Umi Devi

Showing posts with label Economics. Show all posts

Aug 17, 2011

Washington: Debt and Spending, Just the Facts

The waste in Washington has swelled beyond belief and it has done so thanks to both parties the last ten years. Take a look at the facts (CBO). Below are the levels of national debt and the billions added to the deficit each year. The totals get to a Trillion the final year of the Bush presidency and balloon even worse since then.

Year Debt Billions added
2000 5.674
2001 5.807 133
2002 6.228 421
2003 6.783 555
2004 7.379 596
2005 7.933 554
2006 8.507 574
2007 9.008 501
2008 10.025 1017 4.351 Trillion Bush Total (8 years)
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2009 11910 1885
2010 13562 1652 3.537 Trillion Obama Total (2 years)

Year Spending
2001 1862
2002 2010
2003 2160
2004 2293
2005 2472
2006 2655
2007 2728
2008 2982 17.3 Trillion Bush Total (8 years)
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2009 3517
2010 3456
2011 3818 10.791 Trillion Obama Total (2 years)

Aug 15, 2011

Obama left short-handed on economy

From the LA Times - As he confronts the threat of another recession and turmoil in the financial markets, President Obama is being advised by an economic team that is noticeably short on big-name players — potentially hurting his ability to find solutions and sell them to Wall Street, Congress and the American public."When you ask about the economic team, it's kind of like, 'What economic team?'" said Edward Mills, a financial policy analyst with FBR Capital Markets. "They are very thin at a very critical time. They need all the firepower they can muster. Yet the team is missing a key messenger in selling Obama's policies. The post of chairman of the Council of Economic Advisors — an influential position — is vacant and is likely to remain so at least into the fall.When Obama took office in early 2009, he was counseled by an all-star economic team that included former Treasury Secretary Lawrence H. Summers, Great Depression scholar Christina D. Romer and former Federal Reserve Chairman Paul A. Volcker.Also on the roster were well-regarded economists such as Budget Director Peter R. Orszag, Jared Bernstein and Austan Goolsbee. All of them have since resigned.That leaves Treasury Secretary Timothy F. Geithner as the sole remaining top member of the original team. But Geithner is a financial markets expert, not an economist. And some analysts worry that the White House might not have enough economic expertise to fashion new proposals for boosting growth. Read more

Aug 13, 2011

Consumer Confidence Craters in August

Bloomberg - Confidence among U.S. consumers plunged in August to the lowest level since May 1980, adding to concern that weak employment gains and volatility in the stock market will prompt households to retrench. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment slumped to 54.9 from 63.7 the prior month. The gauge was projected to decline to 62, according to the median forecast in a Bloomberg News survey.

The biggest one-week slump in stocks since 2008 and the threat of default on the nation’s debt may have exacerbated consumers’ concerns as unemployment hovers above 9 percent and companies are hesitant to hire. Rising pessimism poses a risk household spending will cool further, hindering a recovery that Federal Reserve policy makers said this week was already advancing “considerably slower” than projected. “The mood is very depressed,” said Chris Christopher, an economist at IHS Global Insight Inc. in Lexington, Massachusetts. “Consumers are very fatigued and very uncertain. In the short term, people are going to pull back on spending.” Read full story here: News New Mexico

Aug 11, 2011

Five Things Leftists Won't Let Obama Do to Help Economy

Commentary by Jeff Carter - President Obama spoke in a time of crisis yesterday. What little credibility he had with the market was blown. The market tanked further after his comments. This time, it was looking for a little pick me up. He advocated for a payroll tax cut (meaningless) and extension of jobless benefits(meaningless). He criticized S&P, but his words are hollow because the scoreboard shows markets the truth. can see a way for the market to rebound. However, it would take the Congress to pass some very aggressive legislation. That is impossible right now because of the Democratic party. My ideas would provide incentives for the private sector to administer a huge positive economic shock to the system. Critics will cite accounting numbers. We need to look at economics. We also can’t control events in Europe-so we need to remedy our situation at home and hope they take care of business there.

Here is what Washington should do:

1. Flat tax everyone at 19%-no write offs

2. Push corporate tax rates and corporate dividend taxes to 0%

3. Take capital gains taxes to 0%.

4. Immediately lift regulations on exploring for domestic energy in oil, gas and coal.

5. Allow highly skilled people to immigrate to the US, and grant them citizenship if they start a business and buy a home.

