America’s Homeless Middle Class

The Buck Stops Here
THE DAILY TELEGRAPH: This week's warning about US debt is the wake-up call Obama needs – and the world needs him to act, says Martin Vander Weyer.

The good news is that America has not suddenly turned into the new Ireland. The bad news is that the Obama administration is only beginning to face up to its debt addiction, in the way that Ireland and other euro delinquents have been forced to do. And Washington's prolonged debt denial is one factor that has made the economic recovery so fragile and uncertain for all of us.

In that context, the announcement on Monday by the ratings agency Standard & Poor's that it had shifted its outlook on US government debt from "stable" to "negative", which sent markets into a tailspin, may actually turn out to be helpful, like the friend who says loudly to a incorrigible drunk at a party: "Another drink, George? Or is that a silly question?" The S&P analysis is not hugely significant – it is a first downward notch on a long scale of potential debt downgrades – but it is a timely warning that the world is aware America has a problem. Uncle Sam has been able to refill his glass time after time for the simple reason that Chinese investors – banks, state agencies and exporters – choose to store the wealth they gain in international trade largely in the form of US government paper. But as iconic as the greenback and the Treasury bill may be, they do not enjoy such a uniquely elevated status as to make them immune from the processes of risk assessment that have been applied so painfully elsewhere.

The IMF says America's fiscal deficit for 2011 will approach 11 per cent – similar to the UK's – and its net debt will exceed 70 per cent of gross domestic product, which is a worse position than ours if we exclude bank bail-outs from the equation. US debt has hitherto been regarded as virtually risk-free, but if the UK and other nations are seen to be making strenuous efforts to cut deficits while America's continues to balloon then, sooner or later, investors must begin to take a more cautious view. » | Martin Vander Weyer | Tuesday, April 19, 2011

My comment:

Obama is clueless! From the beginning, it was clear to me that the man was an “empty suit.” But the American electorate would hear none of it, and got carried away with his rhetoric. Nobody even bothered to find out what he meant by “hope and change.” Hope of what? And change to what? And the mantra, “yes, we can.” What was that supposed to mean? Yes, we can what? As a result, Americans became transfixed by a man who could speak (arguably), but nothing else. Words, words, words!

Meanwhile, all Obama has ever wanted to do is spend, spend, spend. The trouble is, he hasn’t learnt one simple lesson of economics: You have to have it to spend it. None of us can go out and spend like a drunken sailor, as if there weren’t a tomorrow. How foolish that is. Profligacy is never a good thing. It will always lead to disaster.

In fairness to Obama, it’s true that he inherited a huge deficit from George W. Bush. Another profligate president. He ruined America by spending vast sums on wars which America could ill-afford, on wars which could achieve nothing to boot. But that was all the more reason why Obama should have got to work on reducing the deficit straightaway upon getting into office. Instead of that, he embarked upon a spending spree.

The Americans, too, must shoulder part of the burden of responsibility. They don’t seem to understand the meaning of the word ‘saving.’ Saving has become an alien concept to Americans. Americans prefer to consume, consume, consume. They also like to be generous with foreign aid. They give foreign aid abroad in billions, trying to buy influence and popularity. We can all see where that has got them.

In addition, the nature of politics in America is far too ideological. The Republicans and Democrats are far away from each other in political terms, so that it is difficult to find any middle ground. As a result, they cannot move forward in a meaningful way.

The future for America is looking very bleak indeed. This is a seminal moment for the US, and a seminal moment for the rest of the West. One can ask oneself but one question: Is this the start of the decline of the West? It might sound melodramatic, but it isn’t. If the US cannot save itself from bankruptcy, its influence in the world will decline. If this happens, it will no longer be the beacon of freedom. This will have serious consequences for us all. One can only fear the consequences of the eclipse of the US. Its loss of influence may have just begun.

It is to be hoped that, somehow, America will wake up before it’s too late. Bernanke’s love of quantitative easing will not solve anything. Quantitative easing is a fancy term for printing money. Turning on the printing press won’t solve anything. In fact, it will make matters worse. – © Mark

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US Warned Over Debts, as S&P Cuts Outlook to 'Negative'
THE DAILY TELEGRAPH: America's ability to tackle its deficit has been given a strong vote of no confidence, after leading rating agency Standard & Poor's said the chances are rising that the country will lose its prized AAA status.

S&P downgraded the outlook for the US government's debt to negative from stable on Monday in a clear shot across the bows of Congress and The White House.

In sharp contrast to every other developed economy, the US has increased its budget deficit in the last year in an effort to accelerate the economic recovery here.

While President Barack Obama and the Republicans have in the last month laid out plans to reduce the deficit, S&P warned that a plan needs to be agreed upon within the next two years for the US to retain its status as a top borrower.

"More than two years after the beginning of the recent crisis, US policymakers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures," said Nikola Swann, an analyst at S&P.

