Are Bush and the neocons trying to bust the budget?
jamie | 20.01.2004 17:16
Dear friends,
These seemed like some economic notes worth pondering as the “state of the union” nears and budget cutting and war/occupation continue to rage. Are Bush and the neocons trying to bust the federal treasuries so they can eliminate all social spending?
These seemed like some economic notes worth pondering as the “state of the union” nears and budget cutting and war/occupation continue to rage. Are Bush and the neocons trying to bust the federal treasuries so they can eliminate all social spending?
Dear friends,
These seemed like some economic notes worth pondering as the “state of the union” nears and budget cutting and war/occupation continue to rage. Are Bush and the neocons trying to bust the federal treasuries so they can eliminate all social spending? jamie
Mahathir: Sell oil for gold, not dollars
20.01.2004 [07:12]
Former Malaysian Prime Minister Mahathir Muhammad has said Saudi Arabia should sell oil for gold, not dollars, to avoid being "short-changed" by a decline in the US currency.
"The price of oil is $33, but the US dollar has declined by 40% against the euro so you're effectively getting $20," Mahathir told an economic conference in Saudi Arabia's Red Sea city of Jeddah. "So you're being short-changed."
Saudi Arabia, the world's biggest oil exporter, has justified higher world oil prices by saying they are necessary to compensate for the slide in the US currency. Mahathir, who retired last October, spent much of his time in office upsetting Western governments and defying their economic orthodoxies. But he became a respected spokesman in Muslim and developing states and received an ovation in Jeddah.
He suggested countries tally their total annual imports and exports and settle the difference at the end of the year in "gold dinars".
Sounding a discordant note, Mahathir also warned Saudi Arabia against rushing to join the World Trade Organisation (WTO), saying it was not necessarily a positive move.
Saudi Trade Minister Hashim Yamani said on Saturday his country had narrowed differences with the United States that was holding up accession to the organisation and said he wanted to join "tomorrow".
"Everybody should be careful before joining the WTO because it is not all positive. It can be very negative if you don't handle it properly," Mahathir said. "They try to impose their
agenda without regard for some other countries."
Источник: Reuters, Jan 19
-----
Economic Risks Feared Amid Falling Dollar
20.01.2004 [07:00]
Washington -- Gasoline prices on Jericho Turnpike are high and going higher.
"My price has risen 27 cents in the past 10 days. It just keeps going up," said Raj Singh at the Mineola Car Care Center.
But as unlikely as it may seem, each flying digit on the gas pump meter reflects the dynamics of domestic politics, the global economy, and the important role U.S. consumers play in determing the course of the recovery. At $1.73 for a gallon of regular and $1.89 for premium, there's no end in sight, Singh said. "Not as long as the dollar keeps losing value like it is."
From Vienna to Washington to Jericho Turnpike, there is growing anxiety that a confluence of economic and political forces and events that are already affecting peoples' buying habits could pose potential long-term risks to both the national and the global economy. In the past week alone, the dollar has traded at prices nearly 30 percent below year-ago levels. Meanwhile, OPEC officials have said they will let oil prices, now $35.07 a barrel, a 10-month high, rise further to accommodate the dollar's falling purchasing power.
In New York and and on Capitol Hill, bankers and economists and budget hawks from across the political spectrum also are increasingly worried that federal red ink is driving the dollar lower. Finally, International Monetary Fund economists have warned that U.S. budget and trade deficits threaten the global economy.
The risks stem from a combination of the nation's federal budget deficit and the overall trade deficit called the current account balance. As President George W. Bush prepares for Tuesday night's State of the Union message and completes his 2005 budget proposal, Treasury Secretary John Snow has already estimated that the 2004 budget of $2.2 trillion will include a $500 billion deficit, a record.
The concern expressed by economists and fiscal conservatives alike is the torrent of red ink will only widen in the future. Congress has stalled in its effort to complete annual appropriations bills for the fiscal year that started last Oct. 1. Beyond that, Washington has made expensive commitments for highway construction, new defense programs, homeland security spending, space travel, and the expansion of Medicare to include prescription drugs, with its pricetag of at least $400 billion over the next decade.
