In his attempt to explode the myth that there is unlimited demand for U.S. government debt, former Treasury official Lawrence Goodman explained that there is high perceived demand because the Federal Reserve is doing most of the buying.
When Federal Reserve Chairman Ben Bernanke donned his professorial cap and addressed 30 undergraduate students at George Washington University on Tuesday, he claimed it was all in the interest of transparency. According to the New York Times, “The Fed is concerned that it is neither loved nor understood by many Americans, and that public anger could lead to constraints on its powers.”
Rep. Paul Ryan (R-Wis.) announced on Tuesday the Republican budget plan to take into the election debate; it is in sharp contrast to the Obama administration’s budget announced last month. Two key differences stand out: reducing the number of income tax brackets from the current six to just two (10 percent and 25 percent), and cutting corporate income tax rates from 35 percent currently to 25 percent. The Obama administration wants to raise taxes instead.
Encyclopædia Britannica’s president Jorge Cauz (left) announced on Tuesday that his company would no longer print its 129-pound, 32-volume sets of its iconic print encyclopedias. He put the best face possible on the decision:
Senator Jim DeMint (R-S.C., left) introduced the Energy Freedom & Economic Prosperity Act (EFEPA) in February and then offered his bill as an amendment to the Transportation Bill last week. Had it passed it would have eliminated all energy tax credits not only for wind, solar, biomass and biofuels but for coal, oil and natural gas as well. Said DeMint:
The continuing boom in North Dakota seemingly has no end. Last June oil production from the Bakken Formation exceeded 11 million barrels a month. In February it reached 16 million with estimates that by late spring North Dakota could be producing more oil than either California or Alaska. That’s more than double what the state produced just two years ago.
When Lakshman Achuthan (left), co-founder of Economic Cycle Research Institute (ECRI) appeared on CNBC to defend his prediction last September of an “imminent” recession, challenges came from many observers, including Tom Keene and Ken Prewitt of Bloomberg and Jon Stewart of The Bonddad Blog. Each pointed to an array of economic indicators that appeared to make Achuthan’s prediction appear almost silly: jobs data improving, auto sales increasing, homebuilders stock prices bouncing, consumer sentiment positive, and others.
White House announcements celebrating the jobs report from the Bureau of Labor Statistics (BLS) were optimistic: “Private sector employers added 233,000 jobs to their payrolls in February [which] means the economy has added jobs for 24 consecutive months…” This illustrates “the progress of the last two years and the importance of doing everything we can to continue strengthening our economy and creating jobs for the months and years ahead,” wrote Megan Slack on the White House blog. Alan Krueger, chairman of the Council of Economic Advisors, was equally enthusiastic:
In yet another sign that the looming American debt crisis is close to spiraling out of control, February’s monthly federal deficit was the highest ever recorded — $229 billion, according to a report released last Wednesday by the Congressional Budget Office. Even more alarmingly, five months into this fiscal year (which began October 1, 2011), the deficit has already exceeded half a trillion dollars, with the government having to borrow 42 cents of every dollar spent during that same span.