Wall Street Journal (January 20, 2012)
“Run up spending and debt, raise taxes in the naming of balancing the budget, but then watch as deficits rise and your credit-rating falls anyway.” The Journal describes not a European country, but the State of Illinois, which was just downgraded by Moody’s to A2, the worst rating of all 50 states. Among other problems, Illinois “has $6.8 billion in unpaid bills and unaddressed obligations” and a pension fund which covers less than half of its projected liabilities.
“Run up spending and debt, raise taxes in the naming of balancing the budget, but then watch as deficits rise and your credit-rating falls anyway.” The Journal describes not a European country, but the State of Illinois, which was just downgraded by Moody’s to A2, the worst rating of all 50 states. Among other problems, Illinois “has $6.8 billion in unpaid bills and unaddressed obligations” and a pension fund which covers less than half of its projected liabilities.
New York Times (August 7)
There’s a sensible way to quickly cut $100 billion from the budget. The Times points to “two obvious and long overdue cuts: ending the web of tax breaks enjoyed by the rolling-in-dough oil industry and terminating the ethanol subsidy.” Over 10 years, eliminating these tax breaks “would save up to $100 billion…without hurting the poor and middle class or slowing the economy.”
The New York Times (July 30)
Just when “the economy needs more spending,” everyone is focused on the debt limit and spending cuts. “The premature budget tightening of 1937… reignited the Depression,” and increasingly we look posed to make the same mistakes. The Times does not argue for unlimited spending. “Budget cuts are unavoidable — but they are not urgent. With the economy weak and interest rates low, austerity makes no sense.”
The New York Times (May 7)
The U.S. added 244,000 jobs in April, but the jobless rate rose because even more people left or lost jobs. The “contradictory employment data raise questions about the economy’s momentum,” demonstrating the need for additional job creation programs, rather than government budget-cutting. “Job growth is not taking off. At the current monthly rate, it would take more than five years to return to the pre-recession unemployment rate of 5 percent in December 2007.”
Tags: Budget, Jobs, U.S., Unemployment
Wall Street Journal (May 4)
What accounts for the landslide victory of Stephen Harper’s Conservative Party on Monday? The Journal thinks the success is due to the conservative economic policies that Harper has put in place since 2006. “Canada’s general sales tax fell to 5% from 7%. Mr. Harper has also cut the federal corporate tax rate, which is now 16.5% and is scheduled to fall to 15% in 2012.” To be sure, Canada also benefited from oil and mineral deposits, which helped boost GDP growth beyond that of the U.S. Moreover, Harper has pledged to “balance the budget by fiscal 2014-2015 without raising taxes, which was a clear dividing line in the recent campaign.”
New York Times (April 19)
S&P lowered the outlook for the credit rating of the United States. Credit rating agencies are suspect—anything they “say has to be taken with a block of salt.” Still, this latest move by S&P may be a good thing. The downgrade should focus the minds of the Government on determining a sustainable budget. While the ratings agencies “squandered their credibility” leading up to the sub-prime crisis, S&P did well this time in sending a powerful warning.S&P lowered the outlook for the credit rating of the United States. Credit rating agencies are suspect—anything they “say has to be taken with a block of salt.” Still, this latest move by S&P may be a good thing. The downgrade should focus the minds of the Government on determining a sustainable budget. While the ratings agencies “squandered their credibility” leading up to the sub-prime crisis, S&P did well this time in sending a powerful warning.
Tags: Budget, Ratings agencies, S&P, Sub-prime crisis, U.S.
Financial Times (April 17)
To close its budget shortfall, America needs to tackle tax reform. Tax simplification could eliminate “the lunatic complexity of the US tax code” and provide a “free lunch” to a nation stretched for dollars. “Gradually eliminating tax exemptions for mortgage interest, employer-provided healthcare, and myriad other expenditures…would raise so much money that tax rates could be deeply cut even as revenues were increased.”
Tags: Budget, Revenue, Tax reform, Taxes, U.S.
Financial Times (March 22)
America needs to get its fiscal house in order. “Halfway through the current fiscal year, the US still has no budget and shows little sign of getting one.” In a sign that Congress is unable to make progress on its own, 64 Senators asked President Obama to directly intervene. The Financial Times believes he must try. He alone “might sway the country and break the impasse.”
America needs to get its fiscal house in order. “Halfway through the current fiscal year, the US still has no budget and shows little sign of getting one.” In a sign that Congress is unable to make progress on its own, 64 Senators asked President Obama to directly intervene. The Financial Times believes he must try. He alone “might sway the country and break the impasse.”
New York Times (March 3)
In the U.S., conservatives are creating false alarm that federal and state governments may go bankrupt. “A country with a deficit is not necessarily any more ‘broke’ than a family with a mortgage or a college loan. And states have to balance their budgets. Though it may disappoint many conservatives, there will be no federal or state bankruptcies.”
Tags: Bankruptcy, Budget, Government, U.S.
