William C. Dudley, president of the Federal Reserve Bank of New York, defended the Fed’s recent announcement to print more money (called Quantitative Easing) to stimulate the moribund economy. Dudley, who is also the vice chairman of the Fed’s FOMC (Federal Open Market Committee), and former chief United States economist for Goldman Sachs, said that the decision to increase the supply of money was only to reduce interest rates further and not to devalue the dollar. He said, “We have no goal of pushing the dollar up or down. Our goal is to ease financial conditions and to stimulate a stronger economic expansion and more rapid employment growth.”
California is drowning in public debt. The California Legislative Analyst’s office, which is nominally nonpartisan and objective, projects that for the fiscal year ending June 30, 2011, the state will have a deficit of $6.1 billion — over $150 for one year for every man, woman, and child in California.
New York University economics professor Nouriel Roubini made a name for himself back in 2005 by predicting the Great Recession long before others did. Fortune magazine wrote “In 2005 Roubini said home prices were riding a speculative wave that would soon sink the economy.” The New York Times said he predicted “homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt.” In September, 2006 Roubini warned that “the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence, and, ultimately, a deep recession.”
Speaking on one of the political television shows before the election, Vice President Joe Biden proposed to make a deal with Republicans on tax increases. Democrats, who just raised the Medicare tax by 0.9 percent on those earning over $200,000 ($250,000 for joint filers), want to increase their political capital by making the Bush tax cuts — due to expire this year — permanent. The sticking point is the $250,000 threshold at which Democrats want “the rich” to begin to pay higher tax rates. Biden said the Obama administration was willing to consider raising the threshold. “I don’t have any problem with wealthy people getting a tax cut. I mean, for real,” Biden explained. “I mean, these are good guys.”
While average Americans have seen their wages and benefits stagnate, decrease, or even vanish altogether in recent years, federal workers have been doing very well for themselves. In August USA Today reported that “federal employees’ average compensation has grown to more than double what private sector workers earn” and that these same “workers have been awarded bigger average pay and benefit increases than private employees for nine years in a row.