budget deficit

If You Want to Decrease the Budget Deficit, Decrease Health Care Costs

With the never ending pundit pontificating on the budget deficit and how we must cut spending, it seems always the bulls-eye is on the backs of the U.S. middle class, poor and national interest. Yet, even the Wall Street Journal notes health care costs are out of control. In their number of the week, they amplify the U.S. Spends 141% More on Health Care than other nations.

 

Tax Cuts for the Rich Do Not Generate Jobs

Earlier this week the Huffington Post proclaimed Obama caved on giving tax cuts to the rich. Previously Economist Alan Blinder declared extending Bush tax cuts will not create jobs.

President Barack Obama's top adviser suggested to The Huffington Post late Wednesday that the administration is ready to accept an across-the-board, temporary continuation of steep Bush-era tax cuts, including those for the wealthiest taxpayers.

The infamous Bush tax cuts, what are they exactly? Below are the tax rates for 2010.

Enron Fun with Fannie and Freddie

Let me take you back to Christmas Eve, 2009. It was a time to wrap gifts for loved-ones. That's how the Obama Administration felt about the financial industry when it lifted all caps in emergency bailout money to Fannie Mae and Freddie Mac. That means the taxpayer was on the hook for all losses at these two mortgage giants no matter how large the losses.
The move caused a slight stir, but never got the attention of the American public because the announcement was timed to coincide with the peak season of distraction. And so it was forgotten...but not by Fannie and Freddie.

The Very Bad Year is Just the Beginning

Anyone in denial about the United States and the economy should now get over it.

The unemployment numbers for December came in and it ain't pretty.

The unemployment rate is now 7.2%. This is the largest unemployment jump since 1945, The massive job hemorrhage shows the economy is in free fall.

 

Also the Congressional Budget Office released it's Budget 2009 Outlook report and it ain't pretty either.

  • CBO projects that the deficit this year will total $1.2 trillion, or 8.3 percent of GDP
  • CBO expects federal revenues to decline by $166 billion, or 6.6 percent, from the amount in 2008
  • An unemployment rate that will exceed 9 percent early in 2010
  • CBO anticipates that the current recession, which started in December 2007, will last until the second half of 2009, making it the longest recession since World War II

T-Bills hit 0%

Amid the good news that the banks are beginning to lend again, the 4-week Treasury bond market is showing something different, which makes me suspect some mixed signals out there.  Quote and link from the article:


Investors are so nervous they're willing to accept the same return from government debt that they'd get from burying money in a coffee can — zero.

Hmm, suddenly apparently the financial equivalent of a mattress doesn't seem so bad; in fact, in trading at times T-bills hit a slightly negative rate.

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Marginal Tax Rate Single Married Filing Jointly or Qualified Widow(er) Married Filing Separately Head of Household
10% $0 – $8,375 $0 – $16,750 $0 – $8,375 $0 – $11,950
15% $8,376 – $34,000 $16,751 – $68,000 $8,376 – $34,000 $11,951 – $45,550
25% $34,001 – $82,400 $68,001 – $137,300 $34,001 – $68,650 $45,551 – $117,650
28% $82,401 – $171,850 $137,301 – $209,250 $68,651 – $104,625 $117,651 – $190,550
33% $171,851 – $373,650 $209,251 – $373,650