US economy

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[edit] Overview

This page is a portal for articles and information about various aspects of the United States economy, including:
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[edit] Terminology

  • budget deficit: the amount of money which the United States must borrow in order to meet the federal budget; such borrowing increases the public debt. Opposite of budget surplus.
  • budget surplus: the amount of money left over in the federal budget after everything has been allocated. This money can be used to pay off the public debt. (Note: not sure if it automatically does this, or if there are other things that can be done with it.) Opposite of budget deficit.
  • public debt: the amount of money owed by the United States federal government to creditors who hold US Debt Instruments. This does not include the money owed by states, corporations, or individuals, nor does it include the money owed to Social Security beneficiaries in the future. Common synonyms include: national debt, gross federal debt, U.S. government debt Creditors charge interest on the public debt, so it increases each year unless there is a budget surplus sufficient to (at least) pay off that year's interest.
  • external debt: that portion of the debt of all sectors of the economy (public and private) which is owed to foreigners. Foreign ownership of the public debt is a significant part of the United States's external debt.

A budget deficit increases the public debt; a budget surplus can decrease it, but only if there is still some left over after paying off that year's interest.

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[edit] Filed Links

  • 2008-07-28 /S/D/ ANWR Drilling Would Provide Quick Relief “Yet there is an even stronger argument for opening up ANWR: because of its impact on oil prices in the future, relaxing federal prohibitions would cause current oil producers to change their pumping decisions right now. Even though the additional barrels from ANWR wouldn't physically hit the market for years, current knowledge of this fact will alter current behavior, leading to rapid relief at the pump.”
  • 2008-07-02 /S/D/ President Bush Boosts Pornography Industry With Economic Stimulus Plan, According to AIMRCo “An unforeseen and surprising beneficiary of the Economic Stimulus Plan, a plan that George Bush contends will "boost our economy and encourage job creation," has surfaced this week. An independent market-research firm, AIMRCo (Adult Internet Market Research Company), has discovered that many websites focused on adult or erotic material have experienced an upswing in sales in the recent weeks since checks have appeared in millions of Americans' mailboxes across the country.” Well, it was intended to be a "stimulus" package.
  • 2008-06-27 /S/D/ Does the Housing Bubble Have to Pop? “Congress, looking to protect debt-threatened homeowners and shore up the economy in the wake of the sub-prime mortgage crisis, has spent the spring wrangling over relief legislation now expected to pass after the Fourth of July recess. The bill, sponsored by Senator Chris Dodd (D-CT) in the Senate and Representative Barney Frank (D-MA) in the House, is designed to ease the threat of mass foreclosures by protecting some existing loans, and prevent future crises by imposing stronger regulations on major mortgage financers Fannie Mae and Freddie Mac. But does the bill go far enough in protecting homeowners, and does it offer the most efficient solution to the problem? Prospect Founding Editor Robert Kuttner and TAP Online columnist Dean Baker debate the bill and the future of the home loan regulation.”
  • 2008-06-25 /S/D/ Money for Nothing “The Bear Stearns people dismissed my questions with ill-concealed contempt. Their computer models told them that home prices wouldn't fall much and that few people would default on their loans, barring another Depression. .. About the same time, Richard Bitner, the co-owner of a small subprime mortgage bank in Dallas, was coming to a different conclusion. Mr. Bitner wasn't relying on mathematical formulas. He was dealing with actual subprime borrowers...” The article is a review of Bitner's book Confessions of a Subprime Lender.
  • 2008-06-18 /S/D/ Don’t Expect Too Much From ANWR “Last month the Department of Energy produced a report titled, “Analysis of Crude Oil Production in the Arctic National Wildlife Refuge.” .. The report makes two points that indicate that drilling in ANWR won’t do much to decrease energy prices any time soon. First, the report states that drilling wouldn’t add to domestic production for at least 10 years, and peak production can’t be expected until the 2020s. Meanwhile, under the middle-of-the-road estimate for output oil prices would be expected to decline by only 75 cents per barrel in 2025. If there’s less oil than expected in ANWR the reduction in prices would be 41 cents per barrel in 2026, and if there’s more than expected the drop in prices is seen around $1.44 per barrel in 2027. That would translate into a reduction in gas prices between just one cent and four cents, according to an analysis prepared by Congress’s Joint Economic Committee.”
