June 22nd, 2010 by John Feehery
The President’s top budget guy announced today that he’s leaving.
That should come as no surprise. After all, Congressional Democrats announced that they weren’t going to do a budget this year anyway.
Who needs a budget?
Our country is doing fine financially.
Sure, we’ve got historically high debt to deal with. Sure, we have tax policy that is about to get a lot more interesting at the end of the year, when a bunch of tax provisions expire. Sure, we have Social Security starting to go broke quicker than anybody anticipated. Sure, we have a huge problem with chronic unemployment in the private sector and bursting employment in the public sector. Sure, almost every state seems like it is ready to go belly-up financially.
Sure, we have all of those problems, problems that are all budget-related. But that doesn’t mean we should do a budget.
We don’t need no stinking budget.
Budgets require tough choices. Budgets require (at least notionally) that the numbers all add up. Budgets require leadership.
We aren’t going to get much leadership from the guys running the country these days. Read more...
Tags: American, Budget, Congress, Democrats, Peter Orszag, Republicans, Unemployment
Posted in Bad Decisions, Economy, Financial Crisis, Government, Politics | 2 Comments »
June 10th, 2010 by John Feehery
Greece / Photo credit: Ulamm
In actuality, there isn’t much in common between the United States and the Greeks.
That was the conclusion of a distinguished panel of economists hosted by the American Action Forum and led by former CBO director Doug Holtz-Eakin.
But if we don’t get our act together soon, things could get steadily worse for the economy and for the American people, and while we probably won’t default on our debt (because we can always print more money), it won’t be very pleasant around here unless we start making some fundamental changes
Senator Judd Gregg, a longtime deficit hawk and current ranking member of the upper chamber’s Budget Committee, keynoted the forum, wryly pointing out in his presentation that western Democracies founded on the Scottish Enlightenment philosophy of free market capitalism and representative government (which, of course, would include the UK, the US, and Japan) are having the hardest time dealing with debt.
Totalitarian regimes, like the Chinese and the Cubans, don’t have our debt problems, because in the case of the Chinese, they work hard and have a government that is immune to public opinion, and in the case of the Cubans, nobody sane would lend the large amounts of money in the first place. Read more...
Tags: Andy Busch, china, Cuba, Dean Baker, Debt, doug holtz eakin, Government, Greece, health care, judd gregg, Politics, spending
Posted in Economy, Financial Crisis, Government, health care, spending | 2 Comments »
May 27th, 2010 by John Feehery
Planet getting eaten (Credit: ESA/C Carreau)
I was watching television this morning and CNN was alternating between video of the great Gulf leak and a video from the Hubble telescope of a planet getting eaten by a bigger star.
So, the message is if we don’t all kill ourselves, well, then a big star is going to eat us all any way.
On that cheery note, let me add another.
America is doomed. At least, that is the message that we get all too often from both the left and the right.
We are going broke. Our workforce isn’t competitive. People in the rest of the world hate us. We can’t plug the damn hole. We have too many immigrants coming into this country. Crime is too high. Our military is stretched too far. We are too fat. We are too old. We are too young.
And of course, we better all start speaking Chinese soon, because the Chinese are so rich, they work so hard, they are so smart, and there are so many of them, that we really can’t compete. America is doomed.
Really? Put me down as an America-is-doomed skeptic. Read more...
Tags: Al Gore, Barack Obama, Brazil, china, Chinese, Christian right, Conservatives, Economy, Europe, India, Politics, poor, Tea Party, Tom Friedman, USA, WASP-12b
Posted in Economy, Financial Crisis, Foreign Relations, GOP, Government, Politics, Theory | 2 Comments »
May 14th, 2010 by John Feehery
In 1921, the Congress first started thinking about doing a budget. It passed the Budget and Accounting Act legislation that first directed the President to submit a budget. It also created the General Accounting Office (which a couple of years ago changed its name to the General Accountability Office), an agency tasked with making certain that federal dollars were spent wisely.
