Archive for the ‘economics’ Category

Stimulus Meant To Make Jobs But States Lay-Off Amid Budget Cuts

May 12, 2009

Eleven weeks after Congress settled on a stimulus package that provided $135 billion to limit layoffs in state governments, many states are finding that the funds are not enough and are moving to lay off thousands of public employees.

By Alec MacGillis
The Washington Post

The state of Washington settled on a budget two weeks ago that will mean 1,000 layoffs at public colleges and several times that many in elementary and high schools.

The governor of Massachusetts, who cut 1,000 positions late last year, just announced 250 layoffs, with more likely to come soon.

Arizona has already laid off 800 social service workers this year and is facing the likelihood of deeper cuts over the next two. The state no longer investigates all complaints of child or elder abuse.

“Don’t be a child or a vulnerable adult in Arizona,” said Tim Schmaltz of the Protecting Arizona’s Family Coalition.

The layoffs are one early indication of how the stimulus funding could be coming up short against the economic downturn. As the stimulus plan was being drawn up, there was agreement among the White House, congressional Democrats and many economists that a key goal was to keep states from making big layoffs at a time when 700,000 Americans were losing their jobs every month.

Read the rest:
http://www.washingtonpost.com/wp-dyn/con
tent/article/2009/05/11/AR2009051103
062.html?hpid=topnews

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Obama Moving America To Less Dynamic, Less Innovative, Less Skilled and Poorer Nation

May 11, 2009

Something bad and dangerous is happening in Barack Obama’s America.

The powers that the Obama administration claimed in order to arrest the financial crisis and mitigate the recession are being used and abused in ways that are underming the legal and financial stability of the United States. Investors: You are warned.

By David Frum
National Post

The first warning was the attempt to snatch Chrysler’s assets away from their rightful owners to pay off administration friends and supporters.

The Obama plan to save Chrysler would have sold Chrysler’s most valuable assets into a new company co-owned by the U. S. and Canadian governments, Fiat and the United Auto Workers (UAW) — with the UAW getting the biggest piece, 55%. (more…)

Stimulus Not About Jobs, But About Control, Payback, Punishment by Fed Government — California Lawmaker Says

May 11, 2009

With an economy the size of Britain’s, the State of California is struggling to balance its budget.

But now the federal government has become the enemy.

The Los Angeles Times reported last week that the federal government could not reduce the pay on unionized health care workers in order to trim the state’s budget.  The feds say stimulus money headed for California will be withheld if California insists on the pay cuts.

Related:
Fed Tells California: Can’t Cut Pay of Union Jobs To Save Budget; Threatens Loss of Stimulus Money
.
Representative Brian Bilbray (R-CA) says the federal government is”engaging in Chicago style politics” and “working to reward supporters with favors.”

Among those getting the favors from the fed are union health care workers in California, Bilbray says.

Bilbray said on Fox News this morning that all kinds of California government employees are taking pay cuts and keeping their jobs in order to help keep the state from bankruptcy.

Bilbray said the stimulus from the U.S. government “is about control” and “punishing people” for not following the lead of Washington DC.

The fed is sticking by statements saying California will not get all its stimulus money if it doesn’t restore the union pay cuts….

Wealthy Democrat Supporters Dumbfounded… Realize Obama Will Take Their Money

http://exurbanleague.com/2009/05/11/do
ing-the-jobs-that-hardworking-gop-politic
ians-wont.aspx

U.S. Government Borrowing 50 Cents on Every Dollar Spent; Interest Likely To Rise

May 11, 2009

The Office of Management and Budget says for the first time ever, the U.S. government is borrowing 50 cents of every dollar it spends.

Barack Obama and democrats will quadruple the U.S. deficit this year.

The receipts of the U.S. government from taxes paid was down 15% in January 2009 compared to January 2008.  In April, receipts were off a full 30%.

Meanwhile, U.S. government spending is way up: up fully $38 billion in April alone over April 2008.

