Recovery Summer My Ass!

For weeks now, all the economic data have painted a grim picture of an economy that’s rapidly grinding to a halt. And yet Obama, Biden, and the rest of the Clown Car Club Democrats swear up and down, with supposedly straight faces, that the economy is turning around and is headed in the right direction. Either they’re deliberately lying or they’re incompetently insane, take your pick.

/Michael Ramirez

‘Recovery Summer’ goes bust

Declaring a “Recovery Summer” victory tour at the start of June must have looked like a pretty safe wager for the Obama administration. The economy seemed to have shifted firmly into gear during spring. Lawrence Summers, director of the National Economic Council, told the Financial Times in early April that the economy was “moving toward escape velocity. You hear a lot less talk of ‘W’-shaped recoveries and double-dips than you did six months ago.”

A big reason for White House optimism was a stronger job market. The economy added an average of 320,000 net new jobs a month during March, April and May, about half of them in the private sector. Granted, the unemployment rate still hovered close to 10 percent. But if the economy kept growing at a 3 percent annual clip or greater — creating lots and lots of new jobs in the process — unemployment would eventually fall, perhaps dramatically.

Since then, however, the economy has fallen back to Earth, and “Recovery Summer” looks more like a bad bet. Private sector job growth has fallen by two-thirds, and the unemployment rate is still at a sky-high 9.5 percent. And if the size of the U.S. work force, as measured by the Labor Department, had stayed constant since April — instead of shrinking by a million — the unemployment rate would be 10.4 percent. Jobless claims are at their highest level since February. Worse yet, the expansion is decelerating. After growing by 5.7 percent in the final quarter of 2009 and 3.7 percent in the first quarter of 2010, gross domestic product advanced by just 2.4 percent from April through June, according to the Commerce Department.

See also:
White House’s ‘recovery summer’ could be slipping away
Grim jobs report undercuts talk of a recovery
GOP Targets Obama’s ‘Recovery Summer’ Amid Economic Gloom
The recovery is losing steam, fast
Doubt keeps people from investing
Recovery a job killer on Highway 66
Obama’s Economic Recovery Hits a Snag

So, what’s Obama’s plan to restore positive economic momentum, where’s the leadership? Aside from blaming Bush, who left office a year and a half ago, and the Republicans at every opportunity, it appears Obama doesn’t have a plan, he’s AWOL on the economy, he has no idea what to do or what needs to be done. In fact, all the policy he has so far foisted upon the country has been economically counterproductive and has created nothing but market confusion and uncertainty.

/I think Obama needs another vacation, don’t you think he’s earned it?

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The State Of The Union Is Not Strong

The U.S. economic forecast looks grim and we’re definitely expecting more rain.

UPDATE: CBO Estimates 2010 Deficit At $1.34 Tln

A new projection from the Congressional Budget Office forecast the federal government’s budget deficit for fiscal 2010 would total $1.34 trillion, improving to just over $1 trillion in fiscal 2011, which begins on Oct. 1.

If the CBO’s figures are reached, the deficit in the current fiscal year would be equal to 9.1% of U.S. gross domestic product, compared with fiscal 2009’s mark of 9.9%.

The latest figures from the nonpartisan agency portray a dreary picture of the U.S. economy, predicting U.S gross domestic product would only grow by 2% between the fourth quarter of 2010 and the same period next year.

It said the unemployment rate would not fall back to the long-term average of 5% until the end of 2014.

The CBO said since mid-2009, the recovery in the U.S. economy had been “anemic” compared with the periods following earlier recessions.

The projections involve several assumptions that likely make them optimistic. They assume the Bush-era tax cuts expire at the end of 2010, for example, and also that Congress makes no further annual adjustments to prevent the alternative minimum tax from hitting middle-class taxpayers.

The projections also don’t include any further government stimulus efforts to accelerate the lagging economy.

