Perhaps if Mr Obama and his imbecilic economic advisers wouldn't have been so shortsighted and would helped the private sector from the start instead of their failed stimulus bill he wouldn't have to BEG for more money to throw at the failed stimulus bill.
Election-year deficit fears stall Obama stimulus plan
Barely a week after President Obama tried to re-energize his push for more spending on the economy, his agenda is stalled on Capitol Hill, mired in election-year anxiety about the deficit.
Congress has delivered only about a quarter of the $266 billion in "temporary recovery measures" the president sought in his February budget request and ignored much of the rest. There is unlikely to be another "recovery" check for Social Security recipients. Come December, Obama's "Making Work Pay" tax credit -- the signature initiative he regularly touts as a tax cut for 95 percent of Americans -- will probably be gone
Another failed idiot jumping from the sinking SS Obama!
Soon the White House Will Be A Little Less Orszagulous
Office of Management and Budget director Peter Orszag will leave the Obama administration in the next few weeks, Democratic sources familiar with the situation tell ABC News. http://blogs.abcnews.com/politicalpunch/2010/06/soon-the-white-house-will-be-a-little-less-orszagulous.html
Cancelled: There Will Be No Congressional Budget This Year ***The Following Is An Important Fiscal Health Announcement***
Washington (Jun 22)
In light of House Majority Leader Steny Hoyer's (D-MD) announcement this morning that House Democrats will not pass a budget this year - failing to fulfill what he has called "the most basic responsibility" of governing - the following important fiscal health warning has been issued:
I think the Europeans understand that borrow and spend is a failed (Keynesian philosophy) though they will have to increase taxes on ALL of their citizens for their prior foolishness.
Osborne's Anti-Keynesian Budget Another government abandons the idea that it can spend its way back to prosperity.
George Osborne presented the U.K. government's emergency budget yesterday, with spending cuts and consumption-tax hikes intended to shrink public borrowing to 1.1% of GDP by 2016, down from 10.1% of GDP this year. Nearly 80% of that retrenchment comes as spending cuts rather than tax increases. The Chancellor of the Exchequer's cuts are, on balance, good news for the British economy. Even more welcome, though, is that Mr. Osborne's budget is the latest to depart from the short-lived Keynesian consensus that government can spend its way back to prosperity. http://online.wsj.com/article/SB10001424052748704853404575322651850598306.html
Artificially inflating anything is nothing more then smoke and mirrors, this administration has tried this from the failed stimulus to housing with the same result!
New-home sales plunge 33 pct with tax credits gone New-home sales drop to lowest level on record in May after federal homebuyer tax credits end http://finance.yahoo.com/news/New-home-sales-plunge-33-pct-apf-1718773153.html?x=0&.v=1
It is my opinion that if we don't jump start the private sector ASAP and say the heck with Gov't jobs this will be a real possibility ...
What's Ben Gonna Do?
Every day the deflation story gets stronger. Almost all of the numbers in the US are pointing in that direction. A slowdown in the EU is a sure thing. Japan is going nowhere. China is a question mark, but even if they do continue growing it will not result in enough Eco. Juice to offset the global deflationary forces.
I was anticipating a slowdown in the 4th Q. It is now looking more likely that we will fall of a cliff starting July 1st. Extended benefits will be ending. Most states start a new fiscal year and they are all dead dead dead on revenue. Any benefit we got from the census will be in reverse gear. By August 1st approximately 1mm temporary workers will again be out of a job. Housing is falling off a cliff.
The market sees this. The ten-year is at an incredible 3.1%. The last few days of trading in gold has a smell of deflation as well.
Bernanke must be beside himself. He bet the farm to save the economy in 2009. He has done things that no other Fed head as ever contemplated. As betting goes, he is "all in" on this one. He bet the economy, our future solvency and his reputation. In my opinion there is no way he is going to throw in the towel and accept that deflation is inevitable.
Ben spelled out what he would do in the "unlikely" event that deflation became a real threat in his famous 2002 "Helicopter" speech. The full speech is here. This speech has been hashed many times before. Given the news of late it is worth relooking at what Ben had to say. Some excerpts:
Under a fiat money system, a government should always be able to generate increased nominal spending and inflation, even when the short-term nominal interest rate is at zero.
Well Ben, we have had ZIRP for two years now. It has made a difference. But zero interest rates have just bought time, not a recovery.
The U.S. government has a technology, called a printing press that allows it to produce as many U.S. dollars as it wishes at essentially no cost. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.
Ben has been running that printing press. QE created $1.75t. It has not had a lasting benefit.
The Fed could stimulate spending by lowering rates further out along the Treasury term structure. There are at least two ways of bringing down longer-term rates: (I) Fed could commit to holding the overnight rate at zero for some specified period. (II) A more direct method, which I personally prefer, would be for the Fed to begin announcing explicit ceilings for yields on longer-maturity Treasury debt. The Fed could enforce these interest-rate ceilings by committing to make unlimited purchases of securities.
Ben has done (I). As of yet we have not seen (II). For me it is scary that this is his "favorite" approach. That makes this one a sure thing if evidence mounts that we are rolling over. But this does not accomplish much in today's markets. The 2-year is at 75bp. What is Bernanke going to do? Push that to zero also? He might.
The Fed could also attempt to cap yields of Treasury securities at still longer maturities, say three to six years.
