Daily Digest

Daily Digest 6/22 - Congress Clashes Over Budget, Russia Threatens Belarus Electricity, U.S. Is Halfway To Lost Decade

Wednesday, June 22, 2011, 9:43 AM
  • GOP doubts over long-term deficit deal grow
  • Clock is ticking: U.S. politicians clash over budget
  • California Lawmakers Lose Pay Over Budget, Controller Says
  • U.S. mayors find few recovery signs as cutbacks pose new risks
  • California district can't afford to use new $105M school
  • Russia threatens to cut off Belarus electricity
  • Annapolis boosts water and sewer rates
  • U of Minnesota regents approve 5% tuition hike
  • FGCU tuition increase approved by trustees
  • Springfield trims 16 jobs, adds new fees
  • Mansfield considers $5 license plate fee, killing street lights
  • JeffCo considers more layoffs, court closings
  • Calls grow for Greek Marshall Plan
  • UK's Biggest Public Service Union Threatens Strikes
  • Scholarship cut for 1,400 of Florida's top students
  • Bourne cuts lifeguards at town beaches, raising concerns from some residents
  • R.I. bus service faces 10% cut to cover deficit
  • Job crisis: U.S. is halfway to lost decade (Lawrence H Summers)
  • Maki Says Fed May Lower First-Half U.S. Growth Forecast 
  • World Bank debuts tool to fight food price swings
  • Households poorer by £60 a month, survey shows
  • Number of Nevadans on food stamps jumps 21%
  • 'Total chaos:' Flint firefighters respond to 11 vacant house fires all around the same time, location overnight
  • Hong Kong’s May Inflation Rises to 5.2%
  • Harrisburg Hoping God Can Help Balance the Books
  • Oakland counting on unions to help close deficit
  • Bridgeport Public Schools are on the Brink of Extreme and Grim Budget Cuts
  • NH halts recycling of bulbs containing mercury
  • Two out of three drivers use car less as cost of fuel soars
  • Pink Slips Handed Out at North Las Vegas Detention Center
  • Gannett laying off 700 more workers amid ad slump
  • Greek opposition leader: austerity will not work
  • European Bank Debt Dominates U.S. Money-Market Funds, Fitch Ratings Says
  • Report claims Cook governments’ debt at $108 billion

Crash Course DVDOwn the Crash Course Special Edition Set with Presenter’s Pack (NTSC or PAL)


GOP doubts over long-term deficit deal grow

Doubt appears to be growing among congressional Republicans about getting a long-term deficit-reduction deal by early August in exchange for hiking the U.S. debt limit, as high-level talks restarted Tuesday.

Two Republican lawmakers said at a Wall Street Journal conference on Tuesday that there isn’t enough time to thoroughly deal with a host of issues, including taxes and entitlement reform, before Aug. 2 — the day the Treasury says the United States will default if the debt limit isn’t raised.

Clock is ticking: U.S. politicians clash over budget

Over the next six weeks, negotiators must strike a bipartisan compromise to slice more than $US2 trillion ($1.9 billion) from the federal budget by 2021, reduce the complex plan to writing and persuade a bitterly divided Congress to support it. But time is running out.

"I keep talking to other colleagues who have confidence that someone else is working things out," said Senator Chris Coons, a freshman Democrat member of the budget committee. "But I keep looking around thinking, 'If we're not doing it, then who is?"

California Lawmakers Lose Pay Over Budget, Controller Says

The $89.8 billion budget that the Democrat-run Legislature sent to Brown was short $1.85 billion of revenue needed to balance, Controller John Chiang said today in a statement.

“My office’s careful review of the recently-passed budget found components that were miscalculated, miscounted or unfinished,” Chiang said. “The numbers simply did not add up, and the Legislature will forfeit their pay until a balanced budget is sent to the governor.” Without a budget, the biggest issuer of municipal debt in the U.S. is unable to borrow on Wall Street to pay bills when the fiscal year starts July 1.

U.S. mayors find few recovery signs as cutbacks pose new risks

Little Rock, Ark., has stopped replacing aging police cars. Mesa, Ariz., is losing $5 million a year from thousands of vacant homes that aren’t paying utility bills. Providence closed schools, fired teachers and may cut almost a fifth of its police force.