Read the report:

The Budget and Economic Outlook:
An Update

See also:
Keeping tax cuts beneficial in short term, harmful over long term, CBO says
Stimulus and tax cuts now, smaller economy later, CBO report says
Analysts: CBO GDP Forecast A Fantasy
Budget analysts: Near-record 2010 deficit of $1.3T
UPDATE 1-U.S. 2010 budget deficit at $1.342 trln – source
$1.3-trillion U.S. budget deficit expected
Projected US budget deficits threaten to curtail growth: CBO
Gloom weighs on fragile US recovery

The economy’s in shambles and getting worse by the day, so what does Congress and Obama do? Why naturally they all go on vacation for the rest of the month! Crisis, what crisis?

/if these so called people’s representatives don’t get deadly serious about making the hard and unpopular choices that are necessary to get us out of this massive deficit mess, we’ll soon be past the debt with interest tipping point and unable to avoid total economic collapse no matter what anyone does

Friday Night Bad News Dump

Obama was hoping you wouldn’t notice the new record deficit he set. It’s more than three times as large as the deficit was when Bush left office.

White House predicts record $1.47 trillion deficit this year, 9 percent unemployment next year

New estimates from the White House on Friday predict the budget deficit will reach a record $1.47 trillion this year. The government is borrowing 41 cents of every dollar it spends.

That’s actually a little better than the administration predicted in February.

The new estimates paint a grim unemployment picture as the economy experiences a relatively jobless recovery. The unemployment rate, presently averaging 9.5 percent, would average 9 percent next year under the new estimates.

The Office of Management and Budget report has ominous news for President Barack Obama should he seek re-election in 2012 — a still-high unemployment rate of 8.1 percent. That would be well above normal, which is closer to a rate of 5.5 percent to 6 percent. Private economists don’t think the unemployment rate will drop to those levels until well into this decade.

“The U.S. economy still faces strong headwinds,” the OMB report said. They include tight credit markets, a high inventory of unsold housing and retrenchment by state governments bound by balanced budget mandates. The European debt crisis has also had an impact.

See also:
Mid-Session Review
Budget of the U.S. Government

Federal budget deficit to exceed $1.4 trillion in 2010 and 2011
Forecast for 2011 Deficit Is Raised to $1.4 Trillion
Obama Budget Office Forecasts $1.47 Trillion Deficit This Year
Obama’s budget deficit heading further up
US deficit heads toward record $1.47 trillion
Federal deficit expected to reach record high
OMB: Economic pain will linger
US predicts record budget deficit
U.S. economy faces strong headwinds: White House
U.S. Trims ’10 Deficit Forecast as Economy Faces Headwinds
Republicans pounce on new OMB deficit predictions
Budget 2011: Past Deficits vs. Obama’s Deficits in Pictures

And remember, these record deficit projections are based on rosy White House economic assumptions.

Real GDP is expected to rise by 3.1 percent during the four quarters of 2010 and to increase 4.0 percent in 2011. The growth rate is projected to rise to 4.3 percent in 2012 and 4.2 percent in 2013 as the economy returns closer to its potential output level. Beyond 2013, real GDP growth is projected to moderate, declining gradually to 2.5 percent per year in 2018-2020.

If the U.S. economy falls short of these GDP projections, the now record deficits will become even worse. And you don’t even want to think about what happens if interest rates rise significantly and it costs the U.S. Government even more to borrow these incredibly humongous amounts of money.

/there’s no way that Obama can legitimately blame Bush for this budget mess anymore, although that won’t stop him from trying to revise history

In One Door And Out The Other

Your tax dollars, hard at work, heading for the airport, getting out of town.

Afghanistan: $4.2 billion in mysterious cash flown out of Kabul since 2007

THE “blizzard of banknotes” leaving Kabul airport is worse than originally feared, The Scotsman has learned, with at least $4.2 billion (around £2.8 billion) exported in cash over the last three-and-a-half years.

Congressmen in the United States voted to suspend $4bn in aid to the Afghan government last week, after media reports showed $3bn in cash has been flown out of the country since 2007.

US and British fraud investigators fear that most of the money leaving Kabul has been siphoned-off from international aid contracts, or made from the country’s rapidly expanding opium trade.

Documents seen by The Scotsman show that the Afghan Ministry of Finance puts the real figure at $4.2bn – at least $1.2 billion higher than previously feared.

“Our records show that $4.2bn has been transferred in cash through Kabul International Airport alone during the last three-and-a-half years,” Afghanistan’s finance minister, Dr Omar Zakhilwal, wrote in a letter to US Congresswoman Nita Lowey.

