Tag: debt

Argentina’s Milei Borrows Warren Buffett’s Idea To Punish Deficit-Spending Politicians

More than two years after campaigning to “blow up” Argentina’s central bank, President Javier Milei has announced his “Fiscal Shackle” bill – a permanent rule aimed at preventing Argentina from approving or maintaining budgets with fiscal deficits that could have consequences for politicians.

On Thursday, in a speech recorded at the Casa Rosada and broadcast nationwide, Milei proposed an overhaul that would restore the Central Bank of Argentina’s sole mandate of preserving the currency’s value, stop direct and indirect financing of the Treasury, provinces, and municipalities, and expose officials who violate the rules to criminal charges. “It will be considered fraud and illicit association,” he explained.

Milei said this is the “most important set of structural reforms in the last 91 years,” taking the year of the Central Bank’s founding, 1935, as the starting point for that period. He argued that the central bank has functioned as “a tool for theft” and indicated that his reform proposal seeks “to put an end to the scam of counterfeiting money to finance high-level politics, whose most evident manifestation is the inflation rate.”

The plan would also strengthen independence of central bank officials, making them more difficult for future administrations to remove. Milei said the reforms were an effort to end decades of deficit monetization, the primary source of Argentina’s recurring inflation and currency crises.

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Money Issues, Paranoia, And A Hurled Phone: Blistering Reports Detail Ken Martin’s Collapsing DNC

The Democratic National Committee is running on fumes, and chairman Ken Martin is headed for a full-blown mental breakdown, according to a pair of blistering reports.

A New York Times report published Sunday revealed that the committee is $2 million in the hole and begging vendors to sit on their invoices until after the midterms.

The DNC quietly put the Southeast Washington building up as collateral last year to land a $15 million line of credit and bankroll off-year races, according to DC deed records not previously reported, according to NOTUS. The party has pawned the property, which it only partially owns, in past cycles. But going back to the well ahead of 2026 for the biggest off-year loan in committee history set off alarms among members who saw it as one more flashing red light.

“Ken gaslighting us about the DNC’s finances and not being transparent about the financial situation makes us doubt if he can oversee the DNC during the most important primary of our lifetime,” an unnamed DNC member told NOTUS.

The Republican National Committee is sitting on $128.5 million, and President Trump’s main super PAC, MAGA Inc., closed out June with roughly $400 million in the bank.

The DNC has downplayed the alarm. Roger Lau, the committee’s executive director, told the Times that the request for vendors to hold their invoices was “nothing more than standard negotiations with vendors over contracts and payment processes.”

Meanwhile, the pressure mounting on Martin is showing, according to the Times:

In a pique of frustration in early July, he threw his phone at the desk of a junior aide while upbraiding the person. The phone-tossing incident resulted in a formal complaint to the D.N.C.’s human resources department.

The fallout from the phone-throwing episode was described by half a dozen people familiar with the incident, who spoke on the condition of anonymity because they were not authorized to discuss internal party matters. None of them witnessed the encounter, and there was some dispute over how aggressively the phone was tossed. Mr. Martin was said to have thrown the phone at the desk, rather than at the aide.

Unsurprisingly, the DNC refused to comment on the incident.

To make matters worse, Martin has reportedly developed a “growing sense of paranoia” about a possible push to dump him and is “paralyzed by the idea of leaks.”

“It pisses me off when I see leaks out of this building,” Martin lamented during a meeting in May. “No more of that shit. No more.“

“My success is your success,” he added. “So the weaker I am, the weaker all of you are.”

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He Helped Build Obama’s Legacy. The Job Cost Him His Company.

Mike Owen spent years helping build the Obama Idolatry Worship Center Obama Presidential Center. On June 25, the owner and president of Adamson Plumbing Contractors suspended operations, laid off 25 union workers, and abandoned about six other construction jobs.

Breitbart News:

“Before the center opened, Owen said the project had left his company with $3.9 million in losses tied to delays, rework, labor overruns, and changing project demands. He said he spent months negotiating with Lakeside Alliance, the project’s construction manager, before going public after failing to reach a resolution,” the article read.

Indeed, the center was reportedly also costing taxpayers more and more money as it put out a call for unpaid volunteers even though its chief executive would be paid a salary of $740,000, according to reports.

