Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Category Archives: Economics

Standard & Poor’s: Clock is Ticking on U.S. Debt

NEW YORK - NOVEMBER 16:  A trader works on the...

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Within minutes of Monday morning’s announcement by the credit-rating agency Standard & Poor’s that “we have revised our outlook on the long-term rating [for US government debt] to negative from stable,” the Dow Jones Industrial Average dropped 200 points.

In its announcement, the agency tried to soften the blow:

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Investors in U.S. Debt at Tipping Point?

Teeter-Totter Crossing

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When Terence Jeffrey, writing for CNSNews.com, noted that true federal spending for the fiscal year 2010 wasn’t $3.7 trillion after all, but closer to $11 trillion, he discovered an old accountant’s trick to make things look worse (or better) than they are: either double count, or don’t count at all.

In the process of sorting out the accountant’s trick, however, Jeffrey uncovered an unnerving fact:

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$4 Trillion in Cuts Proposed by GOP Rep. Paul Ryan

Paul Ryan

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During an interview on “Fox News Sunday”, Rep. Paul Ryan (R-Wisc.), chairman of the House Budget Committeeoutlined many of the details of the GOP‘s 2012 budget proposal that will officially be announced on Tuesday. He said, “We can’t keep kicking this can down the road. The President has punted. We’re not going to follow suit. ” Implying that the proposal would cut the deficit by “much more than” $4 trillion over the next decade, he offered a synopsis of what to expect on Tuesday:

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Cato Puts Budget-Cutting Debate in Perspective

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The Cato Institute’s just-announced ad campaign in major newspapers around the country asks rhetorically, “This is leadership?” and then neatly summarizes numerous areas where major budget cuts could be made. The ad questions the debate currently taking place over almost invisible cuts to the federal budget: “The House Republican leadership has proposed $61 billion in spending cuts—but that’s less than 4% of this year’s massive $1.65 trillion federal deficit.” And the Democrats have managed to squeeze out an even more modest proposal of

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Funding of Bretton Woods II by George Soros Exposed

DAVOS/SWITZERLAND, 27JAN10 - George Soros, Cha...

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When billionaire George Soros wrote two years ago that what the world needed now was “a new world architecture,” he was already laying plans for Bretton Woods II, April 8-11, 2011, to be held at the Mount Washington Hotel in Bretton Woods, New Hampshire.

Soros wrote:

While international cooperation on regulatory reform is difficult to achieve on a piecemeal basis, it may be attainable in a grand bargain that rearranges the entire financial order.

A new Bretton Woods conference, like the one that established the international financial architecture after World War II, is needed to establish new international rules…reconstitute the International Monetary Fund (IMF)…[and] to reform the currency system…

Claiming that the international monetary system “cannot survive in its present form,” Soros argues that it could and should be revamped so that American leadership would be “re-established…in a more acceptable form.”

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Portugal PM Resignation Rattles EU

Sócrates

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When the Portuguese Parliament failed to pass an austerity bill on March 23, the country’s Prime Minister, Jose Socratesresigned. That move leaves Portugal leaderless for at least two months while facing a significant financial crisis: it must refinance nearly $13 billion of short-term debt by June. Investors have already pushed interest rates on Portugal’s sovereign 10-year debt to almost 8 percent, while credit-rating agencies Fitch and Standard & Poor’s both downgraded that debt’s quality on March 24.

The European Union (EU) has already bailed out Greece and Ireland, and a top official announced that the EU has the resources to rescue Portugal, if necessary. The bailout would cost an estimated $60 billion to $80 billion.

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Housing Decline: Only Halfway Home

House

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When Reuters and CNBC.com announced the awful housing numbers from February, most observers were surprised. The housing market appeared to have found a bottom last fall, and many economists were expecting small but predictable improvements every month.

The Commerce Department, however, doused whatever positive expectations there were when they announced that new home sales for February compared to January declined by

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Trillion-dollar Tax Holiday Sought by Multinationals

Oracle logo at the Oracle headquarters.

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Claiming that granting a “tax holiday” for her company (and other large multinationals) would be beneficial to the United States, Oracle president Safra Catz said that such a holiday would allow earnings sitting in idle accounts abroad to be “repatriated” and freed up for better use here in the United States. “It’s an absolute no-brainer,” she said. If the money flows back to the United States, “it will

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Shutting Down Fannie and Freddie: Locking the Barn Door

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It appears that there is at least one thing the Obama administration and the GOP can agree on, and that is that Fannie Mae and Freddie Mac have got to go.

Given the immense role these two government-sponsored enterprises (GSEs) had in the Great Meltdown, they remain an embarrassment for every politician even remotely related to them. As noted cryptically in his latest book, Rollback, Professor Thomas Woods said,

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Increasing Gas Prices: What’s Seen and Not Seen

Pumping Fuel

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With the national average price of gasoline hitting the highest level in history for this time of the year, the impact of that increase reaches far beyond the pocketbook of the average worker driving off to work in the morning. For every 25-cent increase in the price of gas (which has increased almost 70 cents per gallon in the last year, and by nearly 30 cents in just the last month), consumers are forced to spend an extra $3 billion that

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The Great Recession and American Boomer Reality

Gold Rolex Oyster Perpetual Date

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In its extensive study of how the Boomer generation is faring, the Wall Street Journal focused mostly on their difficulties, challenges, disappointments and missed opportunities. It had little to say about the outside event no one saw coming, the Great Recession, and nothing at all about the resilience of the individuals moving into what used to be called the “golden” years.

