UP Ibalon Bicol: deficit

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Credibility: a big factor in economic recovery

11/04/2009 | Posted by mesiamd | Edit Post

When Pres. Barack Obama was elected in November last year, Americans and the entire world were quick to embrace a charismatic man with a promise. Expectation was matched by soaring rhetoric and media support that made the prudent among us watchful.

There were quick infusions of capital to rescue the ailing banks, the collapsed housing market, and bankrupt auto industry---- as if the United States could buy its way out to prosperity. Short-lived jubilation came from cash-strapped Americans who believe that government entitlements would solve their money problems. They banked on Pres. Barack Obama who they thought could bring the Harvard magic and his talents to the realities of their household. At their peril, Americans suddenly learned their expectations couldn't be met as painted before the election.

A chorus of approval to Obama’s “changes” later degenerated into public insecurity. Trillions of dollars had to be paid by taxpayers on recovery plans riddled with questionable provisions. Interest groups, political allies, and large companies were direct beneficiaries while the people waited for some windfall that was hard to come by.

For instance, healthcare budget, comprising 16% of the US economy, had ominously ballooned from below $900 billion dollars to an astronomical $1.2 trillion. Many were not happy because this was not what they expected in the onset. The public saw moves to make Americans accept a plan that is very costly---a debatable proposal with hidden and confusing strings attached.

A year into Obama’s presidency, despite hopeful indications that the economy is recovering, millions of Americans are still jobless, the highest ever in 26 years. Financial experts say the recession is going away, but they are quick to qualify that the the future is uncertain and life ahead will be choppy. It's as if they don't want to be blamed if something far worse happens.

Unemployment rate has climbed to 10%. This breaks the psychological confidence of those who believe in the competence of the administration. The budget deficit has gone to the roof, worrying USA’s domestic and international business-partners. How will America be able to pay those trillions of debts from foreign lenders without mortgaging the people's future?

Despite rosy reports of improvements in US manufacturing, consumer spending has been sluggish. This causes markets to lose confidence. Investors have become panicky as the Christmas season is coming. They know tepid business will only delay the financial rebound everybody is wishing for.

“There seems to be lots of uncertainty in the markets," said Peter Lai, investment manager at DBS Vickers in Hong Kong. "I'm very cautious about the U.S. economic figures. It will be very damaging to sentiment if the U.S. unemployment rate crosses 10 percent."

Hong Kong's Hang Seng led Asia's losses, falling 380.13, or 1.8 percent, to 21,240.06 while South Korea's Kospi was down 0.6 percent at 1,549.92. Japan's market was closed for a holiday.

Elsewhere, Australia's S&P/ASX 200 closed down 0.2 percent and Taiwan's market lost 0.2 percent. China's Shanghai index bucked the trend, gaining 1.2 percent to 3,114.23 with sentiment still boosted by a weekend report manufacturing expanded for an eighth straight month in October.

As trading got under way in Europe, Britain's FTSE 100 was off 1.3 percent, Germany's DAX lost 1.4 percent and France's CAC 40 fell 1.5 percent. Stock futures pointed to losses Tuesday on Wall Street. Dow futures were down 49, or 0.5 percent, at 9,686 and S&P Futures dropped 5.9, or 0.6 percent, to 1,033.20." ----Philstar.com (11/02/09)

Aside from the economic front, there is doubt in how Untied States is dealing with the nuclear issue of North Korea and Iran which use deceitful diplomacy to proliferate weapons of mass destruction. With little options, USA is forced to deal with these rogue nations.

Lately, Obama has accepted the reinstatement of Pres. Hamid Karzai, known to have won in a rigged election which left his chief rival withdrawing in protest. Afghanistan, the center of the 911 disaster, is experiencing a resurgence of Taliban activity. Bomb attacks, killing soldiers and civilians are on the rise.

