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* Late yesterday, I linked this story from the Sun-Times…
Speculation is that, if S&P downgrades the 50 states’ ratings, Illinois overall rating would drop to A2-Minus, which could mean a one-half of 1 percentage point increase in interest rate payments on future bond issues. For a $2 billion to $3 billion capital plan bond issue such as the state is planning this fall, such an increase would cost hundreds of millions more in interest.
* That “speculation” appears to be coming from the governor’s budget office…
Having to pay higher interest rates on future state bond issues – possibly ½ of 1 percent — is a possibility, said Kelly Kraft, spokeswoman for Gov. Pat Quinn’s Office of Management and Budget.
“However, at this time Illinois has not been downgraded, and we are not issuing bonds until September, which allows the market to digest the situation,” Kraft said in a statement. “If we were downgraded as a result of S&P’s downgrade of federal debt, the other 49 states would be downgraded as well. Therefore, until S&P indicates how states will be affected, offering more specifics on the ripple effect would not be prudent.”
Kraft said the state expects to issue $2 billion to $3 billion in general obligation bonds in September.
* Confusion was the order of the day yesterday…
Scott Pattison, executive director of the National Association of State Budget Officers, said he had been talking with state financial officers throughout the day Monday and there was no consensus about how the S&P action would affect states.
A state’s reliance on federal assistance “would be a factor to consider” for a rating agency, but Pattison said some states might be able to offset those concerns by showing they have a strong rainy day fund or have been willing to make spending cuts to keep their budgets in line with dwindling tax revenue.
“The downgrade is certainly not good news. But on the other hand, we’re really uncertain at this moment as to the direct effect, whether it will have a direct effect or not,” Pattison said. “I think it’s going to be a case-by-case basis.”
* But, as subscribers know, S&P offered up a bit of clarity late last night…
While the worldwide markets continue to decline in a vortex, Standard & Poor’s offers a nugget of good news for U.S. states and municipalities.
Despite S&P’s August 5 downgrade of the long-term U.S. sovereign debt, some state and local governments will maintain or even achieve AAA ratings, according to Standard & Poor’s. That’s in contrast to a slew of entities and companies, including Fannie Mae, Freddie Mac, several private insurers, such as New York Life and Northwestern Mutual, who were downgraded Monday in the aftermath of the government downgrade.
A S&P press release cites a report, “State And Local Government Ratings Are Not Directly Constrained By That Of The U.S. Sovereign,” which explains the factors that allow for this situation to occasionally occur.
“The report notes that many U.S. state and local governments function with a high level of revenue, treasury, finance, and debt management independence compared to their global counterparts,” the press release stated.
The report said much more than that, and some of it certainly applied to states like Illinois which don’t have AAA ratings, but you’ll have to subscribe to find out what that was.
* The biggest problem, however, is not so much the impact of the S&P federal rating on Illinois, but what happens with the economy. And the future ain’t too bright right now…
But the bigger cloud hanging over the municipal bond market is the prospect of evaporating federal support to states and cities at a time when another economic swoon is possible, observers say.
In the current political climate, observers say states cannot count on another stimulus package, for instance, if tax receipts begin to plummet again. For fiscally wobbly states, such as Illinois, a deepening squeeze can translate into higher borrowing costs.
“The market is worried about whether the economy will slip into another recession in 2012,” said bond expert Richard Ciccarone, managing director at McDonnell Investment Management LLC. “That is causing some skittishness, more so than the rating downgrade.”
What we’ve got is a real conundrum, caused mainly by national partisan politics. The economists and business types I’ve been reading are saying that we need a short term stimulus to keep the country on track and long term cuts to prevent real problems down the road. This is from Terry Belton, the head of fixed income strategy for JP Morgan Chase…
“I think, on the fiscal side, what we need — and we have sort of missed the boat here — a little bit of the opposite of what we got. We need long-term reform. We need to deal with entitlements reform and tax reform. That lowers the deficit in the long run. But we actually need stimulus now.
