The first warning about the possible bankruptcy of the town of Vallejo, California, was reported by the Associated Press on February 28, 2008, when Councilwoman Stephanie Gomes said, “Our financial situation is getting worse every single day. No city or private person wants to declare bankruptcy, but if you’re facing insolvency, you have no choice but to seek protection.”
More tough times lie ahead, according to a report on the state of the economy just released by the Congressional Budget Office (CBO). Unemployment is likely to remain high, not returning to 5 percent or lower until at least 2014, while this year’s budget deficit will hit $1.342 trillion, the second highest ever.
Infowars.com, the website founded by self-described “aggressive constitutionalist” Alex Jones, published an article by former Reagan Treasury Department official and co-author of Reaganomics, Paul Craig Roberts entitled “The Ecstasy of Empire.” With such an alluring title, it is little wonder that the article has attracted a volume of comments. Roberts brings to bear all the entries of his impressive resume in diagnosing the illness afflicting the American body politic, particularly the economic might that is its lifeblood.
The San Francisco Branch of the Federal Reserve Bank has found that the United States will more likely than not be dipping back into formal recession over the next two years, according to an August 9 study of nine economic indicators. Study authors Travis J. Berge and Òscar Jordà concluded that “for the period 18 to 24 months in the future, the probability of recession goes above 0.5 [50 percent], putting the odds of recession slightly above the odds of expansion.”
Item: House Speaker Nancy Pelosi (D-Calif.) said not long ago that unemployment insurance is “one of the biggest stimuluses [sic] to our economy.” Fox News.com reported on July 1: “Unemployment benefits are creating jobs faster than practically any other program, House Speaker Nancy Pelosi said Thursday. Talking to reporters, the House speaker was defending a jobless benefits extension against those who say it gives recipients little incentive to work. By her reasoning, those checks are helping give somebody a job.”