Why stop at 6 years Ben? To make a dent he would have to have the 10-year at 1%. Is that what he has in mind? I think it is a real possibility.
An option would be for the Fed to use its existing authority to operate in the markets for agency debt.
We have done that already in a biblical manner. $1.25 trillion. Three months after the program ended the housing market is falling off a cliff. I would not be surprised if Ben re-established this program. Buying another $1 trillion would not accomplish anything but make the primary dealers rich. But a desperate Ben would do this again in a NY minute.
The Fed might next consider attempting to influence directly the yields on privately issued securities.
Oh boy, this is the beginning of the end. Ben would buy corporate debt. GE would be high on the list; the rest of corporate America would follow. Ben could buy BP bonds. That would solve our problems, wouldn't it?
The Fed might make 90-day or 180-day zero-interest loans to banks.
Lights out when this happens. Ben will stop at nothing. This option is not far from reality. That said, if this happens the public backlash is going to be vicious.
The Fed has the authority to buy foreign government debt. Potentially, this class of assets offers huge scope for Fed operations, as the quantity of foreign assets eligible for purchase by the Fed is several times the stock of U.S. government debt.
The "nuclear option" is to buy up the sovereign debts of other countries. This would extend QE globally. In a way we just did this with the opening of $100b in swaps lines to the European central banks. This gives them the wherewithal to buy their debt. The ultimate is when the Fed starts doing it for their own account. I doubt this option is realistic. It would require the approval of the other CB's. That said, should you see this headline buy lots of canned food and rice. If this step is implemented bread lines will follow.
It's worth noting that there have been times when exchange rate policy has been an effective weapon against deflation.
In this case the Fed would attempt to devalue the dollar in order achieve its goals. This of course would just destabilize everything else in the world and would insure a downward spiral in economic activity.
Most of the things Ben spoke of back in 2002 have already been tried (or are now in place) and have not worked. The remaining options do not appear to have much chance of working either. But that does not mean that we will not see these steps.
Ben has already destroyed savers. This is the consequence of his steps. It was not his goal, but he understood fully that savings would have to be penalized. He is in so deep at this point that I believe he will consider anything to protect his reputation in history. The one thing that he did not bring up in the 2002 speech was negative interest rates. While this option sounds ridiculous it can't be excluded as a possibility. The SF Fed had a paper on this recently. A graph of the "proper" Fed funds rate:
John Hilsenrath at the WSJ also put the idea of negative interest rates on the table in a recent piece. I think the article was from Ben's lips, into John's ear and then onto the front page of the Journal. If Ben has something to say on this matter he should address us all. He should not use a beard to influence public/market thinking.
How could something as crazy as negative interest rates work? Consider this from none other that Harvard economist Greg Mankiw. He had this to say on the subject back in March of 2009:
I can now state the proposed solution: Reduce the return to holding money below zero. Imagine that the Fed were to announce that it would pick a digit from 0 to 9 out of a hat. All currency with a serial number ending in that digit would no longer be legal tender. Suddenly, the expected return to holding currency would become negative 10 percent.
This bit of lunacy comes from one of our best and brightest economists. Should this (or any other negative % plan) be implemented it would mean that a depression is just a few months away. The last desperate acts would insure that we would fall into a very big hole. We will hear more on these "emergency" measures in the coming months. Should any of them come to pass, be guided accordingly. These steps will only agonize what must come.
-- "All I notice is some deranged flake talking to herself... "
He's doing that a lot lately. He spends all his time bashing Obama and extolling Sarah Palin. A half term governor and failed VP candidate who can barely put a sentence together and communicates to the world through Facebook and Twitter. Even Bill O"Reilly got fed up with her.
Lisa says, "The original 'tea party' was a movement addressing taxation without representation."
The original tea party was people being angry with the government over financial matters.
I don't think the connection could be any more clear. You're just being intentionally obtuse for the purpose of trolling. (Either that or years of liberal groupthink really have rendered you incapable of thinking and analyzing anything for yourself. Are you just parroting Daily Kos and Huffington Post or can you still think for yourself? ... Yes, I'll wait while you search left wing liberal sites for an appropriate comeback *sigh*.)
"He spends all his time bashing Obama and extolling Sarah Palin."
So like Scanlon, Lisa, electronics guy and Roberts, except in reverse!
I think you guys are arguably worse. At least bashing Obama is relevant, seeing how he is the president and is actively ruining everything he touches. Bashing some citizen in Alaska seems pretty pointless by comparison.
If the Congress uses the census to appropriate money to the States we are in big trouble!
NEW YORK (AP) -- Two U.S. Census Bureau managers in Brooklyn have been fired over allegations that they forged questionnaires.
According to reports in The New York Times and the New York Daily News on Saturday, officials said about 10,000 household interviews would have to be redone to ensure that the count is accurate.
The Census Bureau's New York regional director, Tony Farthing, told the Daily News that the fakery took place over the weekend of June 12 when the Northeast Brooklyn office was under pressure to meet a deadline.
Farthing said instead of surveying people in their homes, the managers cheated by copying information from phone books and Internet directories. They were turned in by whistleblowers.
The two managers were fired on June 18 but do not face criminal charges, Farthing said.
"Newsflash! You don't get to choose the policies."
Actually as a constituent we do have the the right to choose policy, by electing representation to pass policy that we want. It's when those who were elected decide to lie and deceive the people who elected them do we run into problems, but that will be corrected in November.