My sentiments, exactly! Why did it take nearly 3 YEARS into his presidency for Obama to suddenly take an interest? Oh, that's right! Because the presidential election season is upon us!
by Andrew Malcolm at the LA Times:
Speaking on behalf of millions of Americans who've grown angry and frustrated over the president's 32-month ineffective inactivity on the job creation front, President Obama on Thursday told members of Congress they really have to do something about the crummy employment situation -- and do it quickly.
Citing the plight of millions of struggling Americans whose wishes for jobs Obama ignored for most of the 961 days he's been in office while chasing shinier healthcare and financial reforms, Obama said it was time that Congress stop blaming others. He said it was time members take responsibility for their inaction and halt their phony partisan games and political circus acts that pervade Washington culture.
Because the Americans Obama hasn't been listening to are really hurting now. And -- who's....
....counting? -- but it's only 424 days until Nov. 6, 2012. No plan yet to pay for Obama's ideas. But he wants immediate passage of his American Jobs Act anyway. Obama, whose Democratic spending priorities have pushed the national debt beyond $14,000,000,000,000, said it was important to curb spending and keep to the deficit reduction plan agreed to earlier this summer while also investing in, you know, many important things.
He then provided a joint session of Congress with a broadly ambitious list of goals that sounded to many people very much like a lot more spending, like, say, the $787 billion economic stimulus bill of 2009 that didn't stimulate much of anything except that national debt.
With the national debt already increasing $3 million every minute of every day, Obama wants to repair and modernize 35,000 schools. Obama wants $35 billion to go toward salaries for teachers, firefighters and police.
Obama wants $140 billion largely to update roads and bridges. Obama wants another $245 billion in business and individual tax relief. Obama also wants to extend unemployment benefits.
And Obama wants it all right now. Seriously. Now that his Martha's Vineyard vacation is over, this situation is urgent.
Obama didn't have room in his 4,021 word speech to mention how he intended to pay for all this new sounds-an-awful-like-increased-new-stimulus-spending-but-we're-not-using-that-word-anymore.
Aides said Americans should trust the president and sometime soon he would be outlining the finances that would not increase the national debt by one dime, honest.
Today in Virginia and next week in Ohio, Obama begins an aggressive autumn of travels selling his sounds-like-new-spending plans by day and fundraising by evening, bashing guess who for not solving the job crisis long ago.
Because like pretty much every sentient American, he knows full well there isn't one chance in Haiti of the divided Congress approving this package.
In fact, Obama's counting on that because grandiose program-proposing like this costs nothing-zero-nada, except the limo gas to the Capitol. Yet it gives perpetual candidate Obama tons of swell-sounding details to talk about during the 2011-12 reelection campaign.
Because he can't blame his mother-in-law for the nation's economic mess. When's the last time you heard a Harvard grad say, "Boy, did I blow that!" So, the only culprits left are in Congress, especially those Repugnicans.
But here's the catch that Obama and his Windy City wizards missed: Most Americans are not politically obedient machine Chicagoans. Like a linebacker reading the quarterback's eyes, they've already figured out this South Sider's game.
This week's ABC News/Washington Post Poll found that, based on their 961 days' experience with the current White House crowd, 47% say Obama's new economic program will have zero effect on the economy.
Worse politically, twice as many -- 34% vs 17% -- say Obama's plan will actually make matters worse, instead of better.
An NBC News/Wall Street Journal Poll the other day found 73% of Americans believe the nation is on the wrong track. That's 23 points more than felt that way at the beginning of summer.
Funny coincidence. The last time the revealing wrong track number was this high (78%) was in the autumn of 2008, just two weeks before Americans bought Obama's "Change to Believe In" line.
And they have the pink slips to prove it.
from Washington Post:
The daunting tower of national, state and local debt in the United States will reach a level this year unmatched just after World War II and already exceeds the size of the entire economy, according to government estimates.
But any similarity between 1946 and now ends there. The U.S. debt levels tumbled in the years after World War II, but today they are still climbing and even deep cuts in spending won't completely change that for several years.
As President Obama and Republicans squabble over whose programs to cut and which taxes to raise, slow growth and a rising tide of interest payments - largely beyond their control - are making the job of fixing the budget much harder than in the past. Statehouses and governors face similar challenges.
After World War II, the federal debt - including debt purchased by the Social Security Trust Fund - hit nearly 122 percent of gross domestic product. State and municipal debt back then was minimal. By the time Dwight Eisenhower was elected president six years later, the federal government's debt had dipped to about three-fourths of GDP.
The key factor in the rapid drop in government debt, said Harvard University economist Kenneth Rogoff, was fast economic growth. Spurred by a young labor force, world-leading manufacturers, high personal savings rates, a pent-up demand for consumer goods after years of war and the Depression, and a bout of inflation, the economy grew 57 percent in six years. Thanks to sharp postwar cuts in defense outlays, federal government spending also tumbled for a couple of years.
