Tag Archives: Government budget deficit

America’s government debt bomb

By Stephen Moore – The story is simple:

Over the past seven years American companies have become hyper- and even ruthlessly efficient, which has meant shedding unproductive operations and reducing employment, cutting debt burdens, and focusing on profitability.

It’s the reason the stock market has soared since 2008. Companies are now sitting on $1 trillion to $2 trillion of reserve cash, according to The Wall Street Journal, and balance sheets are generally pristine. Households have cut their debt, too.

We have here a tale of two economies. At a time when private-sector debt burdens have flattened out and even fallen, the government debt has soared frighteningly from $8 trillion to $16 trillion.

If there is a fundamental structural weakness in the economy holding back growth, this is it. more> http://tinyurl.com/poasxrf

Why the Fiscal Cliff Negotiations Will Fail Even If They “Succeed”

By Charles Kadlec – The false premise championed by President Barack Obama and his fellow Democrats is higher tax rates on “the rich” are the key to fiscal balance.

The false premise championed by House Speaker John Boehner is that the number one driver of future deficits is entitlement spending in the form of Social Security and Medicare.

False premises are dangerous because they lead to bad policies.

Currently, the negotiations over the budget are based on the CBO‘s assumption that real economic growth will average a paltry 2.8% over the next 10-years. Just getting back to the average of 3.1% would reduce projected deficits by more than $900 billion. more> http://tinyurl.com/cdbw6xp

“Fiscal cliff” talks stalled but progress possible

By Jason Lange – The United States is on course to slash its budget deficit nearly in half next year. Closing the gap that quickly, which in Washington is referred to as going over a “fiscal cliff,” could easily trigger a recession.

“Unfortunately, for the last 10 days, with the House and Congress gone for the Thanksgiving recess … much progress hasn’t been made,” Dick Durbin, the No. 2 Senate Democrat, told ABC’sThis Week” program. more> http://tinyurl.com/brjzr8f

Let It Be Known That No Financial Crisis Was Ever Caused by Stable Money

By Nathan Lewis – No economic crisis was ever caused by stable money.

The purpose of funny money is to solve some kind of problem whose fundamental cause is typically not monetary at all. For example, we are now in a process of trying to solve a bank insolvency crisis, an unemployment problem, and a fiscal deficit problem, with a monetary solution. more> http://tinyurl.com/dy69798

EU Trials New Crisis Model in Spain Trading Budget Cuts for Time

By Ben Sills – European leaders are testing the latest version of their debt crisis strategy in Spain, granting Prime Minister Mariano Rajoy more time to reduce the budget deficit in exchange for deeper spending cuts.

Europe’s concession to recession-wracked Spain has raised expectations in Ireland and Portugal that they can win more time to rein in their budget deficits after Germany’s hardball tactics in Greece spurred a rebellion against bailout politics there. more> http://tinyurl.com/clbjgzw

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CONGRESS WATCH CBO to Release 2012 Long-Term Budget Outlook Next Week Related articles Updates from Congressional Budget Office (blogs.strategygroup.net) Updates from Congressional Budget Office (blogs.strategygroup.net) Updates from Congressional Budget Office (blogs.strategygroup.net)

The Fiscal Game in Washington Is at Odds with Reality

US annual federal deficits 1901 to 2006

US annual federal deficits 1901 to 2006
(Photo credit: Wikipedia)

By Henry J. Aaron – Let’s play a game.

You are a legislator in a fictional country. You pride yourself on being fiscally responsible. Under current law, the government will run a small budget deficit …

Now, as a legislator, you are asked to cut taxes and raise spending–a lot! If you comply, huge and growing budget deficits will result. Debt will grow faster than income. Eventually, the debt will become so large that lenders will lose faith that the nation will have the will or ability to service the debt. When that happens, interest rates will spike and investment will collapse. What position do you take on these proposed tax cuts and spending increases?

Easy question, you say. You vote “no.” To do otherwise would be irresponsible.

If that is your position, you have just shown that you would not get very far in current U.S. politics. more> http://tinyurl.com/c5p6crf

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CONGRESS WATCH List of CBO publications that analyze the budgetary impact of the Budget Control Act of 2011 (P.L. 112-25) Related articles Updates from Congressional Budget Office (blogs.strategygroup.net) Updates from Congressional Budget Office (blogs.strategygroup.net)

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CONGRESS WATCH CBO Releases Report on the Troubled Asset Relief Program–March 2012 Report on the Troubled Asset Relief Program–March 2012 Report on the Troubled Asset Relief Program: Infographic Food Insufficiency and Income Volatility in U.S. Households: The Effects of Imputed … Continue reading