In what could be one of the understatements of 2011, Fed Chairman Ben Bernanke, speaking at the International Monetary Conference in Atlanta on Tuesday, remarked, “U.S. economic growth so far this year looks to have been somewhat slower than expected.… A number of indicators also suggest some loss of momentum in the labor market."
With the European economy in shambles from a seemingly intractable sovereign debt crisis and the United States technically out of money to fund its own bloated government, talk of sovereign default is in the air. Greece, the beneficiary of the first of three EU/IMF bailouts, is again on the ropes, insisting that it will not be able to meet its June obligations of more than $13 billion in interest payments. The hard-pressed Greek populace, meanwhile, is balking at the range of financial austerities being urged upon them by their government’s creditors, and Greece’s political class is caught in the middle. The financial world is expecting Greece to default eventually, and other EU debtors like Ireland, Portugal, and even Spain to follow suit.
Anyone paying much attention to the news is aware that the U.S. government is now about $14.3 trillion in debt and considering borrowing even more. That $14.3 trillion, however, only includes what the government currently owes. If one includes Uncle Sam’s unfunded liabilities — promised future payments the government does not expect to have revenue to cover — Washington actually owes “a record $61.6 trillion,” according to a recent USA Today analysis.
A new report released by the United Nations blames the “herd” mentality of investors and poor regulation for volatile commodity prices, suggesting new global “transaction” taxes on trading and more international government involvement in controlling markets as possible solutions.
When Jason West of Vernal, Utah, tried to pay his disputed medical bill last week with 2,500 pennies, he was issued a citation for disorderly conduct. The reason for the charge was that West allegedly dumped the pennies onto the cashier's desk and asked her to count all of them. While the manner in which West delivered his payment may have been a bit extreme (placing rolled coins gently on the desk might have avoided the citation) there was an irony in his case that points to a more important principle than good manners, which are more frequently these days being enforced by the local constabulary, rather than by Emily Post. That is, had he paid the bill with federal reserve notes — backed, really, by nothing more than the promise of the federal government that the paper money has value — then he would have faced no legal problems at all.
Do we need a “Balanced Budget” Amendment? NO! A constitutionally sound, informed electorate could quickly bring about the conditions that would allow the nation to balance the federal budget and end deficit spending. Thomas Jefferson wrote: “A nation that expects to be ignorant and free … expects what never was and never will be.” The voters must come to understand that it is our responsibility to make certain our Representatives honor their oath of office and keep their actions constrained within the scope and bounds established by the Constitution (no, the Constitution does not say “from each according to his ability, to each according to his need” — that was Karl Marx).
President Barack Obama has lately been touting the government’s takeover of two of the Big Three automakers as an unqualified success. This is not surprising considering the large hand he had in it; nor is it surprising that his statements on the subject have been less than forthright.
The calamitous economic plight of the so-called “PIGS” nations of the European Union (Portugal, Ireland, Greece, and Spain) is well known to the world. Greece is in the spotlight this week, as, according to the New York Times, "[It] took the first step to raise money from the sale of government assets on Monday while a top official at the European Central Bank argued that the country was not insolvent and should not be excused from paying its debts."
In 2006 the Federal Reserve decided it was time to begin to reach out and influence middle schoolers with the party line about the Fed, and launched the Federal Reserve Kids Page. Consisting of 10 harmless-appearing questions, either in English or Spanish, the Fed’s answers gloss over, and sometimes deliberately misstate, the correct answers.
The U.S. economy experienced disappointing jobs numbers in May, according to figures released June 3 by the U.S. Bureau of Labor Statistics (BLS), leaving the unemployment rate at 9.1 percent at the end of the month.
Analysts are warning that the Federal Reserve is gearing up for a third round of quantitative easing, which involves printing money and flooding the market with the inflated cash through the bond market. The Federal Reserve purchases bonds with printed money, which in turn leads to more inflation. Despite the lessons learned by the first two rounds of quantitative easing, the Federal Reserve is preparing for a third round.