The difference between receipts and money spent is the deficit and that could exceed $1.8 trillion this year; added to the U.S. burden of borrowed money and interest paid.

The massive budget deficit created by democrats this year represents a massive 12.9% of gross domestic product. President Obama expected the deficit level to be 12% of GDP this year. This puts the US above the UK deficit that runs more than 10% of GDP, and puts the US above troubled states Pakistan and Hungary.

As several commentators have said, the U.S. would not be given permission to join the EU with this much debt….

http://gatewaypundit.blogspot.com/2009/05/w
hite-house-sees-higher-us-deficit-than.html

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From The Associated Press

With the U.S. economy performing worse than hoped, revised White House figures point to deepening budget deficits, with the government borrowing 50 cents for every dollar it spends this year.

The deficit for the current budget year will rise by $89 billion to above $1.8 trillion — about four times the record set just last year. The unprecedented red ink flows from the deep recession, the Wall Street bailout, the cost of President Barack Obama’s economic stimulus bill, as well as a structural imbalance between what the government spends and what it takes in.

As the economy performs worse than expected, the deficit for the 2010 budget year beginning in October will worsen by $87 billion to $1.3 trillion, the White House says. The deterioration reflects lower tax revenues and higher costs for bank failures, unemployment benefits and food stamps.

For the current year, the government would borrow almost half the money it takes to run the government under the administration’s plan. In one of the few positive signs, the actual 2009 deficit is likely to be $250 billion less than predicted because Congress is unlikely to provide another $250 billion in financial bailout money.
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Read the rest:
http://finance.yahoo.com/news/White
-House-Budget-deficit-to-apf-15199183.html?.v=8

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What does all this mean?  Well, your taxes will likely go up, and Washington should be looking for ways to spend less and make cuts….

This also means interest rates will likely go up for everyone, across the board, for up to ten years, because individual borrowers will be competing with the federal government for money…

Reactions To Recession: Isreal Wants Huge Spending Cuts; Brits Mulling Huge Taxes; Obama Wants To Totally Fund Health Care, Education, Re-engineered Energy System

Obama’s rich supporters fear his tax plans show he’s a class warrior

May 10, 2009

Some of Barack Obama’s richest supporters fear they have elected a “class warrior” to the White House, who will turn America’s freewheeling capitalism into a more regulated European system.

By Leonard Doyle in Washington
Telegraph (UK)

Barack Obama's rich supporters fear his tax plans reveal him as a class warrior
Barack Obama: some of his rich supporters fear he is becoming a class warrior Photo: AP

Wealthy Wall Street financiers and other business figures provided crucial support for Mr Obama during the election, backing him over the Republican candidate John McCain as the right leader to rescue the collapsing US economy.

But it is now dawning on many among them that Mr Obama was serious about his campaign trail promises to bring root and branch reform to corporate America – and that they were more than just election rhetoric.
.
Related:
Wealthy Democrat Supporters Dumbfounded… Realize Obama Will Take Their Money

A top Obama fundraiser and hedge fund manager said: “I’m appalled at the anti-Wall Street rhetoric. It was OK on the campaign but now it’s the real world. I’m surprised that Obama is turning out to be so left-wing. He’s a real class warrior.”

Chris Edwards of the Cato Institute, a free enterprise think tank, said Democrats in Congress were unnerved by the president’s latest plan to raise $210 billion over 10 years from multinational corporations.

The money is needed to pay for a national debt that will double over the next five years; and triple over the next 10 years to $17.3 trillion. But the crackdown already faces fierce Democratic resistance.

“These big companies are based in New York Boston, Seattle and Silicon Valley, where Democrats dominate,” Mr Edwards said. “Obama’s tax plan is already cleaving him from his big corporate supporters,” he said.

Mr Obama made no secret of his plans to raise taxes on the “working rich” (individuals earning more than $200,000) by imposing a top income tax rate of almost 40 per cent, and there is little surprise that those plans remain on track, even during the worst economic crisis since the Great Depression.