In regard to Owen’s battle over the nearly $4 million payment dispute, his company that performed the work under the name Marsh-Adamson, has filed a $1.72 million mechanic’s lien against the center’s property in an effort to be paid for the work.

“Laying off close to 30 people is something that no owner in our industry wants to do. It’s a hard thing to do, especially when you know you can finish them and the company can still make money. But we were put in a pretty bad corner,” he said.

A project promoted as an investment in Chicago’s South Side had become, in Owen’s account, the job that pushed his company to the edge.

Owen says Adamson lost about $3.9 million through delays, rework, labor overruns, and changing demands. The company performed roughly $12 million in work after starting with a bid near $6.9 million. Marsh-Adamson, the name used for its work on the center, has filed a $1.72 million mechanic’s lien against the property.

The immediate break came just before the center opened on June 19. Owen says Lakeside Alliance, the project’s construction manager, agreed to release $100,000 if Adamson supplied two journeyman plumbers for last-minute nighttime work. His crew completed the assignment, but the money didn’t arrive before the opening.

Lakeside eventually sent the $100,000, along with about $35,000 for change orders. The payments arrived more than two weeks after Adamson had suspended operations and dismissed its workers. The money reduced a debt to one supplier, but it didn’t reverse the shutdown.

Owen has moved out of his company’s building and is working from home while attorneys handle the dispute. He says Adamson may regroup in September, but its future remains uncertain.

After 35 years in the industry, he may now have to find a job.

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Five tech giants are hiding $1.65tn in AI debt, using the trick that toppled Enron

Look at what Alphabet, Microsoft, Amazon, Meta, and Oracle officially owe, and the numbers seem large but manageable. Look off the books, and a second, bigger pile of debt appears.

A Nikkei study put that hidden figure at $1.65 trillion, up roughly eightfold in four years. It is more than the $1.35 trillion the five report outright.

The Enron echo

The money is tied up in off-balance-sheet vehicles, the same kind of structure Enron used to hide debt before it collapsed 25 years ago. Back then it was fraud. Now, tightened rules and fuller disclosures make it legal.

The tools are still there, though. “Enron’s crime wasn’t having special purpose vehicles,” analyst Gil Luria told Bloomberg Law. “Enron’s crime was hiding them.”

The mechanics are simple. A company packages the debt for chips, servers, and power into a separate legal entity, often a joint venture, so the cost never flows through its own accounts.

Take Meta’s Hyperion data centre in Louisiana. Meta and Blue Owl Capital both put equity into a separate structure that took on $27 billion in debt. Meta is the sole tenant, yet argues it does not have to record that debt, because it is not the one who must find replacement tenants.

Oracle has $260 billion of future lease commitments that will eventually land on its books. Nvidia carries $119 billion in purchase obligations. Alphabet and Microsoft keep their vehicles off-book too.

The numbers behind the boom

The scale is the story. Meta’s off-balance-sheet debt alone is about $420 billion, nearly triple its reported debt. Oracle’s has grown roughly thirtyfold in four years.

It is all in service of the same race. The industry is expected to spend more than $3 trillion through 2028 building and equipping AI data centres, much of it financed against the chips inside them.

Why it matters now

The timing is awkward. Four of the five report earnings in the next two weeks, and the reported debt will look tidy. The $1.65 trillion sitting in the footnotes will not make the headlines.

The catch is what happens later. When a data centre goes live, its lease rolls onto the balance sheet at once. If AI demand falls short, the facility is marked down, and the loss lands on the lenders and insurers who funded it.

Some already see the risk. S&P has cut Oracle’s credit rating over stretched leverage, and both Morgan Stanley and Moody’s have flagged the wider issue. “What if one of these companies was a house of cards,” asked accounting consultant Tom Selling, “and was propping itself up with this accounting treatment?”

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Department of Labor Announces Gavin Newsom’s California Owes OVER $22 BILLION to U.S. Unemployment Insurance Trust Fund – The ONLY State Still in Debt, Slamming Businesses with Higher Federal Payroll Taxes

The radical left’s favorite golden boy is running the once-great state of California straight into the ground.

The Trump Labor Department announced Wednesday that California Governor Gavin Newsom’s failed administration owes more than $22 billion to the U.S. Unemployment Insurance Trust Fund.

