The U.S., rated Aaa since 1917, was put on review for the first time since 1995 on concern the debt limit will not be raised in time to prevent a missed payment of interest or principal on outstanding bonds and notes even though the risk remains low, Moody’s said. The rating would likely be reduced to the Aa range and there is no assurance that Moody’s would return its top rating even if a default is quickly cured.

“It certainly underscores the importance of passing the debt ceiling and not putting us in default status, and making sure there’s a longer term fiscal plan to contain spending and the deficit we’ve been running up over the last few years,” said Anthony Cronin, a Treasury bond trader at Societe General SA in New York, one of the 20 primary dealers that trade with the Federal Reserve. “Maybe it’s the impetus to say we’ll need more of a concession.”

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Yuck. Read it all and there is now a lot more there.

Free lunchism is ultimately the problem with the no-new-taxes pledge that so many politicians have adopted. A refusal to raise taxes, no matter how principled, cannot take us back to the good old days. It would instead lead to a very different American society. For taxes to remain where they are, Washington would need to end Medicare as we know it, end Social Security as we know it, severely shrink the military ”” or do some combination of the above.

“We cannot repeat the past when it comes to the federal budget,” Douglas Elmendorf, director of the nonpartisan Congressional Budget Office, recently wrote. “The aging of our population and the rising cost of health care have changed the backdrop for federal budget policy in a fundamental way.”

The most important part of the recent Republican budget plan, written by Representative Paul Ryan, was that it acknowledged this reality…

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An extraordinary amount of personal income is coming directly from the government.

Close to $2 of every $10 that went into Americans’ wallets last year were payments like jobless benefits, food stamps, Social Security and disability, according to an analysis by Moody’s Analytics. In states hit hard by the downturn, like Arizona, Florida, Michigan and Ohio, residents derived even more of their income from the government.

By the end of this year, however, many of those dollars are going to disappear, with the expiration of extended benefits intended to help people cope with the lingering effects of the recession.

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With South Sudan set to become an independent nation Saturday, Rhode Island Episcopal Bishop Geralyn Wolf will go to Washington in coming days to advocate for a renewed effort by the United States to secure peace and security in the troubled region.

Bishop Wolf noted that she has been invited by Sen. Sheldon Whitehouse to lead the U.S. Senate in prayer at its July 14 session. Following that, she said, she and her husband, Thomas Bair Jr., plan to meet the other members of Rhode Island’s congressional delegation, Sen. Jack Reed and Representatives David N. Cicilline and James R. Langevin, about the problems facing the people of South Sudan.

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State and federal regulators are cracking down on waste and fraud in the unemployment insurance system, problems that have hit record levels as jobless claims surge in a weak economy.

In the 12 months through March, the overpayment rate was 11.6% ”” more than $1 for every $9 paid out, Labor Department figures show. That’s up from the 12 months that ended in June 2010, when 10.6% of the $156 billion in jobless benefits disbursed to Americans should not have been paid, the department says. The overpayment rate was 9.6% in fiscal 2009 and 9.2% in 2008.

About 9.3 million Americans are currently receiving jobless benefits. Several state agencies have had to borrow money to pay those benefits.

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Overall, the proposal would cut Social Security benefits by $112 billion over the next decade, according to the nonpartisan Congressional Budget Office. It would cut government pensions and veterans’ benefits by $24 billion over the same time period if adopted for them.

Reaction from the president’s own party was swift Thursday, raising questions about whether Obama can keep Democrats on board if he agrees to cuts in Social Security. House Democratic leader Nancy Pelosi said her caucus won’t support any package that includes Social Security cuts.

“Do not consider Social Security a piggy bank for giving tax cuts to the wealthiest people in our country,” Pelosi said. “We are not going to balance the budget on the backs of America’s seniors.”

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It’s a sad mark of the times to have to point this out, but “averting calamity” doesn’t suffice as governing strategy. It’s not what more effective public sectors in places such as Singapore or Finland, or even China, are doing.

