Can the news around here get any worse?

So many articles, so much news, so little time; here are the more interesting links from my weekend perusal:

1) According to this HuffPo report, the poverty rate has jumped along with the number of families in shelters. Hmm, it looks like Obamanomics is working to perfection. Soon we will all be much poorer and Democrats will come to the rescue with even more government social engineering and fiscal interventions. Happy days.


2) Randall Hoven over at American Thinker soberly summarizes the extent of debt and future fiscal liability that our country faces.

3) For some weird reason Obama gear is not selling as much as it used to. How strange.

4) Obama has installed another Keynesian hack, Austan Goolsbee, to pull levers and plan great big plans to “fix” our economy--at our expense, of course. God help us. Goolsbee has already started to create a narrative of low expectations by announcing that unemployment will stay high for a long time. Thanks a lot, dude. We have already figured that out by simply taking a gander at your economic policy to see that you are creating a train wreck. Goolsbee said this:

"This recession is the deepest in our lifetimes, the deepest since 1929…more than 8 million people lost their jobs. It's going to take a significant push on our part -- and time -- before that comes down…I don't anticipate it coming down right away."

Mr. Goolsbee, there is no doubt that this past recession was severe but we are no longer in a recession. The economy is in a slow lull caused by the anticipation of higher taxes, regulations, de-leveraging, and federal debt. It is obvious from the above quote that you will “push” for more government planning to solve a problem created by government. Please stop helping before it's too late.

Economy slowing down more than expected

From the WSJ:

The U.S. economy grew more sluggish than initially estimated in the second quarter, and corporate profits nearly dried up, further evidence that the recovery is losing steam.

Gross domestic product, the value of all goods and services produced, rose at an annualized seasonally adjusted rate of 1.6% from April to June, the Commerce Department said Friday.

In the government's first report of the economy's benchmark indicator a month ago, the growth rate was estimated to have slowed to 2.4% after a 3.7% expansion in the first quarter.

Still, the revised estimate for the second quarter was above expectations for a 1.3% gain among economists polled by Dow Jones Newswires.

Friday's report also showed that companies barely managed to post profit gains, following several very profitable quarters. After-tax earnings edged up 0.1%, well off the previous quarter's gain of 11.4%. First-quarter profits were revised down from the initial estimate of a 12.1% increase.

Year over year, profits remained 37.7% higher, with companies cutting costs by trimming payrolls.

So, it is now clear that GDP is in a downward trend after a brief sugar high in the 4th quarter of 2009 from the so-called stimulus package. Here are the GDP numbers:

1st quarter of 2009: -4.90%

2nd quarter of 2009: -.70%

3rd quarter of 2009: 1.6%

4th quarter of 2009: 5%

1st quarter of 2010: 3.7%

2nd quarter of 2010: 1.6% (revised downward from 2.4%)

Bad economic policy ideas continue to abound: The very same people that trumpeted from the highest tree tops that the stimulus was and has worked are now running around telling us that it simply wasn't big enough. Now we have liberals in Congress making noise about a second package. The first one didn't work so they want to try it again! We even see liberal economist Paul Krugman calling to use Fannie and Freddie, agencies that are in conservatorship and that currently carry $5.5 trillion in public liabilities, in more useless transfer schemes. My lord, when will the madness end?

Cities going broke

I hate to say it but I have a bad feeling that we are going to see more of these in the next couple of years.

Public Pension Crisis

Why the heck did I go to college? I could have joined a public union early on as a roadside sign inspector or something and been better paid than most people in the private sector. Additionally, the pension benefits are SWEEEET!

Depressing Charts

From the Dallas Federal Reserve. Not for the faint of heart.

HT: Cafe Hayek

Is the economy heading for another dip?

After reading depressing articles this morning like the following, I fear that it may be possible: Housing and manufacturing slow down.

Penn Jillette - Taxes

The madness of the progressive tax code is explored--only a bureaucrat out of a Kafka novel would love it. (Warning: Strong language.)

HT: Liberty Pen

Thomas Sowell on Obama's economic policy

Thomas Sowell is a national treasure.

White House, Congress projects record deficits

From AP:

The federal government faces exploding deficits and mounting debt over the next decade, White House and congressional budget officials projected Tuesday in competing but similar economic forecasts.

Both the White House Office of Management and Budget and the nonpartisan Congressional Budget Office predicted the budget deficit this year would swell to nearly $1.6 trillion, a record, and far above the then-record 2008 budget deficit of $455 billion.

But while figures released by the White House foresee a cumulative $9 trillion deficit from 2010-2019, $2 trillion more than the administration estimated in May, congressional budget analysts put the 10-year figure at a lower $7.14 trillion...

...Beyond the 10-year forecast, the nation will face further challenges posed by rising health care costs and the aging of the population, the CBO said. "The budget remains on an unsustainable path" over the long-term and will require some combination of lower spending and higher tax revenues, it said.

Both forecasts see unemployment rising to 10 percent before falling and both suggest growth will return to the economy later this year but that recovery will be slow after the longest and deepest recession since the 1930s

Comment: This is no surprise to fiscal conservatives that have been sounding the alarm since Bush was in office. With the threat of government interventionist policies like Cap and Trade and a massive overhaul of the health care system, the private economy will have to carry a burden that may be so large that any real and sustained growth will be difficult. The article didn't mention anything about inflation which would be another thorn to knead its way into our economy.

What Exactly Can A Trillion Buy These Days?

I think I have a headache now.

