Detroit’s Default May Spark U.S. Death Spiral of Debt

Debt is deadly, and it’s made even worse with rising interest rates that can prevent you from eliminating the load. What happens with rising interest rates is that more of the payments go toward the interest and less to the principal. In fact, it’s what I call a death spiral of debt that worsens as rates move higher.

When individuals face excessive debt, often the solution is to reduce spending and adhere to a strict repayment program.

EU Plans to Withhold Funds From Hungary

Hungary — quite possibly the next target of the German-dominated EU.

Hungary appears to be turning into the next Greece. The country has failed to reduce its deficit, and today the European Commission reacted. The executive arm of the European Union has announced a proposal to withhold from Hungary $655 million in EU development funds.

“The commission took a decision today to propose to partially suspend commitments of the EU Cohesion Fund for Hungary from January next year onwards because of non-compliance with the latest council recommendation in January to correct its excessive deficit,” said Olli Rehn, EU commissioner for economic and monetary affairs.

This is the first time the European Commission has taken such an action against one of its members as punishment for an excessive deficit.

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Though EU officials portray today’s action as an encouragement rather than a punishment, the greater truth is that the European Union is now wielding tremendous power over nations that were formerly sovereign—especially those that are poorer. Expect Hungary’s sovereignty to fade away just as Greece’s has, and for EU authority to continue to strengthen.

Full article: EU Plans to Withhold Funds From Hungary (The Trumpet)