President Obama to Push 3-Year Spending Freeze on Non-Security Discretionary Spending
In his budget for Fiscal Year 2011, to be presented on Monday, February 1, President Obama will propose a three-year hard freeze on non-security discretionary spending, to last from 2011 through 2013.
This is nuts. If he follows through with this, the only way he'll be able to stimulate the economy and create more jobs is through military spending — more high-end weapons systems, more arms sales and more troop deployments. Awesome. And to be entirely selfish about it, if the American economy stalls again what happens to ours? Harper is talking as if he intends to do pretty much the same thing here so growth in our economy would have to come from exports. No?
I hear ya, pogge.
And I'm not the only one.
Meet the new boss, same as the old boss.
{sarcasm] And God Bless America, and its Manifest Destiny. [/sarcasm]
From the spin zone to the twilight zone.
Have you seen Coyne's recipe for cutting spending? Read it and weep.
Unable to learn. They're threatening their own system with their delusions.
The US is screwed. They are drowning in debt, and can't get out of recession without going farther in, but can't go farther in debt without screwing up their economy in the long term. Bill Clinton managed to balance the budget, but the debt he had to manage was half that that Obama faces.
I keep getting reminded of "The Onion"'s headline - Black Man given World's Worst Job.
America is diminishing in signifance and power on the global stage, this slide was begun under Bush Jr, and can't be stopped until it's run its course. Of course, the american government can't see that, and will cling to the illusion of its global authority, that will act as an anchor, dragging it down.
Once, they were a great powerfull country. They used to be The Bald Eagle, now they have become A Eagle that's gone bald.
so growth in our economy would have to come from exports. No?
Happily, no. Domestic demand drove the last expansion, and it can play the same role this time around as well.
hmmm - correct me if I'm wrong, but the growth in the last expansion came when our dollar was low. That made it more expensive to import goods, and made our own goods more competitive in the domestic market. Our low dollar helped increase domestic market share of made in Canada goods. Our dollar is not low now. In fact, it is close to parity with the US and that is not likely to change. in fact because our dollar has become so closely tied to oil, it will likely see a slow increase as the rest of the world picks up. This will keep Canadian manufacting down, and depress employement in all provinces except Alberta, the main beneficiary of oil revenues.
Increase in domestic demand may play a small role in any recovery, but it will not be the main driver, or if it is, it will be a very slow "jobless recovery".
Well, maybe if we had an industrial policy (ideally a green one), some protectionism, and measures to increase wages we might get some domestic demand stimulating domestic supply.
Around the same time I'd expect to meet Satan skating to work admiring the aerobatic flocks of pigs.
hmmmm - I wonder what fried pig wings would taste like. Crispy chicken wing texture with the flavour of bacon on the inside. Maybe some genetic engineer should get to work on that.
Domestic Demand increases have also built upon a giant load of consumer debt during the past decade. There are limits to how much money people can spend that they don't actually have, governments and banks have both acknowledged this in recent years. So if you want to increase domestic demand, you better be willing to increase real, inflation adjusted wages for the first time in 30 (40?)years.
Ah well, a W shaped recession instead of an L shaped one. Either way it means about 10 years of zero or less growth.
Nouriel told us there's be days like this.
New GDP numbers today - economy is up but....
Strength is from financial markets (no job gain, not really producing things, just moving money around), and mining/resouce growth (again, no job gain, just the stuff we mine has gained in value, artificially inflating GDP). That's it. Without those twin relatisticly irrelavant gains, we are still in recession.
I was away on business for a bit or I would have picked up on this one sooner:
...if you want to increase domestic demand, you better be willing to increase real, inflation adjusted wages for the first time in 30 (40?)years.
Yes. The middle class has been getting hammered in the U.S. and has been treading water here. If you want to increase demand that trend has to be reversed.
And then there's Yeti's latest observation that the growth in GDP is based on economic speculation and commodity prices. This is why "belt tightening" and spending freezes are premature. The stock market isn't the economy. Just because the markets seem to have recovered doesn't mean the real economy has.