posted on January 7, 2004 11:38:10 AM new
06 January 2004
What do the war in Iraq and the economic recovery in the United States have in common? More than one might expect, to judge from the last couple of rounds of US growth figures.
The war has been a large part of the justification for the Bush administration to run ever-widening budget deficits, and those deficits, predicated largely on military spending, have in turn pumped money into the economy and provided the stimulus that low interest rates and tax cuts, on their own, could never achieve.
The result, according to economists, is a variant on Keynesianism that has particular appeal for Republicans. Instead of growing the government in general - pumping resources into public works, health care and education, say, which would have an immediate knock-on effect on sorely needed job creation - the policy focuses on those areas that represent obvious conservative and business-friendly constituencies. Which is to say, the military and, even more specifically, the military contractors that tend to be big contributors to Republican Party funds.
"It may be very inefficient and obviously not fair, but it is nevertheless causing almost 5 per cent more money to be pumped into the economy than is being taken out in tax revenues," observed Robert Pollin, professor of economics at the University of Massachusetts at Amherst. "At the same time, it fits into the broader ideological goals of the administration because they can paint it as part of a national emergency, the fight against terrorism, the fight against Saddam Hussein, and so on."
During the second quarter of 2003, when the war in Iraq was in full swing, some 60 per cent of the 3.3 per cent GDP growth rate was attributable to military spending. Expenditure on manpower and weaponry was relatively flat, according to Professor Pollin's analysis, while the lion's share of the stimulus came from the multi-billion dollar contracts handed out to Halliburton, Bechtel and other private contractors.
A smaller proportion of the roaring 8.2 per cent growth recorded for the third quarter was directly attributable to the military, but Professor Pollin and others argue that it is still the military that is driving the deficit, and the deficit - budgeted at about $500 billion (£270bn) for next year - that is driving the recovery.
Just last month, the Pentagon awarded a $4 billion contract to California company Northrop Grumman to work on the Star Wars missile defence programme. It is the sort of figure that can regenerate the economy of an entire region. California - the state where US economic booms have a tendency to begin and end - is also a beneficiary of the boom in security-related spending, since much modern security paraphernalia depends on Silicon Valley computer technology.
The Bush administration itself prefers to attribute the recovery to its tax cuts, targeted disproportionately towards the richest Americans. Many non-administration economists, however, say this is nonsense, and that the tax cuts are far more political than they are stimulative. A more significant role has been played by buoyant household spending, helped by low mortgage interest rates which have inspired many homeowners to borrow against the rising value of their properties. But there are signs that interest rates are now on their way back up and that the refinancing fad has ended.
"The administration is conducting a highly irresponsible fiscal policy, and there is no legitimate economist on the face of the earth who doesn't say the tax cuts are just loony," said Kent Sims, a San Francisco economic consultant and public policy expert. "The chosen weapon for dragging the economy off the floor - now that an election is coming - is the deficit. Military expenditure is usually the least effective of short-run ways of spending money, because it doesn't build infrastructure that give you returns over time. But it does create a short-term lift."
Military-fuelled growth, or military Keynesianism as it is now known in academic circles, was first theorised by the Polish economist Michal Kalecki in 1943. Kalecki argued that capitalists and their political champions tended to bridle against classic Keynesianism; achieving full employment through public spending made them nervous because it risked over-empowering the working class and the unions.
The military was a much more desirable investment from their point of view, although justifying such a diversion of public funds required a certain degree of political repression, best achieved through appeals to patriotism and fear-mongering about an enemy threat - and, inexorably, an actual war.
At the time, Kalecki's best example of military Keynesianism was Nazi Germany. But the concept does not just operate under fascist dictatorships. Indeed, it has been taken up with enthusiasm by the neo-liberal right wing in the United States.
Ronald Reagan famously resorted to deficit spending, using talk of the Evil Empire and communist threats from Central America as his excuse to ratchet up the military budget. In 1984, the deficit rose to a whopping 6.2 per cent of GDP. Consequently, the economy grew by more than 7 per cent that year, and he was re-elected by a landslide.
The corollary of the Reagan military boom was a sharp cutback in social spending, something that was not reversed under Bill Clinton and is now back on the agenda with George Bush. State and local budgets are all in crisis because of the recession of the past two years. The fact that the White House is not using federal dollars to help them finance schools, hospitals and police forces hurts all the more because these things have now been underfunded for a generation.