Ms Lowey, chairwoman of the aid appropriations sub-committee in Congress, has vowed not to send another dime to Afghanistan until she was confident “that US taxpayer money is not being abused to line the pockets of corrupt Afghan government officials, drug lords and terrorists”.

Dr Zakhilwal’s letter acknowledges allegations that Afghan president Hamid Karzai’s government is “assisting or partaking in this fraud” but the minister hits back by pointing out that most of the money America spends in Afghanistan circumvents the Afghan government.

. . .

The sheer volume of cash couriered out of the country’s main airport is huge relative to Afghanistan’s gross domestic product which was just $13.5bn last year, and it easily dwarfs the amount of tax revenue collected by the government.

The figure doesn’t include cash exported from any of Afghanistan’s other international airports, which include Kandahar International, Mazar-e Sharif, in northern Afghanistan, and the main US base at Bagram, north of Kabul.

. . .

Afghanistan relies on a cash economy and there is no limit to how much money can be exported, as long as it is declared to customs. Official records show most of the money that was declared leaving Kabul since 2007 formed part of the traditional Islamic hawala system, in transfers to Dubai. The often informal nature of the hawala contracts, based on trust, honour and lender’s reputation, make the transactions almost impossible for financial investigators to track.

See also:
4.2 billion dollars have left Kabul airport: report
4.2 billion dollar worth ‘blizzard of banknotes’ have flown out of Kabul since 2007
Afghanistan minister rejects US corruption allegations
Afghan leader: Foreign contracts fuel corruption
Finance Minister Calls for Probe of Afghan Money Network
US freezes $4b of aid to Afghans
US cuts $5.6b Afghan aid amid graft charges
Afghanistan: US lawmakers block $4 bln in aid
Over $4 bn in cash flies out of Kabul

It looks like Karzai and his cronies have put together quite the U.S. financed retirement fund.

/no wonder it seems that Karzai doesn’t really care which side wins in Afghanistan, as long as he can make it to the airport to don his golden parachute

And The Loser Is . . . The American People

The last Democrat Senator has literally been bribed and his vote bought and paid for. Harry Reid has the 60 votes he needs to screw the American people who, by the way, are rapidly souring on this travesty.

Nelson Accused of Selling Vote on Health Bill for Nebraska Pay-Off

What started as Sen. Ben Nelson’s personal stand against covering abortion with taxpayer money translated, somehow, into millions of dollars in federal aid for his home state.

The Nebraska Democrat, following weeks of negotiations with his caucus, finally agreed to back the Senate’s health care reform bill this weekend after Democratic leaders made a series of concessions. Nelson’s support gives Democrats the 60 votes they need to overcome a filibuster, barring any last-minute defections.

But critics by Sunday were heavily questioning Nelson’s motivations, given that the abortion restrictions he sought and won did not satisfy several major anti-abortion lawmakers and groups and that it took a major federal payoff to his state to seal the deal.

Critics were calling it the “cornhusker kickback” and the “Nebraska windfall,” lobbing accusations of political deal-making at Nelson.

“It’s pretty obvious votes have been bought,” Sen. Saxby Chambliss, R-Ga., said.

And if anyone tries to tell you that passing this monstrosity is budget neutral, will lower health care costs, will save money, won’t add to the national debt, or will “bend the cost curve” down, well, they’re just flat out lying.

CBO: Real 10-Year Cost of Senate Bill Still $2.5 Trillion

The Congressional Budget Office’s score is in for the final Senate health bill, and it’s amazing how little Americans would get for so much.

The Democrats are irresponsibly and disingenuously claiming that the bill would cost $871 billion over 10 years. But that’s not what the CBO says. Rather, the CBO says that $871 billion would be the costs from 2010 to 2019 for expansions in insurance coverage alone. But less than 2 percent of those “10-year costs” would kick in before the fifth year of that span. In its real first 10 years (2014 to 2023), the CBO says that the bill would cost $1.8 trillion — for insurance coverage expansions alone. Other parts of the bill would cost approximately $700 billion more, bringing the bill’s full 10-year tab to approximately $2.5 trillion — according to the CBO.

