of time. Even if one considers how long it has been since the dispute began, it is absurd that it has not been resolved.
I was wondering if anyone has been able to access the website of the national lottery or use the app since the clock struck nine o’clock yesterday evening.
Should that be the case, to what extent has this been feasible? The inquiry was initially posed by a different individual than the one who was being asked.
Would it be more likely for the problem to be resolved in time for today’s draw, or will it take more time to be resolved? What is the likelihood of each of the following occurring? Please select one of the following two options. “@TNLUK”
Apparently, the National Lottery app is exhibiting peculiar behavior of its own accord, as stated by a third user who reported the matter.
There is a significant probability that the anarchy that has been brought about by the current state of information technology is the party responsible for this. This is a possibility that cannot be discounted.
According to the official National Lottery account.
The following comment was provided in response to someone who inquired about the matter: “Hello. It has come to our attention that a sizeable number of players are encountering challenges while attempting to access both our website and our mobile application.
It was brought to our attention by a member of our staff that this information is available. At this very moment, the members of our team are conducting an inquiry into the matter in order to ascertain what has transpired. We would like to take this opportunity to apologize for any inconvenience that this may have caused.
The fact that they are conducting an investigation into the matter is something that you should be aware of.
SPURCE: BCSE
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(CTN News) – Since Amazon introduced Prime Day in 2015, July sales have been enormous for businesses. Even with fantastic prices, personal finance experts advise against deceptive advertising and buying unnecessary items.
In recent weeks, people have been growing more enthusiastic about the 10th Prime Day event, which will take place on Tuesday and Wednesday for Prime members who pay $14.99 a month or $139 a year for free shipping and other benefits.
Other stores have capitalized on Prime Day with offers. This summer, Walmart, Target, Kohl’s, TikTok Shop, and Temu started sales before Amazon.
This was done to steal from Amazon deal-seekers.
There will be “best summer deals” at Macy’s from Tuesday to August 8. Why do businesses sell so much during the summer?
July offers aid August back-to-school buying, the second busiest season after the holidays. Electronics, home products, and seasonal items like bikinis and summer dresses cost more when costs are low.
Sales could help businesses battle “a summer lull in retail spending” because people are spending money on holidays and eating out, according to Coresight Research’s head of global research, John Mercer.
Mercer says “it drives a bit of excitement in that mid-year period,” when companies may be struggling to sell. He claimed that businesses utilized sales to increase spending during high interest rates and inflation.
Amazon doesn’t disclose Prime Day earnings, but it has proof. Last year’s “single largest sales day” sold almost 375 million products.
Amazon Prime Day sales might reach $12.5 billion worldwide in 2023, according to Emarketer. The company expects 7% sales growth this year.
What’s the pricing offer?
Change who you ask. It is common for store advertisements to use hyperbole in order to attract customers. Earlier this month, Wirecutter wrote that most of Amazon’s early discounts this year are disappointing.
Santa Clara University management professor and Amazon book author Kirthi Kalyanam says Prime Day offers are good. Halyanam said Amandon promoted small businesses on its website to acquire Apple discounts and cut their costs. People are used to Temu and Shein’s low prices, so Prime Day deals may not matter.
Kalyanam stated that “many of the deals may not be as competitive” as Temu and Shien’s.
Other stores may immediately try to match Amazon’s prices, he added. He said Best Buy dropped two goods when Amazon revealed early deals last week.
Numerator questioned 5,000 customers after Prime Day last year and found 40% discounts on some items. Survey responders discovered 60% or greater discounts on 25% of items.
Some retail workers stated Prime offers were smaller than they appeared.
Is there a way to budget and locate Amazon deals?
Personal finance gurus advise caution before buying if you’re on a budget. LendingClub customer support manager Mark Elliot advises, “Avoid the false sense of urgency of manufactured holidays.” “It’s simply not true by definition to say that the more you spend, the more you save.”
Dan Egan, VP of Betterment, a financial advice and investing business, advises users to list their wants beforehand to make good selections. He advises against late-night or bored shopping.
“Having a list makes it less likely that you’ll be sidetracked by unnecessary items,” he said. I recommend removing shop apps from your phone for a week or two if the list is practically empty. You’ll get several alerts otherwise.
He warned credit card holders that summer sales savings may be wasted on interest payments. “If a deal requires interest, it’s not a deal,” stated.
According to Consumer Federation of America head of consumer protection Erin Witte, summer offers are best with free or short-term memberships. After a while, these programs charge customers’ credit cards.
To cancel your membership, Witte advised setting a reminder.Think about it now. Remember that these companies made signing up for this product easy but canceling difficult.
Install the Amazon app, sign up for invitation-only offers, and wait in line for limited-time, sold-out deals.
Price comparisons matter.
Prime members who pay for Prime Day discounts may buy more. Before buying, compare costs on many websites.
Walmart’s price event this month was open to everyone, unlike Prime Day. Allowing Walmart+ users to sign up early improved the deal.
Target Circle, a new membership program, was promoted over the weeklong event to boost sales and foot traffic. However, only Target Circle members might get deals.
TikTok Shop’s summer sale was available to anyone. Celebrations continue till July 9.
Source: APN
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