But today the U.S. economy is in a polar opposite condition. The labor force is aging, U.S. manufacturing often lags behind Asian and European rivals, households are in hock up to their eyeballs, and consumer appetite for goods is tepid. In addition, inflation is tame and government spending locked into entitlement programs and debt service that will be hard or impossible to alter.
"We're not growing like we were after World War II, so the amount of debt you can bear and the trajectory are much worse," Rogoff said.
Moreover, today state and municipal governments are also facing fiscal woes - another difference between now and the postwar era. State and municipal governments from Sacramento to Madison to Harrisburg have racked up about $2.4 trillion in debt, or more than 15 percent of GDP.
Even if analysts leave aside the debt held by the Social Security Trust Fund, the total indebtedness of federal, state and local governments is running around 85 percent, vs. 108.7 percent in 1946.
"It's still very, very, very high," Rogoff said, "and there are a lot of things on the other side of the equation that are much worse." Moreover the debt held by Social Security, which is in surplus now, will have to be paid later as the ranks of senior citizens grow.
Robert D. Reischauer, president of the Urban Institute and former director of the nonpartisan Congressional Budget Office, said that the debt accumulated by 1946 "was for a very different purpose, which was to preserve freedom and democracy versus totalitarianism rather than to throw a huge party and put it on the credit card."
He said that state governments have also squandered much of their spending and failed to meet all their pension obligations.
Reischauer stressed that after World War II, consumers, many of whom had purchased savings bonds, and banks, which had been required to hold certain amounts of government debt, were in strong positions. Today's consumers and banks are strapped.
"We had large household savings, and we flourished," he said of the post-World War II era.
Inflation also reduced the value of World War II-era debts because the United States could pay them back with money that had less buying power. Inflation reached 14 percent in 1947. Many investors fear that inflation is looming now, too, and may be the only way to ease the debt burden. But with high unemployment and slow growth, so far there is little sign of it. On Thursday, the Labor Department said inflation was 1.2 percent during 2010.
Rogoff and Carmen M. Reinhart, a University of Maryland economics professor, have done research showing that once government debt surpasses 90 percent of GDP, average growth rates slide 4 percent. In emerging markets, the threshold is lower and the damage to growth greater.
Slower growth will only slow the erosion of the national debt.
State budget experts say that some governors have exaggerated their fiscal woes. Thanks to relatively low interest rates, states spend on average 4 percent of their budgets to make debt payments, said Joshua Zeitz, state and municipal finance analyst at a research firm, MF Global, and former senior policy adviser to former New Jersey governor John Corzine. (By some calculations, he said, the average is a still modest 5.5 percent.)
Zeitz said that many governors speak of "cuts" when they mean cuts from projected spending, assuming continued growth from inflation and other factors. Many states whose governors boast of making budget cuts could end up with higher levels of spending.
Wisconsin, where Gov. Scott Walker (R) has rocked the legislature with proposed limits on state employee unions, is one of those, Zeitz said. The state is on a two-year budget cycle. This year the governor has talked of a $137 million shortfall, though Zeitz said it was largely of Walker's own making through tax cuts and spending initiatives. In any case, that amount would equal 1 percent of the state budget. "A 1 percent shortfall does not constitute a crisis," Zeitz said.
Walker said the state faces a more than $3 billion deficit next year, but Zeitz said that includes assumptions about program growth and revenue.
Scott D. Pattison, executive director of the National Association of State Budget Officers, estimates that state government revenue will increase 5 percent this year. "The pie is expanding," he said.
But not fast enough for the government sector overall. According to Obama's fiscal 2012 budget proposal released Monday, the federal government's net interest payments (not including money owed the Social Security fund) will rise from 1.4 percent to 3.4 percent over the next decade.
Federal debt (not including debt held by the Social Security fund) fell to a post-World War II low of about 24 percent in 1974. After tax cuts and increased defense spending under President Ronald Reagan, it rose to about 49 percent in 1993, before President Bill Clinton's budget deal took effect. It then fell to 32.5 percent in 2000, but starting rising again when President George W. Bush took office. Tax cuts, war spending and recession costs have more than doubled that level since.
Recalling the post-World War II economy that helped ease government indebtedness, Reischauer said: "It wasn't that when you looked out the windshield of the federal car that you saw steep hills ahead as you do now. It's a very different kind of situation."
headline from Zero Hedge today:
from news.com Australia:
THE actual figure of the US' national debt is much higher than the official sum of $US13.4 trillion ($14.3 trillion) given by the Congressional Budget Office, according to analysts cited on Sunday by the New York Post.
"The Government is lying about the amount of debt. It is engaging in Enron accounting," said Laurence Kotlikoff, an economist at Boston University and co-author of The Coming Generational Storm: What You Need to Know about America's Economic Future.
"The problem is we're seeing an explosion in spending," added Andrew Moylan, director of government affairs for the National Taxpayers Union.
In 1980, the debt - the accumulated red ink incurred by the Federal Government - was $US909 billion.
This represented some 33 per cent of gross domestic product, according to the Congressional Budget Office (CBO).
Thirty years later, based on this year's second-quarter numbers, the CBO said the debt was $US13.4 trillion, or 92 per cent of GDP.
