Stocks plunge as debt talks near collapse

[bluediamond]

NEW YORK—Stocks are plunging at midday after Congress' latest bid to resolve the federal budget gridlock appeared to fail.
The Dow Jones industrial average is down 327 points, or 2.8 percent, at 11,469 shortly before noon Eastern. The Standard & Poor's 500 index is down 31, or 2.5 percent, at 1,185. The Nasdaq composite index is down 67, or 2.6 percent, at 2,506.
A 12-member bipartisan panel was assigned to cut $1.2 trillion from the federal deficit by Wednesday. The panel appeared ready to admit failure on Monday. That could lead to broad, automatic cuts from military and social spending.
Uncertainty about government spending drags on the economy because the private sector is growing so slowly. Traders also fear that Europe's debt crisis might spill over, disrupting the fragile U.S.
Side-note: Dow is just like a yo yo...

http://www.denverpost.com/business/ci_19382688

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[Monster]

btw, the US national debt is 15 trillion dollars, it probably won't be affected by the EU debt crisis.

When Bush Jr. decided to go to war in Afghanistan and Iraq, military spending ballooned to before unseen proportions.

Since the US is now beginning to withdraw troops from Iraq and Afghanistan, military spending will deflate in 2012, roughly.

This case -- the failure to negotiate cuts -- will lead to automatic cuts in military spending in 2013.

 

[bluediamond]

If the Dow does not get better soon, America will blame the government for this debt, so far there is no report of a deal made.