Pres. Barack Obama is ambivalent on his foreign policy in spite of the tough fight US military men are facing lately. He can only promise more US servicemen for troubled Kabul, but their number will be short of the 40,000 top US commander Gen. Stanley McChrystal is asking for to stablize the militant Islamists' lair.

Like in Afghanistan, the Al Qaeda and Taliban threats in Iraq and Pakistan continue to boil with no certainty of how to solve the terrorism problem which brazenly kills scores of innocent victims. Car bombs and suicide bombers continue to bring death and destruction the civilized world finds hard to comprehend.

If Pres. Obama can’t reverse this credibility problem, it will be hard for him to accomplish his election promises. As the public starts to know his liberal and socially progressive agenda with little laudable result, his approval rating (especially among conservatives) has gone low alienating many of the voters who supported his election early on.

His ardent supporters like US ex-president Jimmy Carter blames Obama's floundering support on race--- an assertion that many don't believe. If it is because the president is black that is a problem, how come so many Americans gave him overwhelming mandate in his election?

Obama's style of governance is creating more political divisions that make a bipartisan cooperative work difficult. Many observe the president has the tendency to blame problems on others without facing them squarely. His assistants in Washington seem out of touch with the people they serve. In the meantime, some say the president has become scrawny and fast losing weight. =0=

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Labels: Accountability, Al Qaeda, credibility, deficit, nuclear hazard, politics, recession, recovery, Taliban, terrorism, Totie Mesia, trust

New world currency to replace the US dollar?

9/08/2009 | Posted by mesiamd | Edit Post

Yes! This is the proposal being pushed by the United Nations to revamp the world’s monetary system. Officials of the UN Conference on Trade and Development (UNCTAD said the money arrangement right now is not working well and there is a need for change to help correct the worldwide financial downturn.

The proposal comes at a time with China, worried about USA’s increased printing of cash has suggested with Russia that the US dollar, the current global currency must be replaced to avoid inflation.

"Replacing the dollar with an artificial currency would solve some of the problems related to the potential of countries running large deficits and would help stability," said Detlef Kotte, one of the report's authors. "But you will also need a system of managed exchange rates. Countries should keep real exchange rates [adjusted for inflation] stable. Central banks would have to intervene and if not they would have to be told to do so by a multilateral institution such as the International Monetary Fund." ----Telegraph.co.uk (09/0007/09, Conway, Edmund)

As predicted by economists, hyperinflation is a risk for the United States as the Obama Administration tries to implement its plan of excessive spending. Worrying the public of the present money crunch, the US budget deficit has worsened and risig fast. With Obama's watch, the US economy is expected to saddle a staggering 9 trillion deficit in the next 10 years putting a huge burden to taxpayers.

In the recent poll of the a Geneva-based World Economic Forum, the US dropped down only second to Switzerland as the most competitive economy in a poll conducted to greater than 10,000 business leaders. Singapore and Sweden came third and fourth respectively. (Photo Credit: =0=

Yes! This is the proposal being pushed by the United Nations to revamp the world’s monetary system. Officials of the UN Conference on Trade and Development (UNCTAD said the money arrangement right now is not working well and there is a need for change to help correct the worldwide financial downturn.

The proposal comes at a time with China, worried about USA’s increased printing of cash to buy bonds has suggested with Russia that the US dollar, the current global currency must be replaced to avoid inflation.

"Replacing the dollar with an artificial currency would solve some of the problems related to the potential of countries running large deficits and would help stability," said Detlef Kotte, one of the report's authors. "But you will also need a system of managed exchange rates. Countries should keep real exchange rates [adjusted for inflation] stable. Central banks would have to intervene and if not they would have to be told to do so by a multilateral institution such as the International Monetary Fund." ----Telegraph.co.uk (09/0007/09, Conway, Edmund)

As predicted by economists, hyperinflation is a risk for the United States as the Obama Administration tries to implement its plan of excessive spending. Worrying the public of the present monetary plans, the US budget deficit has further jumped and is expected to reach 9 trillion in the next 10 years.