  • 2008-06-15 /S/D/ Williams Calls Hume and Kristol ‘Out Of Touch’ For Saying McCain’s Tax Plan Will Help Working Americans “Earlier this week, the non-partisan Tax Policy Center released a paper showing that Sen. Barack Obama’s (D-IL) tax plan “offers three times the break for middle class families” than the proposals of Sen. John McCain (R-AZ), which “would steer the bulk of the benefits to the wealthiest families.” On Fox News Sunday this morning, Weekly Standard editor Bill Kristol called the report “good for McCain” because it labels Obama as “a tax raiser” and he doesn’t think voters will be swayed when it’s pointed out that “it’s only a tax on the wealthy.””
  • 2008-06-09 /S/D/ Obama: Give economy $50 billion boost “On the first day of what is to be a two-week economic tour around the country, Barack Obama said Monday that lawmakers should inject another $50 billion immediately into the sluggish U.S. economy. .. The presumptive Democratic presidential nominee cited the largest monthly increase in the unemployment rate in over 20 years, and record highs in oil prices, food prices and foreclosures. ... Obama has pledged to keep the tax cuts in place for everyone except those making roughly $250,000 and up. He has also made proposals to cut taxes further for the middle class, some of which he reiterated in his speech: exempt seniors making less than $50,000 from having to pay income tax; give a tax credit worth up to $500 per working person ($1,000 per family) to offset the Social Security tax on the first $8,100 of earnings; and expand the earned income tax credit.”
  • 2008-05-14 /S/D/ Bernanke's Federal Reserve Freakout “Spooking Bernanke is the Fed's discovery that many thousands of delinquencies are not caused by unemployment or even, perhaps, inability to keep up with payments but rather by the quick, steep drop in the price of real estate. "Sharp declines in house prices, and thus in homeowners' equity, reduce both the ability and incentive of homeowners, particularly those under financial stress for other reasons, to retain their homes," he said.”
  • 2008-04-21 /S/D/ Wage erosion cuts deeper in U.S. “The $20 hourly wage, introduced on a huge scale in the middle of the last century, allowed masses of Americans with no more than a high school education to rise to the middle class. It was a marker, of sorts, but it is becoming extinct. .. Americans greeted the loss with anger and protest when it first began to happen in big numbers in the late 1970s, particularly in the steel industry in western Pennsylvania. But as layoffs persisted, in Pennsylvania and across the country, through the '80s and '90s and right up to today, the protests subsided and acquiescence set in.”
  • 2008-03-27 /S/D/ Equity Loans as Next Round in Credit Crisis “As the housing market spirals downward, home equity loans, which turn home sweet home into cash sweet cash, are becoming the next flash point in the mortgage crisis. .. Americans owe a staggering $1.1 trillion on home equity loans — and banks are increasingly worried they may not get some of that money back. .. To get it, many lenders are taking the extraordinary step of preventing some people from selling their homes or refinancing their mortgages unless they pay off all or part of their home equity loans first.”
  • 2008-03-22 /S/D/ Americans on economy: This hurts “"This economic downturn will be relatively mild according to the numbers," said Wachovia economist Mark Vitner. "But the pain and discomfort for the consumer will be the most severe since 1991, and possibly since 1981 to 1982." .. But there is some hope for the future, as a majority of those surveyed feel that the economy will rebound in 2009.” ... “"For some time we've been trying to determine the breaking point for when gas prices take their toll on the consumer," said John Kilduff, an energy analyst at the trading firm MF Global. "It appears we've found that point." .. Rising fuel prices have caused most Americans to cut back on their driving. Of the over 1,000 American adults surveyed in the poll conducted March 14-16, 64% said they have made some changes to their driving behavior as a result of higher gas prices, with 19% saying they have cut back on driving enough to have a major effect on their daily lives. And 5% say they have stopped driving altogether.”