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New census figures show that the percentage of Californians who live in “nuclear family” households ”” a married man and a woman raising their children ”” has dropped again over the last decade, to 23.4% of all households. That represents a 10% decline in 10 years, measured as a percentage of the state’s households.

Those households, the Times analysis shows, are being supplanted by a striking spectrum of postmodern living arrangements: same-sex households, unmarried opposite-sex partners, married couples who have no children. Some forms of households that were rare just a generation ago are becoming common; the number of single-father households in California, for instance, grew by 36% between 2000 and 2010.

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[BOB] ABERNETHY: But all the moral debate has not made compromise easy.

[MICHAEL] GERSON: I think moral motivations in politics are very important. But when you claim that your own views somehow have a divine sanction, you’ve cut off all political argument. This should be an argument about outcomes, what is really best for the justice and decency of a society. I think a limited government is important to that, and I think a government that provides some of the most basic needs for the most vulnerable people in society is important to that as well. That’s where a lot of Americans are.

ABERNETHY: Alan Simpson thinks his former colleagues will head off a national crisis and that their constituents will accept the need for sacrifice.

[ALAN] SIMPSON: I think there are a lot more heroes in Congress than we recognize.

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Put on asbestos mittens and pick up “Reckless Endangerment,” the scalding new book by Gretchen Morgenson, a New York Times columnist, and Joshua Rosner, a housing finance expert. They will introduce you to James A. Johnson, an emblem of the administrative state that liberals admire.

The book’s subtitle could be: “Cry ”˜Compassion’ and Let Slip the Dogs of Cupidity.” Or: “How James Johnson and Others (Mostly Democrats) Made the Great Recession.” The book is another cautionary tale about government’s terrifying self-confidence. It is, the authors say, “a story of what happens when Washington decides, in its infinite wisdom, that every living, breathing citizen should own a home.”

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MARK SHIELDS: On revenue.

The reality is this, that every single group, whether it’s Simpson-Bowles, whether it’s Alice Rivlin and Pete Domenici, whoever it is — semi-serious, we probably should have said — yes, there have to be budget cuts to deal with the deficit problem and the debt, but there have to be revenue increases.

It’s become a dogma with Republicans now that anybody who votes for a tax increase is no longer a member of the club or the party….

MICHAEL GERSON: I think — I think Democrats are being equally unreasonable on the issue of entitlements.

This is our long-term spending challenge. It’s not that we tax too little. It’s that we have expensive entitlement commitments, an aging population, and health care inflation that have made that portion of the budget completely unsustainable….

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The US dollar will lose its status as the global reserve currency over the next 25 years, according to a survey of central bank reserve managers who collectively control more than $8,000bn.

More than half the managers, who were polled by UBS, predicted that the dollar would be replaced by a portfolio of currencies within the next 25 years.

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Half of those surveyed say the market’s continuing downward spiral has affected their long-term plans. One in five people say the crisis has prevented them from moving to another city or taking a different job. Nearly one-quarter of homeowners say their home is now worth less than what they owe on their mortgage, a condition known as being underwater. Families in this predicament are much more prone to foreclosure if they suffer job losses or other setbacks.

Over all, people are bleaker about the economic outlook than those surveyed in October. While most still think the current downturn is temporary, those saying it is permanent rose to 39 percent, up from 28 percent.

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The Obama administration said Wednesday that al Qaeda and its acolytes””including radicalized Americans””remained the “preeminent security threat to the United States” even after the death last month of Osama bin Laden.

In its first formal document on counterterrorism strategy, the administration said direct attacks on the homeland by foreigners or homegrown militants were its top priority, ahead of such militant-heavy regions as Yemen and the Afghanistan-Pakistan border.

“We seek nothing less than the utter destruction of this evil that calls itself al Qaeda,” John Brennan, the president’s chief counterterrorism adviser, said in a speech Wednesday.

