Deficit spending got just a single mention in President Obama's inaugural address. But the outcome of the the long-running conflict with Republicans over his tax-and-spend policies will help shape the government's role in coming years, not to mention Obama's legacy.
It has been a long, confusing summer for the federal budget: The FAA shutdown, the debt ceiling crisis, the Deficit "Supercommittee." But all of that was just prelude to the battles ahead over the 12 major appropriations bills to fund the government's "discretionary" spending.
Republicans pushing for spending cuts in the 2011 federal budget may be ready to shut the government down to get their way. But is anyone ready to do what it would take to really make a dent in the federal budget: raise taxes on the rich and close corporate tax loopholes?
The European debt crisis is back: Portugal is in political turmoil, and may need a major bailout, and Spain may too. But the E.U.'s strong healthy are rebelling against propping up their weaker neighbors. The real issue, though, is that the E.U. hasn't yet addressed the fundamental flaw built into it at the euro's creation.
Like all budgets, the federal government's spending plan is all about revenues and expenditures. Unfortunately, Uncle Sam is very good at grossly overestimating tax receipts and grossly underestimating spending. It's enough to make you wonder if any of it is real.
When some new members of Congress recently said they oppose raising the U.S. debt limit, it triggered warnings of "catastrophic consequences." Indeed, the result wouldn't be pretty. But here's what's at stake as the country's debt burden swells every year.
Doomsayers insist the recent rapid rise in yields means the nation's creditors are finally getting fed up with financing U.S. deficits. But a stronger argument says the cause is better-than-expected economic reports that have been piling up recently.
Nouriel Roubini, the NYU economics professor who has earned the nickname "Dr. Doom" for his predictions, says he's concerned the tax cut compromise struck by President Obama and GOP leaders could expose the U.S. to bond vigilantes who will drive up bond yields, resulting in higher borrowing costs for the federal government.
President Obama's National Commission on Fiscal Responsibility and Reform couldn't get enough of its members to approve its own recommendations or to find the 14 votes needed to send its proposal to Congress. But don't count out deficit reduction yet.
The new plan to reduce the national deficit, expected to be released Wednesday, includes many of the highly controversial proposals from the previous version, including increasing the Social Security age and reducing benefits from the program.
The U.S. must act to rein in its massive budget deficits or face the risk of a bond market crisis, former Fed Chairman Alan Greenspan said Sunday. If deficits begin to frighten the bond market, interest rates will rise, undermining the recovery, and possibly causing a double-dip recession.
The federal deficit will amount to the equivalent of approximately 10% of U.S. gross domestic product for the fiscal year, which ended Sept. 30, according to a Treasury official. That's about the same percentage as the previous fiscal year.
In a new survey, economists say the U.S. government should focus on promoting economic growth rather than reducing the deficit in the near term. However, 75% of them oppose another stimulus package.
Every 40 years or so in the U.S. American capitalism has to be saved from the capitalists, and the current economic slump appears to be one of those times. What's needed now are policies that will help boost demand.