JAMIE DIMON APPROVES TRUMP’S BOOMING ECONOMY (MORE JOBS, MORE MILITARY)

JAMIE DIMON APPROVES OF TRUMP’S BOOMING ECONOMY (MORE JOBS, MORE MILITARY):

U.S. ECONOMY STRONGEST SINCE 2014.

TRUMP’S TRADE WAR YIELDS POSITIVE RESULTS FOR U.S. ECONOMY.

TRUMP KNOWS BUSINESS & BLOWS OFF TRADITIONAL, COUNTERPRODUCTIVE POLITICS.

MEDIA NEEDS TO FAIRLY GIVE THE PRESIDENT CREDIT WHEN IT’S DUE HIM, REGARDLESS OF PARTY.

GOD BLESS AMERICA


Post Sources: CNN, Fox News, 4-Traders, Youtube


***** US economy grows at fastest pace since 2014


The US economy roared into high gear in the spring, growing at the fastest pace in almost four years.
Second-quarter economic growth came in at an annual rate of 4.1%, the government said Friday. That was the best showing since the third quarter of 2014.

By many metrics, the United States economy is in excellent shape: Unemployment is near an 18-year low, factories are seeing more orders, and exports are surging.

Economists are generally predicting slower growth in the second half of the year, as the effects of the tax cut wear off and rising interest rates depress consumer spending.

Already announced tariffs are forecast to be only a slight drag on economic growth, unless more are imposed. And it seems that corporate executives are treading carefully, as surveys of business confidence and hiring expectations begin to flag.

The strong second-quarter growth reflectedlarge increases in orders of durable goods, investment in non-residential construction, exports, intellectual property, and government defense spending.
Weak home construction and increased imports, which subtract from economic growth, took it down a notch.
Growth in the first quarter was revised up slightly, from 2% to 2.2%.

Personal consumption expenditures, a key metric that the Federal Reserve uses to decide whether to raise interest rates, also came in at a very strong 4%, although that may reflect a bounceback from last quarter's 0.5%.

TAX REFORM PLAN IS ANOTHER TRUMP CAMPAIGN PROMISE KEPT (100 DAYS)

TAX REFORM PLAN IS ANOTHER TRUMP CAMPAIGN PROMISE KEPT:

TRUMP'S TAX PLAN ELIMINATES DEATH TAX.

TRUMP'S TAX PLAN WILL ALSO CREATE JOBS, HELP MARRIED COUPLES, SINGLE WORKING MOTHERS & SMALL BUSINESSES.


Sources: Donald Trump, ABC News, Fox News, Washington Examiner, Youtube


**** Give Trump 130 days: President's tax plan is his biggest test (and biggest opportunity)
Forget the 100 day reckoning; let’s give President Trump 130 days instead.

Here’s why: the president is on the cusp of achieving nothing less than a once-in-a-generation tax cut that will boost the U.S. economy out of its 8-year rut and restore the nation’s competitiveness.

It won’t pass in the next four weeks, but if Trump throws himself into selling the plan over the next month, and it catches the country’s imagination, “Resisting” Democrats will have to climb aboard. The buoyant stock market will continue its run, optimism will rise yet again, and Donald Trump will be well on his way to a successful presidency.

Trump himself will have to hit the campaign trail, dig out those red MAGA hats, and convince the country that this program will create jobs, boost wages, help middle-class families and put the nation on the right track. He must sell it not as a tax cut, but as a jobs bill – something the country has hungered for ever since the Great Recession. Something President Obama failed to deliver.

This is the biggest test yet for the young Trump presidency. It isn’t Paul Ryan’s plan or Kevin Brady’s plan; it’s the Trump tax plan. He owns it, he campaigned on it, and if he can get it done his backers will be thrilled.

It will especially please small business owners, who pay taxes today at over 50 percent in some states, and who are among Trump’s most enthusiastic backers. As one participant in a recent small-biz roundtable with the president wrote in The Hill, “Former President Barack Obama was an almost-daily insult for eight years, telling us the economy was doing great while business owners struggled keep their doors open.” Small firms account for nearly half the nation’s private workforce; they need lighter regulation and a tax break; Trump is serving up both, as promised.

Oh, and by the way, if Trump succeeds in pushing through his tax plan, those deriding the White House as inept and Republicans as unable to govern will develop a sudden case of laryngitis.

Bringing the party together to cut taxes for millions won’t have happened in the first 100 days. Who’s counting? If significant progress is posted in the next few weeks, Trump wins.

The Tax Foundation last year analyzed Trump’s tax plan, and estimated it would boost economic growth, create 5.3 million new jobs, and kick wages up by 6.5 percent. Notwithstanding the benefits that will accrue to U.S. workers, Democrats will fight Trump’s tax plan tooth and nail.
They don’t believe that lower taxes spur growth, even though tax cuts pushed through by John F. Kennedy and Ronald Reagan most definitely did. They don’t want to “starve the beast” of the ever-expanding federal government, because they don’t think that Americans are wiser about investing our money that the bureaucrats in Washington.

Adding to their hypocrisy is a new-found concern about the federal debt. Democrats complained for years that the Stimulus passed in 2009 wasn’t big enough; they are fans of deficit spending – as long as it grows the swamp and not the private sector.

The battle is joined, as we saw from the next-day treatment from the media.

The New York Times banner read: “Tax Overhaul Would Aid Wealthiest”. The paper followed up with: “Trump’s Plan Shifts Trillion to Wealthiest.” Fact: the top 20 percent of earners in U.S. pay 84 percent of the country’s income taxes. Yes, those folks, the ones paying the lion’s share of our taxes, will get a break.