But Democratic opposition is building in Congress to many of the President’s proposals. A plan to reduce tax deductions for charitable gifts by richer people may have to be scrapped, because the charitable sector – which includes hospitals, museums and voluntary service groups – depends heavily on tax-deducted donations.

Charles Rangel, the New York chairman of the Ways and Means Committee, which drafts tax legislation, raised a red flag about the proposal last week. “I would never want to adversely affect anything that is charitable or good,” he said.

Mr Obama also wants to “cap and trade” carbon emissions – seen by business as effectively yet another tax – to tackle global warming.

The president’s plans are direct repudiation of the model of light touch regulation credited with creating economic growth and wealth in America in recent decades.

Setting out his thoughts on the economy, Mr Obama told the New York Times magazine last week: “There was always an unsustainable feel about what had happened on Wall Street over the last 10, 15 years, and it’s not that different from the unsustainable nature of what was happening during the dot-com boom – where people in Silicon Valley could make enormous sums of money, even though what they were peddling never really had any signs it would ever make a profit.”

A senior Wall Street executive who remains an admirer of Mr Obama, told The Sunday Telegraph that the reforms were necessary after years of excess. “I think its refreshing that he has the chutzpah to deal with the previously untouchable abuses of the system like tax dodging and excessive executive pay,” he said.

“We badly need some European style social democracy, and Obama might as well start with health care reform.”

Read the rest:
http://www.telegraph.co.uk/news/worldnews/nort
hamerica/usa/barackobama/5301078/Barack-
Obamas-rich-supporters-fear-his-tax-plans-sh
ow-hes-a-class-warrior.html

China, Asia Dig Out of Recession Much Faster Than U.S.

May 8, 2009

While 10 stressed U.S. banks figure out how to come up with $75 billion, here’s a comparison to ponder: In 2005, the world’s two biggest banks in terms of market cap were Citigroup and Bank of America. In 2009, the world’s three biggest banks are Chinese; Citigroup and BofA are not even in the top 20. In a related sign of the times, BofA is reportedly looking to sell a chunk of its holdings in one, what is now the world’s second biggest financial institution, the Chinese Construction Bank. BofA needs the money, an estimated $8 billion worth for some “quick capital” to toss into the roughly $34 billion hole the government’s stress test has determined it faces.

By Andrew S. Ross
San Francisco Chronicle

The point, as speakers made at a California-Asian Business Council luncheon this week, is that Asia in general, and China in particular, is digging itself financially out of the Great Recession far faster than we are. One key reason: Asian banks didn’t go in for those toxic assets that so many U.S. financial institutions gorged on, explained Cindy Marks, China and Hong Kong Country Manager for the Federal Reserve Bank of San Francisco. In the first three months of this year, she added, Chinese banks have made $640 billion in new loans.

Pity BofA has to sell that Chinese bank stock, Marks noted.

Read the rest:
http://www.sfgate.com/columns/bottomline/

Defying Logic: Obama Wants Congress To Give Him Money Without Plans (And The Money Is Borrowed)

May 7, 2009

President Obama requested funding from Congress to relocate the terrorists prisoners from the Guantanamo Bay prison.  But the funding request had no accompanying plan on what to do with the prisoners.  Mr. Obama’s promised to close Guantanamo Bay by January 2010.

The House Appropriations Committee withheld the funding: and asked for a plan.

“While I don’t mind defending a concrete program, I’m not much interested in wasting my energy defending a theoretical program,” said House Appropriations Committee Chairman David R. Obey, Wisconsin Democrat.

But the White House asking for money without a concrete plan is not unusual: in fact, for the Obama Administration: that is the norm.

Cap and trade and the total re-engineering of the nation’s energy system to remove coal and oil?  We don’t know the total plan or much of the costs either.

The $787 billion stimulus was passed without a single lawmaker admitted he or she had read the request.  So why bother with writing down the tricky deatails of government spending?

Heath care?  The current Obama Administration request is for spending   The details of reform?  Yet to be worked out.

Education?  We don’t have a plan but we want the government to send everyone to college.  What will that cost and what will that mean?  We aren’t sure.

