Will we see a government shut down if the GOP takes back the House?
US recession warnings gain ground!
WASHINGTON: Economists peddling dire warnings that the world's number one economy is on the brink of collapse, amid high rates of unemployment and a spiralling public deficit, are flourishing here.
The guru of this doomsday line of thinking may be economist Nouriel Roubini, thrust into the forefront after predicting the chaos wrought by the subprime mortgage crisis and the collapse of the housing bubble.
"The US has run out of bullets," Roubini told an economic forum in Italy earlier this month. "Any shock at this point can tip you back into recession."
But other economists, who have so far stayed out of the media limelight, are also proselytising nightmarish visions of the future.
Boston University professor Laurence Kotlikoff, who warned as far back as the 1980s of the dangers of a public deficit, lent credence to such dark predictions in an International Monetary Fund publication last week.
He unveiled a doomsday scenario - which many dismiss as pure fantasy - of an economic clash between superpowers the US and China, which holds more than US$843 billion (US$1 = RM3.11) of US Treasury bonds.
"A minor trade dispute between the US and China could make some people think that other people are going to sell US treasury bonds," he wrote in the IMF's Finance & Development review.
"That belief, coupled with major concern about inflation, could lead to a sell-off of government bonds that causes the public to withdraw their bank deposits and buy durable goods."
Kotlikoff warned such a move would spark a run on banks and money market funds as well as insurance companies as policy holders cash in their surrender values.
"In a short period of time, the Federal Reserve would have to print trillions of dollars to cover its explicit and implicit guarantees. All that new money could produce strong inflation, perhaps hyperinflation," he said.
"There are other less apocalyptic, perhaps more plausible, but still quite unpleasant, scenarios that could result from multiple equilibria," he added.
According to a poll by the StrategyOne Institute published last Friday, some 65 per cent of Americans believe there will be a new recession.
And the view that the US is on a decline seems rather well ingrained in many people's minds supported by 65 per cent of people questioned in a Wall Street Journal/NBC poll published last week. - AFP
WILL WE SEE THE GOVERNMENT SHUT DOWN?
Will we see a government shut down if the GOP takes back the House?Mon, 09/13/2010 - 10:03am | posted by Jason PyeOn Friday while speaking at the Faith and Freedom Conference in Washington, Rep. Lynn Westmoreland (R-GA) floated the idea of a government shutdown similar to that of 1995 during the fight over the budget with Bill Clinton if Republicans win back the House of Representatives:
Westmoreland said his caucus — presuming it takes control of the House come November — aims to pass spending bills that Obama is likely to veto. He predicted Republicans would not be able to override such a veto, creating a standoff that could cause Congress to grind to a halt.“If the government shuts down, we want you with us,” he said.The congressman recalled a similar shutdown that took place in 1995, when Newt Gingrich — also a speaker at the conference — was serving as House speaker. A future standstill could temporarily close national parks or delay payments from the government, Westmoreland speculated.“We have put Band-Aids on some things that need to be cleaned out,” he said. “That is going to take some pain. There’s going to have to be some pain for us to do some things that we’ve got to do to right the ship.”Some more moderate Republicans will say that a government shutdown will hurt Republicans, pointing to electoral consequences some members faced in 1996 after the budget fight with Clinton. As Stephen Slivinski noted while discussing his book, Buck Wild: How Republicans Broke the Bank and Became the Party of Big Government, duringa forum at the Cato Institute (about 14:45 into the audio), the GOP didn’t lose seats because of the shutdown:
Conventional wisdom is that Republicans have nothing to show for that but a political black eye. But in retrospect, a lot of observers aren’t so sure. Bob Walker, a former Congressman of Pennsylvania and one of Newt Gingrich’s closest allies, told reporter Major Garrett of Fox News, he said, “Did we lose an election as a result of this [meaning the government shutdown]? No. Is there anything that really bad that happened congressionally because of the fact that we shut the government down? No.”After looking at the election results of the ‘96 congressional election, in that election the GOP lost about a net two seats in the House, Linda Killian, who is a reporter for National Public Radio, certainly no redoubt Republican apologist, concluded the election really can’t be seen as a repudiation of the ‘94 revolution. The dozen freshman or so who lost in their specifc races did so for the reason that most candidates lose, they really weren’t that good as candidates. In fact, if you look at the freshman that were the most hardcore on cutting spending, they actually increased their vote totals. That’s especially astonishing since, one, Clinton was actually able to gain traction politcally in those specific districts and labor unions actually spent about $35 million trying unseat many of the GOP reformers.And so, in light of these seeminly impossible odds, the budget cutters were the ones that actually ended up prevailing in larger and larger portions in terms of vote share in the ‘96 election.I like what Rep. Westmoreland, who was my Congressman until a few years ago, is saying here. For months I’ve been pushing the idea of gridlock in government. A Republican-controlled Congress with Republicans willing to actually embrace the fiscal ideas they campaign on and if the tea party movement sticks around and holds the GOP accountable, doing what Matt Kibbe recently said they had to do when and if the GOP took back control
Most Accessed BH Ekonomi From NST [Image] [Image]US recession warnings gain ground Hertz sweetens Dollar offer Ace tipped to be Jerneh Insurance buyer China firms target US$2b from IPOs KL bourse soars, beats forecasts
WASHINGTON: Economists peddling dire warnings that the world's number one economy is on the brink of collapse, amid high rates of unemployment and a spiralling public deficit, are flourishing here.