In numerous articles, the Grey Lady has hinted recently that Trump’s tax policy is especially crafted to benefiting himself – by retaining the mortgage interest deduction, for instance. Yes, real estate developers benefit from that deduction; so do tens of millions of American homeowners. Since the current plan includes eliminating the ability to deduct state and local taxes, which would pummel wealthy New Yorkers like Trump, that particular story line was muted.

The facts are clear: the United States has one of the highest corporate tax rates in the world. Nearly every one of our major competitors has cut their corporate tax burden in recent years; we are the outliers. While it is true that businesses take advantage of numerous loopholes and pay less than the statutory rate of 35 percent (39 percent for companies operating in high-tax states), it is also true that even adjusting for deductions and carve-outs, American businesses still pay the second-highest actual rate among developed countries.

A CATO study some years ago argued that in today’s interconnected world, it is workers who ultimately pay business taxes. “The burden of corporate taxes in the globalized economy,” senior fellows Chris Edwards and Daniel J. Mitchell wrote in Global Tax Revolution, “mainly falls on average workers in the form of lower wages. If U.S. and foreign semiconductor and pharmaceutical companies are not building factories in America because of higher taxes, it is American workers who lose.”

We need to do better. Donald Trump sometimes says “We don’t win anymore.” His supporters get that. Businesses want to move out of the U.S. to take advantage of low tax rates elsewhere, but our country should press our many advantages. We are a rule of law nation, we speak English and we have vast energy resources that over time will become a significant competitive advantage. While labor rates in manufacturing, for instance, are cheaper elsewhere, automation means that wages are becoming a smaller part of total costs.

If tax breaks spur investment, U.S. firms will become ever more competitive. Most important, we are still the world’s largest consumer market – right here.

Why on earth wouldn’t companies want to locate here? Let’s make it easy for them.
The plan rolled out by the White House is an opening bid. There will be negotiations over the top rates, the repatriation on overseas-held cash and other particulars. Trump could mollify deficit hawks by eliminating the tax break on carried interest, for instance, which mainly benefits private equity and hedge fund managers. Even many industry participants think that hand-out should disappear. He also could pressure Democrats by rolling out an infrastructure plan to be seeded by the proceeds of a one-time repatriation of foreign earnings stashed overseas by U.S. companies. That’s the Art of the Deal.

But the main message is this: lowering corporate and individual rates will gin up growth, create jobs and raise wages. Astonishingly, even the prospect of this tax plan set the stock market soaring and boosted consumer and business confidence. That’s how hopeful people are, and how potent this medicine will be for our ailing economy. This is Trump’s big moment; I’ll give him a few more weeks.



**** TAX REFORM THAT WILL MAKE AMERICA GREAT AGAIN
(The Goals Of Donald J. Trump’s Tax Plan)

~ Too few Americans are working, too many jobs have been shipped overseas, and too many
middle class families cannot make ends meet. This tax plan directly meets these challenges with
four simple goals:
1. Tax relief for middle class Americans: In order to achieve the American dream, let people
keep more money in their pockets and increase after-tax wages.
2. Simplify the tax code to reduce the headaches Americans face in preparing their taxes and
let everyone keep more of their money.
3. Grow the American economy by discouraging corporate inversions, adding a huge number
of new jobs, and making America globally competitive again.
4. Doesn’t add to our debt and deficit, which are already too large.


~ The Trump Tax Plan Achieves These Goals
1. If you are single and earn less than $25,000, or married and jointly earn less than $50,000,
you will not owe any income tax. That removes nearly 75 million households – over 50% –
from the income tax rolls. They get a new one page form to send the IRS saying, “I win,”
those who would otherwise owe income taxes will save an average of nearly $1,000 each.
2. All other Americans will get a simpler tax code with four brackets – 0%, 10%, 20% and 25%
– instead of the current seven. This new tax code eliminates the marriage penalty and the
Alternative Minimum Tax (AMT) while providing the lowest tax rate since before World
War II.
3. No business of any size, from a Fortune 500 to a mom and pop shop to a freelancer living job
to job, will pay more than 15% of their business income in taxes. This lower rate makes
corporate inversions unnecessary by making America’s tax rate one of the best in the world.
4. No family will have to pay the death tax. You earned and saved that money for your family,
not the government. You paid taxes on it when you earned it.


~ The Trump Tax Plan Is Revenue Neutral
The Trump tax cuts are fully paid for by:
1. Reducing or eliminating most deductions and loopholes available to the very rich.
2. A one-time deemed repatriation of corporate cash held overseas at a significantly discounted
10% tax rate, followed by an end to the deferral of taxes on corporate income earned abroad.
3. Reducing or eliminating corporate loopholes that cater to special interests, as well as
deductions made unnecessary or redundant by the new lower tax rate on corporations and
business income. We will also phase in a reasonable cap on the deductibility of business
interest expenses.


~ DETAILS OF DONALD J. TRUMP’S TAX PLAN

America needs a bold, simple and achievable plan based on conservative economic principles.
This plan does that with needed tax relief for all Americans, especially the working poor and
middle class, pro-growth tax reform for all sizes of businesses, and fiscally responsible steps to
ensure this plan does not add to our enormous debt and deficit.
This plan simplifies the tax code by taking nearly 50% of current filers off the income tax rolls
entirely and reducing the number of tax brackets from seven to four for everyone else.
This plan also reduces or eliminates loopholes used by the very rich and special interests made unnecessary
or redundant by the new lower tax rates on individuals and companies.
The Trump Tax Plan: A Simpler Tax Code For All Americans
When the income tax was first introduced, just one percent of Americans had to pay it.
It was never intended as a tax most Americans would pay. The Trump plan eliminates the income tax
for over 73 million households.
42 million households that currently file complex forms to
determine they don’t owe any income taxes will now file a one page form saving them time,
stress, uncertainty and an average of $110 in preparation costs.
Over 31 million households get the same simplification and keep on average nearly $1,000 of their hard-earned money.
For those Americans who will still pay the income tax, the tax rates will go from the current
seven brackets to four simpler, fairer brackets that eliminate the marriage penalty and the AMT
while providing the lowest tax rate since before World War II:

