Budget Deficits | timiacono.com - Part 30

Things Not Going Well in Greece

Riot police with tear gas met thousands of protesters in Athens’ main Syntagma Square and the results were not good. Meanwhile, the Greek government appears to be a little wobbly and European leaders once again gathered in an attempt to determine whether Greece should default on its debt sooner or later, the odds shifting noticeably to the former.

Of course, equity markets are not taking the news well, the Dow Jones Industrial Average now down 200 points while a somewhat odd development can be seen in the currency markets as the trade-weighted dollar is surging while both gold and silver are also moving higher. Don’t know what’s going on with the poor man’s gold, but it is a bit unusual to see it moving higher along with the dollar and gold as everything else tumbles.

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A new Washington Post-ABC News poll indicates that even though most people understand that there could be serious repercussions for failing to raise the debt ceiling, barely half of the electorate favors doing so even if deep spending cuts are made, more evidence that living within our means continues to be the favored approach, that is, up until the point that people learn how those spending cuts will affect them.

The zeal to slash spending until it is learned what spending will be cut can be seen in the middle-left question where respondents say Republicans will do a better job in cutting spending but Democrats would better protect Medicare.

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If it’s June, it must be time for another budget crisis in California, and that’s what appears to be taking shape right now as elected officials have before them a budget plan that, in theory, must be approved in a week. This report in the Contra Cost Times has the details:

Legislative Democrats sent revised budget plans to both houses Wednesday night that would restore nearly $1 billion in spending and that seek a yearlong extension on taxes that could jeopardize any opportunity for an on-time deal.

Lawmakers are racing against a June 15 constitutional deadline to approve a balanced budget. If they fail to meet it, they will not be paid after that date until they reach an accord on how to close a $9.6 billion revenue gap.

Though Democrats have the power to approve a budget with a majority vote, they need four Republicans — two in either house — to approve any revenues. There was little sign the two parties are close to an agreement. Votes on the budget could come as early as Thursday, though nothing has been scheduled as Gov. Jerry Brown continues to meet with Republicans seeking a deal on pension rollbacks, regulatory fixes and a spending cap.

Republicans insisted a so-called bridge tax would undermine any potential deal. Under the Senate plan, a temporary tax would keep in place for one year the same level of sales and auto taxes California residents now pay.

Voters would be given the opportunity to ratify or nullify the extensions as early as September. Republicans complained that voters would have to live with them another nine months even if they rejected them.

Well, at least they don’t have that silly super-majority problem anymore, but, from the sound of it, getting any Republican to vote for the proposed budget will be difficult.

In related news, the Sacramento Bee reports that Governor Jerry Brown has “confiscated” 29,000 cell phones that will save the state millions of dollars – another drop in the bucket…

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Given the complexity (and unpleasantness) of subjects such as budget deficits in a weak economy, structural long-term unemployment, and the possibility that the U.S. is in decline, it’s no wonder that Anthony Weiner’s dalliances are so enthralling. They should see if they can find a way to push back the August 2nd deadline for raising the debt ceiling by at least a few days to make up for all the recent Weiner time.

From the Chip Bok Bokbluster archive of fine cartoons (here’s another funny one).

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