Category : Office of the President

The Economist–Don't bully Boeing, Barack

Labour unions hate right-to-work laws, and are hoping that the NLRB will undermine them. They should be careful what they wish for. The NLRB’s line of reasoning would make it potentially illegal to build a new factory in a right-to-work state if you already operate one in a heavily unionised state””creating a powerful incentive never to do business in a heavily unionised state in the first place. It would be safer to make things only in places like South Carolina, or perhaps south China.

The NLRB is an autonomous body, but its board members are appointed by the president. Under a Democratic president, American businesses expect a more pro-union line, but the agency’s recent militancy is shocking, reminiscent of “loony-left” posturing in Britain in the 1970s. Not only does the agency in effect claim the power to tell firms where they may build factories. It is also suing two states (Arizona and South Dakota) where voters have decided that workers should be guaranteed a secret-ballot election before their workplace is unionised. Mr Obama has so far said nothing about any of these cases. The president claims he understands business. Condemning the NLRB would be a good way to prove it.

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Posted in * Culture-Watch, * Economics, Politics, * South Carolina, Corporations/Corporate Life, Economy, Labor/Labor Unions/Labor Market, Law & Legal Issues, Office of the President, Politics in General, President Barack Obama, State Government, The U.S. Government

William McGurn–Both Sides in Washington Agree There is Huge Revenue Problem

…here’s the question for 2012: If we the people don’t want the higher taxes that are needed to support not only ObamaCare but a growing federal government, are we willing to support the real cuts that go along with that choice? And if we decide we don’t want these programs touched, will we accept the higher taxes that go along with keeping them, including for people making a lot less than $250,000?

This is the heart of the argument shaping up between Mr. Obama and Paul Ryan, chairman of the House Budget Committee. Manifestly Mr. Obama believes that as much as Americans say they want smaller government, the moment they find one of their favorite programs (e.g., Medicare) up for consideration, they balk.

Mr. Ryan and Republicans make the opposite bet: The president’s spending has made Americans more willing to face up to these choices, especially if the alternative is higher taxes on more people.

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Posted in * Economics, Politics, * International News & Commentary, America/U.S.A., Budget, Economy, House of Representatives, Medicare, Office of the President, Politics in General, President Barack Obama, Senate, Social Security, Taxes, The National Deficit, The U.S. Government

Robert Samuelson–Subsidizing the elderly is the biggest piece of federal spending

The problems of old age (chronic illness, outliving savings, loneliness) are real, but age by itself is not an indicator of need. The blanket defense of existing Social Security and Medicare isn’t “liberal” or “progressive.” It’s simply a political expedient with ruinous consequences. It enlarges budget deficits and forces an unfair share of adjustment ”” higher taxes, lower spending ”” on workers and other government programs. This is the morality of the ballot box.

People do not lose their obligations to the larger society by turning 65. We need to refocus these programs on their original purposes. Social Security was intended to prevent poverty, not finance recipients’ extra cable channels. Medicare provides peace of mind as well as health insurance; wealthier recipients can afford to pay more for their peace of mind. Burden-sharing needs to include the elderly. This is the crux of the budget problem.

Facing it is both a moral and financial imperative. With the 2012 election looming, major overhauls of these programs seem unlikely. Still, more modest changes (slow increases in eligibility ages, added taxation of Social Security benefits, costlier Medicare for upscale beneficiaries) could produce significant savings. If even these are absent, the meaning will be plain: Old stereotypes continue to trump new realities.

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Posted in * Culture-Watch, * Economics, Politics, Aging / the Elderly, Budget, Credit Markets, Currency Markets, Economy, House of Representatives, Medicare, Office of the President, Politics in General, President Barack Obama, Senate, Social Security, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government, The United States Currency (Dollar etc)

(BBC) Pakistan to assess Bin Laden raid

Pakistani PM Yusuf Raza Gilani is to make a statement in parliament about the US special forces raid which led to the death of Osama Bin Laden last week.

The address comes amid questions about how the al-Qaeda leader was able to live apparently undetected in the town of Abbottabad near the capital.