This wouldn’t seem so starkly stupid if we had the money to spend.  But this is borrowing huge sums from China and saddling out grandchildren with the debt: while we work out how the money will be spent, exactly.

Donna Smith of Reuters wrote, “Obama wants an overhaul of the $2.5 trillion U.S. health care industry passed by the end of the year.”

She also wrote, “Obama has not put forward a specific plan and is leaving it to the Democratic-controlled Congress to write the legislation.”

Cart before the horse?  Or just stupid government?

Related:
Karl Rove: Obama Outsources His Presidency
.
http://hotair.com/archives/2009/05/0
7/video-senate-republicans-hit-o
bama-on-gitmo/

http://michellemalkin.com/2009
/05/07/support-the-cap-and-t
rade-tax-disclosure-act/

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From The Washington Times

The Senate’s top appropriator Monday vowed to restore funding President Obama requested to close the Guantanamo Bay prison camp, challenging his own Democratic Party leaders who expressed skepticism about the administration’s plan.

“It’s going to be in the bill,” Senate Appropriations Committee Chairman Daniel K. Inouye told The Washington Times. “Something like this should be resolved in the conference.”

The Hawaii Democrat said the $81 million the White House wants to shut down the detention center at the U.S. Navy base in Cuba could come with conditions, such as withholding the money until Mr. Obama presents a plan for relocating the roughly 240 terrorist suspects locked up on the island.

House Democratic leaders left the requested money out of their version of a $94 billion supplemental spending bill for the wars in Iraq and Afghanistan, bucking the White House’s call for funding as it tries to make good on Mr. Obama’s promise to close Guantanamo Bay by January.

But the maneuver shored up Republican support critical to passing the bill and to avoid an embarrassing defeat for Mr. Obama at the hands of antiwar Democrats who will not support the additional funding primarily for military actions in Iraq and Afghanistan.

Republicans, who have been searching for an issue that resonates with voters, hammered the Guantanamo Bay closure in recent weeks.

Democratic leaders also balked at the administration’s lack of a plan to relocate the prisoners, even though they agree that the prison has become a symbol of U.S. excesses during President George W. Bush’s war on terror.

“While I don’t mind defending a concrete program, I’m not much interested in wasting my energy defending a theoretical program,” said House Appropriations Committee Chairman David R. Obey, Wisconsin Democrat.

Mr. Obey, who supports the idea of closing the facility, said that when White House officials develop a plan, “they are welcome to come back and talk to us about it.”

Read the rest:
http://www.washingtontimes.com/new
s/2009/may/07/senator-to-seek-git
mo-funds/

Donna Smith of Reuters on Health Care:
http://news.yahoo.com/s/nm/200
90506/hl_nm/us_usa_healthcare_overhaul_2

Obama: Wall Street Will Play Less Dominant Role

May 3, 2009

Wall Street is not going to play as dominant a role in the economy as regulations reduce “some of the massive leveraging and the massive risk-taking that had become so common,” President Barack Obama says.

The changes in the role of Wall Street and the huge profits that came from that risk-taking could mean other adjustments as well, Obama said in an interview in this week’s New York Times Magazine.

“That means that more talent, more resources will be going to other sectors of the economy,” he said. “I actually think that’s healthy. We don’t want every single college grad with mathematical aptitude to become a derivatives trader. We want some of them to go into engineering, and we want some of them to be going into computer design.”

The Obama administration is trying to restore more regulations on the financial sector to avoid some of the risk-taking that helped cause the current economic problems.

“Wall Street will remain a big, important part of our economy, just as it was in the ’70s and the ’80s,” he said. “It just won’t be half of our economy.”

Obama said he expects that government efforts to fix the economy will cause long-term changes.

“What I think will change, what I think was an aberration, was a situation where corporate profits in the financial sector were such a heavy part of our overall profitability over the last decade,” he said.

Obama said he’s confident that people will regain trust and confidence in the financial system, but he believes it will take time.