The Bush deficit has not yet reached Reaganesque proportions (it stands at roughly 4.5 per cent of GDP). But Professor Pollin, for one, predicts that the resulting debt burden could rapidly rise to the levels seen in the 1980s, with interest repayments eating up as much as 18-19 per cent of the overall federal budget.
Professor Pollin does not share the Clinton administration view that deficits are always bad. In classic Keynesian fashion, he believes they are necessary and desirable to pull countries out of recession. But he, like the generation of economists who criticised Reagan's policies, thinks the priorities are wrong - as well as overtly bellicose - and will have repercussions for years or even decades to come.
"The long-term effects of military Keynesianism are obviously negative on public infrastructure, health, education and so on, and there are limits on how long you can keep it up," he said. "What we borrow we will eventually have to pay back, with interest."
posted on January 7, 2004 05:12:33 PM new
Trust me, I'm no economist. But I've long been saying things are getting better in our economy. Then have had to put on my fire-suit to survive the replies.
But most economic indicators things are improving from where they were in 2001. And the stock market is continuing it's upward move. Jobs are, albiet slowly, returning and manufacturing is increasing.
It's been said many times that the job market usually lags for about 6 months after an economic turn around.
So I would expect to see the jobless rate continue to fall as it has been.
The war has been a large part of the justification for the Bush administration to run ever-widening budget deficits, and those deficits, predicated largely on military spending, have in turn pumped money into the economy....
From news articles I'd read before the Medicare vote that statement was holding up to be true. Spending other than for the wars was separated away from other national spending and had risen only very slightly. If memory serves me only 3-4% above what it was.
So....while I admit I know little in this area, there is improvement and many are excited/more hopeful to see it.
posted on January 7, 2004 09:59:33 PM new
RE: The economy:
The buzz is that it's all lining up for the U.S. economy. The latest GDP number alone was a reason enough for the public to exhale a one big "Phew!" Many economic indicators are pointing up, except a major one - job growth. Let's talk about that.
According to a recent New York Times article, job growth - or lack thereof, to be exact - will be the biggest stumbling block for the economy in 2004. Since consumer spending accounts for roughly 70% of the nation's economic activity, it's clear why new jobs are key for the "economic recovery": no job - no money - no spending - no recovery. So why no new jobs yet?
Wal-Mart.
Yes, it may seem like a stretch to lay blame for the slow job growth on Wal-Mart, but consider the facts. Wal-Mart is a lean, mean monster with a smiley face whose modus operandi is Efficiency. It's the "largest everything" in the U.S. and the world: company, retailer, employer, and importer.
It's so huge that it has no real rivals: Sears, Target, Kmart, JC Penney, Kroger, and Safeway combined sell fewer goods than Wal-Mart does. And Wal-Mart does everything with surgical precision: it's the pinnacle of corporate evolution. In fact, it's too efficient. Every supplier dreams of a Wal-Mart contract, but once they get it Wal-Mart's model forces them into the same relentless efficiency.
Suppliers do or else die. Once Wal-Mart starts buying from a new supplier it buys big, and that business quickly becomes dependent on Wal-Mart's business. It can't continue to operate as before: Wal-Mart's efficiency demands are mind-boggling. Suppliers' trucks are often allowed only a 30-second delivery window, and each year Wal-Mart requires that suppliers decrease their prices by 5%. To keep up, the firms must cut and cut again to get as lean and mean as the master itself.
Of course, Wal-Mart is only trying to please us shoppers. Great values at extra-low prices - who doesn't like that? But the ever-decreasing prices have one big consequence: deflation. Wal-Mart not only forces their suppliers to operate on dangerously thin margins, they also force their competition - Target, Kmart, etc. - to work at the same peak efficiency.
Well, great - Wal-Mart helps everyone trim the fat, right? Yes, but - over 21,000 US companies supply products to Wal-Mart, and when you count their competitors' suppliers, that number gets even bigger. To keep up with the "Always Low Prices" motto, when there's nothing left to trim, manufacturers often have no choice but to move factories overseas or go bankrupt. Either way, they are not boosting the U.S. job market. Examples include Huffy, the bicycle manufacturer, and Levi Strauss, the jeans maker: both are Wal-Mart suppliers, and both no longer have factories in the U.S.
By the way, yesterday I saw that they are now in the online movie-renting business, too. For 25% less a month, Wal-Mart will rent me the same movies I've been getting from their competitor. Typical consumer that I am, I'm thinking about switching...
