Oregon facing $3 billion budget crisis next biennium (2017-19)?

The big news this week was the revenue forecast, which is up an additional $463 million. This means there is an additional $1.75 billion in this budget cycle. On the front end we should keep in mind the fact the revenue forecast is an educated guess as to what the economy will do over the next two years. The state economists work in consultation with business and labor leaders to come up with the projection, which was announced on Thursday. The May forecast is what the Legislature uses to create the budgets for the next biennium. One complicating factor is the fact that while the current biennium ends on June 1, the final numbers won’t actually be “trued up” until September.


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Buffett: I could end the deficit in 5 minutes

“I could end the deficit in 5 minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP all sitting members of congress are ineligible for reelection.” --Warren Buffett

Doug Powers at Michelle Malkin writes,

I like it, Mr. Buffett, but you might have more than a little trouble getting both chambers of Congress to pass a law that castrates their power and would ultimately send them looking for private sector work in this economy.

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Financial Sense: "Must Read"

Financial Sense, Market Focus: Storm Watch

• CNS News, 6/3/2011 - China Has Divested 97 Percent of Its Holdings in U.S. Treasury Bills
  
• Bloomberg, 6/3/2011 - Moody’s May Cut U.S. [AAA Credit Rating] on Debt Limit Concern
  
• Bloomburg, 6/2/2011 - QE2 Failed to Boost U.S. Spending
  
• Financial Sense, 6/1/2011 - After the Dollar: What Comes Next? (Editorial by Peter D. Schiff)
  
• The Big Picture, 5/31/2011 - Its Official: Housing Double Dip is Here. Without artificial government stimulus, Housing is going lower.

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Bush's Deficit?

VIA EMAIL 4/1/2010 (Hat tip: Linda Weiemer) - The Washington Post babbled again about Obama inheriting a huge deficit from Bush. Amazingly enough, a lot of people swallow this nonsense. So once more, a short civics lesson.

Budgets do not come from the White House. They come from Congress, and the party that controlled Congress since January 2007 is the Democratic Party. They controlled the budget process for FY 2008 and FY 2009, as well as FY 2010 and FY 2011. In that first year, they had to contend with George Bush, which caused them to compromise on spending, when Bush somewhat belatedly got tough on spending increases. For FY 2009, though, Nancy Pelosi and Harry Reid bypassed George Bush entirely, passing continuing resolutions to keep government running until Barack Obama could take office. At that time, they passed a massive omnibus spending bill to complete the FY 2009 budgets.

And where was Barack Obama during this time? He was a member of that very Congress that passed all of these massive spending bills, and he signed the omnibus bill as President to complete FY 2009. Let's remember what the deficits looked like during that period:

If the Democrats inherited any deficit, it was the FY 2007 deficit, the last of the Republican budgets. That deficit was the lowest in five years, and the fourth straight decline in deficit spending. After that, Democrats in Congress took control of spending, and that includes Barack Obama, who voted for the budgets. If Obama inherited anything, he inherited it from himself.

In a nutshell, what Obama is saying is I inherited a deficit that I voted for and then I voted to expand that deficit four-fold since January 20th.

There is no way this will be widely publicized, unless each of us sends it on!
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Calling on Congress to stop the debt tsunami

WASHINGTON POST, 12/18/2009 by David S. Broder (Hat tip: John H. Detweiler) - The 34 names are familiar to anyone who has followed economic policy in Washington for the past generation, one-third of them former chairmen or members of key committees of Congress, seven of them former directors of the White House Office of Management and Budget, two of them former comptroller generals of the United States, seven of them former directors of the Congressional Budget Office, and one of them -- Paul Volcker -- a former chairman of the Federal Reserve System and now an adviser to President Obama. ∴ Both political parties are well represented in their number. But they came together this week as signatories of a nonpartisan manifesto, essentially a stark warning to the president and Congress and a plea for action on behalf of the next generation. Read more at the Washington Post...

John recommends reading the Peterson-Pew Commission on Budget Reform warning. Red Ink Rising: A Call to Action to Stem the Mounting Federal Debt Read More......

A budget-buster in the making

WASHINGTON POST, 11/23/2009 by David S. Broder (Hat tip: John H. Detweiler) - It's simply not true that America is ambivalent about everything when it comes to the Obama health plan. ∴ The day after the Congressional Budget Office (CBO) gave its qualified blessing to the version of health reform produced by Senate Majority Leader Harry Reid, a Quinnipiac University poll of a national cross section of voters reported its latest results. ∴ This poll may not be as famous as some others, but I know the care and professionalism of the people who run it, and one question was particularly interesting to me.

It read: "President Obama has pledged that health insurance reform will not add to our federal budget deficit over the next decade. Do you think that President Obama will be able to keep his promise or do you think that any health care plan that Congress passes and President Obama signs will add to the federal budget deficit?"

The answer: Less than one-fifth of the voters -- 19 percent of the sample -- think he will keep his word. Nine of 10 Republicans and eight of 10 independents said that whatever passes will add to the torrent of red ink. By a margin of four to three, even Democrats agreed this is likely. Read more at the Washington Post...

John writes, "Maybe we are getting the picture with respect to the costs of this thing." Read More......

China questions costs of U.S. healthcare reform

REUTERS, 11/16/2009 - Guess what? It turns out the Chinese are kind of curious about how President Barack Obama’s healthcare reform plans would impact America’s huge fiscal deficit. Government officials are using his Asian trip as an opportunity to ask the White House questions. Detailed questions. Read more at Reuters... Read More......

Catching up with financials

• The Obama administration admitted that their estimated 10-year budget deficit was off by $2 trillion.
• The budget czar is Peter Orszag.
• President Obama reappoints Bernanke as Fed Chair.
• The 2009 budget deficit balloons to $1.6 trillion (3 times the 2008 deficit).
• We're drowning in a sea of red ink according to one national magazine.

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Top policy issues: The Economy and the Budget Deficit

AMERICAN SPECTATOR, 7/6/2009 by J.T. Young - America's emerging policy issue is the federal budget deficit. According to the 7/2 released CNN/Opinion Research Corp. poll of 1,026 adults (conducted 6/26-28 with a 3.1% +/- margin of error), the federal budget deficit ranked second only to the economy as "the most important issue facing the U.S. today." That's ahead of health care, the wars in Iraq and Afghanistan, and energy policy. Read more at American Spectator... Read More......