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Nation's Debt Hits Record High $16 Trillion
As the Democrats prepare for their convention in Charlotte, NC, they are greeting by the news just released that the total U.S. government debt eclipsed $16 trillion for the first time Friday, as total federal borrowing continues marching toward the $16.394 trillion borrowing limit.
Sen. Bob Corker (R-Tenn.) said, “Today, the United States passed a new unfortunate threshold which should be a call to action for Washington to finally address the potentially debilitating challenges posed by our unsustainable deficits and debt, which is now over 100 percent of our nation’s gross domestic product.”
Republicans have made the debt the centerpiece of their campaign to unseat President Obama, arguing that under Obama the debt has risen more than under any previous president. They put up two giant debt clocks last week at their convention in Tampa, Fla., to tally the red ink.
Since the Republicans finished their national convention last week and the Democrats start tonight, we dug through the amount of debt added by each of the last three presidents as a result of their policies.
When President Bill Clinton, a Democrat, took office in 1993, national debt stood at $4.1 trillion. He added about $1.5 trillion.
When Republican George W. Bush took over the White House, the debt had grown to $5 trillion. His programs added almost $4.9 trillion.
When Democratic President Barack Obama took over the White House in 2009, debt stood at $10.6 trillion. Today that number broke $16 trillion... a growth of more than $5 trillion in three-and-a-half years.
The government is currently running an average monthly deficit of $100 billion and is likely to hit the debt ceiling sometime in late December. The Treasury Department then can take emergency steps for several months to prevent the government from missing payments. Once the government hits the debt ceiling, it can no longer borrow money in excess of the statutory limit.
More Business News
Last Update on October 20, 2014 17:25 GMT
ARMONK, N.Y. (AP) -- IBM is paying $1.5 billion to Globalfoundries in order to shed its costly chip division.
IBM will make payments to the chipmaker over three years, but it's taking a $4.7 billion charge in its third quarter results.
IBM reports adjusted earnings of $3.68 per share, while revenue totaled $22.4 billion. Analysts polled by FactSet had predicted earnings of $4.32 per share and revenue about a billion dollars higher.
Globalfoundries will get IBM's global commercial semiconductor technology business, including intellectual property and technologies related to IBM Microelectronics. It also gets IBM's existing semiconductor manufacturing operations and plants in East Fishkill, New York and Essex Junction, Vermont, as well as its commercial microelectronics business.
Under the agreement, Globalfoundries will become IBM's exclusive server processor semiconductor technology provider for 22 nanometer (nm), 14nm and 10nm semiconductors for the next 10 years.
NEW YORK (AP) -- A research group says it expects China's economy to slow over the next decade.
The Conference Board on Monday forecast that growth in the world's No. 2 economy will slow to 4 percent per year between 2020 and 2025.
Chinese officials have rolled out stimulus measures as economic growth slows. The government is aiming for growth of 7.5 percent this year.
China's boom in the past decade, with growth peaking at about 14 percent in 2007, was driven by exports and spending on assets such as factories and apartment buildings. China's leaders now want more growth based on Chinese consumers.
EUROPEAN CENTRAL BANK
FRANKFURT, Germany (AP) -- The European Central Bank has started buying securities called covered bonds as it launches its latest stimulus effort aimed at preventing the 18-country eurozone economy from sinking back into recession.
An ECB spokeswoman confirmed the purchases began Monday.
Covered bonds are investments backed by loans such as mortgages. They carry extra protections for investors, which sets them apart from other such asset-backed bonds made from bundled loans.
The ECB is buying them to encourage banks to make the underlying loans. The idea is to get more credit moving to businesses in a eurozone economy that didn't grow at all in the second quarter.
The ECB stimulus efforts also include offers of extra-cheap loans to banks, based on how much they are lending to companies.
NEW YORK (AP) -- Platform Specialty Products Corp. said Monday that it will spend about $3.51 billion to buy rival chemical maker Arysta LifeScience Ltd. to diversify its product offerings.
Miami-based Platform makes specialty chemicals used in computers, cars and oil rigs. Arysta, which is owned by a fund backed by private equity firm Permira, makes fungicides and herbicides for crops.
The deal is expected to close in the first quarter of next year.
Arysta, which sells its products all around the world, had revenue of $1.5 billion in 2013. Platform has been growing its agricultural chemical business. Earlier this month, it bought agrochemical company Agriphar for about $380 million.
Shares of Platform are up 3 percent.
HOFFMAN ESTATES, Ill. (AP) -- Sears is looking to raise more cash, announcing that it is planning a rights offering that may raise up to $625 million.
The company, which runs Kmart and its namesake stores, also said Monday that it struck a leasing deal with European fashion retailer Primark.
Sears Holdings Corp. said the rights offering will allow its stockholders to buy up to $625 million senior unsecured notes due 2019 and warrants to buy shares of its common stock. It anticipates up to $625 million in proceeds if the offering is fully subscribed and closes as planned. The proceeds will be used for general corporate purposes.
Earlier this month Sears said it would sell most of its stake in its Canadian unit to raise as much as $380 million.
Canadian Pacific ends CSX deal talks
Canadian Pacific Railway says it has ended talks with U.S. counterpart CSX about a possible combination and plans no more discussions about a deal.
The railway operator did not say why it ended talks, but it did note in a brief statement that regulatory concerns appear to be a major deterrent for railroads considering combinations.
Several reports surfaced recently that CSX had rejected a merger offer from Canadian Pacific Railway Ltd. Both railroads declined to comment on those reports, but CSX CEO Michael Ward said last week that regulators would likely take a cautious approach to any railroad consolidation deals.
Besides Jacksonville, Florida-based CSX Corp., the other large railroads are Norfolk Southern, Union Pacific, BNSF and Canadian National.
CSX shares are down more than 3 percent to $32.74 in premarket trading.
AIR BAG RECALL
DETROIT (AP) -- U.S. safety regulators are warning owners of more than 4.7 million vehicles that have been recalled for air bag problems to get them repaired immediately.
The warning issued Monday by the National Highway Traffic Safety Administration covers vehicles from multiple manufacturers that date to 2002.
Inflators can rupture in air bags made by Takata Corp., causing metal fragments to fly out when the bags are inflated in crashes. So far, automakers have recalled about 12 million vehicles worldwide because of the problem.
Safety advocates estimate that more than 20 million cars have the faulty inflators in the U.S. alone. They say at least four people have died from the problem.
The inflators have led to multiple recalls from Honda, Toyota, Nissan, Mazda, General Motors, Ford, Chrysler, BMW and Mitsubishi.
TOYOTA-AIR BAG RECALL
DETROIT (AP) -- Toyota is recalling 247,000 vehicles in high-humidity areas as an air bag problem that has plagued most of the auto industry continues to widen.
The recall posed Monday by U.S. safety regulators covers the 2003 to 2005 Corolla and Matrix, the 2002 to 2005 Sequoia and the 2003 to 2005 Tundra. Also included is the 2003 to 2005 Pontiac Vibe made by Toyota.
Inflators can rupture in air bags manufactured by parts supplier Takata, causing metal fragments to fly out when bags are inflated in crashes. The problem has caused serious injuries. So far, automakers have recalled about 12 million vehicles worldwide because of the problem.
The recall covers vehicles in South Florida, along the Gulf Coast, in Puerto Rico, Hawaii, the U.S. Virgin Islands, Guam, Saipan and American Samoa.
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