those of Greece – bad age demographics and a toxic bank system - but you’ll note that, as we tackle each of these, Spain is in fact in far worse fiscal shape than Greece..."
Showing posts with label fiscal deficit. Show all posts
Showing posts with label fiscal deficit. Show all posts
Sunday, April 22, 2012
Graham Summers: Spain’s Fiscal Problems Will Result in Collapse of European Union! Here’s Why
"On the surface, Spain’s debt woes have many things in common with
those of Greece – bad age demographics and a toxic bank system - but you’ll note that, as we tackle each of these, Spain is in fact in far worse fiscal shape than Greece..."
those of Greece – bad age demographics and a toxic bank system - but you’ll note that, as we tackle each of these, Spain is in fact in far worse fiscal shape than Greece..."
Monday, April 2, 2012
World must go back to ‘sound policies’ - Jean-Claude Trichet
"Developed countries must stick to sound policies of not spending more than they earn, which has little to do with austerity measures, former head of the European Central Bank Jean-Claude Trichet said in an exclusive interview to RT.
“What is called austerity very often is only that instead of spending much more than you earn, you spend a little more than you earn – but it is still spending more than you earn,” laughs Trichet. “How can you call that austerity?”
For all advanced economies, austerity measures are part of correcting the economic trajectory, particularly with fiscal policy, Trichet, who headed the ECB between 2003 and 2011, points out.
“When you have had a tendency to spend more than you earn over a long period of time, whatever you do, in whatever continent you are, in whatever category of country you are – you have to correct. You cannot continue eternally to spend more than you earn,” Jean-Claude Trichet stated. “This is true for a country, as well as individuals or firms.”
Trichet noted that once given – sometimes in excess – money is hard to get back, because it is in people’s nature to keep the obtained, so austerity is always painful.
All the advanced economies of the world must undergo a transformation, believes the former head of the ECB.
“We have to do the job. There is no time for complacency. Nobody should be complacent. It is true for all of us, without any exception,” Jean-Claude Trichet said."
at http://rt.com/news/sound-economic-policies-trichet-013/
READ MORE
“What is called austerity very often is only that instead of spending much more than you earn, you spend a little more than you earn – but it is still spending more than you earn,” laughs Trichet. “How can you call that austerity?”
For all advanced economies, austerity measures are part of correcting the economic trajectory, particularly with fiscal policy, Trichet, who headed the ECB between 2003 and 2011, points out.
“When you have had a tendency to spend more than you earn over a long period of time, whatever you do, in whatever continent you are, in whatever category of country you are – you have to correct. You cannot continue eternally to spend more than you earn,” Jean-Claude Trichet stated. “This is true for a country, as well as individuals or firms.”
Trichet noted that once given – sometimes in excess – money is hard to get back, because it is in people’s nature to keep the obtained, so austerity is always painful.
All the advanced economies of the world must undergo a transformation, believes the former head of the ECB.
“We have to do the job. There is no time for complacency. Nobody should be complacent. It is true for all of us, without any exception,” Jean-Claude Trichet said."
at http://rt.com/news/sound-economic-policies-trichet-013/
READ MORE
The 15 Trillion Dollar Party
"If you knew that you could live in luxury for the rest of your life but that by
doing so it would absolutely destroy the future for your children, your
grandchildren and your great-grandchildren would you do it? Well, that is
exactly what we are doing as a nation. Over the past several decades, we have
stolen 15 trillion dollars from future generations so that we could enjoy a
dramatically inflated level of prosperity. Our 15 trillion dollar party has
been a lot of fun, but what we have done to our children and our grandchildren
has been beyond criminal. We ran up the greatest mountain of debt in the
history of the planet and we are sticking them with the bill. Sadly, both
political parties have been responsible for the big spending that has been going
on. Both Democrats and Republicans have run up huge budget deficits when in
power. But instead of learning the hard lessons of the past, both political
parties continue to vote for even more debt. They would rather continue to
steal trillions of dollars from future generations than have the party end and
have to face the consequences.
