Economy

There is No Spending Crisis

AP Photo/J. Scott Applewhite

Most GOP rhetoric centers on the notion the United States is facing a “spending crisis” that will ruin its fiscal solvency. Setting aside the fact that this is impossible—a country with fiat currency (held in reserve by most of the world) can’t “run out” of money, and can’t have a “debt crisis”—it’s also true that the government just isn’t spending as much as Republicans think. Economic stimulus aside, Obama has presided over modest growth in federal outlays. Here’s Bloomberg with more:

Invisible Workers, Global Struggles

Flickr/Janinsanfran

Like countless other migrant girls toiling far from home, her life was invisible—except for the chilling way it ended. Earlier this month, Rizana Nafeek, a young Sri Lankan migrant in Saudi Arabia, was executed after being convicted of killing a baby in her care. The case drew international condemnation not only because of the severe punishment and opacity of the legal proceedings—she was reportedly just 17 at the time, not 23 as her falsified passport indicated, and advocates said her confession had been coerced—but also because the girl’s brief life exposed the consequences of the invisible struggles facing domestic workers in the Middle East and beyond.

The Truth about Student Debt

In 40 percent of cases where a student loan debtor sought forgiveness of their loans as part of a bankruptcy case, the judge granted at least some relief. Only 0.1 percent took the bait.

Flickr/Occupy Student Debt Campaign

There are a few ready talking points when discussing the student-loan crisis: the collective $1 trillion burden of debt, how student debt is now larger than credit card debt in this country, the fact that the 90-day delinquency rate spiked to 11 percent last year, meaning over one in ten borrowers are behind on their payments—all facts that don’t give much hope to those with loans, or those trying to resolve the financial crisis.

The Truth about Student Debt

Flickr/Occupy Student Debt Campaign

There are a few ready talking points when discussing the student-loan crisis: the collective $1 trillion burden of debt, how student debt is now larger than credit card debt in this country, the fact that the 90-day delinquency rate spiked to 11 percent last year, meaning over one in ten borrowers are behind on their payments—all facts that don’t give much hope to those with loans, or those trying to resolve the financial crisis.

Bobby Jindal to Poor Louisianans: Drop Dead

Gage Skidmore / Flickr

Last week, I wrote on how Louisiana Governor Bobby Jindal was transforming his state’s tax system, from a mixed collection of corporate, income and sales taxes, to one where corporate and income taxes have been eliminated, and sales taxes are hiked to make up for lost revenue. In other words, Jindal wants to turn Louisiana’s marginally progressive tax structure into a fully regressive one, which places its largest tax burden on its most vulnerable citizens.

Movin' on Up

Google

Every Thursday, the federal government releases data on new jobless claims, and for the last several months, they’ve hovered between 350,000 and 400,000. For the sake of context, a number below the latter is evidence of an improving jobs landscape, and a number below the former is a sign that jobs are growing at a fast pace. Today, the Department of Labor announced there were only 335,000 new jobless claims for the previous week:

How’s That Medicine Taste, Germany?

Oliver Lang/dapd

Germany, the powerhouse of Europe, experienced negative growth in the last three months of 2012, down from a positive growth rate of 3 percent in 2011. Chancellor Angela Merkel, who more than any other leader inflicted austerity on the rest of Europe, is finding that what goes around, comes around.

Bobby Jindal's New Tax Plan Would Be a Huge Blow to Louisiana's Poorest Residents

Derek Bridges / Flickr

Last week, I mentioned Louisiana Governor Bobby Jindal’s proposal to end all corporate and income taxes, in order to drive economic “investment.” There aren’t many details on the plan, but it’s safe to assume that Louisiana would make up that revenue with higher state and local sales taxes.

All the President's Resolve

AP Photo/Carolyn Kaster

Three very good signs in the past few days suggest that President Obama has been reading Robert Caro’s latest volume on Lyndon Johnson.

The president is handling the debt-ceiling fight very shrewdly, and making the Republicans look both reckless and childish for playing cute with the risk of another financial meltdown. Some of us have been waiting four years for Obama to sound like this:

Republicans Are Creating Their Worst Nightmare

AP Photo/Jacquelyn Martin

Two years ago, when S&P downgraded the credit rating of the United States, they didn’t site our debt or our spending. Instead, they knocked our political system, and in particular, the dysfunction and institutional creakiness that made a debt ceiling stand-off possible: “The downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenge,” said the company in a statement released that summer.

Don't Count on a Sane GOP

AP Photo

A week before his inaugural, President Obama says he won’t negotiate with Republicans over raising the debt limit. 

At an unexpected news conference on Monday he said he won’t trade cuts in government spending in exchange for raising the borrowing limit. 

“If the goal is to make sure that we are being responsible about our debt and our deficit - if that’s the conversation we’re having, I’m happy to have that conversation,” Obama said. “What I will not do is to have that negotiation with a gun at the head of the American people.”

Obama to Republicans: You Have No Choice but to Raise the Debt Ceiling

White House

Two years ago, President Obama welcomed the debt ceiling as an opportunity to negotiate deficit reduction with congressional Republicans. This backfired—rather than work in good faith with the president, Republicans used this as an opportunity to hold the economy hostage to a list of narrow demands: for a balanced budget amendment, for regressive changes to entitlements, for large cuts to the social safety net.

Is Suze Orman's Advice Dangerous?

A conversation with Helaine Olen on her new book about personal-finance gurus

AP Photo/Matt Sayles

In Pound Foolish: Exposing the Dark Side of the Personal Finance Industry, Helaine Olen traces the roots of media advising us about money—a subject many find distasteful to discuss in polite company, but nonetheless spawns a billion-dollar industry of products promising guidance as we navigate the thorny territory of debt, need, and desire.

House Republicans Are Seriously Serious

Artist's rendering of the House Republican Caucus. (Flickr/Rafael Edwards)

As any parent knows, when your children are young, you have one distinct advantage over them: you're smarter than they are. It won't be that way forever, but if it comes down to an argument, using words, with a six-year-old, you're probably going to win. Faced with this disadvantage, children often resort to things like repeating the thing they've already said a hundred more times, or stomping their feet. Which brings us, of course, to the House Republicans.

What the Economy Needs Is Growth (But Washington Isn't Talking About It)

AP Photo/Carolyn Kaster

If there’s anything frustrating about American politics at this moment, it’s the disappearance of mass unemployment as an area of elite concern. Now that joblessness is on the decline, Washington has moved away from efforts to further address the problem, despite the fact that unemployment isn’t expected to reach pre-recession levels for another four years.

You can say the same for Washington’s attitude towards growth. Gross domestic product increased by 3.1 percent in the third quarter of 2012, up from 1.3 percent in the second quarter, and 1.9 percent in the first. Average GDP for the year will probably fall near 2 percent.

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