Monday, February 16, 2009
It's been an odd few days around here, what with multiple snow storms, a power outage, the President's Day holiday (which no one told me about until today), a website outage, and other things disrupting the normal routine.
When retrieving the morning paper today, only the Saturday edition was there, which was the first tip-off that today was a holiday. It's not clear whether the Saturday paper was delivered today or was buried in the snow only to reveal itself after yesterday's rain.
There's more snow falling today, so it was good to get something to read in case tomorrow is a repeat of Saturday.
One chart in the weekend edition of the Wall Street Journal was a real eye-grabber and it is reproduced below. I'm sure this is just one of the first of what will be many, many charts that have a similar dislocation.
The story in question is about the soaring U.S. Federal budget deficit which comes at a time that must make California legislators wonder what all the fuss is about regarding the $42 billion budget shortfall here in the Golden State.
Washington legislators have a projected budget deficit of almost 50 times the one in California and it just keeps getting bigger with no one seeming to mind all that much.
It probably doesn't seem fair to the folks in Sacramento.
It's hard to imagine that President Obama or anyone else in Congress is really serious about fiscal responsibility - they'll probably have their summit, issue platitudes about the long-term knowing that the long-term never really gets here, and then just watch things spin further out of control.
With a $787 billion stimulus package in hand, President Barack Obama will pivot quickly to address a budget deficit that could now approach $2 trillion this year.Reagan never did get to the long-term either - the part about fiscal discipline, that is.
He has scheduled a "fiscal-responsibility summit" on Feb. 23 and will unveil a budget blueprint three days later, crafted to put pressure on politicians to address the country's surging long-term debt crisis.
Speaking Friday to business leaders at the White House, the president defended the surge of spending in the stimulus plan, but he made sure to add: "It's important for us to think in the midterm and long term. And over that midterm and long term, we're going to have to have fiscal discipline. We are not going to be able to perpetually finance the levels of debt that the federal government is currently carrying."
The president met with 44 fiscally conservative "Blue Dog" Democrats this week and gave a nod to legislation that would set up commissions to deal with long-term deficit strains. The commissions would then present plans to Congress for an up-or-down vote.
"We feel like we've found a partner in the White House," said Rep. Charlie Melancon (D., La.), a Blue Dog co-chairman.
Projections for 2009 deficit range from Goldman Sachs's $1.43 trillion to $1.9 trillion from economic firm Strategas Research Partners. At 13.5% of GDP, a $1.9 trillion shortfall would more than double the peacetime record during Ronald Reagan's presidency, and approach the mark set in 1942 as the U.S. joined World War II.