On Sunday, US President Barack Obama called on Pakistan to investigate the network that sustained Bin Laden.

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Posted in * Economics, Politics, * International News & Commentary, America/U.S.A., Asia, Defense, National Security, Military, Foreign Relations, Office of the President, Pakistan, Politics in General, President Barack Obama, Terrorism

Gallup–Americans Back Bin Laden Mission; Credit Military, CIA Most

Ninety-three percent of Americans say they approve of the action that killed bin Laden. This is similar to the 90% of Americans who in an Oct. 7, 2001, poll approved of the U.S. taking military action against Afghanistan. These approval levels are higher than the immediate reaction to the launching of either the first Persian Gulf War in 1991 or the Iraq war in 2003, for which approval was in the mid- to high 70% range.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Defense, National Security, Military, Office of the President, Politics in General, President Barack Obama, President George Bush, Psychology, Terrorism

April Job Data Is Strong, but Some Doubt Trend Can Last

While better than expected, Friday’s employment numbers showed that the national economy still had a long way to go to fully recover. Though down from its peak of 10.1 percent in late 2009, April’s unemployment rate reflects only those Americans who are still actively looking for work.

As such, economists said the April jobs report was part of a larger picture of the economy that remained mixed. The rise in the unemployment rate reflects the survey of households, which indicated a 190,000 decline in employment in April. And recent data on initial jobless claims and other employment indicators have been weak.

“Millions of people are unemployed and many have left the labor market and given up,” Mr. Shapiro said. “Against that we are maybe creating 244,000 jobs. That is all well and good but it just shows you how much further we have to go to make a dent into what has happened in the labor market.”

“It gets the basic debate out there about the economy,” he added. “Is all we have seen the product of government stimulus, and are all the problems coming back or not?”

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Posted in * Economics, Politics, Consumer/consumer spending, Corporations/Corporate Life, Economy, Federal Reserve, House of Representatives, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Office of the President, Personal Finance, Politics in General, President Barack Obama, Senate, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government

David Leonhardt–On the Economy, A Mission Not Yet Accomplished

It’s obviously been a good week for the Obama administration. But it comes at a dangerous time, for both the administration and the economy. The excitement over tracking down Osama bin Laden could end up making the president and his advisers less panicked over the state of the economy. And they should be a little panicked.

For the second straight year, the recovery seems to be at risk of stalling. The economy grew at an annual rate of only 1.8 percent last quarter ”” eerily similar to the 1.7 percent growth last spring, just when job growth started slowing down. Fully 80 percent of people say the economy is in fairly bad or very bad shape, according to a New York Times/CBS Poll last month. More people say it’s getting worse than getting better, the opposite of a few months ago.

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Posted in * Culture-Watch, * Economics, Politics, Budget, Consumer/consumer spending, Corporations/Corporate Life, Economy, Federal Reserve, House of Representatives, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Office of the President, Politics in General, President Barack Obama, Psychology, Senate, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government

BBC–Should photos of Bin Laden's corpse be released?

Before the president’s announcement, it was reported that Secretary of State Hillary Clinton and Defence Secretary Robert Gates were advising him not to.

They fear that the photos might make the US look like it is revelling in Bin Laden’s death, and spark reprisals in the Arab world.

That’s a view expressed by one of the people who has seen the photos, Republican Mike Rogers, chairman of the House Intelligence Committee. He’s worried their release could endanger US troops.

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Posted in * Economics, Politics, * International News & Commentary, Asia, Defense, National Security, Military, Foreign Relations, Office of the President, Pakistan, Politics in General, President Barack Obama, Terrorism

Official White House photograph of the Team Watching the Navy Seal Operation

Wow.

Posted in * Economics, Politics, * International News & Commentary, Asia, Defense, National Security, Military, Office of the President, Pakistan, Politics in General, President Barack Obama

The Full Text of President Obama’s Remarks on Bin Laden’s Killing

Good evening. Tonight, I can report to the American people and to the world that the United States has conducted an operation that killed Osama bin Laden, the leader of Al Qaeda, and a terrorist who’s responsible for the murder of thousands of innocent men, women, and children.