For example, Steven Rutschmann, age 60, has a 401(k) plan with about $500,000 in it, and his wife also has a 401(k) plan and is expecting a small pension when she retires from her nursing position. They went to see a financial planner who told them that

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GOP Uses Flyswatter to Defend Against Incoming Debt Missile

WASHINGTON - MAY 21:  House Minority Leader Jo...

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Even with only  modest cuts in the continuing resolution bill offered by the GOP-controlled House of Representatives, it is highly unlikely to see the light of day when the Senate returns from recess, just before the March 4th deadline. Despite strong rhetoric from House Speaker John Boehner who said “When we say we’re going to cut spending, read my lips. We are going to cut spending, ” this reminded one of the identical words (“read my lips”) uttered by Republican Presidential candidate George H. W. Bush in 1988, which cost him his chance for re-election in 1992 when he voted for higher taxes the year before. Boehner’s words also generated a protest of Senate Majority Leader Harry Reid who accused Boehner of

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Defense Department Builddown Coming?

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As calls for cuts in the defense budget increased, Secretary of Defense Robert Gates knew what he would have to do: throw the cutters a bone, and then dig in against any further reductions. By admitting that he could shave $78 billion out of the defense budget over the next five years, Gates then went to work defending any further suggested incursions into the future spending plans by the military-industrial complex.

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Obama Budget Sleight of Hand

Of all the explanations, statistics, projections, and conjecture about the Obama administration’s new budget, nothing has had the impact of this simple graph in showing the assumptions, misstatements, and downright falsehoods that are required to “make the numbers work.”

The source for this very telling graph is the Obama administration’s Office of Management in budget. Below is the graph, as it appears in the Wall Street Journal.

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Spending on Military and Wars Rising but Cuts are Off-Limits

USS DWIGHT D EISENHOWER CVN-69: Iranian aircra...

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In an exciting, well-researched and gripping novella in the December issue of Popular Mechanics, author Erik Sofge concludes that the war between China and the United States in the year 2015 will be won by China.

It is August, 2015 and the fight is over whether Taiwan’s status as an independent nation will remain intact, or whether it will become, finally and forever, part of the People’s Republic. The big fight, however, is “between an old superpower and a new one.” Using the latest technology, the United States finds itself at a major disadvantage when China is able to render useless the high-tech and very expensive communications network relied upon by the United States. Says the author,

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Are Living Standards Improving?

CD, DVD and SACD player.

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Five years ago Donald Boudreaux, Economics Professor at George Mason University and author of the website Café Hayek, bought a used 1975 Sears catalog on Amazon, and started comparing prices to those current in 2006. His results, at the time, were quite remarkable, and generated much traffic and conversation on the matter. For instance, the lowest-priced electronic calculator in 1975 was $13.88, and with six digits, it allowed one to add, subtract, multiply and divide. When updated for inflation through the Bureau of Labor Statistics (BLS) website, that would be $56.21 in today’s money. Of course, it’s hard to draw any sort of hard conclusion from a single example. First of all, that calculator is no longer available. Those available today are vastly more powerful and versatile and sell now for just a few dollars.

Here are some others that he found, with updated 2011 prices from Sears.com:

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Bernanke Issues Warnings, Accepts No Blame

Ben Bernanke dollar

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Federal Reserve Chairman Ben Bernanke’s address to the National Press Club on Thursday was a remarkable blend of hubris, claimed innocence, and warnings.

His opening remarks were condescending and patronizing to the journalists assembled:

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Is Breakfast Now a Luxury Item?

Breakfast - By the time I got around to eating...

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With the wholesale prices of orange juice and coffee increasing by 20 percent and 41 percent respectively just over the past six months, it’s not surprising to see the reflection in increased prices for them on grocery store shelves. Keith McCullough of Hedgeye asked “What’s for breakfast?” and then answered “Inflation.”

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Removing Geithner’s Temptation to Play Chicken with Debt Ceiling

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When Austan Goolsbee, chief economic advisor to the Obama administration, was asked about the impact not raising the debt ceiling would have on the country, he said, “This is not a game. If we hit the debt ceiling, that’s essentially defaulting on our obligations, which is totally unprecedented in American history.” He continued:

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Voters: Spending Cuts, Yes; Cutting My Programs, No

The Cato Institute’s massive 262-page study, Downsizing Government, by Chris Edwards, is the most recent offering of suggestions and recommendations for cutting severely the size, cost, reach, power and influence of the federal government in the lives of American citizens. In general, those citizens welcome such suggestions, according to Rasmussen Reports, which announced that two out of three Likely Voters they polled “prefer a government with fewer services and lower taxes rather than a more active one with more services and higher taxes.” Surprisingly this was supported by almost half of those Likely Voters who were also Democrats, along with 67 percent of unaffiliated voters, and 90 percent of Republicans voters.

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.
Copyright © 2018 Bob Adelmann