That decision was put in stark terms Tuesday by the Congressional Budget Office, which in a new analysis said the economy will plunge into a recession early next year if Congress lets taxes rise and spending be cut, as called for under the law. But if Congress changes the law to keep taxes low and spending high, it could add more than half a trillion dollars to the deficit in 2013, marking a fifth straight year of trillion-dollar deficits and risking the patience of the country’s creditors.

The CBO numbers come just as the debate is heating up on Capitol Hill over how to handle the looming “fiscal cliff,” which Congress created by continually pushing off tough decisions on both taxes and spending. Senate Majority Leader Harry Reid, Nevada Democrat, signaled Tuesday that he will allow the automatic spending cuts called for in last year’s debt deal to go into effect — culling billions of dollars from defense and domestic spending — unless Republicans agree to allow taxes to increase for at least some taxpayers.

The German austerity dictate, pushing Greece into destitution, is provoking growing popular resistance, which, apparently, can no longer be suppressed with democratic means. Berlin has failed in its efforts to force Athens into subordination by threatening to withdraw the Euro, as much as with its demand that Greece combines its parliamentary elections with a referendum on the question of remaining in the Euro zone.

Berlin categorically rejects the option of retracting the austerity dictate and replacing it with stimulus programs, as is being demanded by leading economists world wide, even though the exclusion of Greece from the Euro zone threatens to push the currency, itself, into an abyss. The sectors of the German elite, which refuse to consider this change of course proposed by Krugman and numerous other experts outside Germany, are now PUBLICLY DEBATING SCENARIOS INVOLVING THE USE OF FORCE. In a newspaper interview early this month, the director of the prominent Hamburg Institute of International Economics, Thomas Straubhaar, called for establishing a protectorate in Greece - "regardless of the outcome of the elections."

The country is a "failed state," he says, which is unable to raise itself "to a new start" under "its own steam." Athens needs "help in establishing viable state structures." IT, THEREFORE, MUST BE TRANSFORMED INTO "A EUROPEAN PROTECTORATE." "The EU must do it," affirms Straubhaar. The EU "would have to help Greece modernize its institutions at every level, particularly with administrative staff, tax experts, and tax inspectors." However, refounding Greece would demand "intuition" to "overcome national pride, conceit, and the resistance of interest groups." This is referring to a sovereign democracy, a German ally in the EU and NATO.

In the meantime, there is even discussion of a putsch in Athens. Greece threatens to sink into complete chaos, warned a long time companion of Germany's former Foreign Minister, Joseph Fischer, Daniel Cohn-Bendit, a European parliamentarian for the French Green Party. Cohn-Bendit explained that it is impossible to avoid extensive foreign interference. "If you leave the Greeks to muddle through alone, you are risking a military putsch."

The meeting comes after the Organization for Economic Cooperation and Development today warned that the 17 countries that use the euro risk falling into a "severe recession." It called on governments and Europe's central bank to act quickly to keep the slowdown from dragging down the global economy. The electoral turmoil in Greece threatens to pull apart the eurozone and Prime Minister David Cameron has warned Europe's nation states to prepare for any possible Greek exit.

Borrowing costs are up for the most indebted governments and there is an increasing number of reports of worried savers and investors pulling funds out of banks that are seen as weak. Just last week, Spanish bank Bankia had to reassure its customers after £1 billion was taken out of its vaults by savers. Meanwhile, unemployment is soaring as recession grips nearly half the eurozone countries.

Switching the conversation from slashing budgets to promoting growth won't be easy as Angela Merkel has continuously pushed to restrain governments. Head of the IMF Christine Lagarde warned today that the only way to protect against a failing debt crisis was to promote fiscal easing. She said: "If the economy turns out to be significantly weaker than forecast, fiscal easing should be considered. Measures should be focused on supporting growth and employment."

Thilo Sarrazin, the former board member of Germany's central bank who caused outrage two years ago with a bestseller criticizing the impact of Muslim immigrants on German society, presented a new book on Tuesday that could strike a similar chord with Germans: "Europe Doesn't Need the Euro."

In his latest work, the combative politician, a maverick member of the opposition center-left Social Democratic Party, controversially argues that Germany is being pressured to bail out the euro zone because it perpetrated the Holocaust. Sarrazin writes that supporters of euro bonds in Germany "are driven by that very German reflex, that we can only finally atone for the Holocaust and World War II when we have put all our interests and money into European hands," according to excerpts published in German media ahead of the book launch.

