Friday, August 26, 2011

Worse Than It Looks: CBO Says Economic Outlook More Dire Than Reported: Wonkette Reams the Righties/Goldmen Hire Sharks/Sensors Removed/Aircraft Blowup!!!

"We might as well have been throwing cream pies."

- Kurt Vonnegut, estimating the net effect of the Antiwar Movement on the course of the Vietnam War

I certainly thought (from my own and my friends' experience) that this was true. Thank whoever that the righties haven't assumed so much control in Congress (yet) that they've been able to stop the CBO from reporting the facts about current economic conditions.

Worse Than It Looks: CBO Says Economic Outlook More Dire Than Reported
Partisans will surely find things to love and hate about CBO's updated economic outlook. It projects that the 2011 deficit will be lower than the last two years' deficits, but still near record highs. It forecasts a slow but steady economic recovery over the next six years. And it makes clear that the country's medium-term fiscal imbalances are manageable unless lawmakers decide to screw things up.

But there's also a major, major caveat.

"CBO initially completed its economic forecast in early July, but it updated the forecast in early August to reflect the policy changes enacted in the Budget Control Act [the debt limit deal]," the report reads. "However, the forecast described here does not reflect any other developments since early July, including the recent swings in financial markets, weakness in certain economic indicators, and the annual revision to the national income and product accounts. Incorporating that news would have led CBO to temper its near-term forecast for economic growth."

Emphasis added.

This is why the CBO's forecast for slow but steady recovery differs so markedly from private sector forecasts, which are increasingly leery of a double dip recession and project growth at levels much lower than previously expected.

It's depressing news for the country, still suffering with unemployment above 9 percent, and a tough political reality for President Obama, who will likely face re-election under dire economic circumstances. Even if you ignore CBO's caveat their forecast still projected unemployment "to fall from 9.1 percent in the second quarter of 2011 to 8.9 percent in the fourth quarter of the year and to 8.5 percent in the fourth quarter of 2012."

Pinpointing the causes of market turmoil isn't science -- and it's often a biased Rorschach test -- but many analysts say the congressional brinkmanship over the debt limit in July deal contributed to recent swings.

Because CBO uses current law as a baseline, it projects deficits to fall markedly over the course of the decade, in large part because the Bush tax cuts are set to expire. However the forecast could look much more bleak if those tax cuts were extended; or indeed if the government were to enact new stimulus measures and yet still see anemic growth.

Read the full report:

There are many good places to find serious dissections on economics and political issues. Wonkette is not one of them, and yet, they've outdone themselves here:

Wonkette posits that:

Social Security is in “trouble” because wealthy people aren’t required by the government to actually pay their share into the national program, and also because Congress has been “borrowing” billions of dollars that working people have paid into the program so that they might not have to starve or die of common illnesses once they’re chewed up and spit out by the capitalist system.
But there’s another part of Social Security that’s running out of money even faster than the old age pensions, because a record number of discarded workers are now claiming disability payments and Supplemental Security Income — 3.3 million unwanted laborers will file for the last-ditch payments this year alone, and nearly 14 million currently receive the monthly stipends and early Medicare coverage. The money isn’t much, and is based on either your actual paycheck contributions or limited to an average $500 a month for SSI, but it’s “better” than the American alternative, which is pretending to rob a bank so you can get food and medical care in prison.

To get disability or SSI, the applicants must go through a lengthy process of ritualized refusals and humiliation: Two-thirds of applicants are turned down, and many legitimately disabled workers are forced to go through two years of appeals and hire vulture law firms to finally get the paltry benefits. But the focus of the federal government is always on “cracking down” on people who aren’t really horrifically disabled enough to get a government check, because it’s certainly not enough to simply be an unwanted factory worker in her fifties who entertains fancy dreams of not being homeless after her extended unemployment benefits run out after her fourth layoff.
Morally, it’s always better to catch the miscreant buying forties with his SSI rather than, say, the biggest corporations in the world not paying a nickel in taxes.

The Associated Press reports from Washington:

Claims for disability benefits typically increase in a bad economy because many disabled people get laid off and can’t find a new job. This year, about 3.3 million people are expected to apply for federal disability benefits. That’s 700,000 more than in 2008 and 1 million more than a decade ago.

“It’s primarily economic desperation,” Social Security Commissioner Michael Astrue said in an interview. “People on the margins who get bad news in terms of a layoff and have no other place to go and they take a shot at disability.”
So it’s kind of like the Lotto! Except instead of paying money you can’t afford down at the corner market for a chance in hell at a million dollars — because that statistical impossibility is literally the only way out of the hole you’ve been intentionally pushed down — you promise a boiler room full of fourth-rate sharks a share of your disability check in exchange for them filing enough papers to finally get you approved. Win win?

