The Bush Administration today issued a mind boggling record deficit projection of $482 billion for 2009. And that’s not even counting the off-budget estimated $80 billion being spent in Iraq and Afghanistan, nor the cost of the Fannie Mae/Freddie Mac and homeowner bailout bill.
That’s a yearly deficit of over one-half trillion dollars, most of it borrowed from strategic competitors like China and Kuwait.
Skyrocketing energy costs are only beginning to ripple through the economy, showing up as higher prices in everything from food to tires to pharmaceuticals.
Home foreclosures are up a staggering 250% (in LA), unemployment is rising rapidly, and even successful businesses with great credit history can’t get a loan.
The entire financial system, ranging from Wall Street, investment houses, to regional banks is in a deep freeze driven by the fact that no one knows what anyone’s paper assets are worth. The economy is so bad that Bush has been forced to betray his conservative base by doing an about-face (legacy pun intended) on the aforementioned bailout. Ayn Rand must be rolling over in her capitalist grave.
Obviously, this is bad news for all Republicans running for office this year. Despite the tragedy of Iraq and the increasing threat of a reconstituted Al Qaeda and resurgent Taliban in Afganistan and Pakistan, we’re back to “It’s the economy, stupid” as the overriding political issue of the 2008 election. And it’s hitting the McSame Campaign like a Democratic mule kick to the gut.
McSame has admitted that the economy is not his strong suit, and that he’s trying to make up it for it by reading the book by the man who did as much as anyone to create the current crisis, former Fed Chairman Alan Greenspan. Kinda like asking a surgeon with a history of amputating the wrong limbs to take a little off the top.
McSame’s answer to the ruinous cost of energy— his flip-flop on off-shore drilling, is a classic case of bad timing, considering that oil billionaire (and Swift Boat funder) T-Boone Pickens is currently spending $58 million on an advertising campaign that states that we can’t drill our way out of the crisis.
Oh well, McSame can still run as Commander-in-Chief of the “surge.”
As for his snuggling buddy, George Junior, the latter can sleep easy knowing that once again he has bested his father, the previous deficit champ. By racking up the three largest deficits in US history, W. wins the gold, silver and bronze medals. Now it’s on to the Beijing Olympics, where he has volunteered to judge the synchronized waterboarding competition.
July 29 (Bloomberg) Merrill Lynch, the third-biggest U.S. securities firm, will sell $8.5 billion of stock and liquidate $30.6 billion of bonds at a fifth of their face value to shore up credit ratings imperiled by mortgage losses.
July 29 (Reuters ) Home Prices Fall in May, Erasing Four Years of Gains. ...S&P said the composite index of 10 metropolitan areas fell 1 percent in May, for a 16.9 percent year-over-year drop. Regions that saw some of the largest gains during the housing boom, such as Miami and Las Vegas, were the worst performing markets in May. Miami home prices fell 3.6 percent in May from April for a 28.3 percent annual drop. In Las Vegas, prices in May slumped 2.9 percent, for a 28.4 percent decline from a year earlier.