Carsten Schneider, a budget policy spokesman for the SPD, said: "Sarrazin is once again trying out the usual provocation. His criticism of the euro is nationalist and reactionary." Volker Kauder, the parliamentary group leader of Chancellor Angela Merkel's Christian Democrats, said: "Sarrazin is wrong again. THE EURO IS A SUCCESS STORY AND WILL REMAIN SO."

Nevertheless, many of Sarrazin's arguments are widely accepted. He says it was a mistake to launch the currency before Europe had a common fiscal policy, and that it was wrong to let countries like Greece join because their economies weren't ready. He concludes that Europe can only get out of its mess if it rapidly moves towards political union, which he opposes, or that the union should be transformed into a looser formation that allows troubled member states to quit so that they can regain competitiveness through currency devaluation.

Setting aside the hype and the cultural phenomenon that is the online networking site, Facebook Inc would be fairly priced at $9.59, according to the smattering of Wall Street estimates analyzed and modeled by Thomson Reuters StarMine.

Data from six brokerages modeled by StarMine forecast the company's estimated annualized earnings growth over the next 10 years at 10.8 percent. That's almost exactly the mean for the technology sector and far below the 24 percent growth rate implied by the current stock price.

Investor confidence in the shares has been damaged after Reuters reported lead underwriter Morgan Stanley cut its revenue forecasts for Facebook in the days before the offering, in part because of comments from Facebook on mobile usage. After pricing at $38, far more than the first estimate of $28 the company gave investors, shares have been sliding - at one point as much as 31 percent from the $45 peak hit shortly after it started trading Friday.

The number of IPOs has dropped from 311 annually before 2000 to 99 the past decade. Meanwhile, the smart CEOs and the Super Rich are “going private,” to avoid government red tape restricting capitalism. Over at BusinessWeek they’re warning investors that the growing number of “cutesy mascots” is a dangerous reminder “of the dot-com boom’s irrational exuberance.” They’re also red flagging new reports that “more Chinese investors are betting on US start-ups.” And feeding the flames.

What’s going on? Facebook’s in trouble, that’s what. Now in the crosshairs of public scrutiny, everybody’s taking potshots. And the warnings are just beginning:

Everything from Facebook being “too big to fail or succeed” to a Chicago attorney warning that the stock could “crater” if Facebook can’t grow revenues 41% annually for five years to “sustain its value” to a warning that FACEBOOK’S ONE OF THE “BLACK SWANS” THAT COULD EVENTUALLY BRING DOWN THE GLOBAL ECONOMY.

More than 70% of an estimated one million suspect parts were traced back to China, the report said. It blamed weaknesses in the US supply chain, and China's failure to curb the counterfeit market. The failure of a key part could pose safety and national security risks and lead to higher costs for the Pentagon, the committee said.

US servicemen rely on a variety of "small, incredibly sophisticated electronic components" found in night vision systems, radios and GPS devices and the failure of a single part could put a soldier at risk, the report said. It highlighted suspect counterfeit parts in SH-60B helicopters used by the Navy, in C-130J and C-27J cargo planes and in the Navy's P-8A Poseidon plane. After China, the UK and Canada were found to be the next-largest source countries for fake parts.

Whether the federal government spends money wisely or foolishly, the truth is that the vast majority of it still ends up in the pockets of the American people who then use it to buy the things they need for their daily lives. If the US government had not borrowed and spent an extra five trillion dollars that we did not have over the past several years, we would be in the middle of a rip-roaring economic depression right now.

So any talk that [Mr] Barack Obama is “improving the economy” is a total farce. It is a five trillion dollar lie. The reality is that [Mr] Barack Obama and the US Congress have been stealing trillions of dollars from future generations in order to make things tolerable in the present. If the federal government adopted a balanced budget next year, the debt-fueled prosperity that we are currently enjoying would start disappearing very rapidly and all hell would break loose in America.

At this point, the US national debt is over 15.7 trillion dollars. When [Mr] Ronald Reagan took office it was less than a trillion dollars. It took from the founding of America until 1995 for the federal government to accumulate 5 trillion dollars of debt. Under [Mr] Obama, we have accumulated more than 5 trillion dollars of new debt in just over 3 years.

[Mr] Barack Obama is prancing about the countryside touting his great “economic plan”, but the truth is that the only reason the economy has not totally collapsed is because he is stealing 150 million dollars an hour from our children and our grandchildren. Sadly, most Americans don’t understand that the current level of prosperity that we are enjoying is a grand illusion. Most Americans still expect things to return to the way that they used to be, and they are increasingly becoming angry that it is taking so long to get back there.