“Even with all that, we’re still looking at a huge tax increase,” said Providence Mayor Angel Taveras, who proposed a $15 million boost in property levies. “Mayors are having to make difficult decisions. They are making them in Boston, New York, Newark, Detroit, all across the country.”

California district can't afford to use new $105M school (Riverside, CA)

In a sign of just how deep economic and budget problems have grown in the nation's largest state, a gleaming new high school built at a cost of $105 million will sit unused for at least a year because education officials say they don't have money to operate it. Hillcrest High School in Riverside was planned to relieve crowding at a nearby school and was financed with bonds approved by voters in 2007. But Wendell Tucker, superintendent of the Alvord Unified School District, says big cuts in state funding, the main source of money for local schools, have left the inland Southern California district without the means to hire administrators, teachers and other staff needed to open the campus when the school year starts this fall.

Russia threatens to cut off Belarus electricity

A potential interruption of Russian supplies should not hit resource-starved Belarus too severely because it only receives a tenth of its electricity from its energy-rich neighbour.

But it adds another psychological blow to a nation of 10 million that this year has already seen its currency devalued by more than a third and inflation reach a staggering 32.6 percent amid its worst crisis since the Soviet era.

Annapolis boosts water and sewer rates

The $401 that average commercial users paid per quarter will soar to $763 under the new fee schedule.

Finlayson said she has the new rates will have a severe impact on some of her constituents. She knows of a household dealing with a lien against the property because of a backlog of unpaid bills.

U of Minnesota regents approve 5 percent tuition hike

The University of Minnesota regents approved what the university president called a "dismal" budget that raises tuition by 5 percent for most resident undergraduate students and trims millions of dollars in costs through layoffs, program cuts, a wage freeze and health care changes.

FGCU tuition increase approved by trustees

Trustees at Florida Gulf Coast University voted this morning to increase tuition there an additional 7 percent, over the top of the 8 percent required in a budget passed by the Legislature and signed into law in May.

That means the students paying $4,981.20 in tuition and fees this year for a 30-hour course load can expect to pay $5,532.60 for 30 hours of classes starting in the fall. FGCU is among 11 state universities considering a full 15 percent tuition hike ahead of a state Board of Governors meeting later this week. While the Legislature required 8 percent increases at all universities, each university has the ability to request an additional 7 percent increase.

Springfield trims 16 jobs, adds new fees

Other Oregon communities, including Corvallis and Oakridge, already are charging such fees, officials said. Eugene and South Lane County Fire and Rescue are considering them. Springfield also is increasing an extra out-of-area fee it charges for ambulance service. Those who live outside the Eugene- Springfield area will see their out-of-area bill increase by $100 to a total of $1,800. Local residents pay $1,600. The fee does not apply to FireMed members.

Mansfield considers $5 license plate fee, killing street lights

The city's fiscal recovery plan calls for either implementing a fee to generate $690,000 annually -- or an alternative, turning off every other street light, to save $65,000 in 2011 and $290,000 in 2012.

JeffCo considers more layoffs, court closings

Originally, county commissioners thought they would have to lay off a total of 964 employees to trim $12 million from the budget. So far, department heads have only given out around 500 pink slips, totaling $10 million of cuts. Commissioner Jimmie Stephens said he hopes the county can fill the remaining $2 million gap with revenue, but if that doesn't work, additional layoffs are possible.

Separately but equally difficult, Circuit Judge Scott Vowell said criminal courts in the county will close on Monday if more money doesn't come in. Currently, the county only has enough money to pay the security guards who man the metal detectors at the main courthouse. For security purposes, the county plans to close access to the public at the four other Jefferson County courthouses next week.

Calls grow for Greek Marshall Plan

As budget cuts and tax increases push Greece deeper into recession, politicians, economists and business leaders are calling for a new approach - a Marshall Plan that would jolt its economy back to life and give its citizens new hope.

Some alterntive plans already exist. Jorgo Chazimarkakis, a member of the European Parliament for the German Free Democrats, has proposed a euro30 billion stimulus package for Greece, dubbed the "Hercules Plan." The package would combine the EU regional funds for the coming years with one fourth of the proceeds of Greece's highly unpopular euro50 billion privatization program.

