President Obama will release his annual budget proposal late yet again. Choosing the date is not merely a convention. By law, the President must release the budget by the first Monday in February, which falls on February 6 this year. Yet yesterday the Administration announced it will release its fiscal year (FY) 2013 budget a week late, marking the third such delay in four years. Right now, when the economy is struggling, annual deficits consistently exceed $1 trillion, and Americans are demanding that Washington govern responsibly, this delay is beyond …
The left continues to resist any suggestion of spending cuts right now. In their view, a depressed economy is no time to slash spending; that would only further weaken demand. The successful austerity policies adopted in response to the downturn of 1920, however, offer a clear rebuttal to this notion. And this is not an isolated instance in the heap of economic history. Similar government restraint and cutbacks marshaled strong recoveries from the depressions of 1837 and 1893. In 1837, financial panic swept the country. According to economist Jim Powell, …
Free trade advocates can finally rejoice in the long-overdue passage of free trade agreements (FTAs) with South Korea, Colombia, and Panama that will benefit U.S. businesses, workers, and consumers. The FTAs will generate an estimated $13 billion in new U.S. exports, a $12 billion increase in U.S. GDP, and 70,000 or more new jobs. These benefits are all without a single penny of federal spending, making the FTAs a cost-free job stimulus program. Amidst the victory euphoria, however, there is the nettlesome annoyance of those now taking credit, including from …
The House Rules Committee advanced three proposals Wednesday that may help curb a growing problem for the nation’s economy: stagnant job growth in the technology sector. The three pending free trade agreements with Columbia, Panama and Korea are up for full House approval next week. Senate Republican Minority Leader Mitch McConnell (R-KY) also said that the Senate will vote on the agreements next week as well. 115, 800 U.S. hi-tech industry jobs were lost in 2010-the second straight year of decline for the industry- according to a report released by …
Reuters has this morning’s bad news on the economic front: The U.S. economy came perilously close to flat-lining in the first quarter and grew at a meager 1.3 percent annual rate in the April-June period as consumer spending barely rose. The Commerce Department data on Friday also showed the current lull in the economy began earlier than had been thought, with the growth losing steam late last year. That could raise questions on the long held view by both Federal Reserve officials and independent economists that the slowdown in growth …
China announced its economic results for the first quarter this morning. GDP was said to grow a strong 9.7 percent, while consumer inflation reached a worrisome 5 percent. Frankly, most Americans shouldn’t care that much. China’s economic importance is being overstated now, and even its considerable economic potential is sometimes overstated. The PRC is much poorer than the U.S., and its economic problems are considerable. The average American made more than 12 times as much as the average Chinese in 2009.
The Commerce Department today revised down its estimate for second quarter gross domestic product from 2.4 percent to 1.6 percent. This is not a sign of a weakening economy but a weak economy last spring. The weakness was especially pronounced as the bulk of what growth did occur was due to a building of inventories and a temporary (and now apparently reversed) blip in home sales. Most of the data since the second quarter ended—from industrial orders to labor markets to housing—has worsened further. What we are seeing is an …
In the week leading up to the G-20 Summit in Toronto this weekend, German Finance Minister Wolfgang Schäuble has added his voice to the growing discussion about the United States’ recession spending spree. In a response to President Obama’s call for further international recession spending, Schäuble stated “governments should not become addicted to borrowing as a quick fix to stimulate demand. Deficit spending cannot become a permanent state of affairs.” As if there were any doubt about the United States’ spending addiction, Heritage budget expert Brian Riedl explains, “the annual …
The United States has set itself on a path of unsustainable debt levels with little political prospect to implement the policy mix that will turn this tide. What America needs is a government committed to generating real and sustainable economic growth and a real lowering of the fiscal deficits through strong commitments to (1) permanently lower tax rates on households and businesses and (2) stricter responsibility and control on government spending. Recent research by two Harvard economists highlights the link between regaining a balanced budget by the federal government, lower …
Figures released today by the Bureau of Labor Statistics provide less encouragement than today’s GDP report. Total compensation increased by only 1.5 percent in 2009 (without adjusting for inflation) – the lowest increase on record. If a turnaround has begun, workers are not feeling it in their wallets. However, this pain has not been distributed equally throughout the economy. In the private sector, total compensation grew just 1.2 percent in 2009. On the other hand the compensation paid to state and local government employees grew 2.4 percent. The average government …
