Speaking on April 20 in a conference call with reporters after returning from the Summit of the Americas, U.S. Trade Representative Ronald Kirk indicated that the administration has no plans to reopen negotiations on the North American Free Trade Agreement (NAFTA). But he also said that NAFTA could be strengthened with labor and environmental standards, without the need to reopen negotiations. During last year's presidential campaign, Barack Obama supported reforming NAFTA, but strengthening NAFTA was undoubtedly not the kind of reform many of his supporters had in mind, particularly those economically devastated by job losses caused by NAFTA.
On April 15, the deadline for U.S. taxpayers to mail their income tax returns, hundreds of thousands of Americans from coast to coast participated in around 2,000 nationally inspired but locally organized "Tea Party" protests. Fox News featured live TV broadcasts from four cities — San Antonio, Sacramento, Atlanta, and Washington, D.C. — featuring Fox personalities Glenn Beck, Neil Cavuto, Sean Hannity, and Greta Van Susteren.
When the Federal Reserve announced on March 19 its latest offensive against the financial crisis — to purchase more than $1 trillion in government debt ranging from mortgage-backed securities to long-term Treasury bonds — Wall Street, the financial media, and the political classes had a conniption. Even the most diehard defenders of Fed Chairman Ben Bernanke and his monetary policies were aghast: surely this latest move would unleash long-latent inflationary forces that would cripple any prospects for a robust recovery. Even the New York Times made note of the danger, worrying that "the Fed was taking risks that could dilute the value of the dollar and set the stage for future inflation." The Times pointed as evidence to the sharp rise in gold prices and a drop in the dollar's value against both the yen and the euro that followed the Fed's announcement.
According to a new report released by the Congressional Budget Office (CBO), the deficits to be generated over the next 10 years by the Obama administration's proposed budget will be much higher than the administration's estimates — unsustainably high, in fact. The CBO foresees an additional $9.3 trillion in red ink per year from 2010 to 2019, which by decade's end would exceed five percent of the gross domestic product (GDP). According to House Minority Leader John Boehner (R-Ohio), "We simply cannot continue to mortgage our children and grandchildren's future to pay for bigger and more costly government."
Economists have long used 1920s Germany as the classic example of what can happen to a nation when monetary inflation gets out of control. So rapid was the inflation of the money supply that the exchange rate went from 60 marks per U.S. dollar during the first half of 1921 to 8,000 marks per dollar by December 1922.