Income
Tax
Rate
Long Term Cap
Gains/
Dividends Rate
Single Filers Married Filers Heads of Household
0% 0% $0 to $25,000 $0 to $50,000 $0 to $37,500
10% 0% $25,001 to $50,000 $50,001 to $100,000 $37,501 to $75,000
20% 15% $50,001 to $150,000 $100,001 to $300,000 $75,001 to $225,000
25% 20% $150,001 and up $300,001 and up $225,001 and up

With this huge reduction in rates, many of the current exemptions and deductions will become
unnecessary or redundant.

Those within the 10% bracket will keep all or most of their current deductions. Those within the 20% bracket will keep more than half of their current deductions.

Those within the 25% bracket will keep fewer deductions. Charitable giving and mortgage
interest deductions will remain unchanged for all taxpayers.
Simplifying the tax code and cutting every American’s taxes will boost consumer spending,
encourage savings and investment, and maximize economic growth.


~ Business Tax Reform To Encourage Jobs And Spur Economic Growth

Too many companies – from great American brands to innovative startups – are leaving
America, either directly or through corporate inversions. The Democrats want to outlaw
inversions, but that will never work. Companies leaving is not the disease, it is the symptom.
Politicians in Washington have let America fall from the best corporate tax rate in the
industrialized world in the 1980’s (thanks to Ronald Reagan) to the worst rate in the
industrialized world.

That is unacceptable. Under the Trump plan, America will compete with
the world and win by cutting the corporate tax rate to 15%, taking our rate from one of the worst
to one of the best.

This lower tax rate cannot be for big business alone; it needs to help the small businesses that are
the true engine of our economy. Right now, freelancers, sole proprietors, unincorporated small
businesses and pass-through entities are taxed at the high personal income tax rates.

This treatment stifles small businesses. It also stifles tax reform because efforts to reduce loopholes
and deductions available to the very rich and special interests end up hitting small businesses and
job creators as well.

The Trump plan addresses this challenge head on with a new business
income tax rate within the personal income tax code that matches the 15% corporate tax rate to
help these businesses, entrepreneurs and freelancers grow and prosper.

These lower rates will provide a tremendous stimulus for the economy – significant GDP
growth, a huge number of new jobs and an increase in after-tax wages for workers.


~ The Trump Tax Plan Ends The Unfair Death Tax
The death tax punishes families for achieving the American dream. Therefore, the Trump plan
eliminates the death tax.


~ The Trump Tax Plan Is Fiscally Responsible
The Trump tax cuts are fully paid for by:

1. Reducing or eliminating deductions and loopholes available to the very rich, starting by
steepening the curve of the Personal Exemption Phaseout and the Pease Limitation on
itemized deductions. The Trump plan also phases out the tax exemption on life insurance
interest for high-income earners, ends the current tax treatment of carried interest for
speculative partnerships that do not grow businesses or create jobs and are not risking their
own capital, and reduces or eliminates other loopholes for the very rich and special interests.
These reductions and eliminations will not harm the economy or hurt the middle class.
Because the Trump plan introduces a new business income rate within the personal income
tax code, they will not harm small businesses either.

2. A one-time deemed repatriation of corporate cash held overseas at a significantly discounted
10% tax rate. Since we are making America’s corporate tax rate globally competitive, it is
only fair that corporations help make that move fiscally responsible. U.S.-owned
corporations have as much as $2.5 trillion in cash sitting overseas. Some companies have
been leaving cash overseas as a tax maneuver. Under this plan, they can bring their cash
home and put it to work in America while benefitting from the newly-lowered corporate tax
rate that is globally competitive and no longer requires parking cash overseas. Other
companies have cash overseas for specific business units or activities. They can leave that
cash overseas, but they will still have to pay the one-time repatriation fee.

3. An end to the deferral of taxes on corporate income earned abroad. Corporations will no
longer be allowed to defer taxes on income earned abroad, but the foreign tax credit will
remain in place because no company should face double taxation.

4. Reducing or eliminating some corporate loopholes that cater to special interests, as well as
deductions made unnecessary or redundant by the new lower tax rate on corporations and
business income. We will also phase in a reasonable cap on the deductibility of business
interest expenses.

DONALD TRUMP'S APPEAL: OPPORTUNITY, GREATNESS, BUSINESS GROWTH & SUCCESS (STEPHEN COLBERT)

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DONALD TRUMP'S APPEAL - OPPORTUNITY, GREATNESS, BUSINESS GROWTH & SUCCESS FOR ALL:

STEPHEN COLBERT AGREES.

2016 GOP Frontrunner Donald Trump's appeal represents more than his Bold personality and Fame.

For American voters, Vets, the U.S. Military and Wall Street Trump's appeal actually represents Opportunity, Greatness, Business Growth & Success for all.

Comedian and Political Commentator Stephen Colbert agrees with this analysis.

~ Stephen Colbert: Donald Trump's Populism 'Very Appealing'

"There is something really hopeful about the fact that, well, 36 percent of the likely voters want him so the people in the machine don't get to say otherwise," late-night host says

Over the past few months, Stephen Colbert has had some fun with Donald Trump's headlines-grabbing presidential campaign, from overdosing on Trump jokes to daring the GOP frontrunner to donate $1 million to charity to disguising Jon Stewart as the mogul. However, in a new interview with Face the Nation set to air Sunday, Colbert admitted that he admires how Trump's campaign has shifted the balance of power in the Republican party.