This ruthless efficiency cuts an obvious cost, yet does so at a time when the bigger price to pay is NOT obvious -- not yet, anyway. That price is deflation. And if you're wondering why no one else is talking about it, ask yourself: Is anyone else explaining the facts above about Wal-Mart?
posted on January 7, 2004 11:29:09 PM newAnd if you're wondering why no one else is talking about it, ask yourself: Is anyone else explaining the facts above about Wal-Mart?
Why no one else is talking about this except the NYT? Because most see the economy IS improving and understand that the NYT wants others to believe it *isn't* improving so they won't vote to re-elect this president.
That was simple.
Too many others economists saying the opposite Reamond. And from what I've heard from Greenspan...the Fed isn't thinking about raising rates anytime in the near future.
As far as WalMart goes, yes they've work to make costs lower. That's nothing different than all companies have done. When times are good, companies get 'fat'. When the economy slows down all companies go 'lean'. It's always been that way, this is no different.
--
The jobless rate is dropping because people are finding work or the numbers wouldn't be continuing to decrease they'd be staying where they were. It's a good sign.
posted on January 7, 2004 11:50:49 PM new
The "jobless" rate isn't droping, only the number of "first time" jobless claims is droping.
The unemployment rate no longer includes those who have ran out of benefits, nor those that take a part time or lower paying job.
The economy is in a shambles. The worst is yet to come.
edited to add- Greenspan can not raise interest rates or he will be blamed for all the bad economic news-- now watch the dollar continue to drop and as it does the cost of oil will continue to climb. Greenspan and the Fed are just holding their breath that the dollar will remain steady or at least in a very controlled dive until the election, then they will begin raising interest rates.
posted on January 8, 2004 12:26:46 AM new
You guys had better do something about your dropping US$.
The way you guys have been going, before the year is out perhaps US$1.00=AU$0.99
Even that Euro (trash) has blitzed you.
I use to cream it on ebay, when selling to USA in US$;
Now…. (along with drop in many prices) it’s hardly worth the trouble.
The US$ has gone limp.
Perhaps not pride ;
But I use to look upon the strong US$ value with glee, now it seems almost daily that I almost choke each time I watch it flop down it’s slippery slope.
If this keeps up, perhaps I should start considering coming over there and buying some cheap Tiffany lamps and selling them to the Europeans.
posted on January 8, 2004 02:20:36 AM new
Okay...so I didn't word it properly.
After nearly three years of job losses, companies are starting to hire rather than layoff people. That's a positive change.
This year *another* Bush's tax cut will be seen/felt/appreciated AND spent. Especially by families with children.
Some job markets are not hiring at all, while others have been reported to be really seeing an increase in hiring. Maybe those still unemployed need to get re-trained so that they can apply where hiring is good.
Who out of the nine democratic candidates do you believe has a plan that will improve our economy any faster than it's going at the present time?
All I hear are criticisms about what's going wrong, but no suggestions on how to improve it. I hear promises of improving our economy, but I haven't read them say *what they'd do to actually make it happen* other than raise our taxes. [take away the Bush tax cuts].
posted on January 8, 2004 07:44:39 AM new The economy is in a shambles. The worst is yet to come.
"The Bush administration itself prefers to attribute the recovery to its tax cuts, targeted disproportionately towards the richest Americans. Many non-administration economists, however, say this is nonsense, and that the tax cuts are far more political than they are stimulative. A more significant role has been played by buoyant household spending, helped by low mortgage interest rates which have inspired many homeowners to borrow against the rising value of their properties. But there are signs that interest rates are now on their way back up and that the refinancing fad has ended."
"The administration is conducting a highly irresponsible fiscal policy, and there is no legitimate economist on the face of the earth who doesn't say the tax cuts are just loony," said Kent Sims, a San Francisco economic consultant and public policy expert. "The chosen weapon for dragging the economy off the floor - now that an election is coming - is the deficit. Military expenditure is usually the least effective of short-run ways of spending money, because it doesn't build infrastructure that give you returns over time. But it does create a short-term lift."
"The long-term effects of military Keynesianism are obviously negative on public infrastructure, health, education and so on, and there are limits on how long you can keep it up," he said. "What we borrow we will eventually have to pay back, with interest."
http://news.independent.co.uk/business/news_analysis/story.jsp?story=478434
A report by IMF is in agreement with Reamond also.
posted on January 8, 2004 08:41:23 AM new
helen - Contrary to what you would like to believe...the IMF states our economy is strong.
They offer suggestions......they're NOT saying it's in "shambles".
We're on a road to recovery whether you like it or not.