“We’re almost getting the opposite. Coming in to next year, we’re going to have quite a fiscal drag kick in as the 2011 tax cuts run off. That’s going to hurt growth a lot next year.”
What Belton (and loads of other like-minded folks) said makes a lot of sense, but it’s not easily sold in the excruciatingly loud and divisive DC echo chamber. “You want to spend more and cut more? Ridiculous!” Also, try cutting the long term growth of Medicare and see how far that gets you in politics. It ain’t just liberals who will beat you over the head.
* And now a warning: Do not drag your goofy DC talking points into the comment section. I will not be kind to mindless rehashing.
* Related…
* Durbin struggles to find bipartisan solution to financial crisis
* VIDEO: Dick Durbin Refuses to Play the Blame Game - The senior senator from Illinois wouldn’t fault either party directly for the credit downgrade.
* IL lawmakers react to nation’s credit downgrade: “The one that I would blame is Standard & Poor. I think it’s a political ploy by them. They didn’t recognize the crisis that we had with the mortgage bank securities. I think they’re making up for that,” Biggert said.
* Kirk wants Congress recalled to cut spending
* World stock markets stabilize after deep dives
* Panic Selling Across European Markets
* A lot at stake for small-town America - Rural America could be disproportionately affected by efforts to reduce federal spending.
* Illinois proves an amendment doesn’t guarantee balanced budget
* Kotowski grades effect of state budget reform
* Aldermen not warming up to proposed school property tax hike
* Brizard Defends Proposal To Raise Property Taxes For CPS
* Outlook for corn, beans varies widely around state
posted by Rich Miller
Tuesday, Aug 9, 11 @ 4:15 am
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Thee is honest, non-partisan disagreement between economists on whether or not we need more stimulus. For instance:
‘What the economy needs most, said John Silvia, chief economist at Wells Fargo, is time. Consumers must further shrink huge debts amassed in the mid-2000s. And the depressed housing market needs time to recover from a collapse in prices and sales.
“There are no magic bullets,” Silvia said. “A lot of this stuff just really needs to be dealt with. It’s not a question of stimulus.”‘
http://www.statesman.com/business/ap-survey-economists-warn-against-more-fed-action-1537701.html
This isn’t surprising considering that many didn’t see any improvement with the last stimulus:
“NABE conducted the study by polling 68 of its members who work in economic roles at private-sector firms. About 73% of those surveyed said employment at their company is neither higher nor lower as a result of the $787 billion Recovery Act,”
http://money.cnn.com/2010/04/26/news/economy/NABE_survey/
Comment by Pelon Tuesday, Aug 9, 11 @ 5:14 am
What could help shrink household AND federal debt? Jobs. Much of the increased spending is safety net spending.
What could help raise demand to get the economy moving again? Jobs. The private sector won’t make a move until demand rises.
If we had attacked with a jobs plan up front, I’m convinced we’d be better off today.
And, it’s not too late.
Regarding stimulus, there were economists who said up front it was too small, and saying now we are grinding to a halt because it’s almost gone. They are the same people who predicted the market crashes, and that there’d be no problem with inflation.
In other words, there are economists out there who understand what we’re dealing with and what we should do about it. We should seek them out.
Comment by yinn Tuesday, Aug 9, 11 @ 6:49 am
The real estate market is frozen.
Homeowners do not have access to cash.
Homeowners cannot move for jobs or retirement.
We have lost all the spin off jobs related to home sales.
We need a long term (5 years) US 1040 tax credit of at least $ 20,000 for individuals buying homes. The credit would pay for itself in economic stimulus.
You could limit the use of the credit at one per person.
If people cannot move, the economy is restricted.
Comment by gg Tuesday, Aug 9, 11 @ 7:36 am
On Illinois’ failed balanced budget amendment and its implications in the national debate, I think a pay-as-you-go system is more in line with the intended goal. Revenues in year+1 need to exceed expenses in the given year and the actuarial value of promised future expenses needs to be counted in this year’s expenses. This takes how much to tax out of the equation, leaving only how to distribute the tax and what services we truly require as the topics to debate.