UK's Biggest Public Service Union Threatens Strikes

Unison, the U.K.'s largest public service union, will carry out a campaign of strikes "without precedent" to defend against the coalition government's planned pension reforms, the union's general secretary said Tuesday.

The threat from Dave Prentis increases pressure on the coalition government of Prime Minister David Cameron after thousands of workers from four other public sector unions said last week they would hold a joint strike June 30 over plans to make public sector employees work longer and with higher contributions for a smaller pension.

    Crash Course DVDOwn the Crash Course Special Edition Set with Presenter’s Pack (NTSC or PAL)

Scholarship cut for 1,400 of Florida's top students

The cost of college just went up by an unexpected $1,500 for some of Florida's top students. Recipients of the highly competitive, merit-based Robert C. Byrd Honors Scholarship have received letters from the state this month saying the federal government is no longer funding the awards.

About 1,400 students in Florida and 28,000 nationwide received the $1,500-per-year renewable scholarship during the 2009-10 year, the most recent figure available.

Bourne cuts lifeguards at town beaches, raising concerns from some residents

Residents and tourists swimming at Bourne's beaches this summer are on their own if they get into trouble in the water. The town has eliminated lifeguards at all town beaches in response to a budget shortfall, raising safety concerns from some residents.

Town Administrator Thomas Guerino tells the Cape Cod Times the alternative was cutting police officers, firefighters or other town workers.

R.I. bus service faces 10% cut to cover deficit

Charles Odimgbe, the CEO of the Rhode Island Public Transit Authority, said Monday that he will propose cutting the state’s bus service by 10 percent to cover a projected deficit in the fiscal year that begins July 1.

Odimgbe was reacting to the House Finance Committee’s proposed budget for the year, which he said does nothing for RIPTA’s financial situation. “I’m really very frustrated,” he told the authority board of directors. “I don’t know what else to do.”

“Seventy percent of our riders take the bus to work,” Odimgbe said. “That’s what’s so frustrating.”

Job crisis: U.S. is halfway to lost decade (Lawrence H Summers)

Over the last five years, from the first quarter of 2006 to the first quarter of 2011, the US economy’s growth rate averaged less than 1 per cent a year, about like Japan during the period when its bubble burst. At the same time, the fraction of the population working has fallen from 63.1 per cent to 58.4 per cent, reducing the number of those with jobs by more than 10 million. The fraction of the population working remains almost exactly at its recession trough and recent reports suggest that growth is slowing.

Maki Says Fed May Lower First-Half U.S. Growth Forecast (Video)

Dean Maki, chief U.S. economist at Barclays Capital, talks about May U.S. existing-home sales data and the outlook for tomorrow's policy statement by the Federal Reserve's policy-setting Federal Open Market Committee. Purchases of existing homes fell 3.8 percent to a 4.81 million annual pace last month, data from the National Association of Realtors showed today.

World Bank debuts tool to fight food price swings

Poor farmers in the developing world will now be able to use Wall Street-style financial wizardry to protect against food price volatility, under a new program announced by the World Bank on Tuesday....The new financial product -- which will help buyers hedge against price spikes in wheat, sugar, cocoa, milk, cattle, corn, soybeans, and rice -- was developed jointly by the World Bank and Wall Street bank JPMorgan Chase.

On Wednesday and Thursday, agriculture ministers from the G20 grouping of rich and developing countries will meet in Paris to discuss measures to constrain volatility in food prices.

Households poorer by £60 a month, survey shows (UK)

Households are about £60 a month worse off than they were a year ago as rising inflation puts the squeeze on household budgets, latest figures show.

Family spending power fell by £14 a week in May, according to the Asda income tracker, a record low since the supermarket started publishing the data in January 2007. The figures show that the average family had just £165 a week to spend in May, 8% lower than this time last year due to higher food bills and soaring transport costs. Staple foods have risen in price by 40% over the past 12 months, while the cost of getting around by car and public transport is 8% higher than a year ago.