This staggering debt comes from loans California took during the COVID-19 pandemic to pay unemployment benefits — benefits that were looted by massive fraud under Newsom’s watch. California is now the only state in the entire country with an outstanding federal unemployment insurance loan balance.

As a direct result, California business owners are being forced to pay higher federal payroll taxes to bail out Sacramento’s incompetence and corruption. Every other state that borrowed during the pandemic has repaid its loans. Not Newsom’s California.

During and after the pandemic, California raked in record budget surpluses, at one point nearing $100 billion. Instead of using that taxpayer windfall to repay the federal loan like responsible states did, Newsom and the Democrat supermajority in Sacramento sat on the money, spent it on other priorities, and let the debt balloon with interest.

The state has paid $1.8 billion in interest since 2021, with Newsom’s latest budget proposing another $668 million in interest payments this year while putting zero dollars toward the actual principal.

The bill keeps growing. The California EDD’s UI Fund Forecast officially projects the outstanding loan balance to reach $22.0 billion by the end of 2026.

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Japan’s Keynesian Mirage: How Debt, Inflation, & A Collapsing Yen Expose A Failed Model

Japan’s yen crisis exposes the long‑running failure of the Keynesian strategy that has dominated the country’s economic policy: chronic deficits, exploding public debt, and engineered inflation are now eroding Japan’s purchasing power, competitiveness, and monetary stability.

For decades, many mainstream analysts pointed to Japan as proof that a rich, “monetarily sovereign” country could keep an extremely high public debt without relevant consequences. The argument was simple: as long as the state can issue its currency, it can always print whatever is needed to cover deficits, refinance debt, and support public spending.

In reality, that has meant public debt soaring to around 250% of GDP, one of the highest levels in the developed world, while repeatedly increasing government expenditure and leaving large, persistent deficits. Even the IMF notes that, even after several years of moderate growth, prudence is “key to keep debt‑to‑GDP on a firmly downward path,” admitting that the current level is a structural vulnerability.

Japan’s apparent stability depended on a crucial external factor, the country’s enormous exporting capacity.

As a leading exporter of cars, technology, and capital goods, the country attracted a continuous inflow of US dollars and foreign capital that supported a stable currency and kept inflation low, despite fiscal excess. That protective layer is eroding fast. Headline inflation has edged up from 1.4% in April 2026 to 1.5% in May, while core inflation has held at 1.4%, still below the Bank of Japan’s 2% target but clearly positive after three decades of near‑zero price growth.

A key factor of the Japanese model was its export engine and the “golden goose” of capital inflows.

These two factors allowed the country to live with large debt and deficits without immediately triggering high inflation. However, that mirage is vanishing as external performance falters and inflation, though moderate, bites into real incomes.

Keynesianism did not spur growth or improve Japanese citizens’ lives. It just bloated an unsustainable government machine.

Recent data show that price increases are now broad‑based, not confined to a few categories. In May 2026, overall CPI inflation was 1.5% year-on-year. However, food prices rose 3.5% year-on-year, which is a heavy burden for households. Goods inflation stood at 2.0%, while services inflation was around 1.0%.

Underlying inflationary pressures, particularly in services and wage‑sensitive sectors, are now embedded in the system rather than an isolated energy shock. Meanwhile, real net wages are stagnant or declining. Japanese citizens face an affordability crisis.

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US Debt Exceeds 100% of GDP for the first time since World War II

The United States has crossed a milestone that Washington has spent decades pretending would never arrive. Federal debt held by the public has now exceeded 100% of GDP for the first time since the aftermath of the Second World War. According to the latest government data, debt held by the public reached approximately $31.27 trillion while the nation’s annual economic output totaled roughly $31.22 trillion, pushing the debt-to-GDP ratio to 100.2%. The Congressional Budget Office now projects debt held by the public will average 101% of GDP this year and continue climbing to 120% by 2036 if current law remains unchanged.

The media continues to compare today’s numbers with the end of World War II, but that comparison completely misses the point. After 1945, the United States emerged as the world’s dominant industrial power. Soldiers came home, factories shifted from producing tanks to automobiles, the population expanded rapidly, and economic growth far outpaced government borrowing. Debt declined because the nation was producing wealth. Today we are doing precisely the opposite. Washington continues borrowing during periods of economic expansion, not because the country faces an existential war, but because politicians refuse to tell voters that promises have become mathematically impossible to keep.

