July 25, 2011 |
The debt ceiling looms. Confusion reigns. Schemes abound. We are deep in a hole with, as of now, only three ways out: the McConnell plan, the G6 plan, and the half-trillion plan. The McConnell essentially punts the issue until after Election Day 2012 - a good last resort if nothing else works. The G6, proposed by the bipartisan Gang of Six senators, reduces 10-year debt by roughly $4 trillion. It has some advantages, even larger flaws. The half-trillion raises the debt ceiling by that amount in return for an equal amount of spending cuts.
July 19, 2011 |
DES MOINES, Iowa - They have one eye on Washington and the other on Wall Street. Investors are paying close attention because the contentious debate in Congress could have very serious implications for their 401(k) accounts. There's no doubt much is as stake for retirement savers. All told, they have more than $3 trillion invested in 401(k) plans. So far investors haven't made significant shifts within their accounts. The Vanguard Group, a leading 401(k) provider, says that there hasn't been a notable rise if the volume of client calls or visits to its website.
July 14, 2011 |
WASHINGTON - The once-vaunted unity of congressional Republicans has become a distant memory, crumbling under pressure of the deadline to raise the government's credit limit. As the internal fissures widened and another White House meeting ended inconclusively, the economic stakes rose. Federal Reserve Chairman Ben Bernanke warned in congressional testimony that failure to raise the government's debt limit by Aug. 2 would be a "huge financial calamity. " And Senate Minority Leader Mitch McConnell, R-Ky., issued a political warning that the party risked losing the next election if Republicans persisted on their current path.
July 13, 2011
By Stephen J. Marmon On Aug. 4, $90,785,744,400 in U.S. Treasury bills will come due. If the federal debt ceiling hasn't been raised by then, the government will have only $16 billion available to redeem them. That's a full-blown default. President Obama can unilaterally prevent that and the worldwide financial crisis it would cause. And he won't have to claim, as some have, that the debt-ceiling law is unconstitutional. He can use the rarely discussed power of executive discretion.
July 12, 2011 |
WASHINGTON - President Obama and congressional leaders yesterday emerged still deeply divided over how to slash the nation's debt, with reality sinking in that even a middle-ground proposal was not big enough to succeed and would not get through Congress anyway. As time runs perilously short for action, Obama challenged top lawmakers to return to the White House today with fresh ideas for a debt-reduction plan that could pass the House and Senate. All sides are scrambling to reach a deal as part of a tradeoff in which Congress would agree to extend the nation's debt limit by Aug. 2 to prevent a catastrophic government default on its bills.
July 11, 2011 |
WASHINGTON - President Obama met last night at the White House with congressional leaders, after his Treasury secretary warned that failing to reach a deal to raise the U.S. debt ceiling could cause "catastrophic damage" to the American and global economies. U.S. credit could be downgraded if a deal isn't reached by Aug. 2, Treasury Secretary Timothy Geithner said, complicating the government's ability to cut checks for Medicare and Social Security recipients. Failure to reach a deal would affect "the value of all Americans' savings, the capacity of businesses to borrow to put people back to work," Geithner said on NBC's "Meet the Press.
July 10, 2011 |
On Oct. 1, in a continuing effort to extricate itself slowly from the mortgage business, the federal government will reduce the size of loans it will back from $729,700 to $625,500. Once the change takes effect, if you want to get a loan higher than the new limit and you are buying in a part of the United States with high-priced housing - such as California or the New York City and Washington metropolitan areas - you will be required to put more money down and pay higher interest rates.
July 3, 2011 |
The United States and Greece are both in crisis over the size of their national debts. In each country, people are furious at the government for financial mismanagement, which throws additional burdens on the middle and working classes. In Greece, demonstrators are protesting austerity measures enacted to secure emergency funding from Greece's European Union partners. No one believes such measures or emergency funding will solve the country's chronic national debt, which exceeds 155 percent of gross domestic product and is projected to increase next year to 170 percent.
June 28, 2011 |
Most times, the questions I'm asked as an economist are as wide-ranging as the groups I speak to. But these days, everyone asks the same questions: When will we get more jobs? Why aren't businesses hiring more? Where are the jobs going to come from? Can policymakers do anything to help? Beneath these questions, of course, is the fear that more jobs aren't coming, ever. This is understandable. The recovery is two years old and the U.S. economy has added back fewer than 2 million of the almost 9 million jobs lost in the Great Recession.
June 24, 2011 |
WASHINGTON - Republicans on Thursday pulled out of bipartisan talks aimed at finding ways to cut trillions of dollars from future federal budget deficits while raising the government's debt ceiling, triggering fresh fears of deadlock that could roil financial markets and kick the economy back into recession. House Majority Leader Eric Cantor (R., Va.) and Senate Minority Whip Jon Kyl (R., Ariz.) said they wouldn't continue because Democrats were pushing for higher tax revenues in any agreement.