And the consequences will be dramatic when the party ends. During fiscal year 2011, the U.S. government spent 3.7 trillion dollars but it only brought in 2.4 trillion dollars. That means that the U.S. government spent about 1.3 trillion dollars that it did not have. It is important to understand that even if the U.S. government spent that 1.3 trillion dollars on really stupid things, that money still got into the pockets of ordinary Americans who then spent it on things like food, gas, housing, etc. In turn, most of those that received money from providing those goods and services would spend it on other things..."
at http://theeconomiccollapseblog.com/archives/the-15-trillion-dollar-party
READ MORE
And the consequences will be dramatic when the party ends. During fiscal year 2011, the U.S. government spent 3.7 trillion dollars but it only brought in 2.4 trillion dollars. That means that the U.S. government spent about 1.3 trillion dollars that it did not have. It is important to understand that even if the U.S. government spent that 1.3 trillion dollars on really stupid things, that money still got into the pockets of ordinary Americans who then spent it on things like food, gas, housing, etc. In turn, most of those that received money from providing those goods and services would spend it on other things..."
at http://theeconomiccollapseblog.com/archives/the-15-trillion-dollar-party
READ MORE
Sunday, April 1, 2012
Huge NYT Exposé Reveals Why The Fiscal Timebomb Will Explode Next Year
"Nobody wants much to think about it yet, but it's well understood by everyone in Washington and on Wall Street, that a potentially massive fiscal problem is looming for the economy next year.
The issue is divided into three parts:
But in the worst case scenario we could have bracing austerity (tax hikes and spending cuts) coupled with another heart-stopping debt ceiling fight. Or we could have some kind of reversal of the spending cuts and a debt ceiling fight, and perhaps another downgrade from ratings agencies, another potential confidence blast.
Just in terms of the drag on growth, recent analysis by Barclays (according to BW) puts the hit at around 3% of GDP..."
at http://www.businessinsider.com/nyt-on-who-killed-the-debt-deal-2012-3#ixzz1qn4vF0nk
Read more
The issue is divided into three parts:
- Sometime in late 2012 or early 2013, Congress will have to approve another debt ceiling hike.
- At the same time, all of the Bush tax cuts are set to expire -- not just the tax cuts for the rich.
- Thanks to the last debt ceiling deal, some big time spending cuts are due to go into effect starting in 2013. In theory, these could be reversed by Congress, but in the context of everything else it will be challenging.
But in the worst case scenario we could have bracing austerity (tax hikes and spending cuts) coupled with another heart-stopping debt ceiling fight. Or we could have some kind of reversal of the spending cuts and a debt ceiling fight, and perhaps another downgrade from ratings agencies, another potential confidence blast.
Just in terms of the drag on growth, recent analysis by Barclays (according to BW) puts the hit at around 3% of GDP..."
at http://www.businessinsider.com/nyt-on-who-killed-the-debt-deal-2012-3#ixzz1qn4vF0nk
Read more
Friday, March 16, 2012
Collapse Coming–Not Recovery
"According to economist John Williams of Shadowstats.com, the latest good news about job creation is distorted with what he calls “massive seasonal adjustments.” The latest Shadowstats.com report, last Friday, said, “With heavy warping of the seasonal-adjustment process from the effects of the extreme nature of the current downturn, the resulting employment gain and unemployment rate level remain of questionable quality and significance.” If unemployment were calculated the way BLS did it in 1994 or earlier, the true unemployment rate would top 22% according to Shadowstats.com. Williams also says, “The outlook for the broad economy remains bleak, despite relatively upbeat February payroll data. Bank lending remains impaired, while household income has taken a new hit, as indicated in recent reporting. Separately . . . annual and monthly growth in the broad money supply appears to be stalling, again. That likely is a further indication of mounting difficulties in the systemic-solvency crisis.” (Click here to go to the Shadowstats.com home page.)