Number of Nevadans on food stamps jumps 21 percent

The number of Nevada food stamp recipients shot up by 21 percent in the last year, a sign of the recession's ongoing toll. Nevada ranked third in the nation in the number of new people enrolling in the Supplemental Nutrition Assistance program.

Romaine Gilliland, administrator for the state Division of Welfare and Supportive Services, said 329,105 people received benefits through the program in March. The 21 percent jump follows a 47 percent increase in 2009 and a 27 percent increase in 2010.

'Total chaos:' Flint firefighters respond to 11 vacant house fires all around the same time, location overnight

The fires started around 12:30 a.m. and continued into the night, said Battalion Chief John Babb.

The fires took place in the same area — on Dakota, New York, Bennett and Oklahoma avenues between Lewis Street and Minnesota Avenue, Babb said. "It was total chaos," Babb said. "They were circling us. They would set one fire and then another."

Hong Kong’s May Inflation Rises to 5.2%

Financial Secretary John Tsang said on June 9 that inflation is “heating up” imposing a “challenge” to the city, as rising global food costs and the introduction of a minimum wage last month pushes up consumer prices. Hong Kong’s currency peg to the U.S. dollar deprives the city of the monetary tool to rein in prices through interest rate adjustments.

“The city’s inflation rate will continue to climb,” Raymond Yeung, a senior economist at Australia & New Zealand Banking Group Ltd. in Hong Kong, said before today’s report. Droughts in China are pushing up food costs and residential rentals are rising on higher home prices, he said. Yeung said inflation may exceed 6 percent by September.

Harrisburg Hoping God Can Help Balance the Books (CNBC)

If all the brightest minds in Harrisburg’s government can’t solve the city’s financial problems, maybe God can.

That seems to be the thinking in Pennsylvania’s capital city, where Mayor Linda Thompson and a host of other religious leaders are about to embark on a three-day fast and prayer campaign to cure the city’s daunting money woes.

“The City of Harrisburg is facing a direct, immediate and grave financial crisis,” the DCED wrote in a massive 422-page analysis of the government’s perilous condition. “The financial crisis is so severe that the City teeters uncomfortably on the verge of bankruptcy that could be triggered at any moment by parties outside its control.”

Oakland counting on unions to help close deficit

The Oakland City Council is hoping today to nail down millions of dollars worth of union concessions that Mayor Jean Quan has sought to plug half of the city's $58 million deficit....The public was supposed to get its first look at the council proposals tonight. Instead, however, council members said their counterproposals would be discussed for the first time at a special meeting on June 28 - just days before the budget is due.

The delay to get a budget passed puts the city in limbo, with residents and city workers wondering about the future of jobs and city services. Quan's budget called for, among other things, the closure of 14 of the city's 18 libraries, four fire stations and five recreation centers.

Bridgeport Public Schools are on the Brink of Extreme and Grim Budget Cuts

Four hundred and thirty-four positions, one in five across the district, will be eliminated if the board of education adopts the budget. Among the losses would be 18 administrators, 150 teachers, more than 100 paraprofessionals (like librarians and teacher aides) and another 100 or so other employees (such as IT workers and crossing guards). Class sizes would be upped to 29 students, the highest allowed in the district's contract with the teachers union, the Bridgeport Education Association. Other programs, like sports and music would be effected.

“I can't see them running a school district with the proposed cuts,” says BEA President Gary Peluchette. In the last two budget cycles, Bridgeport Public Schools received $16 million in federal stimulus dollars, money that was cut off this year. Meanwhile, expenses continue to go up, says Ramos. For example, last year, the district spent $37 million on healthcare benefits. This year, that cost jumped to $44 million.

NH halts recycling of bulbs containing mercury

New Hampshire's program to recycle mercury-laced low-energy light bulbs is going dark due to budget cuts.

Funding runs out this month for a five-year-old program that allows residents to recycle long fluorescent light bulbs and compact fluorescent light bulbs at participating hardware stores.

Two out of three drivers use car less as cost of fuel soars (UK)

TWO-THIRDS of motorists are cutting back on driving due to rising fuel prices, according to a new survey.

Just under half of drivers blame the UK government for the high cost of fuel, the poll by motoring organisation the AA showed.