The move by S&P sparked an immediate reaction in financial markets, with US government bond prices falling alongside the S&P 500. Gold prices jumped to a new record of $1,496. » | Richard Blackden, US Business Editor | Monday, April 18, 2011

Markets Hub: Stocks Tumble as S&P Cuts U.S. Outlook
Stocks tumbled Monday after Standard & Poor's cut its credit outlook on the U.S. to negative, increasing the likelihood of a potential downgrade from its triple-A rating. Paul Vigna, George Stahl, Kathleen Magigan and Jim McTague discuss

US Economy in Deep Hole

U.S. Housing Slump Deepens
Mar 23 - Summary of business headlines: New home sales plunge to record low in the U.S.; Japan quake could be costliest natural disaster; Goldman Sachs CEO takes witness stand at insider trading trial. Conway G. Gittens reports

China Using Debt to Deal with U.S.
Feb 17 - Summary of business headlines: WikiLeaks cables show China used its position as America's largest debt holder to apply pressure on the U.S. Wall Street rallies as strong regional factory data offset inflation signals, jobless claims spike. Conway G. Gittens reports

Niall Ferguson: Yes, The US Is Screwed
This is an interview conducted by Business Insider Editor in Chief Henry Blodget In Davos

USA: Fears Over Economy Highest Since Recession
MAIL ONLINE: The number of Americans worried about the economy has reached its highest level since the darkest days of the recession two years ago, according to a new survey published today.

The Rasmussen poll showed that 87% of voters view the economy as by far the most important issue facing the government.

The percentage is five points up from an October poll and underlines the task still faced by President Obama to restore confidence in the shell-shocked financial system.

Improving the economy is seen as the highest priority since August 2008, when the scale of the financial crisis was first becoming clear.

Only 24% of voters agree with Mr Obama’s claims that his policies have the economy moving in the right direction. However, halfway into the Obama presidency more voters still believe the Bush White House was more to blame for the financial collapse than the current administration. Welcome home, Mr President: Poll reveals fears over economy at highest level since recession as Obamas return from Hawaii
>>> David Gardner | Wednesday, January 05, 2011

Obama Can Fix It!
MAIL ONLINE: President Barack Obama today set out an ambitious New Year's resolution for 2011 - repair the struggling U.S. economy.

In his weekly radio and Internet address, the president said recent data showed the economic recovery was gaining traction even though millions of Americans were still out of work.

'Our most important task now is to keep that recovery going,' said Mr Obama, who is currently enjoying a family vacation in Hawaii.

'As president, that's my commitment to you: to do everything I can to make sure our economy is growing, creating jobs, and strengthening our middle class. That's my resolution for the coming year.” 'I CAN fix the economy': Obama reveals his (very ambitious) New Year's resolution >>> Daily Mail Reporter | Saturday, January 01, 2011

Headwinds Hamper Job Recovery
THE WALL STREET JOURNAL: Faced with higher payroll taxes and healthcare costs, employers are waiting to see a stronger economic recovery before adding new workers, according to Tig Gilliam, CEO of Adecco Group North America. He talks with Kelsey Hubbard about the health of the labor market and where we'll add jobs in 2011.

Cutting Off Jobless Benefits for Millions
THE WALL STREET JOURNAL: Congressional conservatives have cut off extended jobless benefits unless Bush-era tax cuts remain in place for people earning more than $200,000 a year. Video courtesy of Fox News.

China May Be Bigger Economy Than US Within Two Years
Barack Obama greets China's Paramount Leader, Hu Jintao. Photo: The Daily Telegraph
THE DAILY TELEGRAPH – BLOGS – JEREMY WARNER: Here’s a finding that will have any red-blooded American spluttering into his cornflakes. According to the Conference Board, a highly respected economic research association, China will overtake the US as the world’s biggest economy by 2012, or within two years. Read on and comment >>> Jeremy Warner | Wednesday, November 10, 2010

New Poll Shows Majority of Americans Disapprove of Obama

Visit msnbc.com for breaking news, world news, and news about the economy

MAIL ONLINE: New poll shows majority of Americans disapprove of Obama as he announces $50bn infrastructure plan to rebuild U.S. >>> David Gardner and Daniel Bates | Tuesday, September 07, 2010

THE TELEGRAPH: US dollar falls to 15-year low against the Yen on recovery fears: The dollar fell to a 15-year low against the yen Tuesday, at one point slumping to ¥83.52, as investors took refuge in the Japanese currency amid global economic uncertainty. >>> AFP | Tuesday, September 07, 2010

Hussein Obama Goes On Another Spending Spree On Taxpayers’ Dollars
THE TELEGRAPH: President Barack Obama yesterday unveiled a $50 billion plan to expand and renew roads, railways and airports in a late bid to boost confidence in the economy and prevent the Democratic Party from suffering a landslide defeat in forthcoming polls.

The plan was one of several economic initiatives Mr Obama was due to unveil this week, when campaigning begins in earnest for the Nov 2 midterm elections.