Comment by thechampaignlife Tuesday, Aug 9, 11 @ 8:17 am
One thing I would like to see is a better use of language in the whole debate.
The Washington crowd has (deliberately?) lumped almost all government programs into the category “entitlements”, which implies you are entitled to something. Without listing every program, I believe the citizen is entitled to the programs he directly pays for, i.e., things like Social Security and Medicare (and yes, I know each citizen may not be directly paying their full cost but that is what the whole “group” concept is about, some pay less, some pay more). I do not consider programs like Medicaid, food stamps (in all it’s various acronyms), and their ilk entitlements, they are welfare pure and simple, that we as a nation (or maybe it was just Congress) decided we should provide. There is also corporate welfare (subsidies & tax breaks) and state/local government welfare (federal subsidies). The debate needs to start back at ground zero, as in what should government be doing. It should also start with zero based budgeting each year as opposed to the baseline idiocy.
Once we’ve had those discussions, then we can talk about tax reform, stimulus, etc.
Comment by Retired Non-Union Guy Tuesday, Aug 9, 11 @ 8:21 am
Employers are frozen by the unknown. They have plenty of cash, but simply don’t want to add more employees.
A friend’s firm is completing a $1.5 million expansion. Privately he told me they won’t add any new jobs, but maybe able to reduce his workforce because of the expansion.
The leftward thrust of the NLRB also doesn’t help. Business owners don’t want to hire new employees that could bring in a union. Stories like Boeing not able to expand into North Carolina certainly don’t help.
Lots of business owners feel the same way.
Rhetoric in this country has been focused on the “evil” business owners. As a result, the owners are keeping their heads down and simply aren’t hiring.
Comment by Downstate Tuesday, Aug 9, 11 @ 8:26 am
Here is something to think about - There is not one thing that we do, use or eat that is not some how affected by the American transportation system. If you want to have the greatest impact on the economy, allow the roads, rail and river transportation systems to continue to fall apart.
With the current toxic political environment and the continued lack of a federal highway bill, we are doomed as an American society. Nobody wants to pay for the necessary maintenance of once was the greatest transportation system in the world.
Comment by Roads Scholar Tuesday, Aug 9, 11 @ 8:56 am
Historicaly the ovenrment works programs got us out of the great dpression with large and small scale capital projects (this is a simplification for discussion purposes)
We need the same now. Paying support for people who are unemployed is broken, but not in the sense that we shouldnt help those in need. Wit our resources no one should go hungry or without medical care. The problem is we should be focusing on providing support through wages for work. We need to expand construction and governemnt jobs on a temp basis to et the economy moving. Let’s start paying people to build things, clean up roadways, parks, rivers, the sidesof highways and put the unemployed to work.
It is a tried and true formula for starting the economy. Interestingly many of the billion dollar in profits companies are making money whilke laying off workers. I say this becaue those tax breaks and incentives to the large companies are not being reinvested in the workforce, they are paid out in dividends and bonuses. Apparently giving rich people more money does not trickle down.
Comment by Ghost Tuesday, Aug 9, 11 @ 8:56 am
In 2000, during the tech crash, the Fed funds rate was 6.5% and lowered to 1%.
In 2007, the Fed funds rate was 5.25% and lowered to 0.25% where it is today.
My point is the Fed is about out of bullets. It can’t lower rates any further, and it’s very unlikely Congress is going to stimulize things any time soon. The reviews on QE2 won’t exactly take your breath away either.
For those who want a laissez-faire approach to the markets, you’re about to get your wish.
Comment by Regular Reader Tuesday, Aug 9, 11 @ 9:08 am
Regular Reader,
The Fed still has one bullet, printing copious amounts of money. Of course, that would trigger massive inflation if printed in an amount needed to reverse the economic downturn.