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According to the U.S. Census Bureau’s figures, Knoxville, the see city of the diocese, has grown in population from 173,890 in 2000 to 185,100 in 2009. This represents a population growth of approximately 6.45% in this time frame.

According to Episcopal Church statistics, the Diocese of East Tennessee went from Average Sunday Attendance (or ASA) of 6,376 in 1998 to 5,649 in 2008. The finally released 2009 numbers shows a small further decline in ASA to 5645 in 2009. This represents an ASA decline of about 11.65 % over this eleven year period. Please note that if you go to the link toward the end of this sentence and enter “East Tennessee” as the name of the diocese and then “View Diocese Chart” underneath on the left you can see in pictorial form some of the data from 1999-2009.

Underestimating the long-term budget situation is an old game in Washington. But never have the numbers been this large.

There is no way to raise taxes enough to cover these problems. The tax-the-rich proposals of the Obama administration raise about $700 billion, less than a fifth of the budgetary consequences of the excess economic growth projected in their forecast. The whole $700 billion collected over 10 years would not even cover the difference in interest costs in any one year at the end of the decade between current rates and the average cost of Treasury borrowing over the last 20 years.

Only serious long-term spending reduction in the entitlement area can begin to address the nation’s deficit and debt problems. It should no longer be credible for our elected officials to hide the need for entitlement reforms behind rosy economic and budgetary assumptions. And while we should all hope for a deal that cuts spending and raises the debt ceiling to avoid a possible default, bondholders should be under no illusions.

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I’m hosting this month’s CGI America meeting on the assumption that there will be no federal stimulus and no further tax incentives targeted directly toward creating new jobs. Going on these assumptions, we want to analyze America’s economy: What are our assets? What are our liabilities? What are our options? There must be opportunities to be tapped, given all the cash in banks and corporate treasuries. If we have some success, we might be able to influence the debate in Washington in a nonpartisan way because we’ll have economic evidence to show them. I don’t have any problem at all if Congress wants to give tax credits to companies that actually hire people. But I think we have to pay for them, so I’d be happy to go back to the tax rates people at my income level paid when I was president in order to pay for the tax incentives to put more people to work.

The whole purpose of CGI America is to highlight good ideas because not everyone is aware of what’s out there. I’m going to try to get enough commitments that are representative enough of the circumstances facing diverse industries and different cities and states to persuade people across America to try their own version of them in a discussion of our economic stagnation. There’s been a remarkable lack of attention to “microeconomics,” the untapped growth potential of American corporations, entrepreneurs, and workers.

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The Federal Reserve is just days away from ending one of the major steps to aid the U.S. economy””but the effort has done little to solve the original problem: The government and individuals alike are still heavily in debt.

Around the globe, the inability of governments and households to reduce their debt continues to cast a shadow over Western economies and the financial health of individuals. Today, U.S. consumers have more mortgage and credit-card debt than they did five years ago, and the U.S. budget deficit is worsening. At the same time, European governments are having to throw billions more euros at Greece to keep it afloat.

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Alarmed by a shortage of primary care doctors, Obama administration officials are recruiting a team of “mystery shoppers” to pose as patients, call doctors’ offices and request appointments to see how difficult it is for people to get care when they need it.

The administration says the survey will address a “critical public policy problem”: the increasing shortage of primary care doctors, including specialists in internal medicine and family practice. It will also try to discover whether doctors are accepting patients with private insurance while turning away those in government health programs that pay lower reimbursement rates.

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…in an era of greater regulation the government is writing the rules. The definition of what constitutes an adequate capital cushion keeps going up. For example, at the beginning of this month, Daniel Tarullo, Federal Reserve board governor, suggested that bank capital levels should be far higher than the 7 per cent level required by Basel III.

Regulators have further determined that investment in government securities involves no capital hit, despite the fact that sovereign debt these days is in some cases as risky as lending to companies with junk ratings.

