Posts Tagged ‘new york times’
Thursday, September 9th, 2010
Here’s a look at some of this week’s most interesting, and consequential, budget- and economy-related issues in the 50 states:
The President unveiled a $50 billion infrastructure spending plan on a Labor Day stop in Wisconsin. The money would be spent over six years on roads, railroads and airport runways. The Washington Post has the story from Milwaukee.
In anticipation of the President’s visit to Cleveland, the Cleveland Plain Dealer laid out a to-do list for the President to revive the city’s economy. The paper wrote that Ohioans are faced with “unacceptably high unemployment and an economy that lagged the nation’s even before credit markets froze need more than some national salves or the vague promise to ‘fight.’”
In an editorial, the Philadelphia Inquirer urged Senate Republicans to end their opposition to small business tax breaks arguing that it would be a reasonable measure to boost the economy.
Earlier this week in the New York Times, Edward Glaeser examined three states’ economies. He argues that the problems Florida, Michigan and California are having could be a product of their past success; “a reflection of an abundance of people relative to economic activity.”
The Washington Post recently examined the effect Washington is having on small businesses. A small business owner profiled in the article felt overburdened, explaining, “What I want government to do is not raise taxes — decrease them to allow us extra money for hiring.”
Tags: cleveland plain dealer, new york times, Philadelphia Inquirer, state budgets, state news, State news roundup, state spending, stimulus, washington post
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Thursday, September 2nd, 2010
Here’s a look at some of this week’s most interesting, and consequential, budget- and economy-related issues in the 50 states:
The Virginian Pilot reported last week that for 12 years, a government employee in Norfolk, VA drew pay and benefits without a day on the job.
Late last week, the Denver Post called for a balanced budget amendment, saying “reckless spending by both parties has left Americans with an unsustainable $13 trillion federal debt, which is still getting “rapidly worse.’”
Jim Kelly argues in the Pittsburgh Post Gazette that we need to cut more than just defense spending. “We’re in a fiscal emergency. We have to watch what we spend even on vitally important things. So the question isn’t why cut defense spending? It’s why cut only defense spending?”
In an editorial, the Pittsburgh Post Gazette laments the sad state of the economy and the inability of lawmakers to generate solutions. “A worrisome part of the problem is the government doesn’t seem to know what to do to end the suffering.”
The Cincinnati Enquirer reported that the increase in federal funds received by Ohio in 2009 outpaced the national average. Across the country, federal domestic spending increased 16%. Ohio saw a 19% increase in federal dollars compared to 2008.
According to the New York Times, state tax revenues increased 2.2% in the second quarter of 2010. “The greatest year-over-year growth in percentage terms was in Alaska, where revenues shot up 106.3 percent.”
Tags: defense spending, economy, Government Spending, new york times, Pittsburgh Post Gazette, state news, State news roundup
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Monday, August 30th, 2010
There is little doubt Americans are feeling anxious and uncertain about the U.S. economy. According to a CBS poll, 83% of Americans think the economy is in “bad” shape; 37% even say it’s in permanent decline. Economists are uneasy as well. As we pointed out last week, GDP growth for the second quarter of 2010 was just revised down to a dismal 1.6%.
So begins a new push for a second stimulus. Laura Tyson, a professor at University of California-Berkeley’s business school, advocates for one in The New York Times today. Tyson argues the first stimulus worked well, but because it’ll run out soon, Congress must pass another. She then lays out a laundry list of spending initiatives Congress should pass.
Tyson believes the nation’s debate about economic policy has focused too much on reducing the deficit and too little on reducing unemployment.
As we’ve noted before, Harvard economist Robert Barro has explained why government “stimulus” spending is a bad deal for American taxpayers and is not an effective means for creating jobs. In February he explained, “[V]iewed over five years, the fiscal stimulus package is a way to get an extra $600 billion of public spending at the cost of $900 billion in private expenditure.” In other words, the federal government was trading $9 for $6 dollars. A month earlier he suggested Congress concentrate more on “incentives for people and businesses to invest, produce and work. … [W]e should not be considering massive public-works programs that do not pass muster from the perspective of cost-benefit analysis.”
Economists in a new survey by the National Association for Business Economics (NABE) seem to agree more with Barro than Tyson. Those surveyed do not think a second stimulus would help growth. 58% are against allocating more federal money. NABE President Lynn Reaser sums up the survey: “The near-term focus should be the promotion of economic growth…Respondents also do not believe another stimulus package is necessary but think the various tax cuts should be extended beyond their scheduled expiration at year-end.”