It was nearly 10 years ago that a bright September day was darkened by the worst attack on the American people in our history. The images of 9/11 are seared into our national memory ”” hijacked planes cutting through a cloudless September sky; the Twin Towers collapsing to the ground; black smoke billowing up from the Pentagon; the wreckage of Flight 93 in Shanksville, Pennsylvania, where the actions of heroic citizens saved even more heartbreak and destruction.

And yet we know that the worst images are those that were unseen to the world. The empty seat at the dinner table. Children who were forced to grow up without their mother or their father. Parents who would never know the feeling of their child’s embrace. Nearly 3,000 citizens taken from us, leaving a gaping hole in our hearts.
On September 11, 2001, in our time of grief, the American people came together. We offered our neighbors a hand, and we offered the wounded our blood. We reaffirmed our ties to each other, and our love of community and country. On that day, no matter where we came from, what God we prayed to, or what race or ethnicity we were, we were united as one American family.

We were also united in our resolve to protect our nation and to bring those who committed this vicious attack to justice. We quickly learned that the 9/11 attacks were carried out by Al Qaeda ”” an organization headed by Osama bin Laden, which had openly declared war on the United States and was committed to killing innocents in our country and around the globe. And so we went to war against Al Qaeda to protect our citizens, our friends, and our allies.

Over the last 10 years, thanks to the tireless and heroic work of our military and our counterterrorism professionals, we’ve made great strides in that effort. We’ve disrupted terrorist attacks and strengthened our homeland defense. In Afghanistan, we removed the Taliban government, which had given bin Laden and Al Qaeda safe haven and support. And around the globe, we worked with our friends and allies to capture or kill scores of Al Qaeda terrorists, including several who were a part of the 9/11 plot.

Yet Osama bin Laden avoided capture and escaped across the Afghan border into Pakistan. Meanwhile, Al Qaeda continued to operate from along that border and operate through its affiliates across the world.

And so shortly after taking office, I directed Leon Panetta, the director of the C.I.A., to make the killing or capture of bin Laden the top priority of our war against Al Qaeda, even as we continued our broader efforts to disrupt, dismantle, and defeat his network.

Then, last August, after years of painstaking work by our intelligence community, I was briefed on a possible lead to bin Laden. It was far from certain, and it took many months to run this thread to ground. I met repeatedly with my national security team as we developed more information about the possibility that we had located bin Laden hiding within a compound deep inside of Pakistan. And finally, last week, I determined that we had enough intelligence to take action, and authorized an operation to get Osama bin Laden and bring him to justice.

Today, at my direction, the United States launched a targeted operation against that compound in Abbottabad, Pakistan. A small team of Americans carried out the operation with extraordinary courage and capability. No Americans were harmed. They took care to avoid civilian casualties. After a firefight, they killed Osama bin Laden and took custody of his body.

For over two decades, bin Laden has been Al Qaeda’s leader and symbol, and has continued to plot attacks against our country and our friends and allies. The death of bin Laden marks the most significant achievement to date in our nation’s effort to defeat Al Qaeda.

Yet his death does not mark the end of our effort. There’s no doubt that Al Qaeda will continue to pursue attacks against us. We must ”“- and we will ”” remain vigilant at home and abroad.

As we do, we must also reaffirm that the United States is not ”“- and never will be -”“ at war with Islam. I’ve made clear, just as President Bush did shortly after 9/11, that our war is not against Islam. Bin Laden was not a Muslim leader; he was a mass murderer of Muslims. Indeed, Al Qaeda has slaughtered scores of Muslims in many countries, including our own. So his demise should be welcomed by all who believe in peace and human dignity.

Over the years, I’ve repeatedly made clear that we would take action within Pakistan if we knew where bin Laden was. That is what we’ve done. But it’s important to note that our counterterrorism cooperation with Pakistan helped lead us to bin Laden and the compound where he was hiding. Indeed, bin Laden had declared war against Pakistan as well, and ordered attacks against the Pakistani people.