The nonpartisan Congressional Budget Office, the middle-of-the-road Center for a Responsible Federal Budget and the Concord Coalition and the liberal Brookings Institution and Center for Budget Policy and Priorities have all warned that the deficits will persist and even worsen over the next decade. That's before 77 million Baby Boomers retire and claim their Social Security and Medicare benefits. General Accounting Office Comptroller David Walker, a Republican, warns, "Our deficits are not manageable without significant changes in programs, policies and processes."
Conservatives like John Berthold of the National Taxpayers Union also are getting nervous. He worries that if the deficit grows unchecked, Congress will lose its stomach for further tax cuts and will be tempted to limit those already enacted."The seeds are there for a budget revolt," said Rep. Gil Gutknecht (R-Minn.).
Tuesday night, Bush is expected to pledge that the deficits can be cut in half over the next five years as the domestic economy recovers. But IMF economists warned that even a strong recovery will not close the gap. "The global impacts of the U.S. deficit, this is really the key area driving our concern," said Charles Collyns, the IMF's deputy director of Western Hemisphere Department.
The other deficit drawing attention is the current account balance, the total of the trade deficit plus the amount of U.S. bonds and notes owned by overseas interests. It has grown from $110 billion in 1995 to $550 billion this year and is directly tied to budget deficits because the federal government finances the gap by selling bonds, most of which are now purchased by foreign investors.
The worry is that foreign investors will lose confidence in the U.S. politicians' willingness to limit the deficit and increasingly shun their substantial purchases of U.S. debt, leading to what former Treasury Secretary Robert Rubin, conservative economist Allan Sinai and Brookings' Peter Orzag call "a self-reinforcing negative cycle" that could undermine the stock market, global trading, consumer confidence, spending and home values.
Already, foreign investment in U.S. stocks has declined, although purchases of government debt has increased.
Economists fret that the falling dollar could scare foreign investors from buying U.S. investments, which would lose more value as the dollar continues its slide. OPEC has also abandoned its $22-to-$28 a barrel target and left production levels unchanged, in part to members against the declining dollar.
"It gives OPEC countries less buying power and literally no incentive to make any increases in output," of crude, which is denominated in dollars, said Tom Bentz, an analyst at BNP Paribas Commodity Futures in New York.
(www.newsday.com)
These seemed like some economic notes worth pondering as the “state of the union” nears and budget cutting and war/occupation continue to rage. Are Bush and the neocons trying to bust the federal treasuries so they can eliminate all social spending? jamie
Mahathir: Sell oil for gold, not dollars
20.01.2004 [07:12]
Former Malaysian Prime Minister Mahathir Muhammad has said Saudi Arabia should sell oil for gold, not dollars, to avoid being "short-changed" by a decline in the US currency.
"The price of oil is $33, but the US dollar has declined by 40% against the euro so you're effectively getting $20," Mahathir told an economic conference in Saudi Arabia's Red Sea city of Jeddah. "So you're being short-changed."
Saudi Arabia, the world's biggest oil exporter, has justified higher world oil prices by saying they are necessary to compensate for the slide in the US currency. Mahathir, who retired last October, spent much of his time in office upsetting Western governments and defying their economic orthodoxies. But he became a respected spokesman in Muslim and developing states and received an ovation in Jeddah.
He suggested countries tally their total annual imports and exports and settle the difference at the end of the year in "gold dinars".
Sounding a discordant note, Mahathir also warned Saudi Arabia against rushing to join the World Trade Organisation (WTO), saying it was not necessarily a positive move.
Saudi Trade Minister Hashim Yamani said on Saturday his country had narrowed differences with the United States that was holding up accession to the organisation and said he wanted to join "tomorrow".
"Everybody should be careful before joining the WTO because it is not all positive. It can be very negative if you don't handle it properly," Mahathir said. "They try to impose their
agenda without regard for some other countries."
Источник: Reuters, Jan 19
-----
Economic Risks Feared Amid Falling Dollar
20.01.2004 [07:00]
Washington -- Gasoline prices on Jericho Turnpike are high and going higher.