Pink Slips Handed Out at North Las Vegas Detention Center

Fifteen corrections officers at the North Las Vegas Detention Center left work Monday without a job to return to. They are the latest victims of layoffs by the city. With the reduced manpower comes the possibility up to 150 inmates could be released.

Another five corrections officers will lose their jobs Tuesday. That means one of the dorms at the detention center must close, because there aren't enough people to operate it. In order to shut down the dorm, the prisoners housed in it must be released.

Gannett laying off 700 more workers amid ad slump

The nation's largest newspaper publisher is laying off another 700 employees to cope with an unrelenting advertising slump. Gannett, the owner of USA Today and more than 80 other daily U.S. newspapers, hoped to complete the cuts Tuesday. The layoffs are occurring at most Gannett newspapers but not at USA Today.

The payroll reductions represent 2 percent of Gannett's 32,600 employees.

Greek opposition leader: austerity will not work

Greece's opposition leader insists the austerity program designed to pull the country out of its debt crisis "will not work" and must be renegotiated.

Conservative party leader Antonis Samaras spoke Tuesday night during a debate ahead of a crucial parliamentary confidence vote for the Socialist government. Prime Minister George Papandreou called the vote to face down an internal party rebelion and help him push through additional austerity essential to prevent Greece from default

European Bank Debt Dominates U.S. Money-Market Funds, Fitch Ratings Says

European banks have worked to reduce their risk to Greece over fears the Mediterranean country may default on its debt, and to other countries that may be vulnerable if the crisis spreads. The Bank of International Settlements estimated European lenders held $136.3 billion in loans to Greece at the end of 2010 and almost $2 trillion to Portugal, Ireland, Spain and Italy.

Report claims Cook governments’ debt at $108 billion

A report from Cook County Treasurer Maria Pappas claims taxpayers countywide are on the hook for more than $108 billion in debt accrued by various government agencies, including more than $25 billion in unfunded public pension liabilities.

The report shows that only a quarter of the county’s more than 500 taxing bodies are funding pension plans at 80 percent or more, an amount considered “healthy” by federal standards.

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."


saxplayer00o1's picture
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4259
UK Greek bill 'may hit £14,640 per family'

"Britain could be hit with losses of up to £366bn from the collapse of the Greek economy, it emerged last night.

The potential devastation of banks and other City institutions would be equal to 24% of our annual national output, or £14,640 for every family in the UK.

Ministers had claimed that British banks have 'only' £2.5bn of exposure to Greek government debt, while the Bank of England says the potential losses would be just £8bn.

But experts last night said that UK financial institutions are in far more danger than previously thought, because banks are tied up in complicated derivatives and insurance deals. "

"The mayor has acknowledged the legal risks in trying to reduce current employee pension benefits, but argues that the alternative is municipal bankruptcy or a greatly reduced workforce. And he believes the law allows room for what he's proposed."

"Reed has said the move is needed to curb runaway pension costs, which have jumped from $63 million in 2000 to $255 million this year. They are expected to hit $400 million or more in five years.

The city has had to lay off employees, including police officers, to cover that bill, with the number of employees dropping from a high of 7,500 about a decade ago to about 5,300 today."

"At least 66 jobs will be eliminated by the city of Stockton starting with its new fiscal year July 1 but a far greater number of terminations or even bankruptcy have not been ruled out by the Central Valley city.

If the city and various unions reach agreements for sufficient pay and benefit cuts, the firings would stop at 66. If not, as many as 250 jobs would be eliminated, city officials say. Bankruptcy would be the other option.

The cuts were approved Tuesday night as the council tried to bridge a $37 million General Fund deficit for the coming fiscal year."

"Officials in some Southern California cities are wondering whether tight budgets will prevent them from contributing money for floats in the Rose Parade.

Glendale's City Council on Monday asked city staff to create an account where residents can donate to the city's float, the Los Angeles Times reported.

A majority of city councilmembers said they wouldn't commit $130,000 from the general fund to the project because the city is facing a $18 million budget deficit, putting the city's long tradition of participation in the parade at risk."

"The U.S. Postal Service, facing insolvency unless it gets approval to delay a $5.5 billion payment for worker health benefits, will suspend contributions to an employee retirement account to save $800 million this year.