  • 2008-03-21 /S/D/ Is the worst over, or just beginning? “The price of oil has dipped to about $102 after hitting a trading record of nearly $112 earlier in the week, while gold prices, which surged to above $1,000, fell back to $920 Thursday. .. "There is a case to be made - cautiously - that the panic wave may have crested," Van Order said. "This doesn't mean the economy is out of the woods. But people I've been talking to are feeling a little more relieved and optimistic. It just feels better this week."”
  • 2008-03-18 /S/D/ The Iraq War Is Killing Our Economy “To date, the government has spent more than $522 billion on the war, with another $70 billion already allocated for 2008. .. With just the amount of the Iraq budget of 2007, $138 billion, the government could instead have provided Medicaid-level health insurance for all 45 million Americans who are uninsured. What's more, we could have added 30,000 elementary and secondary schoolteachers and built 400 schools in which they could teach.”
  • 2008-03-18 /S/D/ Just how bad is the US recession? “The US government has been fudging its economic statistics to convince the public that conditions are rosier than they look - and to implement secret tax increases, says Richard Benson.”
  • 2008-03-17 /S/D/ Leading Economic Writer: Financial Meltdown A "Gigantic Fraud" “A leading economic journalist has described the current financial crisis as a "gigantic fraud", the fallout of a deliberate and preconceived profit agenda to enslave the middle classes in a debt bubble. .. The economics editor of the London Guardian, Larry Elliott, has hit out at the global financial elite in a refreshing piece that marks a rare shift away from the establishment hackery we are used to from the corporate media.”
  • 2008-03-17 /S/D/ America was conned - who will pay? “Bear Stearns marks the moment when the global financial crisis went critical. Up until last Friday, it had been possible - just about - to believe that the worst was over and that things were about to get better. That pretence was stripped away when JP Morgan, at the behest of the Federal Reserve, stepped in when the hedge funds pulled the plug on the fifth-biggest US investment bank.”
  • 2008-03-07 /S/D/ Freedom Means Responsibility by George McGovern: “Under the guise of protecting us from ourselves, the right and the left are becoming ever more aggressive in regulating behavior. Much paternalist scrutiny has recently centered on personal economics, including calls to regulate subprime mortgages.” McGovern's point about pay-day lending seems related to the point others have made about outsourcing: the terms (be that interest or wages) may seem completely abusive by our standards, but may seem a godsend (or at least far better than the alternatives) to those who choose them.
  • 2008-02-26 /S/D/ Oil Hits a High; Some See $4 Gas by Spring “Gasoline prices, which for months lagged the big run-up in the price of oil, are suddenly rising quickly, with some experts fearing they could hit $4 a gallon by spring. Diesel is hitting new records daily and oil closed at an all-time high on Tuesday of $100.88 a barrel. .. The price of oil has quadrupled in six years, and Tuesday’s close was not far below the inflation-adjusted all-time high set in April 1980, after the Iranian revolution. That record, $39.50 a barrel, equals $103.76 in today’s money." And the chairman of Hess Corporation predicts an oil crisis in the next 10 years, fueled by both increased demand and reduced supply.
  • 2008-01-22 /S/D/ To Some, the Widening Crisis Seems Driven by Fear, Not Facts “Mr. Yardeni warned, however, that in a time of panic and fear, less attention is paid to fundamentals, like a fairly tight United States job market and strong growth and the extraordinary buildup of foreign exchange reserves in emerging markets. The result is panic selling and the prospect of a global recession. “People are creating the financial violence that they hoped to avoid,” he said.”
  • 2008-01-22 /S/D/ Fed Makes Emergency 0.75% Rate Cut “The Federal Reserve, responding to an international stock sell-off and the likelihood of a sharp drop in America on Tuesday morning, cut its benchmark interest rate by three-quarters of a percentage point. ... The Japanese stock market dropped 5.7 percent, for the worst two-day loss in 17 years, while the Australian stock market tumbled 7.1 percent, its worst single-day loss in nearly two decades. The Shanghai market lost 7.2 percent while the Hang Seng index in Hong Kong plummeted 8.7 percent. .. “At this stage, you can say there is panic selling in the market,” said Kwong Man Bun, the chief operating officer of KGI Asia Ltd., a large Asian futures broker. “We don’t think the Hang Seng index has found its bottom yet; the index will continue to go down and will only find its bottom when external markets — namely, the U.S. market — stabilize.””