-------
edited - from the IMF site:
As is widely recognized, recent U.S. fiscal policy has been extremely expansionary. The federal fiscal balance has swung from a surplus of 2½ percent of GDP in fiscal year 2000 to a deficit just under 4 percent of GDP in fiscal year 2003.
This will provide extremely valuable short-term support to the U.S. economy, cushioning the extent of the downturn, after the unprecedented collapse of the asset price bubble and the September 11th attacks. It has also put the economy on a path for what now looks to be a robust expansion.
This fiscal support has been especially timely since the global economy has generally lacked other sources of growth.
Summing up, the recent expansionary stance of the U.S. fiscal policy has certainly been beneficial, supporting the global economy at a difficult juncture. However, it will be important to develop a credible and robust framework to assure that the U.S. fiscal position is a strong one over the long run. This will require determined action to reduce the federal deficit over the next 5 to 10 years and to tackle the difficult long-term problems of Social Security and Medicare.
------
And the latter part is exactly what this President has said he plans to do in his 2005 budget.
But evertime he does make any cutbacks your side screams about all the cuts he's making and how detrimental they are.
France, Germany and many other countries suffer from MUCH higher unemployment rates and they haven't been paying for two wars nor National Security.
[ edited by Linda_K on Jan 8, 2004 08:55 AM ]
posted on January 8, 2004 09:34:08 AM new
I just heard on the news last night that it is estimated that there will be 14 MILLION more jobs exported from the US over the next 5 years.
The tax cut is not working. If it was, we wouldn't see the job losses we have seen - and the economy would be doing very well instead of struggling. It also should have never been given to the wealthy. It would have been far better to give 20 families $4 thousand each than to give a wealthy couple $80 thousand - the family will spend the money on items that would employ other Americans.
The tax cut was a little like re-arranging the deck chairs on the Titanic.
We have fundemental problems in the economy which tax cuts do not address and Bush refuses to recognize these problems and take steps to rectify.
We now have a huge deficit, a "jobless recovery", and jobs being exported at record rates, the dollar is dropping to levels never seen before and oil prices are way out of line due to this devaluation. We are approaching the one-year point in Iraq and we are still having soldiers killed with no end in sight, except a proposed pull-out in June which will de-facto turn the country over to the muslim radicals. Afghanistan faces the same fate.
Unless and until we have smarter people in the White House that can manage free trade, we are in big trouble.
posted on January 8, 2004 09:42:15 AM new
For anyone who would like to check the information that I provided, you may check these current - Janurary 7 and January 8, 2004 sources.
posted on January 8, 2004 09:43:28 AM new
So...you're not buying the IMF report huh?
You didn't answer my question. Who running for the democratic nomination is going to reverse NAFTA? Who is going to stop free trade with China and other countries? Who has given a plan as to how better to continue coming out of a worldwide recession?
I sure haven't seen it. But I have seen the democrats wanting to put a National Health Care program into affect. Is that going to lower our decifit?
posted on January 8, 2004 11:05:22 AM new
I spoke too soon about new unemployment claims going down- they have again went back up.
Thursday, January 08, 2004
WASHINGTON — New claims for unemployment benefits increased last week following three straight weeks of declines, the Labor Department said Thursday
New applications filed for unemployment insurance rose to 353,000, an increase of 14,000 for the week ending Jan. 3. That compared to 339,000 new applications in the previous week, when claims were at their lowest level since President Bush's inauguration day, Jan. 20, 2001.
The report came on the eve of the government's report Friday on the overall civilian unemployment rate for December. The rise could have resulted in part from filings by people who took temporary holiday season jobs, but the Labor Department (search) did not cite any special factors.
The more stable four-week moving average (search) of claims, which smooths out week-to-week fluctuations, fell 5,500 to 350,250 last week. That was the lowest level since Feb. 3, 2001.
Despite last week's rise, claims have remained below 400,000 for 14 consecutive weeks, which economists view as a sign that the fragile jobs market appears to be turning a crucial corner.
The nation's unemployment rate currently stands at 5.9 percent — down from a high this summer of 6.4 percent. U.S. companies have added just 328,000 new jobs in the past four months, and analysts have been looking for stronger growth. They expected a smaller increase in jobless claims for last week.
Since President Bush took office, the economy has lost 2.3 million jobs, a development that Democrats hope to use against the president as he seeks re-election in November.
The Bush administration contends that stronger economic growth will eventually lead to more meaningful job creation on a sustained basis.
