Items of Interest:
John Taylor / Financial Times:
Exploding debt threatens America -- Standard and Poor’s decision to downgrade its outlook for British sovereign debt from “stable” to “negative” should be a wake-up call for the US Congress and administration. Let us hope they wake up.
Under President Barack Obama’s budget plan, the federal debt is exploding. To be precise, it is rising – and will continue to rise – much faster than gross domestic product, a measure of America’s ability to service it. The federal debt was equivalent to 41 per cent of GDP at the end of 2008; the Congressional Budget Office projects it will increase to 82 per cent of GDP in 10 years. With no change in policy, it could hit 100 per cent of GDP in just another five years...
Mark Thoma / Economist's View: Starve the Beast (Recession Edition)Felix Salmon: John Taylor's disingenuousnessAndrew Sullivan / The Daily Dish: Deal With The Debt! — Or face serious inflation.Myglesias / Matthew Yglesias: Has John Taylor Forgotten About Compound Interest?Curtis Dubay / The Foundry: Out of Money? Value-Added Tax Next UpRyan Avent / The Washington Independent: America Unable to Talk About Debt Without Losing ItSteve Verdon / Outside The Beltway: John Taylor on U.S. Debt
Dollar's Slide Begins to Hurt Foreign Investors -- Will the greenback turn out to be the Achilles heel of the US economy?
U.S. Inflation to Approach Zimbabwe Level, Faber Says -- The U.S. economy will enter “hyperinflation” approaching the levels in Zimbabwe because the Federal Reserve will be reluctant to raise interest rates, investor Marc Faber said.
Prices may increase at rates “close to” Zimbabwe’s gains, Faber said in an interview with Bloomberg Television in Hong Kong. Zimbabwe’s inflation rate reached 231 million percent in July, the last annual rate published by the statistics office.
“I am 100 percent sure that the U.S. will go into hyperinflation,” Faber said...
Edward Harrison / naked capitalism: Guest post: Marc Faber says “I am 100% sure that the U.S. will …
Ryan Chittum / CJR.org: Nut Says Moon Is Made Of Cheese, Bloomberg Reports
Felix Salmon: Hyperbole watch, Bloomberg edition
Once Considered Unthinkable, U.S. Sales Tax Gets Fresh Look -- Levy Viewed as Way to Reduce Deficits, Fund Health Reform
With budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax.
Common around the world, including in Europe, such a tax -- called a value-added tax, or VAT -- has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity...
High-End Foreclosures Are Next -- I heard a startling statistic from the National Association of Realtors this morning…no not that home sales are actually increasing, but something about the high end of the market.
Chief economist Lawrence Yun said that the supply of existing homes for sale over $750,000 has reached a forty-month supply. Yep, that means it would take well over three years at the current place to sell off all of those homes.
The trouble is manifold: Jumbo loans are pricier and more difficult to get, job losses are mounting, and buyers in that price home are generally move-up buyers, so they have to sell their own homes first...
- TARP: The Greatest Economic Swindle Ever Sold - Andy Kroll, The Nation
- If a Firm Is Too Big to Fail, It Is...Too Big - Thomas Cooley, Forbes
- Big Banks' Best Friend In Washington - Steven Pearlstein, Washington Post
- Stress Anxiety: What the Banks Still Won't Tell - Noam Scheiber, TNR
- Jamie Dimon's Straight Talk Has A Good Ring - Robert Lenzner, Forbes
- Merrill, IndyMac Show Investors Whom to Distrust - D. Reilly, Bloomberg
- The GOP's Feigned Fiscal Outrage - Thomas Frank, Wall Street Journal
- Surprise! There Are No More Surprises - Paul La Monica, CNNMoney
- Nobody Ever Got Rich Holding Cash - Bradley Kay, Morningstar
- The Dow Is Ready for a Face-Lift - Randall Forsyth, Barron's
- What Would Sotomayor Mean for Business? - Roger Parloff, Fortune
- Some Insight into the Perma-Bear Cult - Doug Kass, TheStreet.com
- Once Glittering Credit Card Business Loses Its Shine - The Economist
- Washington Helped Fuel Our Credit Card Woes - Steven Malanga, RCM
- Latvian Hookers Signal No Economic Recovery - Matthew Lynn, Bloomberg
- No, Undergarment Sales Track Economy Best - Michael Brush, MSN Money
- Are IPOs Back? The Meaning of OpenTable - James Stewart, SmartMoney
- Don't Let Consumer Confidence Fool You - Mark Hulbert, MarketWatch
- Careers That Work for Families - David Leonhardt, New York Times
- GM Bondholders Are You and Me - Dennis Buchholtz, Wall Street Journal
- FDIC’s List of Problem Banks Continues to Grow - Real Time Economics
- The Incredible Shrinking Harvard Endowment - R. Bradley, Boston Mag