The CBO estimates the debt will be at $US16.5 trillion in two years, or 100.6 per cent of GDP.
But these numbers are incomplete.
They do not count off-budget obligations such as required spending for Social Security and Medicare, whose programs represent a balloon payment for the Government as more Americans retire and collect benefits.
In the case of Social Security, beginning in 2016, the US Government will be paying out more than it is collecting in taxes.
Without basic measures - such as payment cuts or higher payroll taxes - the system could be on the road to bankruptcy, according to officials.
"Without changes," wrote Social Security Commissioner Michael Astrue, "by 2037 the Social Security Trust Fund will be exhausted. There will be enough money only to pay about $US0.76 for each dollar of benefits."
Mr Kotlikoff and Mr Moylan agree US national debt is much more than the official $US13.4 trillion number, but they disagree over how to add up the exact number.
Mr Kotlikoff says the debt is actually $US200 trillion.
Mr Moylan says the number is likely about $US60 trillion.
That is close to the figure quoted by David Walker, the US Comptroller General from 1998 to 2008.
He launched a campaign to convince Americans that the federal spending and debt is a greater threat than terrorism.
But whichever figure is accurate, all three agree that the problem has worsened in the last few years.
They say it is because Congress and the Administration, whether Republican or Democrat, consistently overspend.
by Jeff Harding at Daily Capitalist blog:
The world economic recovery may be slowing faster than previously anticipated, according the OECD’s latest Interim Economic Assessment. Growth in the Group of Seven countries is expected to be around 1½ per cent on an annualized basis in the second half of 2010 compared with the previous estimate of around 2½ per cent in the OECD’s May Economic Outlook.It is clear that the OECD does not understand what is happening. Otherwise they wouldn’t need to suggest more fiscal and monetary stimulus if they really believed the “loss of momentum in the recovery” was only “temporary.”
The OECD says the loss of momentum in the recovery is temporary although uncertainty has increased. …
If the slowdown reflects longer-lasting forces bearing down on activity, additional monetary stimulus might be warranted in the form of quantitative easing and commitment to close-to-zero policy interest rates for a long period,” the OECD said. “Where public finances permit, planned fiscal consolidation could be delayed. [my emphasis]
Overall, the incoming data suggest that the recovery of output and employment in the United States has slowed in recent months, to a pace somewhat weaker than most FOMC participants projected earlier this year. …The Obama Administration is proposing more government fiscal stimulus spending to boost the economy.
We will continue to monitor economic developments closely and to evaluate whether additional monetary easing would be beneficial. In particular, the Committee is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly.
from Burning Platform blog:
When I read Paul Krugman and the other Keynesian boneheads saying that our debt is not a problem, they quote figures about our debt of $13.3 trillion versus our GDP of $14.6 trillion not being so bad. That is only 91% of GDP. They point to World War II when our national debt reached 120% of GDP. They say everything worked out after that.
Well lets analyze that comparison for just a second. In 1945, Europe, Russia and Asia lay in ruins. The devastation was epic. The United States stood alone as the only unscathed country in the world. America became the manufacturer to the world. We rebuilt Europe and Asia. Our GDP soared, as our National Debt declined from $269 billion in 1946 to $255 billion in 1951, remaining below $300 billion until 1963.
Today our reported National Debt is $13.362 TRILLION. This is the first big lie. There are two entities named Fannie Mae and Freddie Mac that happen to be 80% owned by the US government. Anyone who thinks these two companies can operate without the backing of the US Government are delusional. The US taxpayer is on the hook for these two disastrously run companies. Somehow, government accounting doesn’t require their debt to be considered the responsibility of the US taxpayer. This is a fraud, pure and simple. Their debt is our debt.
According to their latest 10Q filed in early August (links below), their debts are:
from Tyler Durden at Zero Hedge:
Three days into the month, and the Treasury has already redeemed $169 billion in debt, of which $137 billion in Bills. Run-rated (for Bills alone) this is about $5.5 trillion annually, or basically 63% of all marketable US debt. And somehow the Treasury is lowering the amount of new bond issuance beginning next week. We wonder just where Tim Geithner will get the much needed cash to plug not only the increasing daily deficit spending (today alone the US burned $21 billion net of debt transfers, gross the number was even worse), as well as to fund daily rolls once rates start eventually increasing. This is financial suicide, although the Treasury knows that all too well. It is now stuck in a corner and has no way out than to hope for the best.
Total US debt today was $13.06 trillion. Total debt on March 6, 2009 was $10.95 trillion. The government has spent $2.1 trillion dollars to create a bear market rally which has now fizzled, and to fund a fiscal stimulus that is now dancing its death rattle. GDP will now gradually roll over, the unemployment rate will once again start increasing, diffusion indices, manufacturing and all other economic output will begin declining, but not before the bill is in. It cost Americans $2.1 trillion in debt to generate a 14 months sugar high (for which all will promptly receive a much higher tax bill). Luckily, we will never pay this debt off, so perhaps "the joke is on them" after all.