In Thursday's report, 32 states and territories reported an increase in initial jobless claims for the week of Dec. 27, and 21 reported an increase.
Michigan had the biggest increase, a gain of 20,583 that it attributed to layoffs in the automobile and transportation-equipment industries. Missouri reported the biggest decline, with claims falling by 2,566 because of fewer layoffs in the construction and service industries.
posted on January 8, 2004 11:51:18 AM new14,000. Nation wide...not bad. But obviously not as good as a contining streak of no job losses.
Not sure whether or not those out of work because they're on strike are counted in those job loss numbers or not. I'll have to check.
But in CA alone the unions have been out on strike for extended period of times. [grocery/transportation] Not going to come out ahead from losing all those months of pay either, when they decide to settle.
I'm still going to be optimistic about our future. And the IMF seems to think we have a strong economy....even with our problems.
This is an election year, Bush no doubt will be doing everything he can to improve the numbers.
Therefore, we feel there is a substantial risk that the foreign investors' appetite for U.S. assets, and particularly U.S. Government assets, will over time diminish. And we think, at least to some degree over the past year, this has occurred, and this is one of the reasons why there has been weakness in the U.S. dollar.
So far the downward movement of the U.S. dollar has been fairly orderly. It's been substantial certainly against a number of currencies, particularly the euro and the yen, but it has been orderly in the sense that financial markets have not been substantially disrupted. In fact, U.S. asset prices have continued to increase.
But already, even the orderly movement that has occurred has certainly complicated macroeconomic policy management in other countries such as the euro area and Japan. And we are concerned if the U.S. fiscal problem is not addressed, then the problem could become even more difficult.
There is some risk of a disorderly situation emerging in which you could have a rapid movement in exchange rates that could have an impact on asset prices and equity prices in the United States and equity prices abroad and would be even further difficult to manage, both in the U.S. and in other countries.
Already, as I mentioned, the euro area and Japan have had difficulties responding to the strengthening of their exchange rates, and the levers that they would have to respond to further appreciation of their rates are somewhat limited.
There would also be problems if there were substantial movements in bond prices or equity prices. When the U.S. dollar weakens, that means the value of foreign investments in the United States weakens as well. We have net negative wealth affects on foreigners that affect their consumption decisions. So it tends to have a dampening effect on the global economy, as well as potential negative asset price effects in the United States.
So, if this were to occur in a dramatic and disorderly way, it would clearly have negative consequences for the global economy.
-
In terms of the global impacts of the U.S. deficit, I think this is really a key area driving our concern. We see a very large current account deficit as well as a very large fiscal deficit and believe there is a relationship between the two. The large current account deficit implies that the United States has a need for continuing inflows of foreign financing. As long as those funds are willing to come in, things can move fairly smoothly, but the reality is that the magnitude of the current account deficit is very large and that the net external liabilities of the United States are rising quite rapidly relative to both U.S. GDP and relative also to global savings.
posted on January 8, 2004 01:34:22 PM newIn fact, U.S. asset prices have continued to increase.
There's a FACT.^^^^ The rest is all predictions about what MIGHT happen IF....and how they see it MIGHT effect the U.S. and global markets.
Read the positive statements from the IMF about how this IS current working to improve our economic problems NOW.
I've read some economists who say having these record low interest rates AND the dollar being down could help create new jobs. I believe it was in regard to the building industry....but it could have been in the manufacturing industry...because I was reading about both and how they're very positive their hiring will be picking up soon.
So....everyone's giving their educated guesses....and of course they ususally fall along political lines.
Anyone can do a google search on U.S. 4th quarter results and you will see which industries/companies are improving and which are either stagnating or still losing workers.
posted on January 8, 2004 02:03:50 PM new
Well, the IMF is better qualified to predict the effect of a failing U.S. economy on the U.S. and global economics than either you or me. Surely you can agreee with that?
posted on January 8, 2004 02:14:32 PM new
Here's a statement about creating jobs. Taken from helen's first link in her last multi-linked post.
Many economists predict that the dollar will continue to decline for some time, and that the declining dollar will help boost American industry by making American products cheaper in countries with strengthening currencies. "In the short term, it is probably helping the United States," said Robert Hormats, vice chairman of Goldman Sachs International.
Fund officials and most economists agreed that the short-term impact of deficit spending has helped pull the economy through a succession of crisis.