Ghost,
I would agree with you to a point, capital improvements are indeed needed. Why did Obama not do so in the first go around of Stimulus? Stop funding pie in the sky ideas, like bullet trains and windmills. Stop propping up failing companies and industries. Stop bailing out homeowners who irresponsibly bought homes they couldn’t afford. Relax environmental regulations that stop construction of roads and refineries. Allow oil and gas drilling and relax regulations there. Stop worrying about 54mpg cars, and Chevy Volts. Finish trade deals with Korea and Columbia. Stop subsidizing and requiring that we burn our food for transportation.
There’s a group of ideas that will get Americans back to work,
Comment by Cincinnatus Tuesday, Aug 9, 11 @ 9:29 am
As low as interest rates are, and as low as private sector confidence is, the rational approach would be to let the Bush tax cuts expire and use the revenue stream to guarantee borrowing at the lowest interest rates in history for new public infrastructure and venture capital for private sector activity in energy and new technology. That would provide direct stimulus across the economy and help to start rebuild private sector activity in a way that would feed back to the government in tax revenues. But two-thirds to three-quarters of the politicians and staffers and advisers at the White House and Capitol simply don’t get this. They’d rather stick with their faith in the dogma of “smaller government,” even though the reality is that every recent tax cut has been used to pay off debt or stashed in a mattress or a Swiss bank account rather than used to stimulate the economy.
Comment by Angry Chicagoan Tuesday, Aug 9, 11 @ 9:30 am
Angry Chicagoan,
A better and faster idea to get new revenue would be to lower the tax rate on re-patriated overseas profits for companies that will reinvest that money in American products and services. Instant access to about $2-3 T which could be taxed at something like 15%. You get the new tax stream PLUS trillions in investment capital.
Comment by Cincinnatus Tuesday, Aug 9, 11 @ 9:39 am
Those things aren’t necessarily mutually exclusive. A more functional right would be seeking deals with liberals to log-roll these things, not drawing lines in the sand. I always thought the whole idea behind this thing at least among moderate Democrats was to find a way of getting profits repatriated that could support infrastructure spending.
Comment by Angry Chicagoan Tuesday, Aug 9, 11 @ 9:43 am
I dont want to get too sidetracked here - I’m a big fan of FDR and what he did to create the modern system of safety-nets - but really the only thing that brought the US out of the economic quagmire of the 1930s was WWII.
… and subsequent to that the US had a clear playing field, no serious industrial competition. China - civil war. Soviet Union - 20 million plus dead and fighting ravaged its cities. Europe - in ruins. Japan - in ruins. Etc. etc.
Sure, it was a nice run of 40 years for the US there - just like Ford would have a great 40 years of selling cars if the entire rest of the auto industry was obiliterated and starting over.
The world has changed - we have competition.
Comment by Ghost Tuesday, Aug 9, 11 @ 9:47 am
SORRY!
The 947 am “Ghost” posting was actually Peter Snarker. Apologies for the snafu.
Comment by Peter Snarker Tuesday, Aug 9, 11 @ 9:48 am
I am, and my family (union family) always considered FDR kind of a Robin Hood-ish folk hero, but really, the WPA didnt pull us out of the 1930s economic wasteland - WWII production and massive govt military spending did.
Then after WWII there were no other industrial powers left to compete. Japan in ruins, Europe in ruins, China civil war and way behind, etc. etc. The US economy was ramped up and had no competitors.
Fast-forward 60 years, we have competitors. Things are different. Look, if you obiliterated Ford’s competitors in the auto-industry, they’d have a great 25 year run or whatever too. Then things would look “bad”, but really it would just be a reversion to the mean so to speak. I dont think the public nor the politicians fully understand the era we are coming out of is not coming back - we literally had no competition.
Comment by Peter Snarker Tuesday, Aug 9, 11 @ 9:52 am
Central management of society and the economy has been a major progressive failure.
Comment by Liberty First Tuesday, Aug 9, 11 @ 10:04 am
What we’ve got is a real conundrum, caused mainly by national partisan politics
No…what we have here is the thinking that cheap money would last forever.