“I think it’s important to understand that some of that wealth was illusory in the first place,” he said.

Wall Street is not going to play as dominant a role in the economy as regulations reduce “some of the massive leveraging and the massive risk-taking that had become so common,” President Barack Obama says.

The changes in the role of Wall Street and the huge profits that came from that risk-taking could mean other adjustments as well, Obama said in an interview in this week’s New York Times Magazine.

“That means that more talent, more resources will be going to other sectors of the economy,” he said. “I actually think that’s healthy. We don’t want every single college grad with mathematical aptitude to become a derivatives trader. We want some of them to go into engineering, and we want some of them to be going into computer design.”

The Obama administration is trying to restore more regulations on the financial sector to avoid some of the risk-taking that helped cause the current economic problems.

“Wall Street will remain a big, important part of our economy, just as it was in the ’70s and the ’80s,” he said. “It just won’t be half of our economy.”

Obama said he expects that government efforts to fix the economy will cause long-term changes.

“What I think will change, what I think was an aberration, was a situation where corporate profits in the financial sector were such a heavy part of our overall profitability over the last decade,” he said.

Obama said he’s confident that people will regain trust and confidence in the financial system, but he believes it will take time.

“I think it’s important to understand that some of that wealth was illusory in the first place,” he said.

Associated Press

Read the New York Times

One Face of the GOP Passes; Who Are the “Faces” Now?

May 3, 2009

Jack Kemp was one “face” of the Republican Party at one time and we mourn his loss.

He was important because he believed in people and in their right and responsibility to make their own decision.  An out growth of that was the importance of letting people have their own money to support their own decisions.

But Kemp also believed some people needed help some of the time.

His ability to transmit his character and his beliefs from the football fields, through Congress and during his time at HUD made him an icon Republicans today can learn from….

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From Politico:

This is a personal note because Jack was a personal friend, but the bigger message of Jack’s life is one his fellow Republicans must take to heart. It was a message of inclusion, of support, of compassion, of a belief in government that was limited but not absent; that rewarded individual accomplishment but understood that some among us need the help of the community; that adherence to religious values comes from internal commitment, not from being imposed by others. Jack was both color-blind (he did not distinguish based on race) and color-sensitive (he saw the ways in which minorities were harmed by bigotry and discrimination and worked, in congress and in the cabinet, to overcome those inequities).

Read it all:
http://www.politico.com/arena/
.

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Read the Washington Post on Kemp:

In Mr. Kemp’s 1979 book, “An American Renaissance: A Strategy for the 1980s,” he adopted John F. Kennedy’s idea that “a rising tide lifts all boats.”

But he said he was made aware that it was not universally applicable, and recognized a need for government help for those whose boats had sunk.

Mr. Kemp was regarded as an unusual sort of Republican, combining fiscal and social conservatism with support for civil rights, affirmative action and rights for illegal immigrants. He called himself “a bleeding-heart conservative.”

Read the entire article:
http://www.washingtonpost.com/wp-dy
n/content/article/2009/05/02/
AR2009050202501.html?hpid=topnews

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Who Are the “Faces” of the GOP Today?

 

By Marc Sandalow
The Examiner

Michael Steele has a mouth that roars.

During his first two months as chairman of the Republican Party, he threatened primary challenges for congressional Republicans who voted with President Barack Obama, dismissed Rush Limbaugh as a mere “entertainer” and told GQ magazine that abortion was a matter of personal choice.

Reporters — some armed with a notebook in one hand, gasoline and matches in the other — clambered for interviews.

Many Republicans rolled their eyes when Steele talked of bringing GOP principles to “hip-hop settings.” Some scratched their heads when he derided the stimulus bill as a wish list of folks wanting “to get a little bling-bling.” Others seemed bewildered when he offered “slum love” to Louisiana Gov. Bobby Jindal.

Read the rest:
http://www.washingtonexaminer.com
/local/The-trials-of-Michael-Steele-
44099702.html

http://michellemalkin.com/2009
/05/02/jack-kemp-1935-2009/

Related:
Is Any System Or Party “Dead” Because of Corruption? Or is Corruption With Us Always?