In the recent poll of the Geneva-based World Economic Forum, the US dropped down second to Switzerland as the most competitive economy in a poll conducted to greater than 10,000 business leaders. Singapore and Sweden came third and fourth respectively. (Photo Credit: AP; Mary Altffer) =0=

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Labels: budget, business, currency, deficit, money, Totie Mesia, trillion dollars, UNCTAD, United Nations

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

Chicago interrupts business day to save

8/18/2009 | Posted by mesiamd | Edit Post

To cut cost, the City of Chicago temporarily stopped government businesses by calling on a non-paid holiday for its workers on Monday, August 17, 2009. Among its services the city stopped garbage collection, closed libraries and interrupted street cleaning by asking workers to stay at home. However, emergency services in hospitals, police department and firefighting units were available.

Because of the skyrocketing budget deficit that runs to more than $500 million, Chicago reduces its services to save money just like what other cities have done. Saving of $8.3 million is expected by the partial business stoppage. There is pressure to increase taxes to close the city’s budget gap. (PHoto Credit: destination hero.com) =0=

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Labels: budget, business, Chicago, deficit, economy, holiday, Totie Mesia

US budget deficit jumps to 1.3 trillion

8/08/2009 | Posted by mesiamd | Edit Post

The biggest economy of the world is getting poor. For this year, in July, official records showed a sharp climb in America’s budget deficit that clouds trust in Pres. Barack Obama’s ambitious plan to re-structure the United States.

Anger and opposition are brewing as the Americans wake up to the reality that their country is drastically being changed to a direction that they can’t comprehend. The public is bracing for a more intrusive government which seeks to regulate the lives of its citizens.

In spite of Obama’s campaign promises that taxes will not go up, that the health care reform will be an improvement of the current system, and that the bail-outs of banks, financial institutions and the housing industry will save the economy, many Americans are convinced the United States can’t buy its way to prosperity. They are averse to excessive trillions of dollars of spending by the government.

“The deficit for the first 10 months of fiscal year 2009, which began October 1, reached 1.3 trillion dollars, close to 880 billion dollars greater than the deficit recorded through July 2008, said the US Congressional Budget Office (CBO).

Outlays rose by almost 530 billion dollars, or 21 percent, and revenues fell by more than 350 billion dollars, or 17 percent, compared with the amounts recorded during the same period last year, the non-partisan CBO said.” AFP (08/07/09)

The amounts above are too large to be understood by the ordinary Americans, but many are suspecting something ominiously wrong is going in the management of the country. It is unwise to incur big debts and massive spending at the expense of the taxpayers and ask the children of the next generation to pay for them.

The number of unemployed workers has declined for the first time in 15 months, but joblessness at still high at 9.4%; it is expected to breach 10% by yearend. There are pockets of improvement of the housing market, but housing prices are still falling and foreclosures are rampant.

In spite of the on-going financial crisis, government leaders of Capitol Hill and their supporters spend lavishly with little accountability. Barack Obama’s assurance that things are better under his watch and the recession is ending does not match with what the people are experiencing: Insecurity.

In spite of the rosy outlook the administration is saying, more money is needed to push the economy. There are talks of another stimulus package. There is pressure to borrow and collect more taxes from the people. Entitlements and welfare claims have risen---about 34 million Americans receive food stamps and many more are dependent on social security and unemployment subsidies.

A dangerous mix of a faltering economy, excessive government spending, a declining honesty in society, and a citizenry not used to a life of frugality has become a problem. In spite of America’s apparent strengths, there are obvious weaknesses that can undermine the nation’s future stability. (Photo Credit: Rich Seattle) =0=

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Labels: budget, deficit, economy, joblessness, recession, taxation, taxes, Totie Mesia, unemployment, USA

UP Ibalon Bicol

Credibility: a big factor in economic recovery

New world currency to replace the US dollar?

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

Chicago interrupts business day to save

US budget deficit jumps to 1.3 trillion

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