Trump triumphs as US Congress passes sweeping tax cuts Read more at https://www.channelnewsasia.com/news/world/trump-triumphs-as-us-congress-passes-sweeping-tax-cuts-9514742 (Updated: )
Debt Held by the Public Debt held by the public is the total amount the government owes to all of its creditors in the general public, not including its own federal government accounts. It includes debt held by American citizens, banks and financial institutions as well as people in foreign countries, foreign institutions and foreign governments. As you can see in the pie chart above, about one third of the total federal debt, and nearly half of debt held by the public, is held internationally by foreign investors and central banks of other countries who buy our Treasury bonds as investments. These countries include China ($1.3 trillion), Japan ($1.2 trillion) and Brazil ($262 billion), the three countries that currently hold the most U.S. debt. Treasury also groups foreign holders of national debt by oil exporting nations (including Iran, Iraq, Kuwait, Ecuador, Nigeria and others, $297 billion) and Caribbean banking centers (Bermuda, Cayman Islands, and others, $293 billion).3 The next largest portion of debt held by the public is held by private domestic investors, which includes regular Americans as well as institutions like private banks.
Since 2011, however, due to political partisanship as well as debates about the size of the federal budget and deficit spending, the debt ceiling has become a highly contentious issue. Some members of Congress have pledged to allow the federal government to default on its debt payments rather than raise the debt ceiling again.
Jm Chow - This people have no moral conscience and you say they are good? For 45 years, they are raiding the Government coffers (the taxpayers money and foreign investors money) and put it into their own pocket.
Ricky Lim Precisely, I can't believe some Singaporeans are so shortsighted. I expected better... so disappointed that there are people cheering that buffoon.
Ricky Lim Hey.... Stop puking garbage. No one is interested in your stinking stuff.
If you have the brain...just answer... Is it good ...to make us pay more taxes next year....is it good to give our high-paying jobs to foreign workers ?
Jm Chow - You mention Trump is Good. I dispute you with solid facts. You not happy, your business. People can see from facts.
You mention about tax next year, but nothing concrete announce, then why should I answer you?
You mention that foreigners take over our high paying jobs - yes i agree there are some. But there are many others where local helm the high paying jobs.
I dont see why people should get so heated up by what USA does. So what if they raise taxes to 60% or lower it to 10%? None of your business. This new rate of 21% is what many countries have - you mean other countries may have it but USA may not? Or are people hoping that USA will become uncompetitive? The USA is smarter than you think. Somehow they will muddle through. If other countries are so afraid, simple - just dont have anything to do with the US of A.
The fact is, many Countries lend money to US to fund their tax cut. And US may default.
If not too long ago if you can remember, people got their money burned by investing in the minibonds, lehman brothers collapse, fund collapse, fund loss, sub-prime loss etc. Quite a number of Singaporeans got hit.
Also China, Japan etc are US bonds holders - more than US$1 trillion. If US default in payment -- our trade and business with these Countries will also be impacted ---- resulting in World recession --- it will hurt you and your job. Understand?
The Lehman Brothers Minibond saga refers to the chain of events resulting from the Lehman Brothers’ bankruptcy filing in September 2008.
1 Following the collapse of the Lehman Brothers, about 10,000 retail investors in Singapore lost all or a large part of their investments totalling over S$500 million in structured investment products linked to the American investment bank.
2 The financial institutions that distributed the products were accused of having mis-sold these relatively high-risk products to investors, many of whom were the elderly and less educated. This prompted government investigations, which eventually led to penalties being imposed on 10 financial institutions, and tighter supervision of the industry.
Ricky Lim, No reward without risk. These countries can put their money elsewhere. But I dont think these countries that you mentioned are so stupid or reckless.
The $500 million has already gone into someone's pocket - but the fund bankrupt - and that person is laughing all the way to the bank - what can you do?
And in case you can't remember, US Government have to use taxpayers money to bail out BOA, Citibank, AIA and many other banks and financial institutions - that nearly go bankrupt.
What if Trump say, sorry no more taxpayers money - already $21.4 trillion deficit - cannot bail out those banks, insurance companies, etc ---- if you got deposit or insurance with these companies - you can say bye bye to your money is it?
Exterior view of the US Federal Reserve building in Washington, DC. (AFP/KAREN BLEIER)
(Updated: )
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WASHINGTON: US central bankers are divided over how fast they will need to raise interest rates next year, given differences over the causes behind the low inflation and wage gains seen to date, a report showed on Wednesday (Jan 3).
The minutes of the Dec 12-13 policy meeting, when the Federal Reserve raised the benchmark lending rate for the third time last year, also showed officials believe the likely benefits of the recently adopted tax cut are highly uncertain.
While the tax cuts could boost spending, there are indications companies are likely to use the windfall for mergers and share buybacks, the minutes said. That is contrary to the arguments its supporters used to back the massive tax package.
The Fed's policy-setting Federal Open Market Committee last month increased the key lending rate to 1.25-1.5 per cent, an increase of a quarter-point on the rate that affects all types of credit from mortgages to car loans.
The Fed's quarterly economic projections also released last month indicated the central bank is likely to raise the federal funds rate three times in 2018 and once in 2019.
However, that is a median forecast and the minutes shed light on the conflicting views among the policymakers, which centers on whether inflation has remained stubbornly below the Fed's two per cent target due to temporary or more enduring factors.
HOW MANY RATE HIKES?
A few FOMC members said three rate increases, while still gradual, would be too fast and "might prove inconsistent with a sustained return of inflation to two per cent."
However, a few others found the pace of rate hikes should be "somewhat faster" than the three signalled in the forecast. They worried that "continued low interest rates risked financial instability in the future, or that the labour market was increasingly tight."
With steady job creation in the past two years pushing the unemployment down to a 17-year low of 4.1 per cent, Fed officials have been perplexed by the low inflation and sluggish wage gains seen so far, but largely attributed them to transitory factors.
The Fed's preferred inflation measure, the Personal Consumption Expenditures price index, remains well below two per cent and shows few signs it will rise soon. The 12-month core PCE, which excludes volatile food and energy prices, has risen just 1.4 per cent.
Two voting members of the FOMC, Charles Evans of Chicago and Neel Kashkari of Minneapolis, dissented from the decision to raise rates last month saying the central bank should wait to see actual wage and inflation increases before raising rates.
Analysts at Barclays said the actual pace of rate increases will depend on inflation this year, but if it does not rise by March "or if the unemployment rate decline stalls out, then the case for a pause in the rate hike cycle strengthens."
UNCERTAIN TAX CUT IMPACT
Last month's policy meeting took place just before the US Congress approved the massive US$1.4 trillion tax package, and many Fed officials noted the potential for the tax cuts to provide some boost to consumer and business spending. However, they highlighted the uncertainty about the magnitude of the impact.
On the business side especially, reports from firms and surveys indicate that "the increase in cash flow that would result from corporate tax cuts was more likely to be used for mergers and acquisitions or for debt reduction and stock buybacks."
Republicans in Congress have said the package - which lowers the corporate tax rate to 21 per cent from 35 per cent - would boost business investment and hiring, while also helping American families.
The Fed forecasts showed central bankers now are looking for faster growth of 2.5 per cent next year, compared to the previous forecast of 2.1 per cent.
Source: AFP/de Read more at https://www.channelnewsasia.com/news/business/us-fed-members-divided-over-rate-hikes-in-2018-9830752
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