"There's a populism to Trump that I found very appealing," Colbert said. "The party elders would like him to go away but the people have decided that he is not going to. I may disagree with anything that he's saying and think that his proposals are a little ... well, more than a little shocking. But there is something really hopeful about the fact that, well, 36 percent of the likely voters want him so the people in the machine don't get to say otherwise. That's the one saving grace, I think, of his candidacy."

As 2016 approaches and Trump's GOP lead continues to swell, Colbert also confessed that his earlier boast that there was no way Trump could ever win the White House was shortsighted. "What I do respect is that he knows that it is an emotional appeal, and it might be emotional appeals that I can't respect, but he knows that you have to appeal to the voter. And that's why, I may be wrong - I made a big deal about there's no way he's gonna win," Colbert said before conceding, "I don't know anything about politics."

At a press event before Colbert took the helm of The Late Show, the former Colbert Report host was asked about Trump's presidential odds. "Honestly, he could, and that's not an opinion of Trump. That's my opinion of our nation," Colbert said. "You know what, there have been some great presidents and there have been some bad presidents. Having a giant swinging set of balls isn't the worst thing in the world."

Sources: CBS News, Rolling Stone, NY Times, Face The Nation, YouTube

Standard & Poor's Fires Back At Criticism Of U.S. Downgrade! Endorses Tax Increases!!

Amid Criticism on Downgrade, S.&P. Fires Back


A day after Standard & Poor’s took the unprecedented step of downgrading the creditworthiness of the United States government, the ratings agency offered a full-throated defense of its decision, calling the bitter stand-off between President Obama and Congress over raising the debt ceiling a “debacle,” and warning that further downgrades may lie ahead.

In an unusual Saturday conference call with reporters, senior S.& P. officials insisted the ratings firm hadn’t overstepped its bounds by focusing on the political paralysis in Washington as much as fiscal policy in determining the new rating. “The debacle over the debt ceiling continued until almost the midnight hour,” said John B. Chambers, chairman of S.& P.’s sovereign ratings committee.

Another S.& P. official, David Beers, added that “fiscal policy, like other government policy, is fundamentally a political process.”

Administration officials at the White House and Treasury angrily criticized S.& P.’s action as based on faulty budget accounting that discounted the just-enacted deal for increasing the debt limit.

The agreement set spending caps in the fiscal year that begins Oct. 1 and calls for a bi-partisan Congressional “super committee” to propose more deficit reduction — for up to $2.5 trillion in combined savings over a decade.

“The bipartisan compromise on deficit reduction was an important step in the right direction,” the White House press secretary, Jay Carney, said in a statement on Saturday. “Yet, the path to getting there took too long and was at times too divisive. We must do better to make clear our nation’s will, capacity and commitment to work together to tackle our major fiscal and economic challenges.”

The ratings agency put additional pressure on the joint Congressional committee to find additional spending cuts, tax hikes or both to bring down the inexorably rising national debt.

Still, the posturing on Capitol Hill continued.

“Unfortunately, decades of reckless spending cannot be reversed immediately, especially when the Democrats who run Washington remain unwilling to make the tough choices required to put America on solid ground,” Speaker John A. Boehner, an Ohio Republican, said in a statement.

Senate Majority Leader Harry Reid said the downgrade affirmed the need for the Democratic approach, which would combine spending cuts with tax increases.

The decision, he said, “shows why leaders should appoint members who will approach the committee’s work with an open mind — instead of hardliners who have already ruled out the balanced approach that the markets and rating agencies like S.& P. are demanding.”

Even as the ratings agency insisted on Saturday that its move shouldn’t have come as a shock, it reverberated around the world as political and financial leaders scrambled to assess its impact on the already troubled world economy.

China, the largest foreign holder of United States debt, said on Saturday that Washington needed to “cure its addiction to debts” and “live within its means,” just hours after the S.& P. downgrade.

While Europeans had girded for a possible downgrade, the news that S.& P. had actually yanked the United States’ AAA rating was nonetheless received with a degree of alarm in the corridors of power across the Continent. Finance Minister François Baroin of France questioned the move Saturday, noting that the figures used by S.& P. didn’t match those of the Treasury, and overstated the federal debt by about $2 trillion.

Mr. Baroin said he found it curious that neither Moody’s nor Fitch, the two other major ratings agencies, had reached a similar conclusion. Moody’s has said it was keeping its AAA rating on the nation’s debt, but that it might still lower it.

“We have total confidence in the solidity of the American economy,” Mr. Baroin said in an interview on French radio. Nonetheless, he added, the decision confirms that the world’s most developed economies are confronted with the same urgent priorities: to lift growth and reduce public and private debt.

The lowering of a core financial instrument of the global economy is freighted with symbolic significance, but carries few clear financial implications. The downgrade could lead investors to demand higher interest rates from the federal government and other borrowers, raising costs for local governments, businesses and home buyers. But many analysts say the impact could be modest, in part because the other ratings agencies, Moody’s and Fitch, have not downgraded the government at this time.

The wrangling over the downgrade to AA+ from AAA stretched over days. S.& P. executives came to the Treasury Department earlier in the week to meet with a group of administration officials led by Mary J. Miller, the assistant secretary for financial markets, who is one of the government’s main liaisons to the rating agencies, according to a government official with knowledge of the meeting.

At the meeting, the S.& P. executives walked the Treasury team through its analysis, the official said. Even then, Treasury officials raised concerns about the methodology. S.& P. pointed out that there were at least three sets of assumptions that could be made to project future growth in government spending, according to the official.

The Congressional Budget Office projects spending in two ways — one that shows Congress increasing spending for the domestic and defense programs it finances annually by the projected rate of inflation, and another that shows spending rising by a higher amount pegged to the expected growth in the nation’s gross domestic product.