Tonight, I called President Zardari, and my team has also spoken with their Pakistani counterparts. They agree that this is a good and historic day for both of our nations. And going forward, it is essential that Pakistan continue to join us in the fight against Al Qaeda and its affiliates.

The American people did not choose this fight. It came to our shores, and started with the senseless slaughter of our citizens. After nearly 10 years of service, struggle, and sacrifice, we know well the costs of war. These efforts weigh on me every time I, as Commander-in-Chief, have to sign a letter to a family that has lost a loved one, or look into the eyes of a service member who’s been gravely wounded.

So Americans understand the costs of war. Yet as a country, we will never tolerate our security being threatened, nor stand idly by when our people have been killed. We will be relentless in defense of our citizens and our friends and allies. We will be true to the values that make us who we are. And on nights like this one, we can say to those families who have lost loved ones to Al Qaeda’s terror: Justice has been done.

Tonight, we give thanks to the countless intelligence and counterterrorism professionals who’ve worked tirelessly to achieve this outcome. The American people do not see their work, nor know their names. But tonight, they feel the satisfaction of their work and the result of their pursuit of justice.

We give thanks for the men who carried out this operation, for they exemplify the professionalism, patriotism, and unparalleled courage of those who serve our country. And they are part of a generation that has borne the heaviest share of the burden since that September day.

Finally, let me say to the families who lost loved ones on 9/11 that we have never forgotten your loss, nor wavered in our commitment to see that we do whatever it takes to prevent another attack on our shores.

And tonight, let us think back to the sense of unity that prevailed on 9/11. I know that it has, at times, frayed. Yet today’s achievement is a testament to the greatness of our country and the determination of the American people.

The cause of securing our country is not complete. But tonight, we are once again reminded that America can do whatever we set our mind to. That is the story of our history, whether it’s the pursuit of prosperity for our people, or the struggle for equality for all our citizens; our commitment to stand up for our values abroad, and our sacrifices to make the world a safer place.

Let us remember that we can do these things not just because of wealth or power, but because of who we are: one nation, under God, indivisible, with liberty and justice for all.

Thank you. May God bless you. And may God bless the United States of America.

Posted in * Economics, Politics, Defense, National Security, Military, Office of the President, Politics in General, President Barack Obama, Terrorism

Local Newspaper Editorial–Tough fiscal talk is cheap

…while President Obama has presided over an unprecedented federal spending spree, he’s far from the first White House occupant to run up big debt numbers while insisting that he’s moving toward lowering them — eventually.

He’s also not the first politician caught between contradictory public demands of lower spending and higher benefits. A Washington Post-ABC News poll released last week reports that 78 percent of Americans oppose cutting Medicare spending, and 69 percent oppose cutting Medicaid.

Yet even most liberal Democrats, including the president, concede this indisputable point: America’s long-term debt crisis will never be solved without containing the soaring costs of Medicare and Medicaid.

Read it all.

Posted in * Economics, Politics, Budget, Credit Markets, Currency Markets, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, The National Deficit, The U.S. Government

(FT) US Banks Warn Obama on Soaring Debt

A group of the largest US banks and fund managers stepped up the pressure on Congress and the Obama administration to reach a deal to increase the country’s debt limit, saying that even a short default could be devastating for the financial markets and economy.

The warning over the debt limit is the strongest yet to come from Wall Street, highlighting growing nervousness among investors about the US political system’s ability to forge a consensus on fiscal policy.

The most pressing budgetary issue confronting Congress and the Obama administration is the need to raise the US debt ceiling, which stands at $14,300 billion.

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Posted in * Culture-Watch, * Economics, Politics, Budget, Credit Markets, Currency Markets, Economy, Euro, European Central Bank, Federal Reserve, Globalization, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government, The United States Currency (Dollar etc), Treasury Secretary Timothy Geithner

America's Mood at Lowest Level in Two Years, Poll Shows

Americans are more pessimistic about the nation’s economic outlook and overall direction than they have been at any time since President Obama’s first two months in office, when the country was still officially ensnared in the Great Recession, according to the latest New York Times/CBS News poll.