The market would stop it’s decline. I wouldn’t worry about government revenues. They will come soon enough due to the exponential economic activity that would be created. Read more

Sowell: A Pyrrhic 'Victory'

Commentary by Dr. Thomas Sowell - In Don Marquis' classic satirical book, "Archy and Mehitabel," Mehitabel the alley cat asks plaintively, "What have I done to deserve all these kittens?" That seems to be the pained reaction of the Obama administration to the financial woes that led to the downgrading of America's credit rating, for the first time in history. There are people who see no connection between what they have done and the consequences that follow. But Barack Obama is not likely to be one of them. He is a savvy politician who will undoubtedly be satisfied if enough voters fail to see a connection between what he has done and the consequences that followed. To a remarkable extent, he has succeeded, with

the help of his friends in the media and the Republicans' failure to articulate their case. Polls find more people blaming the Republicans for the financial crisis than are blaming the President. Why was there a financial crisis in the first place? Because of runaway spending that sent the national debt up against the legal limit. But when all the big spending bills were being rushed through Congress, the Democrats had such an overwhelming majority in both houses of Congress that nothing the Republicans could do made the slightest difference. Yet polls show that many people today are blaming the Republicans for the country's financial problems. But, by the time Republicans gained control of the House of Representatives, and thus became involved in negotiations over raising the national debt ceiling, the spending which caused that crisis in the first place had already been done -- and done by Democrats. Read more

Aug 9, 2011

Dow plunges more than 634 points after downgrade

From KOB-TV.com - (AP) NEW YORK - Fear has taken over on Wall Street. The Dow Jones industrial average fell 634.76 points Monday, the first trading day since Standard & Poor’s downgraded American debt. It was the sixth-worst point decline for the Dow in the last 112 years and the worst drop since December 2008. Every stock in the S&P 500 index declined. But the S&P downgrade wasn’t the only catalyst Monday. Investors worried about the slowing U.S. economy, escalating debt problems threatening Europe and the prospect that fear in the markets would reinforce itself, as it did during the financial crisis in the fall of 2008. Read more

Aug 8, 2011

Pearce Comments on Debt Downgrade

Pearce (right) at Pearce Sponsored Job Fair

Las Cruces, NM (August 6, 2011) Today, Congressman Steve Pearce issued the following statement on Standard & Poor’s lowering of the nation’s long-term credit rating from AAA to AA+. “Americans understand the downgrade is serious and are concerned of the impact this will have on their lives,” said Pearce. “The consequences are clear. As the federal government is spending $3.5 trillion for every 2.2 trillion taken in and printing money to cover this out-of-control spending, inflation is driven higher, jobs are placed in danger, and the economy is weakened. This approach is placing us on a dangerous course.”

“With unemployment above 8 percent for the 30th straight month, the Administration's attempts to stimulate the economy by spending money we don't have are clearly not working, as further evidenced by the downgrade,” Pearce continued. “Americans have said they want a new approach; last week, they wanted us not to make a deal but find a solution. It is time to listen to the people and get to work on the real, common sense solutions, providing the accountability they deserve. Once Washington provides a plan that will work, reestablishing the credit rating of the country will require hard work on the part of the American people, but I am confident that each one of us will do our part to restore economic security to our nation and to our families.”

No Chance of Default, US Can Print Money: Greenspan

From CNBC.com - Former Federal Reserve Chairman Alan Greenspan on Sunday ruled out the chance of a US default following S&P's decision to downgrade America's credit rating. Former Federal Reserve Chairman Alan Greenspan on Sunday ruled out the chance of a US default following S&P's decision to downgrade America's credit rating. Read more

How the debt addicts are blaming the victims

From Big Government.com - by Wayne Allyn Root - Can you even imagine blaming a rape victim for being raped, or a terrorist victim for being murdered by terrorists? Of course not. In a sane world, it is the rapist and terrorist that is blamed for the crime, not the victim. But amazingly, this is exactly what Obama and his socialist cabal are now doing in the midst of the debt ceiling crisis- blaming the victims. Taxes aren’t the problem. Heavy federal, state, local, sales, property, and corporate taxes are already choking the entire U.S. economy. The addiction to spending is the problem. Raising taxes hasn’t helped Europe. The PIIGS (Portugal, Ireland, Italy, Greece, and Spain) are all insolvent and bankrupt despite much higher taxes than America. More money has never helped a single addict in world history. Only tough love, discipline and rehab solves the problem. And only hitting rock bottom starts the healing process and saves their lives. Obama is the mother of all spending addicts. He has an illness. Obama needs to stand up in front of America and say, “My name is Barack Obama and I am an addict. I apologize to the taxpayers, all of whom I have wronged. I apologize for spending our economy into insolvency and bankruptcy. I apologize for the historic levels of unsustainable debt. I apologize for trying to blame the victims (taxpayers) for my illness.” It all starts with admitting you have a problem. Read more

