Wednesday, July 25, 2012

Under Obama, the U. S. economy continues to decline

Recent reports underscore the economic failures of the Obama administration

State and local governments, already struggling, are further harmed by shrinking federal funding

Christopher Rugaber of the Associated Press:  “U.S. states face long-term budget burdens that are already limiting their ability to pay for basic services such as law enforcement, local schools and transportation, a report released Tuesday said.  Aging populations and rising health care costs are inflating Medicaid and pension expenses. At the same time, revenue from sales and gas taxes is shrinking. And grants from the federal government, which provide about a third of state revenue, are likely to shrink, the report said.  Those challenges are made worse by a lack of planning by many states and the repeated use of one-time accounting gimmicks to cut costs, the report added.”

Bernanke is not optimistic

Martin Crutsinger of the Associated Press:  Federal Reserve Chairman Ben Bernanke sketched a bleak picture of the U.S. economy Tuesday — and warned it will darken further if Congress doesn’t reach agreement soon to avert a budget crisis…The economy’s challenges go beyond the budget impasse, Bernanke said. Lawmakers must also produce a long-term plan to shrink federal budget deficits. Otherwise, he said the United States could eventually suffer a financial crisis marked by rising interest rates. Consumers and businesses would have to pay more for mortgages and many other kinds of loans.  ‘It would be very costly to our economy,’ Bernanke said.” 

Raising taxes won’t fix the problem 

Diana Furchtgott-Roth of the Manhattan Institute for Policy Research:  “…the Census Bureau and the International Monetary Fund both announced different signs of a weakening economy. Retail sales, the government's measure of consumer spending, declined in June for the third month in a row by 0.5 percent. Economists had forecast an increase of 0.2 percent. And the IMF revised its global growth forecast for 2013 down to 3.9 percent from its previous forecast of 4.1 percent… A tax increase, whether it takes effect in 2013 or 2014, would be the wrong way to help America recover from the recession, because higher taxes would further harm our slow rate of economic growth. They could tip the U.S. economy into another recession and discourage employers from hiring.” 

Four years ago, Obama had no economic track record. Now, unfortunately, he has one, and we continue to pay for giving him the opportunity. 

Are we smart enough to connect the dots?

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