The guru of this doomsday line of thinking may be economist Nouriel Roubini, thrust into the forefront after predicting the chaos wrought by the subprime mortgage crisis and the collapse of the housing bubble.
"The US has run out of bullets," Roubini told an economic forum in Italy earlier this month. "Any shock at this point can tip you back into recession."
But other economists, who have so far stayed out of the media limelight, are also proselytising nightmarish visions of the future.
Boston University professor Laurence Kotlikoff, who warned as far back as the 1980s of the dangers of a public deficit, lent credence to such dark predictions in an International Monetary Fund publication last week.
He unveiled a doomsday scenario - which many dismiss as pure fantasy - of an economic clash between superpowers the US and China, which holds more than US$843 billion (US$1 = RM3.11) of US Treasury bonds.
"A minor trade dispute between the US and China could make some people think that other people are going to sell US treasury bonds," he wrote in the IMF's Finance & Development review.
"That belief, coupled with major concern about inflation, could lead to a sell-off of government bonds that causes the public to withdraw their bank deposits and buy durable goods."
Kotlikoff warned such a move would spark a run on banks and money market funds as well as insurance companies as policy holders cash in their surrender values.
"In a short period of time, the Federal Reserve would have to print trillions of dollars to cover its explicit and implicit guarantees. All that new money could produce strong inflation, perhaps hyperinflation," he said.
"There are other less apocalyptic, perhaps more plausible, but still quite unpleasant, scenarios that could result from multiple equilibria," he added.
According to a poll by the StrategyOne Institute published last Friday, some 65 per cent of Americans believe there will be a new recession.
And the view that the US is on a decline seems rather well ingrained in many people's minds supported by 65 per cent of people questioned in a Wall Street Journal/NBC poll published last week. - AFP
WILL WE SEE THE GOVERNMENT SHUT DOWN?
Will we see a government shut down if the GOP takes back the House?Mon, 09/13/2010 - 10:03am | posted by Jason PyeOn Friday while speaking at the Faith and Freedom Conference in Washington, Rep. Lynn Westmoreland (R-GA) floated the idea of a government shutdown similar to that of 1995 during the fight over the budget with Bill Clinton if Republicans win back the House of Representatives:
Westmoreland said his caucus — presuming it takes control of the House come November — aims to pass spending bills that Obama is likely to veto. He predicted Republicans would not be able to override such a veto, creating a standoff that could cause Congress to grind to a halt.“If the government shuts down, we want you with us,” he said.The congressman recalled a similar shutdown that took place in 1995, when Newt Gingrich — also a speaker at the conference — was serving as House speaker. A future standstill could temporarily close national parks or delay payments from the government, Westmoreland speculated.“We have put Band-Aids on some things that need to be cleaned out,” he said. “That is going to take some pain. There’s going to have to be some pain for us to do some things that we’ve got to do to right the ship.”Some more moderate Republicans will say that a government shutdown will hurt Republicans, pointing to electoral consequences some members faced in 1996 after the budget fight with Clinton. As Stephen Slivinski noted while discussing his book, Buck Wild: How Republicans Broke the Bank and Became the Party of Big Government, duringa forum at the Cato Institute (about 14:45 into the audio), the GOP didn’t lose seats because of the shutdown:
Conventional wisdom is that Republicans have nothing to show for that but a political black eye. But in retrospect, a lot of observers aren’t so sure. Bob Walker, a former Congressman of Pennsylvania and one of Newt Gingrich’s closest allies, told reporter Major Garrett of Fox News, he said, “Did we lose an election as a result of this [meaning the government shutdown]? No. Is there anything that really bad that happened congressionally because of the fact that we shut the government down? No.”After looking at the election results of the ‘96 congressional election, in that election the GOP lost about a net two seats in the House, Linda Killian, who is a reporter for National Public Radio, certainly no redoubt Republican apologist, concluded the election really can’t be seen as a repudiation of the ‘94 revolution. The dozen freshman or so who lost in their specifc races did so for the reason that most candidates lose, they really weren’t that good as candidates. In fact, if you look at the freshman that were the most hardcore on cutting spending, they actually increased their vote totals. That’s especially astonishing since, one, Clinton was actually able to gain traction politcally in those specific districts and labor unions actually spent about $35 million trying unseat many of the GOP reformers.And so, in light of these seeminly impossible odds, the budget cutters were the ones that actually ended up prevailing in larger and larger portions in terms of vote share in the ‘96 election.I like what Rep. Westmoreland, who was my Congressman until a few years ago, is saying here. For months I’ve been pushing the idea of gridlock in government. A Republican-controlled Congress with Republicans willing to actually embrace the fiscal ideas they campaign on and if the tea party movement sticks around and holds the GOP accountable, doing what Matt Kibbe recently said they had to do when and if the GOP took back control
Most Accessed BH Ekonomi From NST [Image] [Image]US recession warnings gain ground Hertz sweetens Dollar offer Ace tipped to be Jerneh Insurance buyer China firms target US$2b from IPOs KL bourse soars, beats forecasts
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