When in the 1970’s, Richard Nixon decided he had the power to impound funds that he didn’t want to spend (his version of the line-item veto), Congress reacted by passing the Congressional Budget and Impoundment Control Act of 1974, legislation that created the Congressional Budget Office and created the modern budget process, if you can call it a process.
Under this law that passed more than three decades ago, the Congress is supposed to pass a budget resolution, to outline how it is going to spend money and raise revenue for the next half decade or so. The budget resolution is not a law because it is not signed by the President, but the purpose of it is law-like. The budget is not just a set of suggestions. Sure it can be waived in emergencies, but they have to be big ones (like war, pestilence or natural disasters, that kind of thing). Read more...
Tags: Budget, Congress, Congressional Budget Office, Economy, election, Greece, spending
Posted in Financial Crisis, Politics, Theory, election, spending | 1 Comment »
May 11th, 2010 by John Feehery
A little more than 2300 years ago, Alexander the Great rampaged out of Greece into Asia Minor, and Greek civilization reached its largest sphere of influence. A few centuries later, the Romans followed suit, and Western civilization would forever be formed in the minds of the Europeans and the world.
After Roman civilization declined, Europe went through some murky times in the Dark Ages, but soon the Renaissance, the Enlightenment and the ideas of free market capitalism, industrialism, scientific progress, democracy and financial innovation made Western nations the most powerful in the world. The Spanish, the Portuguese, Dutch, the French, the English, the Germans and the Austro-Hungarians all took turns establishing different spheres of influence and empires of different sizes and shapes.
The 20th Century was tough on the Europeans. Two world wars decimated its wealth and vibrancy (and growth, especially population growth), and for the last half of the century, the continent was dominated by two non-European powers (the Americans and the Russians). The once dominant European powers were pawns in a Cold War chess match that featured a former colony squaring off against a backward, Communist behemoth. Read more...
Tags: Austro-Hungarians, debts, Dutch, English, European Union, French, Germans, Germany, Greece, Greek civilization, Portuguese, Spanish
Posted in Financial Crisis, Foreign Relations, Theory, spending | No Comments »
April 30th, 2010 by John Feehery
In 1893, Chicago hosted the World’s Fair, which celebrated the 400th anniversary of Christopher Columbus’s arrival in America. Designed by Daniel Burnham, the man who said, “Make no little plans, they have no magic to stir man’s blood,” and Frederick Olmsted, the famed landscape architect, the Chicago Columbian Exposition, sent a clear signal to the rest of the world: Watch out, because America is coming.
A century later, the United States government decided not to fund expositions any more, probably scarred by the memory of the 1984 New Orleans Expo, which is the only Expo to ever go bankrupt. Everything we do now is paid for by corporate America.
This history all came to my mind as I read the story in today’s Washington Post about the opening of the Shanghai Expo. The Chinese are taking this event very seriously, as they usually do. They get the symbolism. Read more...
Tags: china, Communism, Constitution, Corporations, democracy, Exposition, First Amendment, Hillary Rodham Clinton, Hu Jintao, Shanghai, Shanghai Expo
Posted in Financial Crisis, Food, Foreign Relations, Government, Reviews | No Comments »
April 28th, 2010 by John Feehery
Martin Michael Lomasney, a Boston politician from the 19th Century, once said: “”Never write if you can speak; never speak if you can nod; never nod if you can wink.”
Being from Chicago, I was taught that lesson by more a few political types. The Washington corollary to that admonition is: “Never write down anything that you wouldn’t be happy to see on the front page of the Washington Post.”
I bet you that the fabulous Fab, the Goldman Sachs wunderkind, Fabrice Tourre, wish he would have remembered those golden nuggets of advice.
It was the fabulous Fab who wrote in an email: “The whole building is about to collapse any time now. Only potential survivor, the fabulous Fab . . . standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!”
That Fab is a cad goes without doubt.
But he isn’t the only one who failed to heed the advice of fabulous Martin Michael Lomasney.
Think of Tiger Woods. If he wasn’t text crazy, there would be no reason for his wife Elin to beat him with a seven iron, because Elin would have been none the wiser. No text, no bruise, no crash, no rehab, no problem. Read more...
