BA Spending Daily August 22, 2012
Video: Billboards Urge National Debt Reduction in Florida
My Fox Orlando reports, “The billboard next to Interstate 4 in Maitland looks festive at first glance. Turns out, its message is a bummer. America is almost $16 trillion dollars in debt. The non profit group Public Notice put up the billboard. It wants you to understand what’s at stake with the economic policies coming out of Washington, DC. We spoke to Executive Director Gretchen Hamel. She says, ‘Sixteen trillion dollars in debt is greater than the entire size of our economy, and that means every good and product that comes out of the us doesn’t even equal that of our debt.’ Hamel says Republicans and Democrats must work together to solve this problem. She says if they don’t, businesses will not hire due to economic uncertainty.” Click here to watch the video.
Poll: Balance the Budget Before Increasing Education Funding
The Washington Times reports, “What’s more important than ensuring that children get a better education? For most Americans this election cycle, it’s the federal budget. As President Obama continues to assail the Republican presidential ticket for pushing a budget blueprint that could cut education spending, polling data that emerged Wednesday shows that the vast majority of Americans think getting the U.S. back on solid fiscal footing trumps increasing school funding. A survey by Gallup and the Phi Delta Kappa International education association finds that 60 percent of Americans think it’s more important to balance the federal budget than to ‘improve the quality of education.’ The poll indicates a seismic shift in public attitudes toward education as a national priority, at least when compared with the pressing need to slash federal spending.”
The Washington Free Beacon reports, “The struggling, foreign-owned wind power company that laid off two-thirds of its Arkansas workforce earlier this month after receiving more than $30 million in aid from the federal government also received $15 million from the state of Arkansas and was heavily promoted by the state’s Democratic governor. LM Wind Power, a Denmark-based global wind energy firm, promised to bring 1,000 jobs to Little Rock, Ark., when its manufacturing facility broke ground in 2007. In return, it received $15 million from the state and a multitude of tax breaks. … However, early this August, just days after a $32 million loan from the Export-Import (Ex-IM) Bank was approved to a Brazilian company to purchase LM Wind turbines from its Arkansas facility, the firm laid off 234 of the Arkansas plant’s roughly 300 workers.”
Middle Class “has endured its worst decade in modern history”
America’s middle class has endured its worst decade in modern history,’ the Pew Research Center said in its report. ‘It has shrunk in size, fallen backward in income and wealth, and shed some — but by no means all — of its characteristic faith in the future.’ Of the 2,500 people Pew surveyed, 85% of those who identify themselves as middle class say it is more difficult now than it was a decade ago to maintain their standard of living. … The middle class blames Congress as the lead culprit for its demise, but blames itself least of all. While 62% of middle class respondents to the Pew survey blamed Congress for their worsening state, 54% blamed banks and financial institutions, 47% blamed corporations, 44% blamed the Bush administration, 39% blamed foreign competition and 34% blamed the Obama administration. Just 8% of all respondents blamed the man (or the woman) in the mirror.”
Hamel: Party Platforms Should Address the Debt
Gretchen Hamel editorializes in Roll Call, “With the Democratic and Republican conventions around the corner, the political world is abuzz about who’s up in the polls, upcoming debates and attack ads on TV. But while all this politicking makes good fodder for the pundits, a more serious conversation needs to take place about the burgeoning debt that is threatening the nation. The best way to get that conversation going is for both parties to include a commitment to reduce the national debt in their respective platforms. … We at Public Notice recently wrote to both the Democratic and Republican conventions asking them to include the necessary policies to reduce America’s debt in their national platforms.
We addressed both parties because this is not a matter of partisan politics.”
“Survey: Economy, Fiscal Policy Trouble Small Businesses”
The Wall Street Journal reports, “A group that lobbies for small businesses released a big survey showing that uncertainty over the economy and fiscal policy have zoomed to the top of the list of businesspeople’s concerns. Health-care costs and taxes remain big bugaboos too, according to the once-every-four-years survey by the National Federation of Independent Business. ‘In the last four years, the federal government has enacted significant policy changes of an immense nature; their impact will continue as the regulatory system works to implement new policy directives,’ NFIB said in a press release accompanying the survey. ‘Uncertainty also surrounds pending government action on the expiring 2001 and 2003 tax cuts, the debt ceiling and the federal budget. All of these policy changes create a huge ‘question mark’ for small-business owners, impeding their ability to make short and long-term business decisions.'”
With Fiscal Cliff Looming, CBO Warns of “significant recession”
Reuters reports, “Massive U.S. government spending cuts and tax hikes due next year will cause even worse economic damage than previously thought if Washington fails to come up with a solution, the Congressional Budget Office warned on Wednesday. Without action by Congress to avoid a ‘fiscal cliff,’ Americans should expect a ‘significant recession’ and the loss of some 2 million jobs, CBO director Doug Elmendorf said in his gloomiest assessment yet. He said the economy is already being ‘held back’ by the mere anticipation of the fiscal cliff and the uncertainty surrounding it, causing businesses to put off investment and hiring decisions. … But chances for a deal before the November 6 election are slim. They could improve during the post-election lame-duck session of Congress, but that’s unpredictable as well. Reactions to the report did not signal any signs of movement by Democrats or Republicans from entrenched partisan positions that form the basis of their campaigns.”
Europe “edging toward a recession”
Bloomberg reports, “Euro-area services and manufacturing output contracted for a seventh straight month in August, adding to signs of a deepening economic slump as European leaders struggle to contain the fiscal crisis. … Europe’s economy is edging toward a recession as budget cuts from Spain to Ireland undermine consumer spending and company investment just as global demand shows signs of cooling.”
Solomon to Lawmakers: Stop Fighting and Fix the Economy
Deborah Solomon editorializes in Bloomberg , “As the U.S. stands on the precipice of another recession, policymakers continue to quibble over what caused the ballooning federal deficit rather than taking steps to fix it.
Republicans accuse the Obama administration of busting the budget with economic stimulus programs. Democrats blame the Bush administration for pursuing a guns-and-butter strategy of simultaneously financing tax cuts and two wars.
As convenient as policymakers may find this debate, they’re missing the main culprit: A shell-shocked U.S. economy. A new study by Christopher Payne, a Bloomberg Government economist, estimates the economic downturn accounted for more than half the deterioration in the deficit as a percent of gross domestic product. … The upshot: It’s time for lawmakers to stop fighting about what caused the deficit and actually take steps to boost the economy in the short-run while preventing it from collapsing in the long-term.”
Few Signs of Economic Growth May Lead to Fed Action
Bloomberg reports, “Federal Reserve policy makers signaled readiness to boost record stimulus unless they are convinced the economy is poised to rebound. Recent signs of strength may not be enough to satisfy them. Many members of the policy-setting Federal Open Market Committee said further action would probably be needed ‘fairly soon’ without evidence of ‘substantial and sustainable’ improvement in the recovery, according to minutes of the July 31-Aug. 1 meeting released yesterday in Washington. ‘The burden of proof is to see a sustained pickup in growth and I don’t think we’re going to get that,’ said Eric Green, a former economist at the Federal Reserve Bank of New York who is now global head of rates and foreign exchange research at TD Securities Inc. in New York.”