The Postal Service will stop paying employer contributions to the defined-benefit Federal Employees Retirement System, which covers about 85 percent of career postal workers, it said today in an e-mailed statement. The $115 million payment, made every other week, will stop on June 24, the statement said.

Suspending payments to the retirement account will help “conserve cash and preserve liquidity,” the statement said. The agency estimates it has overpaid the retirement account by $6.9 billion and has asked Congress to pass legislation to return that money."

  • Other news, headlines and opinion: 

Millions of middle-class people could get Medicaid

Pimco warns Greece will default

Silver coin sales boom as investors seek haven and Silver-Coin Sales Boom at Perth’s Mint as Mums and Dads Desert Paper Money

Thousands of angry Europeans protest against austerity

India food subsidy law 'to cost $22 bn': official

Tepco books additional Y88 billion loss last FY

Japan pensions bet on hedge funds to boost

Pentagon Crosses $1 Trillion Threshold in War on Terror Spending

Spain's ghost airports: monuments of reckless building that buried a nation in debt

How Do Fannie and Freddie Fit Into the Debt-Ceiling Picture?

Greece's Debt Woes Risk Hindering Drug Supplies

New Greek Bailout Would Put Most Debt With EU, IMF, Report Says

Egyptian T-Bill yields at 2008 high on aid concern: Arab credit

Government layoffs slow US cities' recoveries-report

341 layoffs ahead for St. Paul schools

San Jose City Council hikes parking rates at downtown garages ("by as much as 33 percent")

Sovereign, Corporate Credit-Default Swap Indexes Rise in Europe

Greece's Economic Crisis Upended Middle Class

Allied Irish Bank has 'defaulted' says derivatives body

J.P. Morgan Knew Portfolio Had Losses, SEC Says

Ethiopia food prices spike after govt intervention

Greece 'may need four bailouts' after PM wins vote of confidence

Irish Bonds Decline Amid Concern Over Greece's Austerity Vote

Oil near $94 as IEA warns crude costs hurt economy

Fed Frets Over US Fiscal Recklessness

Solana Beach water district board approves budget, 6 percent water rate increase

S&P says California credit rating at "crossroad"

If state shuts, all could pay for idled Minnesota workers

States Battling Over Education Budgets at Fiscal Year's End

Every Chicago household's share of local govt. debt: $63525

Sonoma County pension report hightlights 'alarming' trend

France Warns of Hunger as Farm Ministers Meet

China Money Rate Reaches Three-Year High as Bill Sale Suspended

Dodd-Frank claims niche form of gold trading

Long-term budget outlook 'daunting', CBO says

Gross: Next Jackson Hole in August will likely hint at QE3 / interest rate caps.

Ireland, Portugal seen restructuring debt -AGIC CIO

Forty groups unite to block debt ceiling hike

Doug's picture
Status: Diamond Member (Offline)
Joined: Oct 1 2008
Posts: 3207
Larry Summers

Is it my imagination, or does Larry Summers' latest just continue deluded policies that encourage spending and borrowing?  Although he doesn't say so explicitly, he seems to be encouraging QEIII.  How does he think this will help?  He wants us to have more confidence in the economy so that we will borrow and spend more while the economy is clearly shrinking and consumers have less money to spend.  I think he represents the prevailing wisdom for the last 30 years or so, which explains our deep hole.



What then is to be done? This is no time for fatalism or for traditional political agendas that the two parties have pushed in more normal times. The central irony of financial crisis is that while it is caused by too much confidence, borrowing and lending, and spending, it is only resolved by increases in confidence, borrowing and lending, and spending. It follows that the central objective of national economic policy until sustained recovery is firmly established must be increasing confidence, borrowing and lending, and spending. Unless and until this is done, other policies, no matter how apparently appealing or effective in normal times, will be futile at best. We should recognise that it is a false economy to defer infrastructure maintenance and replacement, and instead take advantage of a moment when 10-year interest rates are below 3 per cent and construction unemployment approaches 20 per cent to expand infrastructure investment.