Comment by This Little Piggy Tuesday, Aug 9, 11 @ 10:11 am
Peter Snarker,
Your post on competition after WWII may be the most logical thing I’ve ever read on here. Excellent point.
Comment by Downstate Tuesday, Aug 9, 11 @ 10:27 am
Taking off on the comments of “Retired Non-Union Guy” and “Ghost”. I agree that we are entitled to those items that we pay into, like Social Security, and they should not be cut. Unemployment would be another one of these programs as the private sector pays in to unemployment insurance. However, I do not believe that just because you are residing in America you are entitled to free healthcare, free food, a free education, etc., etc. I realize it’s not politically correct but I think you should be an American citizen or a LEGAL immigrant. It may say on the Statue of Liberty “Give me your tired, your poor, your huddled masses yearning to breathe free” but the people it greeted also went through Ellis Island when they landed. I do believe in loving your neighbor and if private individuals and or groups want to come together to fund the education of illegal immigrants, I can live with that. BUT I am opposed to the federal government giving money away just because someone made it across the river without getting caught or did so they could have their baby in a U.S. hospital and have the child automatically be a citizen. (I don’t agree with this one either. If at least one parent isn’t a citizen, than you shouldn’t automatically become one.) The reality is, if we weren’t providing for the needs of the illegal immigrants our national budget would be in much better shape. And before you go down the “how could you think that way” route, remember, if you snuck into a foreign country and couldn’t find work - they wouldn’t support YOU!
Comment by Both Sides Now Tuesday, Aug 9, 11 @ 10:27 am
Cincinnatus…
Printing massive amounts of money was called QE1 and QE2. It can’t do QE3, and that’s what I said.
Comment by Regular Reader Tuesday, Aug 9, 11 @ 10:37 am
===The reality is, if we weren’t providing for the needs of the illegal immigrants our national budget would be in much better shape.===
That is simply not true. Stop looking for bogeymen, it distracts from seeking real solutions to our problems.
You realize building a border fence and new detention centers costs more than providing a path to citizenship right? Because if you don’t understand that we need comprehensive immigration reform that includes a path to citizenship for those already here, then we cannot have a civilized discussion about anything else.
Comment by 47th Ward Tuesday, Aug 9, 11 @ 10:38 am
Illinois congressional delegation did not have a very good few months. Walsh and Schakowsky were firebrands who basically showed they are in dc to throw bombs rather than help the country. Durbin gets credit from others for “trying” to find a solution-but failed, and Roskam who has flown under the radar was part of the house leadership team that many blame for taking us to the brink. Tomorrows question should be grade your member of congress/senator on the debt crisis.
Comment by Shore Tuesday, Aug 9, 11 @ 10:40 am
Regular Reader,
Fed makes an announcement right after lunch today. I hope you’re right and no QE3 will be announced.
Comment by Cincinnatus Tuesday, Aug 9, 11 @ 10:42 am
Shore,
How did Roskam take us to the brink? I don’t think he announced the debt ceiling limit increase as a panic, that was Obama and the administration earlier in the summer. And I don’t think he is a member of the Senate leadership that has not passed a budget in almost three years, that would be Durbin.
Comment by Cincinnatus Tuesday, Aug 9, 11 @ 10:45 am
47th Ward - so you’re saying that if we didn’t pay for anything for the illegal immigrants that the national budget wouldn’t decrease? Last time I knew, 2-1=1. Yes I agree that we need comprehensive immigration reform but we already have a path to citizenship. And if we didn’t make it so attractive to come here we wouldn’t need a big fence! I have no problem with any person of any race, creed, or color coming to America - I just want them to follow the law and become a citizen before the federal government takes my money and provides for their welfare.
Comment by Both Sides Now Tuesday, Aug 9, 11 @ 10:53 am
- How did Roskam take us to the brink? I don’t think he announced the debt ceiling limit increase as a panic -
Huh? I’m guessing shore meant the brink of default.