In Afghanistan, the "SMART" North Atlantic Treaty Organization (NATO) is in fact bound for a humiliating escape. "SMART DEFENSE" IS CODE FOR "THERE'S NO MONEY". Only five among 28 NATO member states spend 2% of their gross domestic product on the military - as NATO would have it. One of them was - surprise! - Greece. Here's yet another crash course on weaponized neo-liberalism. First Greece was more or less forced to buy expensive submarines from the French and the Germans; then it was forced to make budget cuts. Call it the "food for subs" NATO relief plan.

The US pays for no less than 75% of NATO's bills - yet another graphic demonstration of NATO as the European arm of the Pentagon. Still, in 2011 European Union (EU) members spent no less than $180 billion on defense. Not anymore. There's no money. So it will be up to the Pentagon to keep it going. And keep it going it will - with relish. As expected, this Sunday in occupied Chicago NATO approved - better yet, US President Barack Obama and his allies "just decided" - to go with the first phase out of four of the US missile shield for Europe.

Those who believe NATO's spin - this shield is not aimed at Russia, but as a defense against "evil" Iranian missiles - may join Alice in Wonderland. For all practical purposes, Russian military chief General Nikolai Makarov has already said Russia is bound to respond by stationing short-range Iskander missiles in Kaliningrad, near the Polish border. You can take NATO out of the Cold War but you can't take the Cold War out of NATO.

Neelie Kroes, the EU's Digital Agenda Commissioner, will present by the beginning of June a new legislative proposal which aims “to facilitate cross-border electronic transactions” through the adoption of harmonised e-signatures, e-identities and electronic authentication services (eIAS) across EU member states, according to an internal document seen by EurActiv. “A clear regulatory environment for eIAS would boost user convenience, trust and confidence in the digital world,” reads the paper. “This will increase the availability of cross-border and cross-sector eIAS and stimulate the take up of cross-border electronic transactions in all sectors.”

Brussels has long been trying to facilitate the emergence of a parallel system of electronic identification, on top of the the real-world existing documents. This has mainly been linked to the struggle for establishing a truly functioning single market, rather than on security grounds. Despite the EU's efforts to increase the security of e-signatures and the confidence in the emergence of virtual identities, citizens and governments have been slow to adopt electronic IDs.

The UK briefly introduced ID cards during the second world war but abolished them afterwards. The use that the Nazi regime made of identity documents to single out Jewish people and send them into concentration camps has been a powerful argument against introducing ID documents across the Channel.

That group of nuns - the Leadership Conference of Women Religious - has shot back at the Vatican, and is planning to protest in front of St Patrick's Cathedral in Manhattan on Tuesday. They want Cardinal Timothy Dolan to ask the Vatican to take back this criticism.

What caused this schism between nuns and church leadership? In an assessment published in April, the Congregation for the Doctrine of the Faith said that nuns were too "silent on the right to life from conception to natural death" and didn't promote "Church teaching" of reproductive health issues. To better understand what this means, a bit of context is necessary. The conference --which represents 80 percent, or 57,000 US nuns - was formed 56 years ago, at the request of the Catholic Church.

At that time, the Vatican wanted "a unified voice" for US nuns who helped the poor, nursed the sick, taught students, worked as missionaries, and fought violence, USA Today notes. April's assessment, however, criticized conference members as "radical" feminists for failing to condemn things such as gay marriage and birth control. The condemnation pretty much means that a church HQ appointee will take over the organization. At first, nuns mostly reacted with surprise. Many felt that their vows of obedience prevent them from openly protesting church policy.

They quickly changed tactics: They now say that the church's mandate is just a move to avoid addressing longstanding concerns over child molestation, and have since organized an online petition to rally support for sisters nationwide. So far, there are some 48,000 signatures.

'Airplane Hill' lies on the southern fringes of Jerusalem's city limits - rock-strewn land dotted with shabby, prefabricated bungalows and the occasional pine tree. Once a tranquil backwater, the area has become the focus of hectic activity in the last six months, with Israeli authorities releasing plans for 2,610 housing units and 1,110 hotel rooms.

With the approval process going more quickly than expected, building could start later this year, creating the first new Israeli settlement in 15 years among the sprawl of a modern Jerusalem that is spread out over many hills. If that happens, it would effectively cut off the city's mainly Arab neighbourhoods from Bethlehem in the occupied West Bank, imperilling the Palestinians' prospects for establishing a coherent capital and with it their goal of an independent state.