Aug 6, 2011

U.S. Debt Loses A A A Rating from Standard and Poors

(CNN) -- A day after Standard & Poor's rating agency downgraded the U.S. credit rating to AA+ from its top rank of AAA, there were more questions than answers Saturday about what effects the move will have on the economy and American consumers. The move by S&P, one of the leading credit rating agencies, came just days after Congress approved a deal to deliver $2.1 trillion in savings over the next decade. The deal followed heated debt-ceiling talks in Washington. "The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics," S&P said Friday shortly after markets closed. While was unclear what the short-term impact of the credit rating downgrade would be, some initial answers were expected Monday when the stock market reopened. Read full story here: News New Mexico

Aug 5, 2011

Carney: The White House Doesn't Create Jobs

The yield on the two-year U.S. Treasury notes dropped to a record low .26%, as investors plowed into short term U.S. government debt securities in search of safety today. The five year T-note was yielding a paltry 1.19% by mid-morning after yet another poor jobs report that showed the U.S. economy produced less than the 150,000 jobs required to keep the work force steady in the U.S.

Jay Carney

White House press Secretary Jay Carney was poised early in the day to take credit for any good news on the job front. He was also ready to re-direct responsibility for the continuing jobs malaise in the U.S. once the reality of a floundering economy was once again the focus point in the media. When asked about the jobs report and the president's upcoming bus tour Carney said, "the White House doesn’t create jobs." Of course this statement seems to be a far cry from the occasional report over the last 30 months that actually showed job growth. When those reports have surfaced Carney and his predecssor Robert Gibbs kept the phrase "We created," handy to explain any good news on the job front.

Dow falls 512 in steepest decline since '08 crisis

From the Santa Fe New Mexican.com - NEW YORK (AP) — Gripped by fear of a new recession, Wall Street suffered its worst day Thursday since the financial crisis in the fall of 2008. The firestorm of selling that erased more than 500 points off the Dow Jones industrial average then spread overseas. The sell-off wiped out the Dow's remaining gains for 2011. It put the Dow and broader stock indexes into what investors call a correction — down 10 percent from their highs in the spring. In Friday trading in Asia, Japan's benchmark Nikkei 225 stock average was down more than 3 percent and Hong Kong's Hang Seng shed 4 percent. "We are continuing to be bombarded by worries about the global economy," said Bill Stone, the chief investment strategist for PNC Financial. Across the financial markets, the day was reminiscent of the wild swings that defined the financial crisis in September and October three years ago. Gold prices briefly hit a record high. Oil fell even more than stocks — 6 percent, or $5.30 a barrel. And frightened investors were so desperate to get into some government bonds that they were willing accept almost no return on their money. It was the most alarming day yet in the almost uninterrupted selling that has swept Wall Street for two weeks. The Dow has lost more than 1,300 points, or 10.5 percent. By one broad measure kept by Dow Jones, almost $1.9 trillion in market value has disappeared. For the day, the Dow closed down 512.76 points, at 11,383.68. It was the steepest point decline since Dec. 1, 2008. Read more

Aug 4, 2011

Federal Budget 101

By: DAVID THOMAS Chief Executive Officer Equitas Capital Advisors LLC The U.S. Congress sets a federal budget every year in the trillions of dollars. Few people know how much money that is so we created a breakdown of federal spending in simple terms. Let's put the 2011 federal budget into perspective:
U.S. income: $2,170,000,000,000
Federal budget: $3,820,000,000,000
New debt: $ 1,650,000,000,000
National debt: $14,271,000,000,000
Recent budget cut: $ 38,500,000,000 (about 1 percent of the budget)

It helps to think about these numbers in terms that we can relate to. Let's remove eight zeros from these numbers and pretend this is the household budget for the fictitious Jones family.
Total annual income for the Jones family: $21,700
Amount of money the Jones family spent: $38,200
Amount of new debt added to the credit card: $16,500
Outstanding balance on the credit card: $142,710
Amount cut from the budget: $385
So in effect last month Congress, or in this example the Jones family, sat down at the kitchen table and agreed to cut $385 from its annual budget. What family would cut $385 of spending in order to solve $16,500 in deficit spending? It is a start, although hardly a solution. Now after years of this, the Jones family has $142,710 of debt on its credit card (which is the equivalent of the national debt). You would think the Jones family would recognize and address this situation, but it does not. Neither does Congress.

The root of the debt problem is that the voters typically do not send people to Congress to save money. They are sent there to bring home the bacon to their own home state. To effect budget change, we need to change the job description and give Congress new marching orders. It is awfully hard (but not impossible) to reverse course and tell the government to stop borrowing money from our children and spending it now. In effect, what we have is a reverse mortgage on the country. The problem is that the voters have become addicted to the money. Moreover, the American voters are still in the denial stage, and do not want to face the possibility of going into rehab.