Comment by Small Town Liberal Tuesday, Aug 9, 11 @ 10:53 am
- if we didn’t make it so attractive to come here we wouldn’t need a big fence! -
Immigrants don’t come here for welfare, they come for jobs. I’ll be first in line to support tougher laws holding big companies accountable for hiring documented workers, but I don’t think we’re going to see those any time soon.
Comment by Small Town Liberal Tuesday, Aug 9, 11 @ 10:56 am
In the short term, a QE3 would feel really good right about now.
But I do tend to agree with Cincinnatus… Another round of massive spending can’t be good. It’s going to be hard to guard against inflation in the long term.
Wish the Fed had other bullets… curious what it’ll propose this afternoon.
Comment by Regulary Reader Tuesday, Aug 9, 11 @ 11:10 am
===before the federal government takes my money and provides for their welfare===
Illegal immigrants pay sales taxes, property taxes (often through their rent) and some have income tax withheld from their paychecks. Many pay into Social Security. They don’t get welfare. They don’t receive Social Security when they retire. They don’t get tax refunds. They don’t get unemployment benefits. In short, they pay a lot of taxes but get none of the same benefits citizens receive.
At most, Medicaid pays for their medical costs in limited circumstances, and last I checked, in America, we don’t let people die in the streets. Not yet anyway.
You are wrong to suggest illegal immigrants are net consumers of federal spending. They give more than they take.
Comment by 47th Ward Tuesday, Aug 9, 11 @ 11:15 am
Shore,
Roskam and the current GOP leadership didn’t bring us to the brink of anything reckless spending by the current administration and the past several has. We cannot continue to spend more than we bring in. Look at the massive increase in debt we have accumulated in the past 30 months. Yes the GOP may need to give a little on taxes 200k is to low a threshold to call someone rich thou. Closing loopholes and simplifying the tax code would be a good start.
Comment by Fed up Tuesday, Aug 9, 11 @ 11:27 am
Peter that is a common mistake. WWII ended the need for the WPA, but the WPA put the economy into recovery mode and it was recovering at the time.
In simplistic form, the purpose of the WPA was to provide assitance to those in need by having them work for their help. This has been replaced with a number of asitance programs which do not require the reciepent to work. the WPA provided one job per househould and helped to keep families clothed and fed, and it buiult a number of our roads and some famous buildings (including the park lodge in shawnee).
Its a good system, care for those who are unemployed by giving them jobs, not just handingthem unemployement money and food stamps. The society takes care of the unemployed, and in return for the cost we get work.
Comment by Ghost Tuesday, Aug 9, 11 @ 11:37 am
Ghost,
Christina Romer, Obama’s first Chairman of Council of Economic Advisers. Nobel Laureate Milton Friedman, and current Fed Chairman Ben Bernacke would all disagree with your statements about the WPA.
Comment by Cincinnatus Tuesday, Aug 9, 11 @ 11:57 am
We should on a national and local level address the problem by first attacking the arrogance of many in government. Those too arrogant to believe that unchecked spending has no economic consequences. Those too arrogant to believe that refusing to raise any revenue sources has no economic consequences. Those too arrogant to believe that only government has the only solutions to our economic problems. Those too arrogant to believe that the private sector has the only solutions. The S&P downgrade was immediately attacked as being “political” by some too childish to see what is actually going on.
On a national level, those who attempted to behave in a pragmatic fashion were shouted down, ridiculed and threatened. Our President looks like a deer in the headlights with no real plan other than pleasing buzzwords. His cabinet has failed him on the economy. The freaks of the Democratic far left and Republican far right wanted us to jump off the economic cliff and force the crisis. They must all be proud, except that they childishly refuse to accept any responsibility for their actions.
On a local level, our governor looks like a deer in the headlights with no real plan other than pleasing buzzwords. Our one party dominated legislature nibbled around the edges and were profusely thanked for their efforts by those with such lowered expectations of them. Kind of being pleased when the slob of a neighbor sweeps the trash off his sidewalk and onto his lawn.