Speaking in Wisconsin on the Labour Day holiday, which marks the end of summer in the United States, President Obama proposed building 150,000 miles of roads, constructing and maintaining 4,000 miles of rail and rehabilitating 150 miles of runway, as well as modernising the air traffic control system.

He also proposed setting up an infrastructure bank to coordinate private, state and local capital to invest in projects.

A senior administration official said the American President's goal was to "create a substantial number of jobs in the short turn [sic] and lay the foundation for jobs growth in the long run".

The plan, which needs the approval of Congress, would spend $50 billion (£32 billion) in the first of its six years, and would be paid for by ending tax breaks for oil companies, the official said. Obama unveils $50 billion roads, rail and air plan to win votes >>> Alex Spillius in Washington | Monday, September 06, 2010

ZEIT ONLINE: Obama will mit weiteren Milliarden Aufschwung sichern: Die US-Wirtschaft kommt nicht auf die Beine. Präsident Obama plant daher erneut ein gigantisches Konjunkturprogramm – zumal seine Demokraten ein Wahldebakel fürchten. >>> Zeit Online, Reuters, AFP | Montag, 06. September 2010

Poor Jobs Report in August; Obama Blames Republicans

Barack Obama Earns Lowest Marks on Handling of the Economy
THE TELEGRAPH: Barack Obama has earned his lowest ever marks on his handling of the economy, as only 41 per cent said they approve of his performance, according to a new poll.

The poll, conducted by Associated Press-GfK, taken just 11 weeks before the Midterm elections, found his approval rating dropped from 44 per cent in April. It also found that 61 per cent say the economy has got worse or stayed the same under Mr Obama’s presidency. >>> | Wednesday, August 18, 2010

US Job Losses Are Double Expected Figure
THE GUARDIAN: American employers shed 131,000 jobs in July / Data sparks rally in government bonds but stock indices fall

President Barack Obama: the job loss data has fuelled fears that the US economic recovery will not bring about a revival in the job market. Photograph: The Guardian
Employers in the US shed twice as many jobs as expected in July, fanning fears that the recovery in the world's largest economy will not see a revival in employment.

The US government said 131,000 jobs were lost overall, compared with forecasts for a 65,000 fall. The drop was mainly due to work finishing for temporary staff hired by the government to conduct its census. But private hiring was also weaker than expected.

Economists polled by Reuters ahead of the non-farm payrolls data forecast that private sector jobs would rise by 90,000, but in the event only 71,000 were added.

At the same time, June's overall drop was revised to a far steeper 221,000 from 125,000.

The data sparked a rally in government bonds, seen as safer investments when the economic picture darkens. Crude oil futures dropped on the prospect of weaker demand from the US market and stock indices also fell, including the FTSE 100 in the UK.

"This employment report only reinforces a sluggish recovery. Private sector job and income gains are not weak enough to point to a renewed downturn, nor are they strong enough to suggest the recovery is free of such risk," said Stephen Gallagher, economist at Société Générale.

Within July's drop, 143,000 jobs were census staff who were laid off, but there were also a further 59,000 public sector job losses as the US government mirrored its counterparts around the world in tightening budgets. Economists voiced concerns that the private sector outlook was also gloomy, suggesting that Americans will remain wary about their job prospects and do little to power the recovery.

"This is not good news for consumer confidence or spending and will intensify concerns about the pace of the recovery at the Federal Reserve," said James Knightley economist at ING Financial Markets. >>> Katie Allen | Friday, August 06, 2010

Barack Obama Requests $50 Billion in Emergency Funding from Congress
THE SUNDAY TELEGRAPH: Barack Obama has sought to shore up the US economy with a request for $50 billion (£34 billion) in emergency funding from Congress to save the jobs of "hundreds of thousands" of teachers, firemen and policemen.

He said the aid, which also included measures to help small businesses, was essential to ensure that the country did not "slide backwards just as our recovery is taking hold".

"It is essential that we continue to explore additional measures to spur job creation and build momentum toward recovery, even as we establish a path to long-term fiscal discipline," Mr Obama wrote in a letter sent to party leaders in Congress.

Pointing out that 84,000 public sector jobs had been lost so far this year, he said keeping people employed in the short term would cost less than their unemployment.

The demand to inject further government spending into the economy puts America on the opposite course to its major trading partners in the developed world. Britain, Germany, Japan, France and Italy have all announced cuts after boosting spending to counter the recession in recent years.

Mr Obama is also likely to encounter stiff domestic opposition. Republicans immediately criticised the president for seeking to spend more money when the national debt has risen to £9.6 trillion.

John Boehner, the Republican leader in the House of Representatives, said spending more public money without offsetting the costs was irresponsible.

"The spending spree in Washington continues unabated, though the American people are screaming at the top of their lungs: 'Stop'." >>> Alex Spillius in Washington | Sunday, June 13, 2010

Obamonomics©: A Definition >>>

Harvard Prof. Niall Ferguson on Decline of America and Rise of a New Global Economic Order
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