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Republicans Search For New Common Ground With Voters

The Washington Post

A group of prominent GOP leaders yesterday launched an effort to improve their party’s sagging image, hosting an event at which they did not directly attack President Obama, rarely used the word “Republican” and engaged in a healthy dose of self-criticism.

At a pizza restaurant in Arlington, where they officially unveiled the National Council for a New America, party leaders attempted to portray Republicans as sensitive to the concerns of average Americans and to shake off the “Party of No” label that Democrats have tried to affix to the GOP.

House Minority Whip  Eric Cantor (Va.) rejected the idea that yesterday’s event, the first in a national series, was about “rebranding” the GOP, but it gave the impression of a party looking for a fresh start. Cantor, former Florida governor Jeb Bush and former Massachusetts governor Mitt Romney sat on stools and lobbed criticism at “Washington” and “liberals.” They took few shots at Obama as they pledged to start a “conversation” with voters around the country.

Read the rest:
http://www.washingtonpost.com/wp-dy
n/content/article/2009/05/02/AR2
009050202082.html

http://hotair.com/archives/2009
/05/02/breaking-jack-kemp-rip/

Factory orders drop 0.9 percent in March

May 1, 2009

Orders to U.S. factories fell a larger-than-expected 0.9 percent in March, while factory shipments dropped for a record eighth consecutive month. The report was further evidence of the severity of the recession.

The Commerce Department’s reported decrease exceeded the 0.6 percent fall that economists had predicted. Shipments of manufactured products tumbled 1.2 percent, an eighth consecutive decline. It marked the longest such stretch of declines on records dating to 1992.

American manufacturers have been battered by the prolonged recession in the United States and by spreading weakness overseas that has sharply reduced their foreign sales.

Adding to the picture of weakness in March, the government report Friday sharply revised the February increase, to show a smaller 0.7 percent rise rather than the 1.8 percent gain originally reported.

By MARTIN CRUTSINGER, AP Economics Writer

For March, orders for durable goods dropped 0.8 percent as strength in demand for commercial jetliners and military aircraft offset weakness in other areas. Orders for nondurable goods, products such as petroleum, chemicals and paper, dropped 1 percent after a 0.2 percent fall in February.

The weakness in nondurable goods reflected declines in demand for textile goods, clothing, paper and chemicals. They were partly offset by a rise in demand for petroleum — an increase that likely reflected higher prices more than a boost in demand.

Orders to U.S. factories fell a larger-than-expected 0.9 percent in March, while factory shipments dropped for a record eighth consecutive month. The report was further evidence of the severity of the recession.

The Commerce Department’s reported decrease exceeded the 0.6 percent fall that economists had predicted. Shipments of manufactured products tumbled 1.2 percent, an eighth consecutive decline. It marked the longest such stretch of declines on records dating to 1992.

American manufacturers have been battered by the prolonged recession in the United States and by spreading weakness overseas that has sharply reduced their foreign sales.

Adding to the picture of weakness in March, the government report Friday sharply revised the February increase, to show a smaller 0.7 percent rise rather than the 1.8 percent gain originally reported.

For March, orders for durable goods dropped 0.8 percent as strength in demand for commercial jetliners and military aircraft offset weakness in other areas. Orders for nondurable goods, products such as petroleum, chemicals and paper, dropped 1 percent after a 0.2 percent fall in February.

The weakness in nondurable goods reflected declines in demand for textile goods, clothing, paper and chemicals. They were partly offset by a rise in demand for petroleum — an increase that likely reflected higher prices more than a boost in demand.

Read the rest:
http://news.yahoo.com/s/ap/20090501/ap_on_bi
_ge/us_factory_orders;_ylt=Ak_Vk4JKzzSAB6iMA
.CH4Jus0NUE;_ylu=X3oDM
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VzX2ZhY3Rvcnlfb3JkZXJzBGNwb3MDNQRwb
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