The Treasury argued for a third way, that would make sure that whichever so-called base line S.& P. used, it would take into account the spending caps and deficit reduction that Congress and the White House agreed to in the recent debt-limit deal.

Rumors of a potential downgrade started swirling through the financial markets on Friday morning, causing stocks to fall sharply. Although Moody’s and Fitch had affirmed the government’s AAA rating late Tuesday afternoon, S.& P. was silent.

But around 1:30 p.m on Friday, S.& P. sent a memorandum outlining its preliminary position, including specific figures underscoring their argument for a downgrade. Treasury officials were told that S.& P. planned to make its announcement after 4 p.m., when the stock market closes, according to two administration officials.

Treasury officials flagged a concern over how S.& P. crunched the numbers. S.& P. had chosen to assume that government spending grew at the pace of economic growth, rather than rely on numbers that incorporated the new spending limits into its actual budget projection. That is what Treasury officials are now calling a $2 trillion error — and raised the issue with S.& P.

In Saturday’s conference call, the Mr. Chambers said the $2 trillion difference, in one scenario for 2021, equals only about 2 percent of gross domestic product, and doesn’t alter the fundamental reality that the country’s debt burden will continue to rise.

Randy Neugebauer, a Texas Republican who heads the House Financial Services’ subcommittee on oversight and investigations, said that while it was appropriate for S.& P. to consider the political situation in its analysis, it was speculative of it to use predictions of what Congress will likely do in the future as a rationale for a downgrade.

“One thing that puts them out in uncharted waters is trying to predict what the political environment is going to be,” Mr. Neugebauer said. “They’re not predicting an overly cooperative environment in Congress and that’s a very subjective call.”

The ratings agencies, for their part, spent Saturday trying to defend their positions on the nation’s debt. Moody’s and Fitch analysts said Saturday that a downgrade remains a possibility. “Our rating is AAA until the day it changes,” said David Riley of Fitch in London. “That being said, we haven’t formally reaffirmed the rating.”

Moody’s has reaffirmed the AAA, though it put the country on negative watch on Tuesday. The company’s sovereign analyst said Saturday that his company is not as concerned about Washington’s political gridlock.

Steven Hess, a Moody’s analyst, said the debt deal “is not enough, but we thought a downgrade would be premature given that they have come up with a plan for deficit reduction.”

Sources: AP, CNN, Fox News, NY Times, Youtube

Obama's July 2011 Jobs Report: 117,000! GOP's Fake Debt Crisis Failed!

U.S. Posts Stronger Job Gains Amid Fear

As the United States economy continued to wobble, employers added 117,000 jobs in July, staving off a panic that had threatened to engulf the financial markets.

Though the government’s monthly snapshot of the labor market brought a sigh of relief to traders on Friday, the net new jobs created was not enough to provide much comfort to those who have been waiting for the recovery to kick into high gear. The unemployment rate slipped a notch to 9.1 percent, but that was mainly because some people had simply given up looking for work.

The net new jobs created in July exceeded the dismal number reported in June, but the total was barely sufficient to accommodate normal population growth, exceeded the 18,000 net new jobs originally reported in June. The Labor Department also revised its estimate of American job growth in June to 46,000.

Stock markets, pummeled on Thursday on increasing pessimism over the American economy, drew about even in early trading, retreating from a 1 percent bounce higher at the opening.

The latest jobs numbers came in a week when Congress finally agreed to a deal to raise the country’s debt ceiling and cut government spending. Deep divisions remain between the two political parties on how to cut spending further at a time when many economists worry that the economy can ill afford it.

“It gives us some temporary relief,” said Nigel Gault, chief United States economist at IHS Global Insight. “But all we can say is it’s a bit better than the two previous months. I suspect, though, that relief will probably not last too long as people refocus on what they think will happen in the future.”

Indeed, other signs that the recovery has slowed to a crawl are mounting. The Commerce Department reported earlier this week that consumer spending, which accounts for up to 70 percent of economic activity, actually declined in June for the first time in nearly two years. A closely watched survey of manufacturers showed that employment in July grew at a slower rate than in June and that new orders of factory goods actually fell. Housing prices are still extremely weak.

With extended unemployment benefits scheduled to expire at the end of this year, there are still 13.9 million people out of work, 6.2 million of whom have been searching for jobs for six months or longer. Another 8.4 million are working part-time because they couldn’t find a full-time job, and 1.1 million have become so discouraged that they have stopped looking for work altogether. Including such people, the broader measure of unemployment was 16.1 percent.

In a sobering note, only 58.1 percent of the population is working, lower than at any point in 28 years.

With consumer confidence on a knife’s edge and orders slipping, employers have been reluctant to add workers. “We just don’t see where there is much incentive for companies to ramp up hiring at a time when there’s so much uncertainty gripping the country,” said Bernard Baumohl, chief global economist with the Economic Outlook Group.

Mr. Baumohl, who said the risk of a fall back into recession had certainly increased, said the most likely prospect was that the economy would continue in a “muddle through” phase. “I don’t think we’re going to see anything major happen in the labor markets until well into the fall,” he said.

Sources: CNN, NY Times, PBS, Youtube

America Rapidly Spiraling Into GOP Engineered Double-Dip Recession

Visit msnbc.com for breaking news, world news, and news about the economy

10 signs the double-dip recession has begun

Friday's news on GDP shows the double dip has arrived — an expansion of only 1.3 percent and consumer spending up 0.1 percent in the second quarter. Astonishingly low by any account. The debt ceiling trouble and lack of a longer term resolution to the deficit will make it worse.