Amid rising gas prices, stubborn unemployment and a cacophonous debate in Washington over the federal government’s ability to meet its future obligations, the poll presents stark evidence that the slow, if unsteady, gains in public confidence earlier this year that a recovery was under way are now all but gone.

Capturing what appears to be an abrupt change in attitude, the survey shows that the number of Americans who think the economy is getting worse has jumped 13 percentage points in just one month. Though there have been encouraging signs of renewed growth since last fall, many economists are having second thoughts, warning that the pace of expansion might not be fast enough to create significant numbers of new jobs.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Consumer/consumer spending, Corporations/Corporate Life, Economy, House of Representatives, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Office of the President, Personal Finance, Politics in General, President Barack Obama, Psychology, Senate

Shields and Brooks on Libya, the Economy and the National Mood, and the Debate on Entitlements

[MARK SHIELDS] I mean [the Republicans] want to go after the social programs. And each time, they take this election win as a mandate to do it, and they end up…

DAVID BROOKS: Well, but I can say, on the substance, they are right each time. I mean…

JIM LEHRER: You think it is courageous to do that?

DAVID BROOKS: Well, I mean, as I said, your average Medicare enrollee, average income, making I don’t know what it is, $50,000 a year, is paying in $145,000 over the lifetime into the system, taking out $450,000.

Well, there is a big gap there. And that is unsustainable. And so the $450,000 has to be brought down over time. And they are absolutely right to try to bring it down. It just happens to be extremely unpopular to try to talk about that.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, Aging / the Elderly, America/U.S.A., Budget, Economy, Health & Medicine, House of Representatives, Office of the President, Politics in General, President Barack Obama, Psychology, Senate, Social Security, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government

(RNS) Douglas Kmiec’s Gospel Falls Flat in Foggy Bottom

The State Department has a “rigidly narrow” view of diplomacy that neglects religion’s role in foreign affairs, a prominent Catholic ambassador charged on Sunday (April 17) as he announced his resignation.

Other foreign policy experts have another name for it: Religion Avoidance Syndrome.

And the departure of Douglas Kmiec as ambassador to Malta, they say, is symptomatic of a longstanding God gap in American foreign policy.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Economy, Foreign Relations, Office of the President, Politics in General, President Barack Obama, Religion & Culture, The U.S. Government

Notable and Quotable

“More than two years after the beginning of the recent crisis, U.S. policymakers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures….”

–S&P credit analyst Nikola Swann in a statement today explaining why S and P shifted its outlook on America’s credit to “negative”

Posted in * Culture-Watch, * Economics, Politics, Budget, Credit Markets, Currency Markets, Economy, Globalization, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government, The United States Currency (Dollar etc)

(FT) Mohamed El-Erian: A warning for the US, and for the global economy

This is a timely reminder of the seriousness of America’s fiscal issues, for the country and for the rest of the world.

The continued failure to come up with a credible medium-term fiscal reform program would increase borrowing costs for all segments of US society, thereby undermining investment, employment and growth. It would also curtail foreigners’ appetite to add to their already substantial holdings of US assets. And it would weaken the dollar.

The US also risks eroding its standing at the core of the global monetary system.

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Posted in * Economics, Politics, Budget, Credit Markets, Currency Markets, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government, The United States Currency (Dollar etc)

PBS' Religion and Ethics Weekly: Moral Questions and Military Intervention

[KIM] LAWTON: Carter has a new book called The Violence of Peace: America’s Wars in the Age of Obama. He claims the man many voters considered the “peace candidate” has turned into a “war president” with an expanding philosophy about the use of force. Carter says that philosophy was signaled in Obama’s 2009 acceptance of the Nobel Peace Prize.

President Barack Obama (from 2009 Nobel Peace Prize acceptance speech): Inaction tears at our conscience and can lead to more costly intervention later. That’s why all responsible nations must embrace the role that militaries with a clear mandate can play to keep the peace.

