U.S. Economic/Financial News
U.S. Budget Deficit Projected To Hit $631 Billion
The Congressional Budget Office released a report in January revealing that the official fiscal year 2003 budget deficit reached $375 billion. Further, the CBO projects the official FY 2004 (Oct. 1, 2003-Sept. 30, 2004) budget deficit will zoom to $477 billion, a record. (It should be noted, that the CBO makes projections, but the U.S. Treasury Department releases the final budget deficit figures).
But as bad as that is, it doesn't begin to tell the real story: The official budget deficit that the Treasury Department reports on, which is called the "unified budget," is a sham agglomeration, which illegally mixes the actual budget, which is called the U.S. General Revenue Budget, with the off-budget surplus of the Social Security Trust Fund. But the Trust Fund has its own dedicated tax-revenue stream, and should not be mixed in. If one correctly refuses to count the surplus of the Social Security Trust Fund, the U.S. government's General Revenue budget (the real budget) deficit reached approximately $536 billion in fiscal year 2003, and is projected to reach approximately $631 billion in fiscal year 2004.
The CBO also reported that its official 10-year budget projection of cumulative U.S. budget deficits, from fiscal year 2005 through fiscal year 2014, is $1.89 trillion. However, EIR determines that if one correctly refuses to count the surplus of the Social Security Trust Fund, the U.S. government's cumulative budget deficit, from fiscal year 2005 through fiscal year 2014, would be approximately $4.29 trillion.
Though increased defense spending (mostly the spending for personnel and retirement accounts), and legislated tax cuts, each played a role in the growing budget deficits, the prime driving force of the deficits is the collapse of revenues, relative to where they should be, particularly the collapse in personal and corporate income taxes.
Greenspan: Factory Jobs Gone For Good, But: No Problem
The U.S. economy "has always been able to generate enough jobs in cutting-edge industries to replace jobs lost in industries facing the highest competition from low-wage labor," pronounced Federal Reserve guru Alan Greenspan, speaking to a conference in London, by phone. Of course, "cutting-edge" used to mean something better than Wal-Mart, which Greenspan failed to mention.
Derivatives saved us when telecom blew out, he said, adding, "Unlike in previous periods of large financial distress, no major financial institution defaulted and the world economy was not threatened."
'Self-Employed': Euphemism for 'Unemployed'?
The number of self-employed workers has grown during the past two years, rising from 8.9 million Americans in November 2001, to 9.6 million Americans in December 2003, the Bureau of Labor Statistics reports. The self-employed worker includes a wide rangefrom real estate agents, consultants, computer programmers/software designers to graphic artists. This often includes workers once gainfully employed. Take the case of telephone repairmen: Over the past five years, their jobs have disappeared in large numbers. They now "work for themselves," but often less regularly, having to pay out of their own pocket for their health benefits, etc. In some cases, "self-employment" is just a form of disguised unemployment.
The Washington Post Jan. 27, claims that the loss of jobs in the U.S. economywhich EIR has determined to be 7 million jobs since July, 2000, including 2.8 million manufacturing jobscan be explained by the increase in self-employed: "It may be that the economy has already turned around and that [self-employment] will help define this expansion: an era when the creation of permanent full-time jobs will be tamped down by the global availability of work-for-hire independent contractors."
Two Million Jobless Exhaust Benefits in January
At least 2 million more jobless workers will exhaust state unemployment benefitswithout further aid or a paycheckin the first half of this year, according to the Center on Budget and Policy Priorities Jan. 29. The CBPP found that about 375,000 unemployed workers will have used up their state-funded jobless benefits in January, without having found a joband will receive no further government assistance. This is the largest number of jobless workers who will go without further assistance, for any January on record, CBPP said, even after adjusting for growth in the workforce. Indeed, this month, 2 1/2 times as many unemployed workers will exhaust their regular benefits without qualifying for additional aid, as the average level in January from 1973-2003 (based on Labor Department data).
Congress has refused, so far, to approve another extension of the 13-week Federal unemployment benefits program for jobless workers whose state benefits run outthe "forgotten man."
Moreover, during January-June 2004, CBPP estimates that 1.97 million unemployed workers are expected to be in this situation; this will lead, of course, to an explosion in bankruptcy filings. "In no other January-June period on record," CBPP said, "have so many unemployed workers exhausted their regular benefits without qualifying for additional weeks of unemployment assistance."
Yet, the crisis is much worse than CBPP says; CBPP assumes, contrary to reality, that the economy will improve slightly in the coming months, making it modestly easier to find a job.
Greenspan Calls for More Poison; Bows Before 'The Market'
In an apparent response to Democratic Presidential candidate LaRouche's Jan. 25 webcast in Manchester, N.H, in which he called for an FDR-style economic recovery program, discredited Federal Reserve chairman Alan Greenspan denounced government intervention in the economy, and instead touted policies to increase economic "flexibility," i.e., more of the same poisonderegulation and globalizationthat has led the U.S., and the world, to the edge of the greatest financial collapse in modern history.
"Disoriented by the quickened pace of today's competition, some in the United States," he said, "look back with nostalgia to the seemingly more tranquil years of the early post-World War II period, when tariff walls were perceived as providing job security from imports." Were the U.S. to follow a pro-tariff policy, and return to its tradition as a producer society, Greenspin lied, "our overall standards of living would fall." "In today's flexible markets, our large, but finite, capital and labor resources are generally employed most effectively," he babbled. "Any diversion of resources from the market-guided activities would, of necessity, engender a less-productive mix." He urged the Administration, and other nations, to "shun the path" of protectionism, warning of "unexpectedly destabilizing" consequences.
Greenspan was speaking, via satellite, to the U.K. Treasury Enterprise Conference, in London.
Judge Denies Suit vs. Wal-Mart: Too Many Violations
A Florida judge denied a class-action lawsuit against Wal-Mart for unpaid workbecause violation are too widespread! Circuit Judge Glenn Hess in Panama City, Fla., wrote in his ruling that if plaintiffs were able to prove Wal-Mart failed to pay low-level employees for extra work, then determining the amount owed to each worker, would overwhelm the court system. The court would face up to 2,300 trials to determine the damages, he said, if even 1% of the 230,000 Wal-Mart employees in Florida since 1997 joined the lawsuit.
A former night-shift manager in the Panama City Beach Wal-Mart Supercenter, and several former employees of Chipley Wal-Mart, sued the company in 2001, saying they were forced to work through breaks, skip meals, and return to unfinished tasks after they had clocked out.
A lawyer for the plaintiffs, said he would file a Federal class-action suit under the Fair Labor Standards Act.
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