The U.S. has entered a second recession. It may not be as bad as the first. Economists say that the Great Recession began in December 2007 and lasted until July 2009. That may be the way that the economy was seen through the eyes of experts, but many Americans do not believe that the 2008-2009 downturn ever ended. A Gallup poll released in April found that 29 percent of those queried thought the economy was in a “depression” and 26 percent said that the original recession had persisted into 2011.

It is any wonder that many Americans believe that the economic downturn is still in progress? Home prices have fallen to 2002 levels. Values have dropped nearly 50 percent in parts of Florida, California, Nevada and Arizona. Property values are also down that much in parts of troubled big cities like Detroit. Estimates are that as many as 11 million homes have underwater mortgages. Banks have inventories of as many as 2 million foreclosed homes which have not even been released to the market. Home prices could fall another 10 percent if current trends persist.

Perhaps the most powerful argument that the recession never ended or that a new one has begun is the persistence of unemployment. Fourteen million people are out of work. A third of those have been jobless for more than a year. May employment data showed the jobless rate rose unexpectedly and that the economy added only 58,000 jobs. Experts believe that the unemployment rate will not improve significantly until the monthly gain in jobs is consistently 300,000 jobs or more. And, at that rate the gains would have to go one for more than two years to bring the economy back to what is traditionally considered a reasonable unemployment figure.

There are several signs that a recession is firmly in place again and that the downturn could last for several quarters. Most are already easy for the average American to see.

1.) Inflation

There is almost nothing that damages consumer confidence as badly as a rapid rise in prices. Starbucks recently increased the price of a bag of coffee by 17 percent because wholesale prices have risen by almost twice that rate in the last year. Cotton prices nearly doubled in 2010 but have fallen this year. But, apparel is made months in advance of when they reach store shelves. Summer clothing prices are up as much as 20 percent. That may change in the fall, but for the time being, the consumer’s ability to buy even the most basic clothing has been undermined. Consumers today pay more for sugar, meat, and corn-based products as well.




2.) Investments have begun to yield less

Part of the recovery was driven by the stock market surge which began when the DJIA bottomed below 7,000 in March 2009. The index has risen above 12,000 and the prices of many stocks have doubled from their lows. As result, American household nest eggs that were decimated by the collapse of the market have rebounded and enabled people to splurge on themselves. However, the market has stumbled in the last quarter. The DJIA is up only 1 percent during the last three months and the S&P 500 is down slightly.

Americans, though, have few other places to put their money. Ten-year Treasuries yield about 3 percent. Gold was a good investment over the last year, but it has begun to falter as well. The market may not be a friend to investors for quite some time.

3.) The auto industry

The auto industry has staged an impressive comeback, although its profitability is based as much on the layoffs it has made over the last five years as generating new sales. GM and Chrysler have emerged from bankruptcy. Year-over-year monthly sales improved late last year and through April. May sales stalled. GM’s revenue dropped by 1 percent compared to May of 2010. Ford’s sales were down about as much. There are many reasons for this trend including high gas prices and the constrained manufacturing capacity of the Japanese automakers because of the earthquake. Consumers also may be deferring big purchases because they are worried about their economic prospects. Slow car sales are not just a sign of lagging consumer confidence. They also may be a harbinger of tougher times ahead. These companies shed several hundreds thousand jobs before and during the last recession. Car firms have only just begun to hire again, but that trend will die with a plateau in sales.

4.) Oil prices

Oil prices are supposed to drop as the economy slows as they did in 2008 and early 2009 when crude fell from over $140 to under $50. That drop at least allowed consumers and businesses like airlines to more easily afford fuel. Recently, crude has moved back above $100 and appears to be stuck there regardless of the economic situation. American budgets have been hurt by the rising cost of gas. Americans of more modest means have been particularly affected. A slowdown in driving usually also leads to a decline in the retail sector as consumers reduce unnecessary travel to stores. The impact on other businesses is just as great. Airlines suffer and so do firms which rely on petrochemicals. OPEC, for now, has signaled it will not increase production.

5.) The federal budget

The federal budget deficit has decimated any chance for another economic stimulus package which many prominent economists like Nobel Prize-winner Paul Krugman say is essential to create a full recovery. His theory has become more of an issue as GDP growth slows to a rate of 2 percent. The first $787 billion Obama stimulus package may have saved some American jobs, but it is long over and did not work if a drop in unemployment and a sharp improvement in GDP were its primary goals. The deficit has caused a call for severe austerity measures which have already become part of the economics policies of countries from Greece to the U.K. to Japan. Job cuts in the U.S. will not be restricted to the federal level.



A recent UBS Investment Research analysis predicted that state and local governments will cut 450,000 jobs this year and next. That process is already well underway. States like California and New York currently run massive deficits and the rates they must pay on bonds has risen accordingly. Newspaper headlines almost daily report on battles between state unions and governors over employment and benefits.

6.) China economy slows

A slowdown in the Chinese economy is usually seen as a cause of global commodity price inflation, but the effects cut two ways. China’s appetite for energy and raw materials may fall. But, the demand for goods and services by its very large and growing middle class drops as well. Chinese purchaser manufacturing and export numbers have fallen as the central government has tightened the ability to borrow money. US exports to China are key to the health of many American businesses.

John Frisbie, the president of The US-China Business Council, recently said, "Over the last decade we have seen exports to China rise from $16.2 billion to $91.9 billion — a 468 percent increase.” As that rate slows, it has a profound effect on tens of thousands of American companies and their employees. U.S. firms with large operations in China are also effected. GM is one of the two largest car firms in China along with VW. Large U.S. corporations like Wal-mart and Yum! Brands rely significantly on China to boost global sales. Without vibrant consumer spending in China, American companies will suffer.