“Mounting difficulties in the systemic-solvency crisis” means, in reality, it is more likely financial collapse is coming—not recovery. Maybe that’s why the Federal Reserve recently announced it is going to start another round of money printing because the economy is teetering on an abyss. Marketwatch.com reported just last week, “Federal Reserve officials are considering a new type of quantitative easing that will attempt to boost the economy without accelerating inflation, according to a report published Wednesday.” (Click here for the complete Marketwatch.com story.) If the economy was in a real “recovery,” why would the Fed want to “boost the economy”? The Fed also announced at the end of January it would hold a key interest rate at 0% through 2014. If the “breadth and strength of the economic recovery” was so powerful, wouldn’t the Fed be hiking interest rates? Of course it would. The fact it is keeping them at zero for years and starting a new round of money printing is signaling the economy is in trouble, not in a so-called “recovery.”
Even near record low interest rates are not helping the morbid housing market to recover. According to the latest Case-Shiller report, home prices were down nearly 4% at the end of 2011. What kind of a recovery features near record low interest rates and falling home prices? Also, millions of empty houses are sitting on the books of the banks, and millions more are headed for foreclosure. Shouldn’t home inventory be shrinking in a real “recovery”? It is not, and that’s a fact!
Finally, if there really was a recovery, the government would not be hitting record deficits month after month. The deficit would shrink as the economy got better wouldn’t it? (Think Clinton era.) Instead, the Federal deficit is exploding! The Washington Times reported, just last week, “The federal government recorded its worst monthly deficit in history in February, according to a preliminary report Wednesday from the Congressional Budget Office that said the deficit in fiscal year 2012 is already more than half a trillion dollars. . . . The nonpartisan agency projected the government will run a deficit of $229 billion in February, the highest monthly figure ever.” (Click here for the complete report from the Washington Times.) That means the government spent nearly $8 billion more than it took in each and every day of last month (29 days). This is not a sign of economic “strength” but of tremendous weakness.
You cannot print your way to prosperity, but it can pave the way to an economic collapse."
at http://usawatchdog.com/collapse-coming-not-recovery/
“Mounting difficulties in the systemic-solvency crisis” means, in reality, it is more likely financial collapse is coming—not recovery. Maybe that’s why the Federal Reserve recently announced it is going to start another round of money printing because the economy is teetering on an abyss. Marketwatch.com reported just last week, “Federal Reserve officials are considering a new type of quantitative easing that will attempt to boost the economy without accelerating inflation, according to a report published Wednesday.” (Click here for the complete Marketwatch.com story.) If the economy was in a real “recovery,” why would the Fed want to “boost the economy”? The Fed also announced at the end of January it would hold a key interest rate at 0% through 2014. If the “breadth and strength of the economic recovery” was so powerful, wouldn’t the Fed be hiking interest rates? Of course it would. The fact it is keeping them at zero for years and starting a new round of money printing is signaling the economy is in trouble, not in a so-called “recovery.”
Even near record low interest rates are not helping the morbid housing market to recover. According to the latest Case-Shiller report, home prices were down nearly 4% at the end of 2011. What kind of a recovery features near record low interest rates and falling home prices? Also, millions of empty houses are sitting on the books of the banks, and millions more are headed for foreclosure. Shouldn’t home inventory be shrinking in a real “recovery”? It is not, and that’s a fact!
Finally, if there really was a recovery, the government would not be hitting record deficits month after month. The deficit would shrink as the economy got better wouldn’t it? (Think Clinton era.) Instead, the Federal deficit is exploding! The Washington Times reported, just last week, “The federal government recorded its worst monthly deficit in history in February, according to a preliminary report Wednesday from the Congressional Budget Office that said the deficit in fiscal year 2012 is already more than half a trillion dollars. . . . The nonpartisan agency projected the government will run a deficit of $229 billion in February, the highest monthly figure ever.” (Click here for the complete report from the Washington Times.) That means the government spent nearly $8 billion more than it took in each and every day of last month (29 days). This is not a sign of economic “strength” but of tremendous weakness.
You cannot print your way to prosperity, but it can pave the way to an economic collapse."
at http://usawatchdog.com/collapse-coming-not-recovery/
Subscribe to:
Posts (Atom)