Jul 28, 2011

Rural area post offices in danger of closure

From KOB-TV and the Clovis News Journal - Due to financial struggles, the U.S. Postal Service has produced a list of about 3,700 post offices it will study for closure nationwide. This week, the US Postal Service announced 54 offices in New Mexico will be evaluated in a cost-cutting study. USPS spokesman Peter Hass said the 180-day process of considering closure would start once announcements were sent to customers of each post office. He didn’t know when that would be. Each post office is to be studied individually, and the process includes a 60-day public comment period. Hass said no post offices would close before December. The three major criteria USPS considered when choosing which locations to study for closure were the number of retail transactions per day, amount of revenue and proximity of the next-nearest post office, Hass said. If a post office is closed, he said, the community could get a “village post office.” In that arrangement, the Postal Service would contract with a small business or governmental body to offer its services. Hass said 35 percent of USPS revenue already comes from services received outside a regular post office — online or in a private store, for example. “Over the past four years, we’ve seen a 20 percent decline in mail volume,” Hass continued. The economic downturn has led to less advertising mail, and people have been communicating, paying bills and so forth electronically instead of sending first-class mail, he said. Hass said this situation means USPS has to be more efficient. Read more

Jul 11, 2011

55% Say Reduced Gov't Spending Good for Economy

Rasmussen - President Obama and Congress are currently debating how deep to cut government spending and whether to include some tax increases as part of a budget deal. But voters feel more strongly than ever that decreasing government spending is good for the economy and think tax increases of any kind are bad economic medicine. A new Rasmussen Reports national telephone survey finds that 55% of Likely U.S. Voters now think decreases in government spending help the economy. Twenty-four percent (24%) believe decreased spending hurts the economy, while 11% say it has no impact. Read full story here: News New Mexico

Obama Proposes Tax Hikes On Low Income Families

From boston.com -Proposals under consideration include raising taxes on small business owners and potentially low- and middle-income families. You won't hear about that from Obama. Instead the president focuses on the very rich, and speaks euphemistically. Here are a few of the phrases the president has used of late to talk about what amounts to raising taxes for some: "What we need to do is to have a balanced approach where everything is on the table." "We need to take on spending in the tax code." "The tax cuts I'm proposing we get rid of are tax breaks for millionaires and billionaires; tax breaks for oil companies and hedge fund managers and corporate jet owners." More News New Mexico

Spending/Debt Reduction Deal Stuck in the Mud

Speaker Boehner and President Obama

Washington Times - President Obama and congressional leaders ended a Sunday night session of deficit-reduction talks at the White House without announcing any progress, but they agreed to meet again Monday. The president also scheduled a news conference for 11 a.m. Monday at the White House on the negotiations, in which he is still pushing to include tax increases as part of a $4 trillion deal over 10 years. House Speaker John A. Boehner, Ohio Republican, announced Saturday night that he won’t agree to the president’s $4 trillion target if it included tax increases. On Sunday, his office said he reiterated that point at the meeting, saying that he favors a deal closer to the $2 trillion in cuts floated by a bipartisan commission led by Vice President Joseph R. Biden. Read full story here: News New Mexico

Jul 9, 2011

Plouffe: "Most People" Won't Vote Based on Unemployment

The Hill - President Obama’s senior political adviser David Plouffe said Wednesday that people won’t vote in 2012 based on the unemployment rate. Plouffe should probably hope that’s the case, since dismal job figures aren’t expected to get any better for Obama and the economy on Friday. The jobs report released on Friday showed the economy added only 18,000 jobs, much less than anticipated. The unemployment rate creeped up to 9.2 percent. It’s looking more and more like Obama will have to do something no president has done since Franklin Roosevelt: Win reelection with unemployment around 8 percent. Ronald Reagan, another president Obama is sometimes compared with, was reelected in 1984 when unemployment was 7.2 percent. Obama isn’t likely to see a number that low. Read full story here: News New Mexico

Jul 8, 2011

Unemployment UP for 3rd Month in a Row

Bloomberg - American employers added jobs at the slowest pace in nine months in June and the unemployment rate unexpectedly climbed to 9.2 percent, sending global stocks tumbling on concern the world’s biggest economy is faltering. Employers increased payrolls by 18,000 workers, less than the most pessimistic forecast in a Bloomberg News survey of economists, which called for growth of 105,000.

The increase followed a 25,000 gain that was less than half the initial estimate. Hiring by companies was the weakest since May 2010. “Poor job growth essentially stops any growth in consumer spending,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “This is saying that economic conditions are stagnant, with no bright spots.” Read full story here: News New Mexico

"We don't need new taxes. We need new taxpayers"

Marco Rubio

Real Clear Politics - "We don't need new taxes. We need new taxpayers, people that are gainfully employed, making money and paying into the tax system. Then we need a government that has the discipline to take that additional revenue and use it to pay down the debt and never grow it again," Sen. Marco Rubio (R-FL) said on the Senate floor. Read full story here: News New Mexico