Airborne Combat Engineer

Wonkette warns of upcoming depression

Wonkette predicts a depression after the Dow and S&P set new records.

This will be fun to track.

Here come the Chinese cars

The first shipments of Chrysler cars built by China's Chery Automobile Co. could reach the U.S. or Europe within 30 months, Chrysler said on Wednesday, opening the door for Chery to be the first mainland auto maker to do so.

Chrysler -- which is being sold by DaimlerChrysler AG to Cerberus Capital Management -- and Chery will develop, manufacture and distribute Chery-made small and sub-compact cars in North America, Europe and other major automotive markets, they said.

The deal was first announced last year but had been delayed by the sale of Chrysler.

The companies said the first auto would be a Dodge model, and as the cooperation developed the partners would look at other Chrysler brands.

Pravda

The MOPAR image is changing.

A Chinese SUV to be launched in Europe failed its safety tests.

China''s trade surplus will top 100 billion U.S. dollars in the first half of the year, up 60 percent on the same period of last year ... [People's Daily]

We're trending toward a balanced budget, then a surplus

The Skeptical Optimist has a chart showing a crossover in early '08, but he says it could take til '09.

In the 2010 and 2012 elections, the Dems will take credit for it.

Legalize pot and tax it heavily

A report released today by a marijuana public policy analyst contends that the market value of pot produced in the U.S. exceeds $35 billion — far more than the crop value of such heartland staples as corn, soybeans and hay, which are the top three legal cash crops.

LA Times, 18 DEC 2006

We're missing out on a HUGE source of tax revenue.

Make it illegal only for minors. Retain laws against driving under the influence.

Lowest unemployment rate in 5 years

Republicans seized on a drop in the unemployment rate to its lowest level in more than five years to assert today that tax cuts are working and the economy is strong, giving the party an opportunity four days from Election Day to highlight an issue it has counted on to offset bad news about the war.

Hours after the Labor Department announced that the unemployment rate had fallen to 4.4 percent in October — down from 4.6 percent in September and the lowest rate since May 2001, when it was 4.3 percent — President Bush mocked Democrats for predicting that the administration’s tax and spending policies would wreck the economy.

NY Times, 03 NOV 2006

How big a financial burden is the war?

The Skeptical Optimist makes it look like it's not such a big deal, when compared to the GDP.

The Wall Street Journal asks: "Is there a war on?"

So, it looks like we can sustain this level of expenditure indefinitely, as long as we don't mind the national debt continuing to grow.

The problem with debt and entitlements

... is they cost A LOT to maintain

[LINK] heritage.org

The chart at the link projects federal spending out to 2050, increasing from 18% to 38% of GDP as the "baby boomers" contribute less and become increasingly dependent.

That's BIG GOVERNMENT.

I doubt even the Skeptical Optimist can make a libertarian like myself feel good about that chart, even if we can handle the cost if our economy continues to grow.

optional thoughts on why it might not turn out this bad in the continuation

National debt rollover

[LINK] The Skeptical Optimist

Steve Conover uses an animated illustration to help explain how the national government rolls over debt.

"if our economy continues growing at a sufficient pace, our grandkids will never have to pay it back.  Never.  Nor will our grandkids’ grandkids, either."

That if clause seems key.  I'm reminded (from decades ago) of a couple who leased expensive cars with balloon payments. Before the balloon payment was due, they simply traded for a new car at the same dealer, rolling the balance over to the new car.  Each time, they were digging themselves into a deeper hole. I lost contact, and don't know how that story turned out.

Dems accuse Admin. of exaggerating deficit forecast

[LINK] Reuters

In February, the administration projected a budget deficit of $423 billion for the fiscal year that ends in September. Such a shortfall would set a record and exceed last year's deficit of $318 billion.

But private analysts and experts at the Congressional Budget Office have said they believe the deficit for 2006 could come in closer to $300 billion.

A $123B positive swing. Not bad!

The easing of the deficit has come amid stronger-than-expected tax revenues in recent months, a trend for which the administration credits President George W. Bush's tax cuts.

But Democrats ... accuse the administration of inflating the February original budget deficit forecast to try to highlight a picture of improvement.

Yeah, right. The Administration was willing to take all that HARSH criticism back then just so it can show improvement now.

Robust growth shaves 0.5% off debt burden

[LINK] The Skeptical Optimist

"The Bureau of Economic Analysis once again revised its estimate of the economy’s growth rate upwards. It’s news of this kind that keeps me optimistic. I continue to wonder why more politicians don’t pick up on the overwhelming importance of economic growth.

I’ve recalibrated the Debt Clock (at upper right) accordingly.  The revised growth rate, combined with a month of little change in debt, reduced the debt-to-GDP ratio by a full half point from 65.1% to 64.6%."

This guy has a way of making me feel better about the US economic situation despite huge government deficit spending. Hope it works for you also.