Tags: Government Spending, Laura Tyson, new york times, poll, Robert Barro, second stimulus, stimulus, stimulus spending
Posted in Blog, Government Spending, Latest News | 3 Comments »
Thursday, August 26th, 2010
Yesterday we noted Sen. Mike Bennet’s (D-CO) comments Saturday regarding government overspending. Today, The New York Times highlights Rep. Earl Blumenauer’s (D-OR) thoughts on federal spending. According to the paper Rep. Blumenauer believes lawmakers “need to bring the costs of [federal government] programs in line with reality.”
What Rep. Blumenauer means, essentially, is that government must eliminate waste and make sure its programs run effectively. He explains: “We do people no favors if we have systems that leak money … People will pay for all this if they’re convinced they’re getting their value. But our challenge on the federal level is to actually deliver, and we can’t just defend the indefensible.”
The Times notes Rep. Blumenauer is “nobody’s idea of a centrist” — he favors most government programs. Whether he’s right or not on the size of government is another question, but the congressman is clearly correct that Americans are concerned about government waste. (As our new video points out, 66% of Americans think the government wastes “a lot” of their tax dollars.) He’s also right that Congress must eliminate waste before it can be expected to tackle larger issues.
Tags: Earl Blumenauer, Government Spending, government waste, new york times, wasteful spending
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Friday, July 30th, 2010
Today, the Commerce Department released its advance estimate of second quarter GDP growth. The report showed that the United States economy slowed to a 2.4% rate of growth. This is a significant decline from the revised 3.7% rate of the previous three months.
The report also showed that government spending increased. A New York Times article outlining the findings reports that government spending grew “at an annual rate of 4.4 percent after a decline of 1.6 percent in the first quarter. Public spending was broad-based, with even state and local spending increasing for the first time in a year.”
It’s crucial that lawmakers heed the public’s call for fiscal responsibility. With growth slowing and government spending increasing, Congress must make difficult but necessary cuts to get at the root cause of what is Bankrupting America: its out-of-control spending.
Tags: bankrupting america, Commerce Department, economic growth, GDP, GDP growth, Government Spending, new york times, spending cuts
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Monday, July 26th, 2010
A story in The New York Times this morning points out that, while profits have returned, jobs have not.
Why? A spokesman for Alcoa, a large aluminum manufacturer, says it comes down to confidence and certainty.
Alcoa spokesman Michael Belwood said his employer isn’t sure what’s going to happen with the economy: “We’re keeping a close eye on costs because there is still uncertainty about the stability of this recovery.”
Likewise, Washington Post columnist Robert Samuelson says it’s uncertainty about government that’s keeping employers from hiring. Samuelson warns this uncertainty will cause economic disaster:
“[I]t’s unclear whether corporate elites were so traumatized by the crisis that they’ve adopted a bunker mentality. That, as much as uncertainty over Obama administration policies, could be fearsome. What might appeal to individual firms — paring expenses to maximize profits, hoarding cash to protect against a future financial crisis, waiting to hire until sales improve — could, if adopted by most companies, sabotage a stronger recovery.”
One key example in the news today: taxes. While Treasury Secretary Timothy Geithner says raising taxes is the “responsible” thing to do, members of the President’s own party disagree. Democratic Congressman Bobby Bright (AL) said, “In a recession you don’t tax, burden and restrict.”
Right now it’s anyone’s guess what Washington will do next. For many businesses, this guessing game is too risky; they are waiting on certainty before investing capital into new and existing endeavors.
Tags: American Recovery and Reinvsetment Act, geithner, new york times, tax increase, Treasury Secretary Timothy Geithner, uncertainty
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Friday, June 18th, 2010
If you thought last night’s down-to-the-wire Celtics-Lakers battle was exciting, we’ve got a grudge match for you: Krugman versus Greenspan.
In this morning’s New York Times columnist Paul Krugman argues lawmakers — in Europe, and in the U.S. — should ignore “deficit hawks.” He calls for more spending and says plans to cut spending remind him of “1937, when F.D.R.’s premature attempt to balance the budget helped plunge a recovering economy back into severe recession.”
Over at The Wall Street Journal former Federal Reserve Chairman Alan Greenspan, in a timely and direct answer to Krugman’s analysis says, “I believe the fears of budget contraction inducing a renewed decline of economic activity are misplaced.” Greenspan says the U.S. is much closer to Greece than anyone wants to acknowledge.
Greenspan acknowledges common effects of high budget deficits — inflation and long-term interest rates — are low despite buckets of red ink, but warns the U.S. not to grow complacent just because these indicators are low. Greenspan says Americans should be concerned because the “budget constraints of the past are missing.”
Greenspan is — at the very least — right on that account. Federal spending per household has ballooned from around $20,000 in the 1990s to around $30,000 today. That’s a 50 percent increase in just a decade.
If the type of spending Krugman advocates worked shouldn’t the U.S. economy be sailing along?
Who do you think is right? Krugman or Greenspan?