It is far too soon for financial policy to shift toward preventing future bubbles and possible inflation and away from assuring adequate demand. The underlying rate of inflation is still trending downward, and the problems of insufficient borrowing and investing exceed any problems of overconfidence. The Dodd-Frank legislation is a broadly appropriate response to the hugely important challenge of preventing any recurrence of the events of 2008. It needs to be vigorously implemented. But under, not over-confidence is the problem of the moment and needs to be the focus of policy.

Most important, the fiscal debate needs to take on board the reality that the greatest threat to the nation’s creditworthiness is a sustained period of slow growth that, as in southern Europe, causes debt-GDP ratios to soar. This means that essential discussions about medium-term measures to restrain spending and raise revenues need to be coupled with a focus on near-term growth. Without the payroll tax cuts and unemployment insurance negotiated by the president and Congress last fall we might well be looking today at the possibility of a double dip. Substantial withdrawal of fiscal support for demand at the end of 2011 would be premature. Fiscal support should be continued and indeed expanded by providing the payroll tax cut to employers as well as employees. Raising the share of the payroll tax cut from 2 per cent to 3 per cent would be desirable as well. At a near-term cost of a little over $200 billion, these measures offer the prospect of significant improvement in economic performance over the next few years translating into significant increases in the tax base and reductions in necessary government outlays.

It is appropriate that policy in other dimensions be informed by the shortage of demand that is a defining characteristic of our economy. For example, the Obama administration is doing important work in promoting export growth by modernising export controls, promoting US products abroad and reaching and enforcing trade agreements. Much more could be done through changes in visa policy, for example, to promote exports of tourism as well as education and health services. In a similar vein, recent presidential directives regarding relaxation of inappropriate regulatory burdens should be rigorously implemented to boost confidence. Perhaps the most fundamental strength of the United States is its resilience. We averted Depression by acting decisively in 2008 and 2009. Now we can avert a lost decade by recognising current economic reality.


DRHolden's picture
Status: Silver Member (Offline)
Joined: Oct 18 2009
Posts: 131
It's getting crazy out there

Makes me want to pull the sheets up over my head...

aggrivated's picture
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 582
tuition hikes

In Tennessee the system has passed pay raises for university employees but this will require tuition hikes to balance budgets.   The two hikes I know of are Univ of Memphis  11% tuition hike and the Univ of TN medical school 15%  estimated tuition hike.   The fact that education loans now are greater than credit card debt in the USA makes one realize that if you subsidize something it will grow.  Tuition seems to be the 'relief valve' for balancing education budgets in TN.  On the other side of the equation the City of Memphis school system is cutting out teacher's dental and vision benefits for next year as a cost cutting measure.

Tall's picture
Status: Platinum Member (Offline)
Joined: Feb 18 2010
Posts: 564
GAO: leaks at aging nuke sites difficult to detect

The report by the Government Accountability Office was released by two congressmen Tuesday in response to an Associated Press investigation that shows three-quarters of America's 65 nuclear plant sites have leaked radioactive tritium, sometimes into groundwater.


Ready's picture
Status: Platinum Member (Offline)
Joined: Dec 30 2008
Posts: 917
78 links to articles

And not a single one could be considered positive.

Not sure if this is better (or worse) reporting, a wider net (SaxPlayer), or perhaps we have reached a tipping point where public perception is starting to change and understanding of our predicament gaining exponentially?


hucklejohn's picture
Status: Gold Member (Offline)
Joined: Dec 13 2008
Posts: 281
Concur with Doug on the

Concur with Doug on the Summers (ex-Treasury Secretary) piece.  Summers, like most mainstream economists, is basically deceived & remains blinded by his flawed ideology long established in the economics profession.  It's also hubris to think economic policy can adjust an economy to keep it going like a smooth running machine.  Booms & busts will always be with us as will mankind's greed & fear.  All government policy can do is make it worse.

Damnthematrix's picture
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
plan to abandon quake suburbs

NZ to detail plan to abandon quake suburbs

By New Zealand correspondent Dominique Schwartz


New Zealand prime minister John Key will later today tell thousands of Christchurch residents they can abandon their quake-devastated homes and receive a government pay-out.

Frustration in the eastern suburbs of Christchurch has boiled over since last week's strong aftershocks saw residents inundated with flooding and silt for the third or fourth time.