California Unemployment Rate Drops

From The Los Angeles Times:

The U.S. Labor Department says California lost 63,700 jobs in April. But the unemployment rate drops to 11% from March's 11.2%, and one economist sees joblessness leveling off.

This shouldn't be much of a surprise particularly with Obama's stimulus funds making its way through state economies. The question is how much will it level off and will the stimulus funds create the amount of jobs that the Administration forecasted?

Social Security and Medicare hit the fan

Oh crap! Social Security and Medicare are in trouble. Again. What a surprise. I'm so caught off guard. Can I have all the money I paid into these ponzi schemes back now? I wonder how in the world Obama thinks that he is going to fund a single payer national health care plan AND solve the Social Security/Medicare financial debacle? This is going to get very interesting.

Ron Paul vs. Bernanke

Watch as Ron Paul poses some very incisive questions and comments to Ben Bernanke during a recent congressional hearing. Also notice how Bernanke, a very intelligent and learned man, simply does not understand that he is part of a government bureaucracy that is slowly dragging the American economy into the hands of big government power.

Obama's $100 million budget cut

HT: The Bobo Files

"Deficits Don't Matter."---Dick Cheney

While Obama cites "signs of progress" in the economy, the national deficit swells.

Government Intervention, Regulatory Policy, and the Financial Crisis

When you hear the populist pabulum that deregulation was the prime cause of our financial crisis, take a pause and note that it is in a politician’s best interest to regulate industries because it places power and influence in his or her grasp. The opportunity for power coupled with a public outcry to "do something" is too great to resist.

Also, have you noticed that all the banks that have over-leveraged themselves are also the most highly regulated?

Obamanomics and the Dread of Inflation

Greg Mankiw posted the growth forecasts from the Obama administration (in Red) and a competing forecast from a group of private economists (in Blue). It should be no surprise that the Obama administration forecasts are far more optimistic that the "Blue Chip" private forecasters; administrations are notorious for forecasting rosy scenarios when their economic plans are concerned; politics is a strong influence and the Obama regime is no different than other administrations before it.

2009: -1.2% -1.9%
2010: +3.2% +2.1%
2011: +4.0% +2.9%
2012: +4.6% +2.9%
2013: +4.2% +2.8%

Needless to say, I agree with the sober forecast of the private economists. If and when the economy does have some growth, it will be slight and hardly robust due to the massive spending in the public sector. In my opinion, the biggest threat to the economy will be high inflation once there is a return of confidence and some GDP growth. The M2 money supply has been growing at a pace that has never been seen before--the printing presses are working hard printing money in order to pay for all of the bailouts and for Obama's kooky stimulus scheme. This will not end well.

Obama is Bush on Steriods!!

I have always found it quite curious that liberals hated Bush so much yet in many ways he acted (as far as government growth is concerned) like a classic big government liberal---expanding the sheer scope of the federal government and its budget. The size of government grew under his auspices to unprecedented levels. And guess what? The Obama administration is set on making government bigger than even the Bush administration. Watch the video below for Dan Mitchell's explanation:

How bad is it?

From Mark J. Perry at Carpe Diem:

From University of Virginia economics professor Lee Coppock's blog Long Run Equilibrium.

We still have a long way to go before the jobless rate equals the levels of the early 1980s. So before we make comparisons to the 1930s and declare that we are in Great Depression II, how about making first making comparisons to the 1980s?

Comment: All the media that we are exposed to tend to draw the most pessimistic portrait of our current economic situation without really putting it into the right perspective. I'm not saying that things aren't bad or alarming, I'm just saying that we need a bit of a reality check and to understand that the talking heads are going to stoke the bad news for all its worth.

Obama and the Democrats use a crisis to implement their economic plan

Eat your heart out Naomi Klein. Here is an excerpt from Obama's speech today at George Mason University. George Mason must have been spinning in his grave:

It is true that we cannot depend on government alone to create jobs or long-term growth, but at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe. Only government can break the vicious cycles that are crippling our economy – where a lack of spending leads to lost jobs which leads to even less spending; where an inability to lend and borrow stops growth and leads to even less credit.

To finally spark the creation of a clean energy economy, we will double the production of alternative energy in the next three years. We will modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills. In the process, we will put Americans to work in new jobs that pay well and can’t be outsourced – jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain.

To improve the quality of our health care while lowering its cost, we will make the immediate investments necessary to ensure that within five years, all of America’s medical records are computerized. This will cut waste, eliminate red tape, and reduce the need to repeat expensive medical tests. But it just won’t save billions of dollars and thousands of jobs – it will save lives by reducing the deadly but preventable medical errors that pervade our health care system.

Finally, this recovery and reinvestment plan will provide immediate relief to states, workers, and families who are bearing the brunt of this recession. To get people spending again, 95% of working families will receive a $1,000 tax cut – the first stage of a middle-class tax cut that I promised during the campaign and will include in our next budget. To help Americans who have lost their jobs and can’t find new ones, we’ll continue the bipartisan extensions of unemployment insurance and health care coverage to help them through this crisis. Government at every level will have to tighten its belt, but we’ll help struggling states avoid harmful budget cuts, as long as they take responsibility and use the money to maintain essential services like police, fire, education, and health care.

Comment: My first thought after listening to this speech was how much is it going to cost and how long is it going to take to pay for it? With the "Boomer" generation getting ready to retire in great numbers over the next several years or so, social security and Medicare are going to be put to the test. Adding the so-called "Recovery and Reinvestment plan" and the myraid of other government implemented plans Obama spoke of during this speech may end up just as similiar government plans did during the Great Depression.