{STEPHEN] CARTER: What’s striking about the war in Libya, whether one is for it or against it, is that it shows that President Obama was serious, that he actually meant what he said, that he actually believes that’s a justified use of American power.

Read or watch it all.

Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Defense, National Security, Military, Economy, Ethics / Moral Theology, Foreign Relations, Globalization, Office of the President, Politics in General, President Barack Obama, Religion & Culture, The U.S. Government, Theology

President Obama’s Speech on Reducing the Budget this Afternoon (Full Text)

…here’s the truth. Around two-thirds of our budget is spent on Medicare, Medicaid, Social Security, and national security. Programs like unemployment insurance, student loans, veterans’ benefits, and tax credits for working families take up another 20%. What’s left, after interest on the debt, is just 12 percent for everything else. That’s 12 percent for all of our other national priorities like education and clean energy; medical research and transportation; food safety and keeping our air and water clean.

Up until now, the cuts proposed by a lot of folks in Washington have focused almost exclusively on that 12%. But cuts to that 12% alone won’t solve the problem. So any serious plan to tackle our deficit will require us to put everything on the table, and take on excess spending wherever it exists in the budget. A serious plan doesn’t require us to balance our budget overnight ”“ in fact, economists think that with the economy just starting to grow again, we will need a phased-in approach ”“ but it does require tough decisions and support from leaders in both parties. And above all, it will require us to choose a vision of the America we want to see five and ten and twenty years down the road.

Read it all.

Posted in * Economics, Politics, Budget, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, Social Security, The National Deficit, The U.S. Government, The United States Currency (Dollar etc)

David Leonhardt–Congressional Gridlock could Help the Budget

In reality, finding a way to raise taxes may well be the central political problem facing the United States.

As countries become richer, their citizens tend to want more public services, be it a strong military or a decent safety net in retirement. This country is no exception. Yet our political culture is an exception. It has made most tax increases, even to pay for benefits people want, unthinkable.

This is where the Bush tax cuts come in. They have created a way for inertia to be fiscally responsible.

Read it all.

Posted in * Economics, Politics, Budget, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, Social Security, Taxes, The National Deficit, The U.S. Government

Joe Nocera: Pass the Boone Pickens Bill

Every president since Jimmy Carter has called for the country to become more energy independent. Yet none of them have ever done anything to accomplish that. The result is that our reliance on foreign oil has inexorably increased. With the current turmoil in the Mideast, the price of gasoline breaking the $4-a-gallon barrier and the Chinese becoming voracious competitors for imported oil, this would seem an ideal time to pass a law that could lessen our dependence on foreign crude.

Oilmen are incorrigible optimists, and Boone is no exception; he thinks the bill will pass quickly. Not long ago, President Obama spoke out in favor of it, in a speech that included a shout-out for Boone. Already, the bill has attracted 157 co-sponsors. “I think the House can pass it in 30 days,” Boone says.

I hope he’s right. Natural gas is cheaper than oil. It’s cleaner. And it’s ours. If Congress can’t pass this thing, there’s really no hope. ”ƒ

Read it all (emphasis mine).

Posted in * Economics, Politics, * International News & Commentary, America/U.S.A., Consumer/consumer spending, Corporations/Corporate Life, Economy, Energy, Natural Resources, Foreign Relations, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, The U.S. Government

Craig McMurtrie on the American Debt Issue–The small problem of Armageddon

The scale of America’s deficit and debt problem is staggering.

Thanks to an ageing population, exploding health care costs and inaction from both sides of politics, the Government Accountability Office now estimates that the United States is looking down the barrel of a $90 trillion fiscal gap over the next 75 years.

Treasury secretary Tim Geithner estimates that the US is adding about $125 billion of debt each month and the nation is expected to hit its $14.3 trillion debt ceiling in May.

Former treasury secretary James Baker describes the “debt bomb” as the number one problem for America.

“If we didn’t have the dollar as the de facto reserve currency of the world, we’d be Greece. I mean we are broke,” he exclaimed on CNN.

But doing something about it would take real gumption and the political cycle isn’t helping….

Read it all.