Tags: alan greenspan, budget deficit, deficit, deficit hawks, federal spending, federal spending per household, new york times, overspending, Paul Krugman, wall street journal
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Friday, June 18th, 2010
In today’s New York Times, Jack Ewing reports that the European Central Bank told European governments to cut their budgets to stimulate their economies:
“Less government spending will equal more economic growth, the European Central Bank asserted Thursday in a report, in an effort to keep up the pressure on less-troubled countries like Germany to cut their budgets.”
“Previous budget-cutting by countries including Ireland, the Netherlands and Finland led to faster growth fairly quickly, according to an analysis in the central bank’s monthly bulletin for June that appeared to reflect the thinking of members of the bank’s executive board.”
“In recent weeks the European Central Bank president, Jean-Claude Trichet, as well as presidents of national central banks have been urging governments — which only months ago were starting cash-for-clunkers programs and other costly attempts to stimulate growth — to move in the opposite direction.”
“’Sustainable growth is not possible without healthy public finances,’ the Bank of Finland governor, Erkki Liikanen, said Thursday in a statement that echoed Mr. Trichet and other central bank policy makers. While cuts in government spending might temporarily slow growth, Mr. Liikanen said, ’the longer-term impact will be positive.’”
“The central bank cited several academic studies to justify the counterintuitive claim that fiscal austerity would help Europe grow more quickly. ’Although fiscal consolidation may imply costs in terms of lower economic growth in the short run,’ the report said, ‘the longer-run beneficial effects of fiscal consolidation are undisputed.’”
The European Central Bank’s report only confirms what we’ve been saying – in order to get the economy back on track, governments must reduce spending. During these troubled economic times, the American people have tightened their belts in order to get their fiscal houses in order. Government leaders need to do the same.
Please click here to read the entire New York Times article.
Tags: budget crisis, European Central Bank, fiscal crisis, Government Spending, new york times, overspending, spending cuts
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Tuesday, June 15th, 2010
Below is a letter we sent to the editors of the New York Times in response to their June 9th editorial defending continued deficit spending.
The perspective championed in your June 9 editorial (“The Wrong Message on Deficits”) is not new. The suggestion that a difficult economic situation justifies any level of deficit spending is both irresponsible and further damaging to an already precarious fiscal and economic situation.
Contrary to “Wrong Message,” experts suggest that excessive debt has a direct, negative impact on job creation. Economist Carmen Reinhart concludes that when debt levels hit 90 percent of GDP or more (the U.S. is at 93 percent), GDP is likely to fall by one percent.
Christina Romer, the White House’s top economic advisor, found one-percent growth in GDP is equivalent to one million jobs. Connecting the dots, debt is slowing down our economy and, hence, job creation.
The argument that spending restraint and debt reduction hinder recovery does not apply when the debt is almost the size of the entire economy.
Tags: bankrupting america, debt, deficit spending, GDP, job creation, letter to the editor, new york times, overspending
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Friday, June 11th, 2010
On June 9th, the New York Times editorial board contended that a difficult economic situation warrants any level of deficit spending – an argument that justifies a continuation of the same excessive spending that has failed to live up to its promises. The very next day, New York Times columnist David Brooks argues the other side of the fiscal coin. Here are some excerpts from Brooks’ column:
Sixteen months ago, Congress passed a stimulus package that will end up costing each average taxpayer $7,798. Economists were divided then about whether this spending was worth it, and they are just as divided now. The president’s economists ran the numbers through their model and predicted that the stimulus package would create or save at least three million jobs.
…..
In times like these, deficit spending to pump up the economy doesn’t make consumers feel more confident; it makes them feel more insecure because they see a political system out of control. Deficit spending doesn’t induce small businesspeople to hire and expand. It scares them because they conclude the growth isn’t real and they know big tax increases are on the horizon. It doesn’t make political leaders feel better either. Lacking faith that they can wisely cut the debt in some magically virtuous future, they see their nations careening to fiscal ruin.
….
Some theorists will tell you that if governments shift their emphasis to deficit cutting, they risk sending the world back into recession. There are some reasons to think this is so, but events tell a more complicated story. Alberto Alesina of Harvard has surveyed the history of debt reduction. He’s found that, in many cases, large and decisive deficit reduction policies were followed by increases in growth, not recessions. Countries that reduced debt viewed the future with more confidence. The political leaders who ordered the painful cuts were often returned to office. As Alesina put it in a recent paper, “in several episodes, spending cuts adopted to reduce deficits have been associated with economic expansions rather than recessions.”
….
During the period of consolidation, in other words, the government will have to spend less, but target better. That will require enormous dexterity and intelligence from a political system that has recently shown neither.
Tags: bankrupting america, David Brooks, deficit spending, Government Spending, new york times, stimulus, stimulus spending
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