7.) Unemployment

Unemployment creates two immediate problems. People without jobs drastically curtail their spending, which will ultimately affect GDP growth. The second is the need for tens of billions of dollars every year in government aid to keep the unemployed from becoming destitute. That support has increased deficits and the domino effect is that cash-strapped governments need to make more spending cuts. It may be the biggest challenge the economy faces.

Unemployment has worsened because people over 65 to continue to work because the values of their homes — which they once counted on as the financial basis of their retirements — have dropped so sharply. Older Americans also fear that cuts in Medicare and perhaps Social Security are inevitable which increases the cost of their golden years. The jobs that older Americans have taken are often ones that younger Americans might have. People in their 20s must accept low wages to enter the workforce. This has delayed their prime consuming years well into their 30s which will damage GDP recovery now and for another decade.

The worst of the unemployment problem is the roughly 5 million Americans who have been unemployed for over a year. Their unemployment benefits have run out in many cases. The burden of their care falls to their families, friends, community organizations and non-profits. A family which has to support an unemployed person may be a family which cannot spend beyond its basic needs. To the extent that the federal or state governments can support the unemployed, the cost to run support programs increases.

8.) Debt ceiling

The United States debt ceiling, currently at $14.294 trillion, will probably be raised before the government has to cut back essential services on Aug. 2. It might seem that the economic and employment effects of the debt cap are the same as the deficit, but they are actually more insidious and longer term. The first by-product of debt reduction, or at least a slowdown in its growth, is a combination of higher taxes and a lower level of government services. Higher taxes usually slow economic improvements, particularly when they are not coupled with stimulus measures.

A number of economists have pointed out the expense reduction alone will not sharply improve the United States balance sheet. The increase in Medicare and Social Securities costs, brought on by an aging population, are also likely to trigger a need for higher taxes. Tax increases could keep the economic growth of the US on hold for years. The taxation of companies decreases and often eliminates profits, particularly during an already troubled economic period. Profits which disappear usually cause cuts in purchasing and jobs. Taxes on wages and inheritance undermines consumer spending. And, a growth in national debt from already all-time highs will increase the borrowing costs of the U.S. That, in turn, drives up interest rates for everything from mortgages to credit cards.

9.) Access To credit

The lack of access to credit has hurt the economic activity or both individuals and small businesses. Many very large companies can borrow money at rates as low as 2 percent because of their strong cash flows and balance sheets. Banks have been much less willing to loan money to companies with under 100 workers because these firms often rely on a few customers for revenue and usually have very little money on hand.

Early in June, the House Small Business Committee held hearings and among its findings were that concerns about risk and a slow economy has made financial institutions reluctant to lend to small businesses, the main driver of economic growth. Committee Chairman Sam Graves (R-Mo.) said Congress will need to “bridge the gap” between the two sides. There is no plan to accomplish that. Individual borrowers find themselves in a similar position. The cost of credit cards debt is still above 20 percent in many cases although the Federal Reserve loans money to large financial firms for interest rates close to zero.

Potential home buyers, who might help break the gridlock of slow house sales, often find that banks want down payments as high as 20 percent. The median down payment in nine major U.S. cities rose to 22 percent last year on properties purchased through conventional mortgages, according to an analysis done for The Wall Street Journal by real-estate portal Zillow.com. That percentage doubled in three years and represents the highest median down payment since the data were first tracked in 1997. Homes which are not sold often put such great burdens on owners that they are barely consumers of the goods and services that drive GDP. Home builders have continued to struggle. Construction jobs, which were a huge amount of the employment base in states like Florida, have not returned.

10.) Housing

Housing is considered by many economists to be the single largest drag on the American economy, and the housing market has gotten much worse in the last two months. A report from The New York Federal Reserve published early this year said: “When home prices began to fall in 2007, owners’ equity in household real estate began to fall rapidly from almost $13.5 trillion in 1Q 2006 to a little under $5.3 trillion in 1Q 2009, a decline in total home equity of over 60 percent.”

Real estate research firm Zillow reported on more recent developments. “Negative equity in the first quarter reached new highs with 28.4 percent of all single-family homes with mortgages underwater, from 27 percent in Q4.” Many homeowners who want to sell their homes cannot do so because they cannot afford to pay their banks at closing. Whether for good or ill, the American home was the primary source for money used for retirements, college educations and the purchases of many expensive items such as cars.

Economists point out the this leverage helped contribute to the credit crisis as people could not cover the costs of home equity loans as real estate values collapsed. This may be true, but the drop in value happened so quickly that the balance sheets of millions of Americans were destroyed. Their ability to consume was severely damaged, further harming GDP. High mortgage payments bankrupted or nearly bankrupted people who have lost jobs or have found that their incomes had stagnated. The building industry became a shambles overnight. And, whatever the effects have been over the last three years, they are getting progressively worse as home values drop to decade lows. There is no relief in sight because potential buyers worry that price erosion has not ended.


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Sources: CNBC, MSNBC, Russia Today, Youtube, Google Maps

U.S. Deficit Out Of Control! $1.6 Trillion! Freeze Not Enough!

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Obama White House To Paint Grim Fiscal Picture


The White House will predict a $1.6 trillion U.S. budget deficit in the 2010 fiscal year, a fresh record and the biggest since World War Two as a share of the economy, a congressional source told Reuters on Sunday.

The grim forecast adds to the challenges facing President Barack Obama, who is emphasizing a message of fiscal discipline but is also seeking stimulus measures to boost the struggling economy in the near term.

Obama's budget proposal, which will be released at 10 a.m. EST on Monday, will predict a narrowing of the deficits to $700 billion by fiscal 2013 before they gradually rise back to $1 trillion by the end of the decade, the Capitol Hill source said.

He will submit his spending blueprint for the 2011 fiscal year that begins October 1 and runs through September 30 next year.