So there's the glass half full......rather than half empty.
http://www.scoop.co.nz/mason/stories/HL0310/S00074.htm
“18% of American children, almost 15 million, live in poverty, meaning their parents' income is at or below the federal poverty level. 8% of America’s children, 6 million, live in extreme poverty. 39% of American children, 28 million, live in low-income families. That means that over half of all children in America are facing this growing crisis of starvation, insecure housing, and an uncertain future. “
posted on January 8, 2004 02:52:40 PM new
Here's another piece taken from helen's second link on her multi-linked post.
While economists may argue on whether the IMF's assessment of the state of the U.S. economy and its suggestions for dealing with the ballooning deficits, it is unlikely that U.S. policymakers will take much, if any, of the IMF's warnings and suggestions to heart.
For one, neither the Republican nor Democratic administration has had a track record of not taking much notice of what the IMF suggests about directing the U.S. economy.
But more significantly, the United States is the single largest shareholder in the IMF, and is effectively its boss. Unlike many developing nations or countries in financial crises such as Argentina or Turkey, the United States is the biggest provider of funds to the international agency. As such, it does not borrow money from the IMF, and thus it is free from the so-called conditionalities that the IMF would impose upon those countries that would become borrowers of their funds.
hmmmm....We're the biggest provider of funds for the IMF...well maybe we can make a budget cut in that area that will help our deficit.
-----
Besides, if Bush followed one piece of the IMF's advice he'd raise our energy taxes. If he took that advice you'd all be yelling about how *his* special interests are making out while like thieves.
You want your energy costs to be raised? I don't.
-----
But no one has yet offered a democratic candidate who has the answer to correct these projected problems, should they ever happen. That is other than the usual way dems do....raise our taxes higher. Oh....and take away the tax cuts whos full effect won't be felt until 2010. Even IF it may just be why our economy wasn't hurt as badly as it could have been.
But...while complaining about the 'terrible' deficits, call for inacting a national health care system. Yea...that'll lower the deficit for sure.
posted on January 8, 2004 03:55:41 PM new
That's right Linda, call for more access to fuel rather than health!
IMF vet's the veto holder! January 8, 2004
"With its rising budget deficit and ballooning trade imbalance, the United States is running up a foreign debt of such record-breaking proportions that it threatens the financial stability of the global economy, according to a report released Wednesday by the International Monetary Fund. Prepared by a team of I.M.F. economists, the report sounded a loud alarm about the shaky fiscal foundation of the United States, questioning the wisdom of the Bush administration's tax cuts and warning that large budget deficits pose "significant risks" not just for the United States but for the rest of the world.
The report warns that the United States' net financial obligations to the rest of the world could be equal to 40 percent of its total economy within a few years — "
posted on January 8, 2004 04:05:32 PM new
Bush knows what he's doing.
QUOTE
http://www.informationclearinghouse.info/article3977.htm
The plan is very simple, but not obvious on first blush. Make sure that all the money is gone from the U.S. treasury, make sure the deficits are so great that all social and educational programs are cut, increase the military and security budgets to "protect our nation" with all these monies going to corporations and security firms who are extra-national (not tied to any country, but actually more than multi-national in that they are outside the purview of any nation at any single moment) and stave in the social security fund by allowing it to go to private corporations for "investment"-and you have the perfect scenario for saying, "only the private sector can save us-we're broke and they have the money to run every program, fund every program, but of course, at huge costs and profits for the private corporations." Our only resource will be the corporate lenders, especially the large extra-national corporations who will have loyalty to no one except their corporate coffers and large share owners throughout the world.
The Bush administration has shelved a report commissioned by the Treasury that shows the U.S. currently faces a future of chronic federal budget deficits totaling at least $44 trillion in current U.S. dollars.
The study asserts that sharp tax increases, massive spending cuts or a painful mix of both are unavoidable if the U.S. is to meet benefit promises to future generations. It estimates that closing the gap would require the equivalent of an immediate and permanent 66 percent across-the-board income tax increase.
posted on January 8, 2004 04:36:48 PM new
Hint to anyone trying to understand Linda's posts...read the portion *not bolded.
Rant on, Linda. Truth from your viewpoint is pessimissm - and you can't face facts. We've stated that the unemployment rate is increasing and the deficit is increasing along with the overwhelming cost of the war and I've posted the cautionary opinion of the IMF but nothing registers with you.
Remember when you were telling us that Baghdad was wonderful when in reality it was the same war zone that it is today? Now, according to you, the economy is looking up too. You are becoming funny.
Call my name linda but I'll not be there. You are a losing battle.
But I've long been saying things are getting better in our economy. Then have had to put on my fire-suit to survive the replies.