In those real first 10 years (2014 to 2023), Americans would have to pay over $1 trillion in additional taxes, over $1 trillion would be siphoned out of Medicare (over $200 billion out of Medicare Advantage alone) and spent on Obamacare, and deficits would rise by over $200 billion. They would rise, that is, unless Congress follows through on the bill’s pledge to cut doctors’ payments under Medicare by 21 percent next year and never raise them back up — which would reduce doctors’ enthusiasm for seeing Medicare patients dramatically.

And what would Americans get in return for this staggering sum? Well, the CBO says that health care premiums would rise, and the Chief Actuary at the Centers for Medicare and Medicaid Services says that the percentage of the Gross Domestic Product spent on health care would rise from 17 percent today to 21 percent by the end of 2019. Nationwide health care costs would be $234 billion higher than under current law. How’s that for “reform”?

See also:
H. R. 3590 Patient Protection and Affordable Care Act
Manager’s Amendment
Nelson vote triggers firestorm
An Unholy Compromise
House Dems cool to Nelson compromise
Senate Democrats seek to seal health care overhaul
McCain: GOP can’t stop health care

So, barring a miracle, there’s not much left at this point that can stop this deficit busting citizen suppository from becoming law. Bend over American taxpayer and get ready to pay more to wait longer for less health care. Remember, for Democrats, this isn’t even about health care reform, it’s about expanding the size and scope of the Federal government and making more Americans dependent on it. Because a dependent voter is a Democrat voter.

/beginning in 2010, get ready to clean House and start to repeal the socialist bull[expletive deleted]

How’s That Trillion Dollars In “Stimulus” Working Out?

What does a trillion dollars in wasteful deficit spending on Democrat pet pork projects buy, besides record deficits and the most unsecured national debt in American history? Well, lets see, 2.7 million jobs lost since the “stimulus” just had to be passed immediately, without anyone even having read it, and the highest unemployment rate in 26 years, with no net job growth in sight. Hip, hip, hooray, you go Obama and the Democrats (hopefully starting in 2010)!

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Job losses accelerate to 263,000 in September

The nation’s job losses accelerated in September, driving the unemployment rate to a 26-year high of 9.8% and casting a cloud over the incipient recovery, economic data showed Friday.

Nonfarm payrolls fell by a greater-than-expected 263,000 in September, the Labor Department reported. It marked the 21st consecutive month of job losses.

Since the recession began in December 2007, 7.2 million jobs have been lost and the unemployment rate has doubled.

While disappointing, the September numbers were not catastrophic, economists said.

“We are more inclined to view September as a temporary setback than as a signal that the decelerating trend in job losses has stalled out,” wrote Stephen Stanley, chief economist for RBS Securities. “It is far too early to be pulling the alarm on this nascent recovery.”

But another economist sounded the warning.

The “weak employment report lessens hope for a sustainable recovery,” wrote Harm Bandholz of UniCredit Research. “Once the impact of the inventory cycle and the fiscal stimulus has run its course, gross domestic product growth will slow down substantially again.”

The employment figures also carried a political dimension, as Republicans said the continued job losses proved the stimulus had failed, while Democrats said they proved that government support is essential.

“Today’s job report is a sobering reminder that progress comes in fits and starts — and that we’re going to need to grind out this recovery step by step,” said President Barack Obama. “I’m working closely with my economic advisors to explore any and all additional options and measures that we might take to promote job creation.”

“We are headed for what appears to be, at best, a jobless recovery,” said Rep. John Boehner, the Ohio Republican who leads the GOP in the House. “That is not what the American people were promised.”

Details of the report were almost universally dismal, with the number of unemployed people rising by 214,000 to 15.1 million.

And of those, 5.4 million have been out of work longer than six months, accounting for a record 35.6% of the jobless.

Stimulus Spending Doesn’t Work

The global recession and financial crisis have refocused attention on government stimulus packages. These packages typically emphasize spending, predicated on the view that the expenditure “multipliers” are greater than one—so that gross domestic product expands by more than government spending itself. Stimulus packages typically also feature tax reductions, designed partly to boost consumer demand (by raising disposable income) and partly to stimulate work effort, production and investment (by lowering rates).