Obama is trying to strike a balance between long-term deficit reduction and easing the pain of double-digit unemployment through proposals such as tax credits to encourage business hiring and tax breaks for middle class families.

He is to deliver remarks on the U.S. fiscal situation at 10:45 a.m. EST.

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Criticized by Republicans as a big spender, Obama used his State of the Union address last week to tell Americans he would dig the country out of a "massive fiscal hole."

That hole is even deeper than previously believed, according to the estimate by the White House's Office of Management and Budget.

The estimate for the current 2010 fiscal year that ends September 30 is significantly higher than the $1.35 trillion figure forecast by the nonpartisan Congressional Budget Office last week.

Despite the difference, both estimates indicate that the deficit will continue to hover near 10 percent of gross domestic product, a level not seen since World War Two, when measured as a percentage of the economy.

Last year, the government posted a $1.4 trillion deficit, equivalent to 9.9 percent of GDP.

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THREE-YEAR FREEZE WON'T BE ENOUGH

In his budget, Obama will propose a three-year freeze on some domestic programs to save $20 billion next year and $250 billion over the coming decade.

But that will not be enough to get deficits down permanently to the 3 percent of GDP that most economists consider sustainable.

Deficits are projected to fall as the economy recovers, but they will still average roughly 4.5 percent of GDP over the coming decade, according to the estimate.

Deficits are expected to rise again toward the end of the decade due to the increasing cost of retirement and healthcare programs as the "baby boom" generation retires.

Obama has warned that the burgeoning U.S. debt could unnerve U.S. financial markets, driving up borrowing costs and putting future economic growth at risk.

China, the biggest foreign holder of U.S. Treasuries, has urged the United States to get its fiscal house in order.

The bleak numbers could help build support for a bipartisan commission proposed by the White House that would recommend ways to address the budget problems.

Obama and his fellow Democrats face a growing voter backlash for the aggressive spending measures they have taken to stimulate the economy.

But Democrats point out that most of the fiscal mess has been inherited from the previous administration of Republican George W. Bush, who cut taxes and created an expensive prescription drug-benefit while pursuing wars in Iraq and Afghanistan.

The recession, which began in December 2007, also worsened the fiscal picture by depressing government revenues while forcing up spending on unemployment benefits and other safety-net programs.

The U.S. economy returned to growth last year after the worst downturn since the 1930s.


Sources: Reuters, NY Times, The Daily Beast, MSNBC, CNBC

GDP Up, Millions Still Unemployed

This news helps to further prove that last year Pres. Obama did more for Wall Street than he did for Main Street.

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U.S. Economy Grows At Fastest Pace In 6 Years



The economy grew at a faster-than-expected 5.7 percent pace in the fourth quarter, the quickest in more than six years, as businesses made less-aggressive cuts to inventories and stepped up spending.

The Commerce Department said on Friday its first estimate put fourth-quarter gross domestic product growth at its fastest pace since the third quarter of 2003. The economy expanded at a 2.2 percent annual rate in the third quarter.

Analysts polled by Reuters had forecast GDP, which measures total goods and services output within U.S. borders, growing at a 4.6 percent rate in October-December period.

"Wow, great number. It's very solid and gives us a running start into the second half of the year when we can't rely on government stimulus," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

"That's part of the plan, to get us moving as fast as possible so when life support is removed we'll have a pulse."

U.S. stock index futures extended gains on the data, while Treasury debt prices deepened losses. The dollar rose against the yen.

Getting the economy on a sustainable growth track remains one of the key challenges facing President Barack Obama, who on Wednesday outlined a raft of measures to create jobs and nurture the recovery.

Growth was boosted by a sharp slowdown in the pace of inventory liquidation, a factor that could mask the strength of the economic recovery from the longest and deepest downturn since the Great Depression.

But even stripping out inventories, the economy expanded at an annual rate of 2.2 percent, accelerating from the 1.5 percent increase in the third quarter, reflecting relatively strong performance from other segments of the economy.

Business inventories fell only $33.5 billion in fourth quarter after dropping $139.2 billion in the July-September period. The change in inventories alone added 3.39 percentage points to GDP in the last quarter. This was the biggest percentage contribution since the fourth quarter of 1987.

For the whole of 2009, the economy contracted 2.4 percent, the biggest decline since 1946, the first year after the end of World War II.

In the last three months of 2009, consumer spending increased at a 2 percent annual rate, below the 2.8 percent annual pace in the prior quarter when consumption got a boost from the government's "cash for clunkers" program.

In the fourth quarter, consumer spending contributed 1.44 percentage points to GDP.

Consumer spending, which normally accounts for about 70 percent of economic activity, has been held back by the worst labor market in a quarter century.

Business investment in the fourth quarter grew for the first time since the second quarter of 2008 as the drag from the troubled commercial real estate was offset by robust spending on equipment and software.

Business investment rose at a 2.9 percent rate after falling 5.9 percent over the previous three-month period.

The growth of spending on new home construction braked sharply in the fourth quarter to an annual rate of 5.7 percent from an 18.9 percent pace in the third quarter. Home building has received a lift from a popular tax credit for first-time buyers, but recent data have hinted at some weakness starting to creep in.

Export growth outpaced imports, leaving a trade gap that contributed half a percentage point to GDP growth in the last quarter.

Separately, employment costs in the United States rose 0.5 percent in the fourth quarter, Labor Department data showed.

Analysts polled by Reuters had expected the Employment Cost Index to increase 0.4 percent in the three months ending in December 2009, after it inched up an unrevised 0.4 percent in the prior quarter.

Wages and salaries, which make up about 70 percent of compensation, and benefits were both up 0.5 percent, the Labor Department said.


Sources: MSNBC, CNBC