Residents have been demanding to know the future of their suburbs after Mr Key conceded thousands of homes were likely to be abandoned.

New Zealand's TV3 News is reporting that as a first step, home-owners in six eastern suburbs will be given the option of leaving their houses and being paid out by the government, which would then deal with the insurance companies.

Payments would be based on the value of homes before the September 4 quake.

Wendy S. Delmater's picture
Wendy S. Delmater
Status: Diamond Member (Offline)
Joined: Dec 13 2009
Posts: 1988
Poet's picture
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1892
Foreclosure Fraud And Death: Sunny Sheu

ZeroHedge has this posted:

Sunny Sheu Killed After Reporting Death Threat from Foreclosure Judge Joseph Golia
"Sheu's ordeal began over 10 years ago when a bank representative knocked on his door and said he was there to inspect the house for its new owner. The problem was that Sheu had never sold the house. It turns out that someone had forged critical documents and used them to illegally sell the property... Sheu alerted all relevant authorities; including the police, the bank that held the mortgage, and the title insurer of the property. Eventually the parties involved in forging the documents were prosecuted, pleaded guilty to forgery, and went to jail... Sheu hoped that with all the evidence in his favor, the matter would be quickly resolved - it was actually only the beginning of his nightmare."


rjs's picture
Status: Gold Member (Offline)
Joined: Aug 8 2009
Posts: 445
Bill Gross calls for stimulus

Top bond trader Bill Gross calls for more stimulus - Bill Gross, the head of PIMCO, the world’s largest bond investor, on Tuesday lambasted politicians who claim deficit reduction will lead to job growth and called for new stimulus spending. Gross is often cited by House Budget Committee Chairman Paul Ryan (R-Wis.) as having said the U.S. had only a few years to rein in the deficit to avoid a debt crisis. Gross sparked a lot of attention by dumping his holdings of U.S. Treasuries this spring. “Deficits are important, but their immediate reduction can wait for a stronger economy and lower unemployment. Jobs are today’s and tomorrow’s immediate problem,” Gross wrote in PIMCO’s July Investment Outlook.  “Conservative or even liberal agendas that cede responsibility for job creation to the private sector over the next few years are simply dazed or perhaps crazed,” he said.  Gross spoke favorably of New Deal-style infrastructure programs and called for a National Infrastructure Bank.

JohnDoe2b's picture
Status: Member (Offline)
Joined: Jun 12 2011
Posts: 9
Public Works Projects

I think Larry Summers was right about one thing. It's a good time for government spending when unemployment is high and interest rates are low. Given current realities, however, there is no point in building new infrastructure (roads, bridges, etc.)  that will soon revealed as unnecessary, expensive to maintain and energy and resource-intensive. I suggest that environmental cleanups (nuclear sites eg. Hanford, military bases and old mines and industrial sites) would be a productive, labor intensive priority that has already been put off for far too long.

JohnDoe2b's picture
Status: Member (Offline)
Joined: Jun 12 2011
Posts: 9
Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Dr Brian Josephson chews the fat.

Things are hotting up in Greece.

Early news from Greece

June 22, 2011
by Ivy Matt

The Greek website energypress.gr has a recent press release apparently giving details on Defkalion Green Technologies‘ commercial arrangements ahead of their press conference.

Among the details:

  • The company’s funding is completely private.
  • The company has €300-400 million in investments.
  • The company will build three industrial units in Xanthi, Thrace.
  • Apart from the large demonstration reactor, the company will produce large 1-3 MW units and smaller 10-30 kW household units.
  • The first prototype reactors will be produced by the end of July, regular production will begin in November, and the first household units will be introduced next January.
  • The cost of the device (household unit?), used as a water and space heater, will be €4000-5000.
  • A converter to produce electricity from the unit will cost an extra €500-900.


And Dr Brian Josephson (Nobel Laureate) chews the fat with Judith Driscoll about the deafening silence to a backgroud of good music.


RogerA's picture
Status: Silver Member (Offline)
Joined: Jun 18 2009
Posts: 106
Cold fusion

This could be like reinventing the wheel. Bookmarked.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments