Thursday, August 23, 2012

August 23, 2012


Recession Likely in 2013 If U.S. Congress Doesn’t Act, CBO Says
by Newsfront
August 22, 2012

Read more on Recession Likely in 2013 If U.S. Congress Doesn’t Act, CBO Says
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The U.S. economy will probably tip into recession next year if lawmakers can’t break an impasse over the federal budget, according to a report.

The nonpartisan Congressional Budget Office said today that scheduled tax increases and spending cuts in 2013 would reverse the modest economic recovery. Economic output would shrink next year by 0.5 percent, joblessness would climb to about 9 percent with “economic conditions in 2013 that will probably be considered a recession,” the agency said in a biannual report on the budget and economic outlook.

“Whether lawmakers allow scheduled policy changes to take effect to alter them will play a crucial role in determining the path of the federal budget over the next decade and the outlook for the economy,” according to the report.

Congressional leaders have said they probably won’t consider until after the election the Bush-era tax cuts set to expire Dec. 31 or $1 trillion in automatic spending cuts that would begin taking effect in January. There is no sign of an agreement to avoid a so-called fiscal cliff, and the CBO report prompted partisan finger-pointing.

The deficit will reach $1.1 trillion this year, about $100 billion less than CBO had projected in March, according to the report. That would be down from last year’s $1.3 trillion, in part because tax revenue has risen by almost 6 percent and spending is down by about 1 percent this year.

Budget Deficit

It would be the fourth consecutive year the U.S. would run a trillion-dollar budget deficit. The budget office forecasts U.S. debt will total 73 percent of the nation’s gross domestic product this year. That would be the highest level since 1950 and about twice as large as five years ago, before the most recent recession, CBO said.

The report, coming less than three months before the Nov. 6 election, may influence debate between Republicans and Democrats over fiscal policy. The two parties have offered different plans for taxing and spending, with Republicans calling for spending cuts and no tax increases, and President Barack Obama proposing higher taxes for top earners.

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The Greatest Threat to Our Democracy
by Ben Shapiro
August 22, 2012

The American system of democracy is under threat. It's under threat from an Obama campaign that seeks to polarize Americans along race and class lines. It's under threat from a Democratic Party that seeks to pit those who pay taxes against those who don't.

But most of all, it's under attack from America's public sector unions.

Mallory Factor explains in his new book, "Shadowbosses: Government Unions Control America and Rob Taxpayers Blind," just how the unions pervert the political system. They demonstrate how our government has become subject to the demands of an ever-more-powerful minority -- and how that level of control breeds national bankruptcy.

In essence, government worker unions run the Democratic Party. Franklin D. Roosevelt long opposed the notion that government workers should be allowed to unionize; he recognized that the ultimate power of unions is the ability to strike, and that government workers striking would be acting against the interests of the dispersed taxpayers. That was unacceptable.

But over time, FDR's clarity of vision fell away. In 1962, JFK, recognizing the increasing power of private unions, realized that government employees who unionized could build the path to permanent Democratic governance. Here's how the scheme would work. The government would insist on bargaining with unions; employees would have to join unions in order to work and receive representation. Unions would be able to exact dues from their members, and they would use those dues to elect their favored politicians. Those politicians would then strike cushy deals for the unions. The winners: politicians, unions and working union members. The losers: taxpayers, who would subsidize both union salaries and Democratic campaigns.

Democrats across the country quickly adopted this strategy. The system of forced dues now rules larges swaths of the United States, destroying the fundamental freedom of labor that should be an American birthright. In certain states, private individuals have been forced into unions -- and more importantly, into paying union dues -- simply for caring for their disabled children.

But the unions have now become the masters of the Democrats rather than vice versa. As Factor writes, "Democrats live in fear of the people that really impact their reelection campaigns -- the union Shadowbosses. ... Open Secrets reported that of the top ten Congressional candidates whom labor spent money to defeat in 2008, all lost their races."

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Obama's Oil and Gas Folly
by Jeffrey Folks
August 23, 2012

Obama's campaign speeches always seem to include a line about how he can take credit for increasing domestic oil and gas production.  As the official White House website has it, "domestic oil and gas production has increased every year President Obama has been in office."

On Wednesday, however, his administration put into effect yet another new regulation making it harder for America's oil and gas companies to increase production.  In fact, that regulation, as the head of the American Petroleum Institute recently wrote, would make American companies unable to compete with foreign competitors.  That may be exactly why the president supported it.

The new regulation, Section 1504 of the Dodd-Frank bill, would require American companies to release information detailing expenditures on foreign operations.  That proprietary information would immediately be available to foreign and domestic competitors alike, and would be used to undercut whatever advantages American companies have achieved as a result of their own hard work.  Section 1504's "extractives transparency rules," as interpreted by Obama's activists at the SEC, force American companies to compete with one hand tied behind their back.  Competitors in Moscow and Beijing must be dancing for joy now that the rules have been finalized.  Obama has just handed them the keys to the world's oil riches.

The problems with Section 1504 go beyond the "competitive disadvantage" to which it puts American energy companies.  When implemented, Section 1504 will also place American companies in conflict with foreign countries which prohibit the very same disclosures that 1504 mandates.  As a result, American companies might well be forced to cease operations in nations where they have already invested tens of billions of dollars in order to avoid running afoul of the law.

As one study pointed out, there are also serious security implications involved in implementing Section 1504.  American companies working in dangerous environments overseas may be placing their employees at risk if they fully disclose the locations, funding, and status of their operations.  The safety of American workers and their local employees overseas should be a paramount concern, but the SEC ruling does not appear to address this concern.

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