Where is the US economy headed?

A stroke of good fortune or did you arrange it?

Why does raising the debt ceiling equate with increasing the debt? The debt ceiling could be raised and then the debt reduced.

I'm regularly offered loans of one sort or another. I never bother though. There's nothing I want that justifies borrowing these days.

The debt ceiling could be raised and then the debt reduced.

You lot even faster.

Merkel and Sarkozy seem to have agreed on a plan re Italy and Spain. That might soothe the stock markets a bit.

for years the plan has been delay, pray and lie, so it will be very difficult to convince the holders of capital that Europe now has a viable plan and is ready to implement it this late into the melt-down.

"President Sarkozy and Chancellor Merkel reiterate their commitment to fully implement the decisions taken by the heads of state and government of the euro area and the EU institutions on July 21st 2011.

"In particular, they stress the importance that parliamentary approval will be obtained swiftly by the end of September in their two countries.

"They welcome the recent measures announced by Italy and Spain with regard to faster fiscal consolidation and improved competitiveness. Especially the Italian authorities' goal to achieve a balanced budget a year earlier than previously envisaged is of fundamental importance. They stress that complete and speedy implementation of the announced measures is key to restore market confidence.

"As decided on July 21st, the effectiveness of the EFSF will be improved and its flexibility increased linked to appropriate conditionality, in particular through the following instruments: precautionary program, finance recapitalization of financial institutions and to intervene in secondary markets on the basis of an ECB analysis recognizing the existence of exceptional financial market circumstances and risks to financial stability and on the basis of a decision by mutual agreement of the member states, in order to avoid contagion.

"In line with 21st July decisions, France and Germany are confident that the ECB analysis will provide the appropriate basis for secondary market interventions as it will help determine the case when financial stability of the eurozone as a whole is at risk.

Duly noted, hawkeye. The early stories I am seeing suggest that "European Central Banks" may cobble together some money in order to buy secondary bonds to stave off crises in Italy and Spain for the moment. I doubt that, in Italy in particular, that will buy that much time to straighten things out. A few days or weeks perhaps.

Actually, Merkel and Sarkozy did nothing more than reaffirming the decissions of the EURO-summit from July. Just calming down investors before the Asian stock markets open.

I guess that we might as well though in the towel if "more of the same" will not calm anyone down!

Before returning to the States this weekend, I and others in my family spent enthralled hours at the Churchill War Rooms in London, along with the new museum in his honor next door. Now, there was a leader! There was a man whose example shouts out to us now in our hour of trouble.
On both sides of the Atlantic, the turmoil of this past week has sparked cries for those in political power to step up and for God's sake, lead. Fears are spreading across Europe as well as the U.S. that not only are our economies teetering but our politicians are ineffectual.
In their summit a short while ago, leaders of European democracies promised they had fixed the problems of their weakest player, Greece. Instead, their solution was so timid that fears of default have spread to Italy and Spain, the third and fourth largest economies in the euro zone. In the U.S., President Obama and Congressional leaders assured us that their budget deal would put us on a safe path. Instead, markets plunged and Standard & Poors stripped our county of its AAA credit rating for the first time ever.
It's not that you don't have the economic capacity to pay your bills, said S&P; we're just not sure you have the political capacity to pay them. One can well object to the decision, as the White House has, but the damage is done in international eyes. Gloom is thick across the waters.
Winston Churchill would have rejected this pessimism in an instant. He was offered the prime ministership in May, 1940, when Hitler had marched across much of Europe and chased British troops off the mainland. Many of Britain' older political leaders were so despondent they wanted to capitulate to Hitler, and had signed a peace treaty.

who will blame it all on Obama if the markets slump later today and tomorrow.

Bullshit, what we need are leaders who know how to lead