On the heels of dismal second quarter results, mortgage finance giant Freddie Mac is asking for more taxpayer money to continue operations.
The New York Times' leftist columnist Paul Krugman has garnered some headlines recently for attacking the House Republican alternative budget proposal, the so-called “Roadmap to America's Future,” and its author Paul Ryan as “The Flimflam Man.” Krugman calls Ryan's plan the “audacity of dopes” and claims that it wouldn't bring the budget any further into balance than President Obama's budget.
Treasury Secretary Timothy Geithner’s assurance that the Great Recession is over will undoubtedly convince many Americans that relief is on the way and that they can loosen their belts and get back to business.
Just one week after James Bullard of the St. Louis branch of the Federal Reserve Bank released a paper declaring that “the U.S. is closer to a Japanese-style outcome today than at any time in recent history” (meaning that the United States will likely have decades of economic stagnation, which Bullard blames on "deflation"), the news media has taken up a chorus against the bogeyman of “deflation” to explain the need for further social spending by the government and more debasement of the U.S. dollar (causing consumer prices to rise through inflation).
Item: Speaking in Canada where he was attending the Group of 20 summit, “President Barack Obama said on Sunday he would follow through on a pledge to rein in soaring U.S. budget deficits and said that would involve presenting Americans with ‘some very difficult choices’ next year,” reported Reuters for June 27. The President, continued the wire service, “has said the deficits are a legacy of the Bush administration.”
The non-partisan Congressional Budget Office released its most dire warning yet of a looming U.S. debt crisis, openly comparing the U.S. budget situation to the Greek, Irish, and Argentinian debt crises and calling for a 20 percent cut in the size of the federal government. The July 27 report, “Federal Debt and the Risk of a Fiscal Crisis,” comes just days after the Obama administration revised upward its deficit projections for fiscal 2010-11 to a two-year total of $2.89 trillion. The CBO had labeled the federal spending path “unsustainable” in a June report.
Federal Reserve boss Ben Bernanke told Congress this week that despite not having any imminent plans to further “support” the economy, the central bank was “considering all options” to fight unemployment and could “step into new areas” because the alleged recovery remains “unusually uncertain.”
Earlier this year, it looked as if columnist Paul Craig Roberts had hung up his word processor in disgust, having just published his book How the Economy Was Lost (mostly a collection of his best columns of the past decade) and a swansong article “Truth Has Fallen and Taken Liberty With It.” Recently, however, he has returned with a few new columns, e.g., this one — and a revealing interview with the Swiss-based free-market webzine The Daily Bell.
The White House on July 21 extolled the extension of unemployment insurance by the Senate, claiming it was “not only the decent thing to do but one of the most effective ways to boost our economy.” President Obama signed the extension into law immediately, saying that this was “desperately needed assistance to two and a half million Americans who lost their jobs in the recession…Americans who…will finally get the support they need to get back on their feet during these tough economic times.”
Instead of asking for a federal bailout, Maine is considering shifting part of its underfunded pension plan liabilities to Social Security. Without the proposed fix, the pension liability the state currently faces is “going to rip the guts out of our budget,” according to Peter Mills, the state Senator who initially suggested the plan.