Tag Archive | US Economy

Politics: Super Committee Failed To Make Tough Choices


By JOE SCARBOROUGH | 11/21/11 6:12 PM EST
Here’s a message to Washington politicians: duck.

Your failure is now complete. You were faced with a generational challenge to save Americans from the type of collapse European countries are now facing and you blinked. Actually, you did worse.

Read more: http://www.politico.com/news/stories/1111/68876.html#ixzz1eRAFAmaf

The Super Committee Kicks the can again


The special Congressional committee (Super Committee) charged with the responsiblity of cutting the level of US government debt is on the verge of failure.The committee had been charged with finding $1.2tn in savings by Wednesday. But according to Reuters, that is not happening, and the 12-member committee made up of Republican and Democrat will issue a statement on Monday, saying they have been unable to reach a deal.

How did the US debt get so bad?

 The US had its debt downgraded by the ratings agencyStandard & Poor’s in August after narrowly averting a debt default. The debt problem has not gone away, though, and total US debt is expected to overtake GDP, the total amount of goods and services produced in the country, this year.

On personal debt, many people blame the period of extremely low-interest rates that followed the dotcom bubble bursting and 9/11 for creating the housing market boom, which then led to the sub-prime mortgage crisis. That was followed by the financial crisis that caused the 2008 recession.

The federal government is estimated to have spent about $1.6tn  on its response to the financial crisis, which put a big dent in the public finances. The crisis also meant that the government received less in taxes from companies and people hit by the downturn.

Fighting wars in Iraq and Afghanistan has been another big cost for the public finances in the past 10 years, estimated to have cost about $1.25tn so far. Some people also blamePresident Bush’s tax cuts for the level of debt that the US government now finds itself dealing with.

Among the most serious problems since the financial crisis has been rising unemployment, which increases the amount the government has to pay in benefits as well as reducing the tax take. Most disturbingly, there has been zero net job creation in the US since 2000.

More than half of the annual budget is mandatory spending, which would be difficult to cut. Of the discretionary spending, more than half goes on security, which is also hard to cut. Without tax rises or major economic growth, it would be hard to cut enough to get rid of the deficit.

Read more: http://www.bbc.co.uk/news/business-14760684

John Boehner Jobs Plan Rules Out Tax Increases


John Boehner

Image via Wikipedia

Once again, Speaker John Boehner and the GOP, have shown their disdain and disregard for the middle class and the poor. The GOP took over full control of the US House of Representatives in the 2010 elections, because they campaigned on job creation and spending cuts. But to date they have not done anything–absolutely nothing to create jobs or to alleviate the pain and suffering of the poor and needy. The only thing Mr. Boehner and his colleagues have done thus far is to oppose everything president Obama proposes and blame him for a bad economy.

On Thursday September 15 2011, Speaker Boehner presented his so-call jobs bill to the nation, in form of an address to the economic club of Washington. He called Obama’s plan to create jobs, which comprises a mix of tax incentives and state-targeted spending, a “poor substitute” for policies he,  Mr. Boehner views as more effective.

He continues to say; “Private-sector job creators of all sizes have been pummeled by decisions made in Washington. They’ve been slammed by uncertainty from the constant threat of new taxes, out-of-control spending, and unnecessary regulation from a government that is always micromanaging, meddling, and manipulating,” said Boehner. “They’ve been hurt by a government that offers short-term gimmicks rather than fundamental reforms that will encourage long-term economic growth.”

Boehner went on to say:

“It’s a very simple equation. Tax increases destroy jobs. And the Joint Committee is a jobs committee. Its mission is to reduce the deficit that is threatening job creation in our country,” essentially pouring cold water on president Obama’s jobs bill which according to the CBO would create approximately 1.9 million jobs,  plus provide tax incentives for small and large business as well as extending unemployment benefits and provide tax cuts for struggling American families.

There shouldn’t be any  doubt whatsoever that the GOP is willing to negotiate in good faith– to ease the pain and suffering taking place in the richest country in the world.

In its response to Speaker Boehner’s speech, the White House through Jay Carney declares:

“Any plan to grow the economy and create jobs should be measured by whether it puts money in the pockets of middle class families, puts teachers, police officers, firefighters and construction workers back to work, and invests in our small businesses so they can grow and hire. The President’s plan meets that test. The American Jobs Act includes the kinds of proposals that have been supported in a bipartisan way in the past, is fully paid for, and prominent, independent economists say it could create between 1.5 and 2 million jobs. And the President’s plan rebuilds the economy the American way, based on balance, fairness and ensuring there is the same set of rules for everyone from Wall Street to Main Street. The President is committed to working with members of both parties in Congress to pass the American Jobs Act right away.”

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