UP Ibalon Bicol: budget deficit

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Dr. Doom thinks the worse is yet to come

11/19/2009 | Posted by mesiamd | Edit Post

In an article written for the Daily News, Nouriel Roubini, better known as Dr. Doom predicted that unemployment would be worse next year. From the official jobless rate of 10.2% the NYU economics professor who foresaw the economic meltdown spoke grimly of greater loss of work ---probably now hovering at 17.5% if those who stopped looking for jobs or remained underemployed were included.

“The long-term picture for workers and families is even worse than current job loss numbers alone would suggest. Now as a way of sharing the pain, many firms are telling their workers to cut hours, take furloughs and accept lower wages. Specifically, that fall in hours worked is equivalent to another 3 million full time jobs lost on top of the 7.5 million jobs formally lost.

This is very bad news but we must face facts. Many of the lost jobs are gone forever, including construction jobs, finance jobs and manufacturing jobs. Recent studies suggest that a quarter of U.S. jobs are fully out-sourceable over time to other countries.”----Daily News (11/15/09, Roubini, N.)

Roubini suggested that in the coming year the unemployment rate will hover high at about 11%, but it will be far worse in the following two years. Because of a weak labor market, he says the economic growth and recovery will be slow.

The budget deficits will rise accompanied by slowing in the real estate market. Delinquencies on mortgage payments, larger budget deficits and a fall of real estate prices are expected. If these scenarios occur, banks and lending institutions will bear much of the pain.

Roubini’s prescription is for the government to embark on another stimulus---creation of jobs by investing on infrastructure. Giving away unemployment checks is not enough. Those without work must find a way to have one and be productive.

Judging from the falling popularity of Obama, there is doubt if the US president can steer the country to better economic times. As he rounds up his visit to Beijing, China, Obama speaks of a double-dip recession if debt and spending are not controlled. =0=

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Labels: budget deficit, Dr. Doom, economy, joblessness, jobs, Nouriel Roubini, prediction, recession, recovery, Totie Mesia, US debt

Money woes threaten the budget of at least 10 US states

11/12/2009 | Posted by mesiamd | Edit Post

It is not enough to know that New York State has its own money trouble. According to the Washington based Pew Center, California together with 9 other states are on the brink of budget disasters. The group’s analysis put lawmakers and governors in these financially troubled states on notice to the looming increase in taxes, employee lay-offs, and slowing of government services. The economy deteriorates in California, Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin.

According to the report, quick action is needed to mitigate a fiscal disaster. Double digit budget deficits are rising with poor business, massive unemployment, and uncontrolled housing slump and foreclosures. The 10 vulnerable states are home to a third of the American population---California, with a huge economy is mentioned as having the highest risk

“California leads the most vulnerable states identified by Pew, which describes it as having poor money-management practices. According to the Legislative Analyst's Office, California has made nearly $60 billion in budget adjustments — in the form of cuts to education and social service programs, temporary tax hikes, one-time gimmicks and stimulus spending — since February as tax revenues plunged.
Many of those fixes aren't expected to last. The state's temporary tax hikes will begin to expire at the end of 2010, while federal stimulus spending will begin to run out a year after that.”--- AP (11/11/09, Lin, J.)

By estimates California will incur a huge deficit hovering at $12.4 billion and $14.4 billion next year. This may be about 17 percent of the state's $84.6 billion general fund budget that is used for daily operation. Governor Arnold Schwarzenegger predicts more budget cuts are in the offing as a corrective measure.

The poor economy is creating undue stress of many Americans. They are learning the hard way to live within their means. The public is realizing that USA can’t buy its way to prosperity (i.e. by extravagant stimulus packages, unbridled borrowing and spending) as what the current government is doing. The country under Pres. Barack Obama may go through extreme financial hardship if his economic planners don’t go slow in their flamboyance and cocky spending. In this financial crisis, the government should have little room for gimmickry and naive manipulation of the economy. (Photo Credit: library.thinkquest.org) =0=

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Labels: bankruptcy, budget, budget deficit, economy, Gov. Arnold Schwarzenegger, money, national economic planners, Pew Center, recession

Obama’s projected budget deficit jumps from $7.108 trillion to $9 trillion

8/23/2009 | Posted by mesiamd | Edit Post

When Americans were told that under Pres. Barack Obama's term, the 10-year US budget deficit will reach more than $7 trillion, they could only sigh in disappointment. This was not the promise they heard during the campaign. Under Obama’s talk when he sought the presidency, he assured: USA could ride the tide of economic crisis with less spending and less worry. It was not the case.

The deficit forecast was worse than what the White House optimistically insisted. Even with $1.3 trillion deficit Obama inherited from Pres. George Bush, a jump to $9 trillion had been staggering. Amidst promises to overhaul healthcare, improve education, and bring back the country to prosperity, mounting doubts continued to erode the trust Obama enjoyed since the election. Talks of economic recovery was not consistent with persistent high unemployment.

In keeping with original forecast of the Congressional Budget Office issued early in early 2009, the budget deficit in 2010 to 2019 is expected to reach a staggering $9.1 trillion. The disclosure brings more uncertainty and trepidation to the public that tries to make sense of the planned healthcare overhaul which will cost the government greater than $1 trillion in a nine years.

Republicans are quick to point out the excessive spending of Obama. Many question how America can pay and at the same time keep its credit rating in the world market with such huge deficit.

Economists wonder if the administration can stop heavy spending without raising taxes which can slacken eeconomic growth. Time is running out for Obama to convince the Americans that he is on the right track.(Photo Credit: nmfbihop) =0=

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Labels: budget, budget deficit, deficit, forecast, taxes, USA

UP Ibalon Bicol

Dr. Doom thinks the worse is yet to come

Money woes threaten the budget of at least 10 US states

Obama’s projected budget deficit jumps from $7.108 trillion to $9 trillion

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