Anyway, Disability and SSI are now scheduled to begin scaling back benefits over the next five years, when the programs as currently funded will only be able to pay 85% of what’s promised. So that $500 payment will go down to $425 a month, at first, but it should be gradual enough that the poors won’t hardly notice when it’s down to $100 a month and even the Pay-Chex shop next to the liquor store and the pawn shop won’t cash it.
It's always good to catch up with the Goldmen who run the country and try to discern what they think is upcoming for both them and US. Today it's positively eye opening.
Posted: 23 Aug 2011
Weingarten is a very heavy legal hitter, so it looks like old Lloyd really is worried. Geeze, Lloyd, haven't you noticed bankers don't go to jail? (h/t odd man out.)

Goldman Sachs Chief Executive Lloyd Blankfein has hired high-profile Washington defense attorney Reid Weingarten, according to a government source, as the Justice Department continues to investigate the bank.

Blankfein, 56, is in his sixth year at the helm of the largest U.S. investment bank, which has spent two years fending off accusations of conflicts of interest and fraud.

The move to retain Weingarten comes as investigations of Goldman and its role in the 2007-2009 financial crisis continue.

The news spooked already jittery investors. Goldman shares fell sharply in the final minutes of regular trading after Reuters reporting the hiring, finishing down 4.7 percent at $106.51, their lowest level since March 2009.

They slipped further in after-hours trade to $105.45.

The Senate's Permanent Subcommittee on Investigations (PSI) in April released a scathing report that criticized Goldman for "exploiting" clients by unloading subprime loan exposure onto unsuspecting clients in 2006 and 2007, and concluded that its top executives misled Congress during testimony in 2010.
[...] "This was the last thing that Goldman Sachs or any institutions in the sector needed," said Peter Kenny, managing director of Knight Capital in Jersey City, NJ. "There is zero tolerance for risk or perceived risk right now."
How about an update on the earthquake sensor removal ("improving government" project) in Eric Cantor's district?

Yeah. And it was a good idea because too many regulations really slows down progress (and money acquisition).

Quake Sensors Removed Around Virginia Nuke Plant Due to Budget Cuts

By David Edwards
Tuesday, August 23rd, 2011

A nuclear power plant that was shut down after an earthquake struck central Virginia Tuesday had seismographs removed in 1990s due to budget cuts.

U.S. nuclear officials said that the North Anna Power Station, which has two nuclear reactors, had lost offsite power and was using diesel generators to maintain cooling operations after an 5.9 earthquake hit the region.

The North Anna plant, which was near the epicenter of Tuesday's quake, is reportedly located on a fault line.

The U.S. Nuclear Regulatory Commission rates the plant as the seventh most likely to receive core damage from a quake. But they say the chances of that are only 1 in 22,727.
According to the Virginia Department of Mines, Minerals and Energy (DMME), the Virginia Tech Seismological Observatory (VTSO) removed all seismographs from around the plant in the 1990s due to budget cuts.

In February, Dominion Virginia Power confirmed its commitment to add a third reactor to the plant.

"While Dominion has not decided on the schedule to build the unit, the company will continue to move forward with the federal combined operating license process and preliminary site development work," Dominion CEO Thomas F. Farrell II said in a statement.

US Military Video Shows Hypersonic Aircraft Test Flight

The U.S. military released new details today (Aug. 25) about the recent test flight of a super-fast prototype aircraft, along with a video showing the vehicle streaking through the sky at more than 20 times the speed of sound.
The shaky, minute-long video was taken with a handheld camera aboard a tracking vessel in the Pacific Ocean. It shows the unmanned Falcon Hypersonic Technology Vehicle 2 (HTV-2), billed as the fastest aircraft ever built, blazing bright in the sky on its way to an ocean splashdown.
The HTV-2 suffered an anomaly shortly after its Aug. 11 launch from Vandenberg Air Force Base in California, guiding itself into the Pacific sooner than military officials had hoped.
 Well, at least it's pretty. And we certainly couldn't have found a better use for the national moolah right now.

Still pretty.




Truth 101 said...

Relevant post to what I've been arguing in my community lately. especially the Social Secuirty and disability aspect.

People on disability aren't living large. they get at most I think $1,100 a month. Less than poverty. Yet the ignorant think these people are just lazy bums who don;t want to wotk and are living it up. With average rents and food prices that don't leave mush to live it up on.

Good post Suzan. great information.

TONY said...

The Plane looks capable of doing even more damage to villagers and farmers than the drones. Maybe the drones aren't lethal enough for them. If I was being 'liberated' in Libya I would be worried right now.

Suzan said...

Thank you, Truth. I believe we are together on all these issues. Wish we could get this point across easily to the mentally/emotionally challenged 'thugs who are voting against their own best interests.

And, yes, Tony. You got my point splendidly. They are developing more and more high-tech vehicles that can annihilate obstructive populaces as we breathe.

And who can breathe easily anymore?

Love you both!