At the same time, governments are raising liquidity requirements and ”“ no surprise ”“ it is government securities that are classified as the most liquid.

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In Deborah Brown’s family lore, the American South was a place of whites-only water fountains and lynchings under cover of darkness. It was a place black people like her mother had fled.

But for Ms. Brown, 59, a retired civil servant from Queens, the South now promises salvation.
Three generations of her family ”” 10 people in all ”” are moving to Atlanta from New York, seeking to start fresh economically and, in some sense, to reconnect with a bittersweet past. They include Ms. Brown, her 82-year-old mother and her 26-year-old son, who has already landed a job and settled there.

The economic downturn has propelled a striking demographic shift: black New Yorkers, including many who are young and college educated, are heading south.

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Found here:

“These people have lived their lives with borrowed money,” [Attorney Sorrell] Trope said. “They have to stop spending. This isn’t the federal government.”

A temporary fix to the U.S. debt problems could be a sign that Washington’s final budget agreement will not be enough to meaningfully cut the nation’s deficit, Moody’s main analyst for the United States warned on Wednesday.

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New figures released Wednesday by the Congressional Budget Office (CBO) show debt rising to 190 percent of the gross domestic product by 2035.

The annual long-term budget outlook forecasts a surge in public debt this year that will rise to 70 percent of GDP by the end of fiscal 2011, compared to 62 percent by the end of 2010.

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Spending on the war in Afghanistan has skyrocketed since Mr. Obama took office, to $118.6 billion in 2011. It was $14.7 billion in 2003, when President George W. Bush turned his attention and American resources to the war in Iraq.

The increase is easy to explain. When Mr. Obama took office, he vowed to aggressively pursue what he termed America’s “war of necessity” (Afghanistan) and to withdraw from America’s “war of choice” (Iraq). He has done so; the lines on Iraq and Afghanistan war spending crossed in 2010, when the United States spent $93.8 billion in Afghanistan versus $71.3 billion in Iraq, according to the Congressional Research Service.

But the White House is keenly aware that the president is heading into a re-election campaign; with the country’s jobless rate remaining high, topping 9 percent, his poll numbers on his handling of the domestic economy have plummeted.

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Fill in the blank: Just one short decade ago, about 10 percent of America’s corn went to ethanol. Now, the number is closer to _____ percent….

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One disturbing fact from the McKinsey report is this: The number of new businesses, a traditional source of jobs, was down 23 percent in 2010 from 2007; the level was the lowest since 1983, when America had about 75 million fewer people. Large corporations are standoffish. They have about $2 trillion of cash and securities on their balance sheets, which could be used for hiring and investing in new products. Meanwhile, the latest University of Michigan Survey of Consumers reports that “record numbers ”¦ thought that their incomes would lag inflation over the next five years.” Note: They didn’t expect high inflation so much as low income growth.

It’s not that economics achieved nothing. The emergency measures thrown at the crisis in many countries ”” exceptionally low interest rates, “stimulus” programs of extra spending and tax cuts ”” probably averted another Depression. But it’s also true that there’s now no consensus among economists as to how to strengthen the recovery.

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Much of the public focus is on the nation’s public debt, which is $14.3 trillion. But that doesn’t include money guaranteed for Medicare, Medicaid and Social Security, which comes to close to $50 trillion, according to government figures.

The government also is on the hook for other debts such as the programs related to the bailout of the financial system following the crisis of 2008 and 2009, government figures show.

Taken together, Gross puts the total at “nearly $100 trillion,” that while perhaps a bit on the high side, places the country in a highly unenviable fiscal position that he said won’t find a solution overnight.

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Oh, Facebook, here we go again.

The social media giant is facing a new wave of concerns over privacy protection after launching its latest feature, which allows users to identify their friends automatically in photos without their permission.

The photo tagging tool, called Tag Suggestions, was put into place in December, but it was listed as unavailable until recently.

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