Tags: CDO, Economy, Fabrice Tourre, Fabulous Fab, Goldman-Sachs, Jack Abramoff, Justice Department, Martin Michael Lomasney, tiger woods
Posted in Financial Crisis, Politics, Theory, corruption | No Comments »
April 24th, 2010 by John Feehery
My wife’s boss, George LeMieux, the junior Senator from Florida, gave me a startling statistic the other day. He said that he got it from Erskine Bowles, President Clinton’s former chief of staff.
According to LeMieux, the Federal government is taking in roughly 23 trillion in tax revenue, but spending roughly 34 trillion. That is bad enough, but what is chilling about these numbers is that the 23 trillion that we are taking in only covers the costs of entitlement spending. Entitlement spending is the money we pay for Social Security, Medicare and the federal portion of the Medicaid programs.
For everything else, including national defense, the State Department, the FAA, etc, we have to borrow money from the Chinese and other generous foreign governments. How does that little fun fact grab you? I feel more confident about America’s future, don’t you?
Now Democrats will say that there is an easy way to close this gap: Raise taxes on the rich. But if you raised taxes to one-hundred percent on all the rich people, the gap would likely still grow, because when you raise taxes on rich people, you usually get less revenue. Read more...
Tags: America, china, dollar, entitlement spending, Erskine Bowles, George Lemieux, Greece, International Monetary Fund, Medicaid, medicare, retire, Social Security, tax revenue, Washington Post, yuan
Posted in Financial Crisis, Foreign Relations, Government, Politics, Theory, spending, taxes | No Comments »
April 19th, 2010 by John Feehery
It used to be said that what is good for General Motors is good for America.
And for much of the last century, that assertion was basically true. Economic policies that helped make General Motors the number one car maker in the world were also good for the country.
That wasn’t just because of some broad economic theories on taxes, regulation and labor management either. GM itself played a central and stabilizing role in American society. It provided health care and economic security for hundreds of thousands of American workers, many of whom were blue-collar workers and didn’t have too many other job prospects outside of the auto industry. GM also promoted American power and American ingenuity across the globe, spreading the myth of American supremacy in far-reaches of the earth.
As we all know, General Motors fell on hard times, as it had trouble competing with foreign automakers. Things got so bad, GM last year was actually taken over the by the U.S. government, giving a new spin to the idea that what is good for GM is good for America. Read more...
Tags: Bailout, General Motors, Goldman-Sachs, Hank Paulson, Morgan Stanley, PricewaterhouseCoopers
Posted in Bailouts, Financial Crisis, Government, Politics, Theory, spending | No Comments »
April 16th, 2010 by John Feehery
The American people don’t like bailouts, unless it is they themselves who are getting bailed out. And even then, being bailed out leaves a bitter taste in one’s mouth.
TARP has popularly been described as a bailout, and maybe it was. But without TARP, the financial system would have completely crashed, and believe me, millions of Americans would have come to the government, asking for their own personal bailout.
America, as a society, has been over-leveraged. The federal government is over-leveraged. Investment houses were over-leveraged. Most consumers were over-leveraged.
What does that mean? It means they were buying stuff that they couldn’t afford. The government was buying a prescription drug bill, two wars, and a bunch of other stuff, including now a new health care bill, without either getting more revenue or cutting spending elsewhere.
Investment houses were making huge bets with little money to back up the bets. And they were betting that the housing market would continue to rise for the rest of history. In some cases, these smart investors were betting 40 bucks for every one dollar they had in the bank. And they were making stupid bets. These are the geniuses that we entrust with all of our pension funds and retirement savings. Read more...
Tags: Aaron Sorkin, Bailout, bankruptcy, banks, Chuck Schumer, Economy, Federal Reserve, Goldman-Sachs, Hank Paulsen, Michael Lewis, Rahm Emanual, spending, TARP, Wall Street
Posted in Financial Crisis, GOP, Government, Theory, spending | No Comments »
The President’s top budget guy announced today that he’s leaving.
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