The numbers expose just how unsustainable the fiscal position has become. The Congressional Budget Office estimates the federal deficit will total roughly $1.9 trillion this fiscal year, equal to 5.8% of GDP. By 2036, annual deficits are projected to exceed $3.1 trillion, or 6.7% of GDP. Federal spending will consume 23.3% of GDP this year, while revenues amount to only 17.5%. Washington is spending approximately $1.33 for every dollar it collects. That gap is no longer the result of recession or emergency stimulus. It has become the permanent operating model of government.

The real crisis is not simply the debt itself. It is the cost of carrying that debt. Net interest payments exceeded $1 trillion for the first time last year, consuming roughly 14% of all federal spending. Interest on the debt now exceeds what Washington spends on national defense. Every increase in long-term interest rates compounds the problem because trillions of dollars in Treasury securities must continually be refinanced at higher yields. Governments cannot borrow indefinitely without eventually becoming captive to their creditors.

This is exactly why I have repeatedly explained that the sovereign debt crisis, not inflation, will define this decade. Every government has embraced the Keynesian fantasy that deficits do not matter as long as borrowing remains possible. They assume they can simply issue another bond and postpone the consequences for another administration. That strategy works only until confidence begins to disappear. Sovereign debt crises are never caused by running out of money. They begin when lenders question whether governments possess either the ability or the political will to restore fiscal discipline.

Our computer has never suggested that the sovereign debt crisis would begin with a sudden default. It unfolds gradually through rising interest costs, capital migration, declining confidence, and governments searching for new ways to finance themselves. That inevitably leads to higher taxes, inflationary policies, capital controls, and expanding regulation of private wealth. Politicians will never admit they overspent. They will instead insist that the problem is wealthy citizens who have not contributed enough, corporations that have not paid their “fair share,” or investors who moved capital abroad. Governments always blame the people before accepting responsibility for their own fiscal recklessness.

Crossing 100% of GDP is not merely another statistic. It marks the point where the United States officially joins the group of heavily indebted nations that believed perpetual borrowing could replace sound fiscal policy. Unlike 1946, there is no peace dividend waiting on the horizon, no manufacturing boom capable of overwhelming the debt, and no political appetite to reduce spending. Every election promises more benefits, more subsidies, and more borrowing. That is why this cycle will end as every sovereign debt cycle throughout history has ended, with a crisis of confidence rather than a shortage of promises.

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Abolish the Fed: The Root of Inflation, Debt, and the Destruction of the Dollar

In 1913, the year the Federal Reserve was established, an ice cream cone typically cost about $0.05 (a nickel), while the average American home cost around $2,500 to $3,500 to purchase or build. Today, the national average cost of an ice cream cone is about $4.00 to $5.50 for a single scoop, while the median sale price of an existing single-family home in the United States is approximately $404,300.

In 1970, the year before America went off the gold standard, gold traded at an average price of roughly $35.96 to $38.90 per troy ounce. Today, the live spot price of gold is approximately $4,320 to $4,350 per troy ounce.

The Federal Reserve, through its artificial control of interest rates, credit expansion, and increases in the money supply, is the root cause of inflation and the weakening of the U.S. dollar. In the United States, a capitalist country, we trust the market to set the price of shoes, sandwiches, movie tickets, and cars. Why do we not trust the market to set a market-driven interest rate?

If interest rates were determined by the market, they would never be artificially too high or too low, and America could avoid the cycles of boom and bust fueled by cheap money. Whether during a boom or a bust, both periods ultimately result in a weaker U.S. dollar. Eliminating the Fed would make the dollar stronger and economy more stable.

Before examining how the Fed contributes to inflation, currency devaluation, and economic instability, a few common misconceptions should be addressed.

First, it is not a hidden secret that the Federal Reserve is not a direct agency of the U.S. government. This is publicly available information. The Fed is a federally chartered, operationally independent institution. Its Board of Governors is a federal agency whose members are appointed by the President and confirmed by the Senate, while its 12 regional Reserve Banks are privately owned by member commercial banks. Congress retains the authority to alter or abolish the Fed by legislation.

Second, this arrangement is not unusual. Nearly every country has a central bank, although it may operate under a different name. Central banks exist on a spectrum from fully independent to fully government-controlled, with most operating as hybrids that combine varying degrees of operational independence with government oversight and accountability. The Federal Reserve is simply the American version of a central bank.