The old ideas will not work anymore. WPA worked in an era where there were few safety nets. Now we have all kinds of safety nets that are stretched out to the breaking point. Extending unemployment benefits for the unfortunate is one thing. Figuring out how to pay for it is another. The FDR days do not apply and our post WWII economic days are long behind us. One commentator hit the nail on the head, we were the only economy up and running at the end of WWII. Today we have many other competitors.
Europe is slowing collapsing economically and riots in Athens and London show certain medicine to fix those problems isn’t going down easy. We have had scattered episodes of flash mobs of minority kids who raid stores or people walking down streets for goods and money. They aren’t working and no one is paying attention to their plight.
I see where home ownership has dropped to 1960’s levels. Back when I lived in a two flat owned by grandma and filled with extended family. Back when my wife lived with her parents, grandparents and an uncle. We had one car and one bathroom for 7 people. So did the wife’s family.
How many people have returned under the radar screen to that lifestyle or something close to it?
Nothing gets fixed until the arrogance is removed, both nationally and locally.
Until then, expect long tough extended hard times. I don’t see any upsides, other than irate tea party groups and other groups voting out the arrogant who have redistricted themselves and think they may be safe. That may actually be a good start to trying to turn things around.
Comment by Louis G. Atsaves Tuesday, Aug 9, 11 @ 12:11 pm
I’d like to see the fed start buying state debt, driving down interest rates on state bonds. I’d also like to see them buying delinquent or late state obligations from companies, individuals and organizations owed money by the states and waiving or modifying statutory interest owed on those obligations.
Comment by lincoln's beard Tuesday, Aug 9, 11 @ 12:14 pm
@Louis Atsaves
I love that you castigate office holders for having “no real plan other than pleasing buzzwords” while in the same breath advocating “first attacking the arrogance of many in government”? Tell me, what is the real plan for this attack on arrogance? Will the state be buying humility missiles from virtue contractors and bombarding arrogance from the air, or will be we arming our constabulary with modesty batons and conducting street-level meekness operations?
Comment by lincoln's beard Tuesday, Aug 9, 11 @ 12:20 pm
lincoln’s beard - If only I’d been drinking coffee, it would have been spit for sure.
Comment by Small Town Liberal Tuesday, Aug 9, 11 @ 12:31 pm
@Louis G. Atsaves
Excellent assessment!
Comment by Wensicia Tuesday, Aug 9, 11 @ 12:32 pm
47th Ward @ 11:15am ==They don’t get tax refunds.==
Yes, they do. But your basic position is correct.
Comment by Pat Robertson Tuesday, Aug 9, 11 @ 4:30 pm
There is one thing that all of us could do to help the American economy … try to buy a few more things made in the good old US of A. It isn’t easy these days … but it can be done. We just helped the American economy with the purchase of some stone tile for the bathroom floor … made in South Carolina and quite expensive. And we’re looking at a tank-less water heater built in Florida rather than the European models. I’m not saying you have to also buy union products, although that would help too, but if everyone bought a few less Chinese or Mexican items and bought US items instead, it sure wouldn’t hurt.
Comment by Retired Non-Union Guy Tuesday, Aug 9, 11 @ 6:18 pm
–The Fed still has one bullet, printing copious amounts of money. Of course, that would trigger massive inflation if printed in an amount needed to reverse the economic downturn.–
Where have you been? The Fed has been printing money hand over fist since 2008. Banks are going to the overnight window, borrowing for nothing and investing in T-Bonds. The margin is sweet.
Where’s the inflation, outside of that caused by energy? We could use some.
Comment by wordslinger Tuesday, Aug 9, 11 @ 10:24 pm
Again, Word, you don’t bother with the context of the statement. We were talking exactly about the various QEs the Feds have done in the past couple of years. And how ineffective they’ve been in stimulating job creation.
The point is, the normal methods of creating inflation (i.e. printing money) haven’t and probably won’t work. When there is no demand and a generous supply of goods and services, there is no inflation.
Comment by Cincinnatus Wednesday, Aug 10, 11 @ 7:39 am