Tuesday, September 18, 2012

Economy - #4222 - The Magnitude of the Mess We're In - Wall Street Journal (2) How QE3 Will Make the Wealthy Even Wealthier, While Causing Living Standards to Fall For Rest of U.S. - Economic Collapse (3) Manufacturing Index Drops to Lowest Level Since April, 2009 - Hot Air (4) Gasoline Prices More Than Double Under Obama $1.84 to $3.85 - CNS News (5) Great News! Middle Class Sinks to All-Time Low in 2011 - Hot Air

The next Treasury secretary will confront problems so daunting that even Alexander Hamilton would have trouble preserving the full faith and credit of the United States.Sometimes a few facts tell important stories. The American economy now is full of facts that tell stories that you really don't want, but need, to hear. Where are we now? Did you know that annual spending by the federal government now exceeds the 2007 level by about $1 trillion? With a slow economy, revenues are little changed. The result is an unprecedented string of federal budget deficits, $1.4 trillion in 2009, $1.3 trillion in 2010, $1.3 trillion in 2011, and another $1.2 trillion on the way this year. The four-year increase in borrowing amounts to $55,000 per U.S. household. The amount of debt is one thing. The burden of interest payments is another. The Treasury now has a preponderance of its debt issued in very short-term durations, to take advantage of low short-term interest rates. It must frequently refinance this debt which, when added to the current deficit, means Treasury must raise $4 trillion this year alone. So the debt burden will explode when interest rates go up. The government has to get the money to finance its spending by taxing or borrowing. While it might be tempting to conclude that we can just tax upper-income people, did you know that the U.S. income tax system is already very progressive? The top 1% pay 37% of all income taxes and 50% pay none.  Read more........


How QE3 Will Make the Wealthy Even Wealthier While Causing Living Standards to Fall for Rest of U.S. - Economic Collapse - The mainstream media is hailing QE3 as a great victory for the U.S. economy. On nearly every news broadcast, the "talking heads" are declaring that Ben Bernanke's decision to pump 40 billion dollars a month into our financial system is definitely going to help solve our economic problems. The money for QE3 is being created out of thin air and this round of quantitative easing is going to be "open-ended" which means that the Federal Reserve is going to keep doing it for as long as they feel like it. But is this really good for the average American on the street? No way. Despite two previous rounds of quantitative easing, median household income has still fallen for four years in a row, the employment rate has not bounced back since the end of the last recession, and new home sales have remained near record lows.  Read more.........


Manufacturing Index Drops to Lowest Level Since April, 2009 - Hot Air - The economy made an intrusion into the news this morning, breaking the focus of late on foreign affairs, with some bad news on the manufacturing front. The New York Federal Reserve manufacturing index dropped to its lowest level since the recession ended, surprising economists and signaling a further slowdown in both factory orders and employment: Factory activity in New York state contracted for a second month in a row in September, falling to its lowest level in nearly 3-1/2 years as new orders shrank further, a report from the New York Federal Reserve showed on Monday.  Read more........


Gasoline Prices More Than Double under Obama, $1.84 to $3.85 - CNS News - Average retail gasoline prices have more than doubled under President Obama, according to government statistics, rising from $1.84 per gallon to $3.85 per gallon.  Read more.......

Great News! - Middle Class Sinks to All-Time Low in 2011 - Hot Air - Meanwhile, back at the US ranch, the economy is still the biggest issue on the minds of voters, or so we think, anyway. If so, the middle class got some bad news yesterday from the Census Bureau — they earn a lower percentage of overall income than ever: The middle class lost ground again last year, falling to an all-time low in their share of how much income they take in, new census data released Wednesday showed. People with incomes between $20,263 and $62,434 collectively earned less than 24 percent of all income in 2011, even though they made up 40 percent of the population. The dip was part of a long, steady decline dating back to at least the 1960s, when the middle class shared 29 percent of all income.  Read more........

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