The U.S. federal deficit continues to soar (US red ink rising even higher, to$1.8T; AP). This is more than four times the record budget deficit of last year but will be dwarfed by the 2010 budget, which currently stands at $3.6 Trillion. Budget deficits are not expected to dip below $500 Billion per year and over the next decade prediction call for a total deficit of over $7 Trillion. The problem is that those forecasts are based on extremely optimistic economic predictions, such as a GDP contraction of only 1.2% for 2009 and an economic expansion of 3.2% for 2010, and therefore a far shot from actual figures.
GDP contraction will most likely be at least three times as big for 2009 as used in the budget projections and there may be a continued contraction in GDP for 2010. The 2010 budget if filled with counter-productive measures which will only increase the deficit and nothing more. There is an increase of fear in regards to the continued rise in the federal budget, which will cap any potential recovery. There simply is no room for a sustainable economic recovery with deficits. An economy can't borrow itself out of a recession or a depression. The more the economy is pushed with counter-productive measures the more the economy will push back and the downward spiral will only accelerate, with false signs of stability.
In attempt to continue the display of ignorance, arrogance and stupidity, the Obamanites have issued a progress report on the $787 Billion stimulus package (White House updates stimulus progress; CNNMoney.Com). The Obamanite stimulus package, just like TARP, will only stimulate the federal deficit an nothing more. Ultra-short term job creation in one sector of the economy, mainly construction and governemnt, is sacrfifized for long-term economic plans in order to create the illusion of growth and change. A lot of money will be sent to education, since the teachers union one of the biggest Obama supporters. The $787 Billion stimulus, just like the $3.6 Trillion budget, is porked up and will partially pay off for the received votes.
In the meantime, another dead cat bounce initaitve of the Obama administration, more counter-productive moves have been initiated or increased on the housing front (Gov't expands housing plan, off to slow start; AP). In essence, the plan offers support to those who have purchased a home they could not afford with money they did not have. In order to make things worse, those who lend them the money did not have it either, you get the idea.
Since the current hype is to focus on minor issues which are part of the side-effect of larger problems while the core will be ignored until it explodes, the Obamanites push a credit card reform which prohibits rate increases and days notices to customers before legit rate hikes (Obama urges Congress to act on credit card bill; AP). Nice move but equivalent then to pour a bucket of water in the Atlantic in order to raise the overall water level. The Senate pushes the bill (Senate deal reached on bill to impose credit card curbs; CNNMoney.Com).
The credit card crisis will dwarf the 'regular credit crisis' and will have far more negative effects on the economy. Unfortunately the looming credit crisis is ignored just as the current credit crisis has been ignored.
Could it get worse?
Yes we can...
GDP contraction will most likely be at least three times as big for 2009 as used in the budget projections and there may be a continued contraction in GDP for 2010. The 2010 budget if filled with counter-productive measures which will only increase the deficit and nothing more. There is an increase of fear in regards to the continued rise in the federal budget, which will cap any potential recovery. There simply is no room for a sustainable economic recovery with deficits. An economy can't borrow itself out of a recession or a depression. The more the economy is pushed with counter-productive measures the more the economy will push back and the downward spiral will only accelerate, with false signs of stability.
In attempt to continue the display of ignorance, arrogance and stupidity, the Obamanites have issued a progress report on the $787 Billion stimulus package (White House updates stimulus progress; CNNMoney.Com). The Obamanite stimulus package, just like TARP, will only stimulate the federal deficit an nothing more. Ultra-short term job creation in one sector of the economy, mainly construction and governemnt, is sacrfifized for long-term economic plans in order to create the illusion of growth and change. A lot of money will be sent to education, since the teachers union one of the biggest Obama supporters. The $787 Billion stimulus, just like the $3.6 Trillion budget, is porked up and will partially pay off for the received votes.
In the meantime, another dead cat bounce initaitve of the Obama administration, more counter-productive moves have been initiated or increased on the housing front (Gov't expands housing plan, off to slow start; AP). In essence, the plan offers support to those who have purchased a home they could not afford with money they did not have. In order to make things worse, those who lend them the money did not have it either, you get the idea.
Since the current hype is to focus on minor issues which are part of the side-effect of larger problems while the core will be ignored until it explodes, the Obamanites push a credit card reform which prohibits rate increases and days notices to customers before legit rate hikes (Obama urges Congress to act on credit card bill; AP). Nice move but equivalent then to pour a bucket of water in the Atlantic in order to raise the overall water level. The Senate pushes the bill (Senate deal reached on bill to impose credit card curbs; CNNMoney.Com).
The credit card crisis will dwarf the 'regular credit crisis' and will have far more negative effects on the economy. Unfortunately the looming credit crisis is ignored just as the current credit crisis has been ignored.
Could it get worse?
Yes we can...
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