"My price has risen 27 cents in the past 10 days. It just keeps going up," said Raj Singh at the Mineola Car Care Center.
But as unlikely as it may seem, each flying digit on the gas pump meter reflects the dynamics of domestic politics, the global economy, and the important role U.S. consumers play in determing the course of the recovery. At $1.73 for a gallon of regular and $1.89 for premium, there's no end in sight, Singh said. "Not as long as the dollar keeps losing value like it is."
From Vienna to Washington to Jericho Turnpike, there is growing anxiety that a confluence of economic and political forces and events that are already affecting peoples' buying habits could pose potential long-term risks to both the national and the global economy. In the past week alone, the dollar has traded at prices nearly 30 percent below year-ago levels. Meanwhile, OPEC officials have said they will let oil prices, now $35.07 a barrel, a 10-month high, rise further to accommodate the dollar's falling purchasing power.
In New York and and on Capitol Hill, bankers and economists and budget hawks from across the political spectrum also are increasingly worried that federal red ink is driving the dollar lower. Finally, International Monetary Fund economists have warned that U.S. budget and trade deficits threaten the global economy.
The risks stem from a combination of the nation's federal budget deficit and the overall trade deficit called the current account balance. As President George W. Bush prepares for Tuesday night's State of the Union message and completes his 2005 budget proposal, Treasury Secretary John Snow has already estimated that the 2004 budget of $2.2 trillion will include a $500 billion deficit, a record.
The concern expressed by economists and fiscal conservatives alike is the torrent of red ink will only widen in the future. Congress has stalled in its effort to complete annual appropriations bills for the fiscal year that started last Oct. 1. Beyond that, Washington has made expensive commitments for highway construction, new defense programs, homeland security spending, space travel, and the expansion of Medicare to include prescription drugs, with its pricetag of at least $400 billion over the next decade.
The nonpartisan Congressional Budget Office, the middle-of-the-road Center for a Responsible Federal Budget and the Concord Coalition and the liberal Brookings Institution and Center for Budget Policy and Priorities have all warned that the deficits will persist and even worsen over the next decade. That's before 77 million Baby Boomers retire and claim their Social Security and Medicare benefits. General Accounting Office Comptroller David Walker, a Republican, warns, "Our deficits are not manageable without significant changes in programs, policies and processes."
Conservatives like John Berthold of the National Taxpayers Union also are getting nervous. He worries that if the deficit grows unchecked, Congress will lose its stomach for further tax cuts and will be tempted to limit those already enacted."The seeds are there for a budget revolt," said Rep. Gil Gutknecht (R-Minn.).
Tuesday night, Bush is expected to pledge that the deficits can be cut in half over the next five years as the domestic economy recovers. But IMF economists warned that even a strong recovery will not close the gap. "The global impacts of the U.S. deficit, this is really the key area driving our concern," said Charles Collyns, the IMF's deputy director of Western Hemisphere Department.
The other deficit drawing attention is the current account balance, the total of the trade deficit plus the amount of U.S. bonds and notes owned by overseas interests. It has grown from $110 billion in 1995 to $550 billion this year and is directly tied to budget deficits because the federal government finances the gap by selling bonds, most of which are now purchased by foreign investors.
The worry is that foreign investors will lose confidence in the U.S. politicians' willingness to limit the deficit and increasingly shun their substantial purchases of U.S. debt, leading to what former Treasury Secretary Robert Rubin, conservative economist Allan Sinai and Brookings' Peter Orzag call "a self-reinforcing negative cycle" that could undermine the stock market, global trading, consumer confidence, spending and home values.
Already, foreign investment in U.S. stocks has declined, although purchases of government debt has increased.
Economists fret that the falling dollar could scare foreign investors from buying U.S. investments, which would lose more value as the dollar continues its slide. OPEC has also abandoned its $22-to-$28 a barrel target and left production levels unchanged, in part to members against the declining dollar.
"It gives OPEC countries less buying power and literally no incentive to make any increases in output," of crude, which is denominated in dollars, said Tom Bentz, an analyst at BNP Paribas Commodity Futures in New York.
(www.newsday.com)
jamie