The Federal Reserve, created by the Federal Reserve Act of 1913, operates through three primary mechanisms: setting the federal funds rate, conducting open market operations, and regulating reserve requirements for commercial banks.

The core of its money-creation power lies in open market operations. The Fed controls the monetary base, currency in circulation plus deposit balances that depository institutions hold at the Fed, by buying or selling securities. When the Fed buys a security, it pays by crediting the bank’s reserve account. No prior savings are required. The reserves are created by accounting entry.

Those reserves flow into the broader economy through fractional reserve banking. When you deposit $1,000 in a bank, the bank keeps a fraction and lends out the rest. That money, spent and redeposited elsewhere, is lent out again. Through this money multiplier effect, banks expand the money supply well beyond the original deposit.

Since March 2020, the reserve requirement floor has been set at zero, meaning US banks face no mandatory reserve floor at all. The only remaining brake on credit expansion is the interest rate the Fed itself sets and can raise or lower at will.

The federal funds rate is the rate at which commercial banks lend and borrow excess reserves overnight. The FOMC meets eight times annually to set this target. This single administered price, set by committee rather than by markets, governs the cost of capital for the world’s largest economy.

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Phoenix Pride Files for Bankruptcy Ahead of ‘Pride Month’

Phoenix Pride, a prominent organization behind Arizona’s largest LGBTQ+ gathering, announced on the eve of “Pride Month” that it has filed for bankruptcy. 

“The filing, submitted Thursday in the U.S. Bankruptcy Court for the District of Arizona, showed that Phoenix Pride was seeking Chapter 11 bankruptcy protection, allowing time to continue operations while restructuring its debts under court supervision,” the Tucson Sentinel reported. 

The organization’s board of directors said in a press release that the decision “was not made lightly.” 

“Rising operational costs, economic uncertainty, shifts in sponsorship and fundraising partly due to the current political climate and administration, and increasing demands on nonprofit organizations have created circumstances we can no longer navigate alone,” the press release reads. “Like many Pride organizations and LGBTQ+ nonprofits across the country, Phoenix Pride has faced mounting financial pressures that threaten our long-term sustainability.” 

The local publication noted that Phoenix Pride’s financial woes come just months after Tucson Pride shut down “following years of financial strain and leadership problems.” 

“The sequence of events raises new questions about the sustainability of some of the state’s largest LGBTQ+ organizations as they navigate rising costs, strict budgets, internal struggles and community trust,” the report continues. 

Phoenix Pride said filing Chapter 11 gives the organization the opportunity to reorganize its finances while continuing to operate, with the board of directors saying, “Our mission has not changed.”

According to the local news report, residents at a January town hall questioned the organization’s finances, transparency, and long-term plan. In November, Phoenix Pride publicly announced that its budget was $350,000 short and blamed its troubles on waning festival attendance and the loss of major sponsors.

Court documents list three creditors or entities who allege the organization owes them money, including $11,770 to a Wells Fargo Business Elite Card account and $1,600 to Oracle Event Group, per the report.

“The largest debt is a disputed claim of $418,886.31 tied to Pride Group, LLC, an Arizona-based event services company. A disputed claim means the two organizations disagree about the amount of money owed. The details of the dispute have not been disclosed,” the report details.

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The Financial Decline Of Miami Beach: When Pride Becomes Debt

Every time Miami Beach wants residents to accept another tax increase, another utility hike, another bond, or another excuse for why basic infrastructure still has not been fixed, the same pattern begins. First comes the whisper campaign. Then comes the friendly media narrative. Then come the professional politicians telling you there is no other choice. They want you to believe that more borrowing on your back is the only responsible path forward and that if you question them, you are somehow against progress, resiliency, public safety, or the future.

That is dishonest.

Miami Beach is not broke because the people have failed to pay. Miami Beach is in trouble because the political establishment has failed to lead.

For years, residents have paid more in taxes, more in fees, more in utility bills, and more through debt. The city has approved luxury development, expanded its budget, increased administrative costs, hired more staff, funded consultants, celebrated ribbon cuttings, and marketed itself as a global success story. Yet now we are told the city faces more than one billion dollars in infrastructure needs.

How?

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