There is only so much territorial abuse this tortured land can take before we kill the political options of saving the two-state solution," said Daniel Seidemann, an Israeli attorney who monitors urban developments he thinks affect chances for peace. "What is happening at Givat HaMatos is a game changer," he said, his finger tapping a map of the area for added emphasis. "Events are careering out of control." Of all the obstacles blocking the way to peace between the Palestinians and Israelis, the status of Jerusalem is arguably the most intractable.

For Israelis, all of the city, including East Jerusalem and its West Bank suburbs captured in 1967, is their "eternal and indivisible" capital, the home the Jews dreamed of through 2,000 years of exile, and the site of their revered Western Wall. For Palestinians, there can be no peace until Israel cedes them control over East Jerusalem, a symbol of their national struggle and home to Islam's third holiest site, al-Aqsa mosque and the glittering Dome of the Rock.

The currency bloc's powerhouse set a zero percent coupon on a new two-year bond to be auctioned on Wednesday, the Bundesbank said on Tuesday - the first time this has happened on debt of such long maturity. However, analysts said the €5 billion of paper on offer should easily sell as investors seek to shelter their capital in top-rated debt before Greek elections next month.

"There is still a considerable demand for flight-to-quality assets, investors remain very uncertain and what you can't discount into markets is how (the Greek crisis) will play out," said Sanjay Joshi, head of fixed income at London & Capital, a $3.5 billion fund. "It's not Lehmans going under, this is a country that could go under... and it is an interlinked system across Europe." German government bond yields have sunk to record lows in recent days and, with euro zone inflation at 2.6 percent last month, investors are losing money in real terms.

But that has generally not deterred buyers worried that a new Greek government will reject the terms of the country's bailout, possibly forcing it to ditch the euro. Contagion from a so-called Grexit could pile pressure on other strugglers. Concerns over Spanish banks, some of which are riddled with bad loans and stuffed with their sovereign's debt, are also souring sentiment and Spanish and Italian bond yields have risen sharply.

"The capital volatility of (German bonds) versus the capital volatility of other European assets means there will be demand for this paper. It's a viable asset for those running benchmark funds," Joshi added. Demand for German bonds pushed two-year yields in the secondary market as low 0.28 percent last week and some analysts see them dipping below zero.

If Greece were to leave the eurozone, the immediate cause might be an ECB decision to pull the plug. Extensive use of “emergency liquidity assistance” (ELA) to help banks in the weakest economies has been one of the less-noticed features of the eurozone crisis. Separate from normal supplies of liquidity and meant originally as a temporary facility for national authorities to use when banks hit problems, ELA proved a lifesaver for the financial system in Ireland and is now even more so in Greece. As such, it has given the ECB — which has ultimate control over the facility — considerable power to determine countries’ fates.

Whether that power would ever be exercised is unclear. ELA is a subject on which the ECB is deeply reluctant to provide information — even on where or when it is provided. “You don’t say when you are in an emergency situation, because then you make the situation worse. SO I REALLY DON’T SEE THE USEFULNESS OF BEING MORE TRANSPARENT,” Luc Coene, Belgium’s central bank governor, explained in a Financial Times interview this month.

Nevertheless, ambiguity over how the ECB would really act gives it sway over eurozone politicians. An ECB threat in late 2010 to pull the plug helped persuade Ireland to accept an international bailout plan. No doubt, its governing council will hope to concentrate minds similarly in Athens.

Dimon is not the only banking executive to serve two masters. Along with Dimon, the New York Fed board includes CEO’s from Banco Popular de Puerto Rico, Solway Bank, heads of Macy’s Department Store, the Metropolitan Museum of Art and representatives from Columbia University. Senator Elizabeth Warren wants to see Dimon resign from the Federal Reserve Board.

She told CBS, “I’d like to see Jamie Dimon, for example, resign from his position as a Class A director of the New York Federal Reserve Bank. The banks cannot regulate themselves.” Senator Bernie Sanders, who has been calling for a revision of the Fed, told CNN’s Wolf Blitzer “The conflicts of interest are so apparent that they’re laughable. Here you have the Fed, which is supposed to regulate Wall Street. Then you have the CEO of the largest Wall Street company on the board which [it] is supposed to be regulating. This is the fox guarding the henhouse.”

The Federal Reserve Act of 1913 states that bankers should hold seats on the Fed’s regional boards. This addition was meant to allude to some semblance of decentralization of the Fed’s board members; however the clause has only served to bring the corruption closer to home.