Archive for February, 2009

The economy is spiraling down at an accelerating pace, threatening to undermine the Obama administration’s spending plans, which anticipate vigorous rates of growth in years to come.

A sense of disconnect between the projections by the White House and the grim realities of everyday American life was enhanced on Friday, as the Commerce Department gave a harsher assessment for the last three months of 2008. In place of an initial estimate that the economy contracted at an annualized rate of 3.8 percent — already abysmal — the government said that the pace of decline was actually 6.2 percent, making it the worst quarter since 1982.

The fortunes of the American economy have grown so alarming and the pace of the decline so swift that economists are now straining to describe where events are headed, dusting off a word that has not been invoked since the 1940s: depression. Read the rest of this entry

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“NEW YORK (CBS) ―

Secretary of State Hillary Rodham Clinton speaks to members and guests of the Asia Society Feb. 13, 2009, in New York City. Secretary Clinton’s speech was made ahead of her first official trip to the East Asian countries.

“In a swift about face from her views as New York’s senator, Secretary of State Hillary Clinton is now hammering Israel over its treatment of Palestinians in Gaza.”

In a shocking development the Obama administration has tasked Secretary of State Hillary Clinton with chastising the Israeli state while giving Hamas $900 million to rebuild the damage caused by the military action taken by Israel.

Citing Hamas as the forward foot soldiers of the Iranian terror state, the Israeli government and supporters around the world reacted with shock in what can clearly be seen as favoring a terrorist state over a long time friend. This stark shift in foreign policy can only bring into question how the Obama administration views a terror state that has been the consistent aggressor versus the one that has been it’s target since its’ creation.

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*Deficit for FY2009 would represent 12.3 percent of GDP
*Obama vows to slash deficit to $533 billion by 2013
*Cost of Iraqi, Afghan wars seen at $140 billion in 2009

By Caren Bohan and Jeff Mason

WASHINGTON, Feb 26 (Reuters) – President Barack Obama will forecast the biggest U.S. deficit since World War Two in a budget that urges a costly overhaul of the healthcare system and would spend billions to arrest the economy’s freefall.

An eye-popping $1.75 trillion deficit for the 2009 fiscal year is projected in Obama’s first budget, according to U.S. officials who briefed reporters on the numbers.

That is equal to 12.3 percent of U.S. gross domestic product — the largest share since 1945 when the country ran a shortfall of 21.5 percent of GDP.

Obama will unveil the budget at 11 a.m. EST (1600 GMT). It provides the broad outlines of a more detailed document to be released in April.

The soaring deficit figure sent U.S. Treasury bond prices lower and yields up to three week highs on Thursday.

Gold prices slid to their lowest level in more than a week, after testing all time highs over $1,000 an ounce earlier this month. Spot gold fell to $941.20 an ounce, the lowest since February 17. Stock futures rose.

The budget, for the fiscal year that begins on Oct. 1, 2009, requires passage by Congress to take effect.

While Obama, a Democrat, has broad support with both chambers in Congress controlled by his party, he could face a fight as the sticker shock of huge deficits lead to wariness about more spending for goals such as the healthcare overhaul.

FEDERAL SPENDING SOARING Read the rest of this entry

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Feb 26, 9:16 AM (ET)

By MARTIN CRUTSINGER

WASHINGTON (AP) – President Barack Obama is sending Congress a budget that would boost taxes on the wealthy and curtail Medicare payments to insurance companies and hospitals to make way for a $634 billion down payment on universal health care.

Obama’s first budget predicts the deficit for this year will soar to a whopping $1.75 trillion, according to administration officials who spoke on condition of anonymity before the public unveiling of the budget Thursday.

As part of the effort to end the nation’s financial crisis, the administration will propose boosting the budget deficit by an additional $250 billion this year – to the record $1.75 trillion – enough to support as much as $750 billion more in spending under the government’s rescue program for financial institutions. That would more than double the $700 billion bailout effort passed by Congress last October.

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By CALVIN WOODWARD and JIM KUHNHENN

WASHINGTON (AP) – President Barack Obama knows Americans are unhappy that the government could rescue people who bought mansions beyond their means.