Posted in * Economics, Politics, * International News & Commentary, America/U.S.A., Budget, Consumer/consumer spending, Corporations/Corporate Life, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, Taxes, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government

(FT) US lacks credibility on debt, says IMF

The US lacks a “credible strategy” to stabilise its mounting public debt, posing a small but significant risk of a new global economic crisis, says the International Monetary Fund.

In an unusually stern rebuke to its largest shareholder, the IMF said the US was the only advanced economy to be increasing its underlying budget deficit in 2011, at a time when its economy was growing fast enough to reduce borrowing.

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Posted in * Culture-Watch, * Economics, Politics, Budget, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Globalization, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, Taxes, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government

David Leonhardt–Generational Divide Colors Debate Over Medicare’s Future

The Republican budget released on Tuesday is a daring one in many ways. Above all, it would replace the current Medicare with a system of private health insurance plans subsidized by the government. Whether you like or loathe that idea, it would undeniably reduce Medicare’s long-term funding gap ”” which is by far the biggest source of looming federal deficits.

Yet there is at least one big way in which the plan isn’t daring at all. It asks for a whole lot of sacrifice from everyone under the age of 55 and little from everyone 55 and over. Representative Paul Ryan, the Wisconsin Republican who wrote the plan, calls the budget deficit an “existential threat” to the United States. Then he absolves more than one-third of all adults from responsibility in dealing with that threat.

This decision doesn’t make him unique in Washington. There is nearly a bipartisan consensus that any cuts to Medicare and Social Security should spare the baby boomers and the elderly. And, certainly, retirees or people on the verge of retirement shouldn’t have their benefits changed radically. But the consensus, like Mr. Ryan’s plan, goes too far.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, Aging / the Elderly, Budget, Credit Markets, Currency Markets, Economy, Health & Medicine, House of Representatives, Middle Age, Office of the President, Politics in General, President Barack Obama, Senate, Social Security, The National Deficit, The U.S. Government, The United States Currency (Dollar etc), Young Adults

Michael Kinsley–Presidents can't declare war? Just watch them

It really couldn’t be clearer. “The Congress shall have power ”¦ to declare war.” Yet these are probably the most egregiously ignored words in the Constitution. You would think that Republicans, especially, with their showy fondness for “originalism” and “plain meaning” in interpreting the Constitution, would have no problem interpreting the meaning of these words: If a president wants to go to war, he must get the approval of Congress.

Presidents of both parties traditionally ignore the congressional war power when they feel like it. Or they wait until the troops are poised for battle ”” putting Congress in an impossible position ”” before asking permission.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, Africa, Defense, National Security, Military, Economy, History, House of Representatives, Libya, Office of the President, Politics in General, President Barack Obama, Senate, The U.S. Government

Bill Gross–Without big cuts in entitlements, a dreary Future for America

The above four multi-trillion-dollar liability balls are staggering in their implications. Remember first of all that the nearly $65 trillion of entitlement liabilities shown above are not some estimate of future spending. They are the discounted net present value of current spending should it continue at the projected demographic rate (importantly ­”“ it is much higher than the annual CPI + 1% used as a discounter because demand for healthcare rises much faster than inflation.) And while some Honorable Congressional Le Pews would counter that Medicaid is appropriated annually and therefore requires no discounted reserve, those words would surely count as “sweet nothings,” believable only to those whom they romance every several years at the polls. The incredible reality is that the $9.1 trillion federal debt that constitutes the next-to-tiniest ball in our chart is nothing compared to unfunded Medicaid and Medicare. It is like comparing Pluto to Saturn and Jupiter. The former (the $9.1 trillion current Treasury debt) does not even merit planetary status in our solar system of discounted future liabilities. It’s really just a large asteroid.