The existing empirical evidence on the response of real gross domestic product to added government spending and tax changes is thin. In ongoing research, we use long-term U.S. macroeconomic data to contribute to the evidence. The results mostly favor tax rate reductions over increases in government spending as a means to increase GDP.

. . .

The bottom line is this: The available empirical evidence does not support the idea that spending multipliers typically exceed one, and thus spending stimulus programs will likely raise GDP by less than the increase in government spending. Defense-spending multipliers exceeding one likely apply only at very high unemployment rates, and nondefense multipliers are probably smaller. However, there is empirical support for the proposition that tax rate reductions will increase real GDP.

Gee, who would have ever figured that tax cuts were more effective at stimulating the economy and creating jobs than massive government deficit spending on Democrat pet pork projects that do nothing to create sustainable jobs. Just a thought, maybe the Democrats should have passed more tax cuts instead of wasting most of a trillion dollars in taxpayer money on incredibly stupid crap like frozen sliced ham, turtle tunnels, and outhouses in national parks.

See also:
US unemployment at 26-year high
Jobless rate reaches 9.8 percent in September
263,000 Jobs Lost, Worse Than Views; Jobless Rate 9.8%
Unemployment rate rises to 9.8% as employers cut more jobs than expected
UPDATE: Fed’s Rosengren Sees High Unemployment Next 2 Years
2.7 Million Jobs Lost Since “Stimulus” Bill Enacted
Stimulus can’t ease job pain for U.S. states and cities
Biden on Unemployment: “Less Bad” Isn’t Good
Republicans Seize on Jobs as Proof Obama’s Policies Have Failed
Job Numbers Released, GOP Pounces
As Biden lays out stimulus goals, GOP demands specifics on new jobs
Romney: Stimulus Not Working, Time to Fix It
Stimulus: New Research on Government Stimulus Spending and Tax Cuts
How Bad Does The “Stimulus” Suck?
Where’s The Stimulus And Why Do We Need Any More Of It Anyway?

/so, Obama and the Democrats have lost 2.7 million jobs, the U.S. unemployment rate is the highest in 26 years, and their trillion dollar “stimulus” has failed miserably, I guess there’s only one thing left for them to do, blame Bush!

It Wasn’t Supposed To Be A Comedy Tour

Tim Geithner took his show on the road to try and convince the Chinese that their U.S. investments were safe and to grovel to China to keep buying our debt. The Chinese thought it was funny and rightfully so, they’re good at math.

Chinese Students Laugh At Tim Geithner

Poor Tim Geithner. He already comes off as kind of nervous and insecure when talking in public, but at least in the US, the only people who ever bother him are crazed Code Pink activists.

But in China, representing the country as chief bond salesman, the man named to People’s 50 most beautiful people list was openly mocked.

Telegraph: In his first official visit to China since becoming Treasury Secretary, Mr Geithner told politicians and academics in Beijing that he still supports a strong US dollar, and insisted that the trillions of dollars of Chinese investments would not be unduly damaged by the economic crisis. Speaking at Peking University, Mr Geithner said: “Chinese assets are very safe.” The comment provoked loud laughter from the audience of students.

Geithner insists Chinese dollar assets are safe

In his first official visit to China since becoming Treasury Secretary, Mr Geithner told politicians and academics in Beijing that he still supports a strong US dollar, and insisted that the trillions of dollars of Chinese investments would not be unduly damaged by the economic crisis. Speaking at Peking University, Mr Geithner said: “Chinese assets are very safe.”

The comment provoked loud laughter from the audience of students. There are growing fears over the size and sustainability of the US budget deficit, which is set to rise to almost 13pc of GDP this year as the world’s biggest economy fights off recession. The US is reliant on China to buy many of the government bonds it is planning to issue but Beijing’s policymakers have expressed concern about the strength of the dollar and the value of their investments.

See also:
UPDATE 3-Geithner tells China its dollar assets are safe
Laughing at us in China
China May Scoff At Us But This Is No Laughing Matter
You’d Better Sit Down, I’ve Got Some Bad News

/we’re going to need a bigger clown car