But his assurance Tuesday night that only the deserving will get help rang hollow.

Even officials in his administration, many supporters of the plan in Congress and the Federal Reserve chairman expect some of that money will go to people who used lousy judgment.

The president skipped over several complex economic circumstances in his speech to Congress – and may have started an international debate among trivia lovers and auto buffs over what country invented the car.

A look at some of his assertions:

OBAMA: “We have launched a housing plan that will help responsible families facing the threat of foreclosure lower their monthly payments and refinance their mortgages. It’s a plan that won’t help speculators or that neighbor down the street who bought a house he could never hope to afford, but it will help millions of Americans who are struggling with declining home values.”

THE FACTS: If the administration has come up with a way to ensure money only goes to those who got in honest trouble, it hasn’t said so.

Defending the program Tuesday at a Senate hearing, Federal Reserve Chairman Ben Bernanke said it’s important to save those who made bad calls, for the greater good. He likened it to calling the fire department to put out a blaze caused by someone smoking in bed.

“I think the smart way to deal with a situation like that is to put out the fire, save him from his own consequences of his own action but then, going forward, enact penalties and set tougher rules about smoking in bed.”

Similarly, the head of the Federal Deposit Insurance Corp. suggested this month it’s not likely aid will be denied to all homeowners who overstated their income or assets to get a mortgage they couldn’t afford.

“I think it’s just simply impractical to try to do a forensic analysis of each and every one of these delinquent loans,” Sheila Bair told National Public Radio.

Read the rest of this entry

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Today, Microsoft released a security advisory warning of a very serious unpatched Excel vulnerability, which attackers have already begun exploiting on the Internet. The vulnerability affects all current versions of Excel for Windows and Mac, as well as the Microsoft Excel Viewer and the Office Compatibility Packs.

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House bill to keep govt. running totals $410 billion, features thousands of pet projects

* David Espo, AP Special Correspondent
* Tuesday February 24, 2009, 8:50 am EST

WASHINGTON (AP) — House Democrats unveiled a $410 billion spending bill on Monday to keep the government running through the end of the fiscal year, setting up the second political struggle over federal funds in less than a month with Republicans.

The measure includes thousands of earmarks, the pet projects favored by lawmakers but often criticized by the public in opinion polls. There was no official total of the bill’s earmarks, which accounted for at least $3.8 billion.

The legislation, which includes an increase of roughly 8 percent over spending in the last fiscal year, is expected to clear the House later in the week.

Democrats defended the spending increases, saying they were needed to make up for cuts enacted in recent years or proposed a year ago by then-President George W. Bush in health, education, energy and other programs.

Republicans countered that the spending in the bill far outpaced inflation, and amounted to much higher increases when combined with spending in the stimulus legislation that President Barack Obama signed last week. In a letter to top Democratic leaders, the GOP leadership called for a spending freeze, a step they said would point toward a “new standard of fiscal discipline.”

Either way, the bill advanced less than one week after Obama signed the $787 billion economic stimulus bill that all Republicans in Congress opposed except for three moderate GOP senators.

Apart from spending, the legislation provides Democrats in Congress and Obama an opportunity to reverse Bush-era policy on selected issues.

It loosens restrictions on travel to Cuba, as well as the sale of food and medicine to the communist island-nation.

In another change, the legislation bans Mexican-licensed trucks from operating outside commercial zones along the border with the United States. The Teamsters Union, which supported Obama’s election last year, hailed the move.

The Bush administration backed a pilot program to permit up to 500 trucks from 100 Mexican motor carriers access to U.S. roads.

The legislation covers programs for numerous Cabinet-level and other agencies, and takes the place of regular annual spending bills that did not pass last year as a result of a deadlock between the Bush administration and the Democratic-controlled Congress.

Congressional expenses are included. The bill provides $500,000 for what is described as a Senate “pilot program” that will defray the cost of mass mail postcards to households notifying them of a nearby town meeting to be attended by any senator.

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Rick Santelli, “Let’s reward people that can carry the water rather than drink the water.”

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