  • 2008-01-22 /S/D/ Asian markets plunge for second day by Lindsay Whipp in Tokyo and Andrew Wood in Hong Kong: “Stocks plummeted across Asia for a second day on Tuesday on unrelenting fears that the US, Asia’s most important trading partner, is heading into recession.”
  • 2008-01-21 /S/D/ World's Largest Bond Insurers Collapsing! by Martin D. Weiss Ph.D.: “Ambac and MBIA, the two largest bond insurers in the world, are careening toward collapse. .. Barring a miraculous rescue, their demise could promptly deliver a massive blow to the U.S. bond market ... severely damage America's already shaken big banks ... and largely trash the net worth of millions of investors.”
  • 2008-01-21 /S/D/ Stocks Plunge Worldwide on Fears of a U.S. Recession “Fears that the United States is in a recession reverberated around the world on Monday, sending stock markets from Frankfurt to Bombay into a tailspin and puncturing the hopes of many investors that Europe and Asia will be able to sidestep an American downturn.”
  • 2008-01-08 /S/D/ US recession is already here, warns Merril “The US has entered its first full-blown economic recession in 16 years, according to investment bank Merrill Lynch. .. Merrill, itself one of Wall Street's biggest casualties of the sub-prime crisis, is the first major bank to declare that a recession in the world's biggest economy is now underway.”
  • 2007-12-28 /S/D/ Grim November for New-Home Sales “Sales of new homes hit a 12-year low in November, falling short of even the most skeptical Wall Street estimates. .. The unexpectedly weak report suggested that home prices would fall further next year as the housing market struggles to break out of its deepest slump since the early 1990s. .. Sales of single-family homes fell 9 percent last month, the Commerce Department said, for a seasonally adjusted annual rate of 647,000, the slowest pace since April 1995.”
  • 2007-12-26 /S/D/ Bush's very good year by Larry Kudlow: “Against all odds, and despite the usual drumbeat of criticism, President Bush had a very good year. .. The troop surge in Iraq is succeeding. America remains safe from terrorist attacks. And the Goldilocks economy is outperforming all expectations.”
  • 2005-11-10 /S/D/ Discontinuance of M3 “On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.” "George Washington's Blog" reports this indicator (presumably referring to the M3) as "the size of the money supply"; is this accurate? If so, GWB's contention that this was specifically to hide vast new quantities of money being printed to shore up the US economy may be on target.
  • 2004-02-20 /S/D/ Soldier for the Truth: Exposing Bush’s talking-points war “The neoconservatives pride themselves on having a global vision, a long-term strategic perspective. And there were three reasons why they felt the U.S. needed to topple Saddam, put in a friendly government and occupy Iraq. .. One of those reasons is that sanctions and containment were working and everybody pretty much knew it. Many companies around the world were preparing to do business with Iraq in anticipation of a lifting of sanctions. But the U.S. and the U.K. had been bombing northern and southern Iraq since 1991. So it was very unlikely that we would be in any kind of position to gain significant contracts in any post-sanctions Iraq. And those sanctions were going to be lifted soon, Saddam would still be in place, and we would get no financial benefit. .. The second reason has to do with our military-basing posture in the region. We had been very dissatisfied with our relations with Saudi Arabia, particularly the restrictions on our basing. And also there was dissatisfaction from the people of Saudi Arabia. So we were looking for alternate strategic locations beyond Kuwait, beyond Qatar, to secure something we had been searching for since the days of Carter — to secure the energy lines of communication in the region. Bases in Iraq, then, were very important — that is, if you hold that is America’s role in the world. Saddam Hussein was not about to invite us in. .. The last reason is the conversion, the switch Saddam Hussein made in the Food for Oil program, from the dollar to the euro. He did this, by the way, long before 9/11, in November 2000 — selling his oil for euros. The oil sales permitted in that program aren’t very much. But when the sanctions would be lifted, the sales from the country with the second largest oil reserves on the planet would have been moving to the euro. .. The U.S. dollar is in a sensitive period because we are a debtor nation now. Our currency is still popular, but it’s not backed up like it used to be. If oil, a very solid commodity, is traded on the euro, that could cause massive, almost glacial, shifts in confidence in trading on the dollar. So one of the first executive orders that Bush signed in May [2003] switched trading on Iraq’s oil back to the dollar.”

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