Look at it another way and our dire situation becomes equally revealing. Suppose that the $65 trillion of entitlement liabilities were fully funded in a “lockbox,” much like Social Security is falsely imagined to be. Just suppose. And say the cost of that funding (Treasury debt) was the same CPI + 1% that was used to produce the above discounted present value in the first place. Actually, that’s not a bad guesstimate for the average yield of all Treasury debt. If so, then the interest expense on the $75 trillion total debt would equal $2.6 trillion, quite close to the current level of entitlement spending for Social Security, Medicare and Medicaid. What do we pay now in interest? About $250 billion. Our annual “lockbox” tab would rise by $2.35 trillion and our deficit would be close to 15% of GDP! The simple conclusion would be this: Unless you want to drastically reduce entitlement spending or heaven forbid raise taxes, then Pepé, you’ve got a stinker of a problem.

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Posted in * Economics, Politics, Budget, Credit Markets, Currency Markets, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, Social Security, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government, The United States Currency (Dollar etc)

Thomas Friedman–Looking for Luck in Libya

There is an old saying in the Middle East that a camel is a horse that was designed by a committee. That thought came to my mind as I listened to President Obama trying to explain the intervention of America and its allies in Libya ”” and I don’t say that as criticism. I say it with empathy. This is really hard stuff, and it’s just the beginning.

When an entire region that has been living outside the biggest global trends of free politics and free markets for half a century suddenly, from the bottom up, decides to join history ”” and each one of these states has a different ethnic, tribal, sectarian and political orientation and a loose coalition of Western and Arab states with mixed motives trying to figure out how to help them ”” well, folks, you’re going to end up with some very strange-looking policy animals. And Libya is just the first of many hard choices we’re going to face in the “new” Middle East.

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Posted in * Economics, Politics, * International News & Commentary, Africa, America/U.S.A., Defense, National Security, Military, Foreign Relations, House of Representatives, Libya, Middle East, Office of the President, Politics in General, President Barack Obama, Senate

Foreclosure Aid Fell Short, and Is Fading

Last summer, as President Obama’s premier plan to save millions of Americans from foreclosure foundered, the administration tossed a new life preserver to homeowners.

Officials unveiled a $1 billion program to offer loans to help the jobless pay their mortgages until they could find work again. It was supposed to take effect before the end of the year, but as of today, the program has yet to accept any applications.

“We wait and wait, and they keep saying it’s coming,” said James Tyson, 50, a Philadelphia homeowner who lost his job a year ago.

That could be an epitaph for the administration’s broader foreclosure prevention effort…

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Posted in * Economics, Politics, Economy, House of Representatives, Housing/Real Estate Market, Office of the President, Politics in General, President Barack Obama, Senate, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government

Christopher Whalen–As Obama and Congress fiddle, America liquidates housing sector

I estimate that Fannie and Freddie alone are hiding $200 billion worth of bad loans on their books simply because there is no market for these foreclosed homes. Ditto for the largest servicer banks such as Wells Fargo, Bank of America, JPMorgan Chase and Citigroup. To clean up this mess with finality is going to cost $1 trillion or so in round numbers. But nobody in Washington wants to go there.

The Obama Administration and the Congress need to put aside their respective fantasy world views and focus on the horrible economic reality ongoing in the housing and banking sectors. It may be that the degree of self-delusion in Washington has reached the point that only another financial catastrophe can wake us from out collective distraction. But if President Obama really believes he can win reelection with housing prices falling from now till November 2012, then perhaps those who liken him to Louis XIV are right.

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Posted in * Economics, Politics, Economy, House of Representatives, Housing/Real Estate Market, Office of the President, Politics in General, President Barack Obama, Senate, The U.S. Government

(NPR) 'Kill Them, Bury Them': The Rise Of Fannie and Freddie

Before the financial crisis, many Americans had never heard of Fannie Mae or Freddie Mac. Today, we own them.

The federal government took over Fannie and Freddie after bailing them out in 2008. The bailout cost taxpayers more than the bailouts of GM, Goldman Sachs, Bank of America and Citigroup combined.

By 2010, roughly 90 percent of all new mortgages issued in this country went through the U.S. government. For all intents and purposes, the $1.5 trillion U.S. mortgage market is now a government-run industry.

How did we get here?…

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Posted in * Economics, Politics, Economy, House of Representatives, Housing/Real Estate Market, Office of the President, Politics in General, Senate, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government