from the story:
David Walker, 51, a respected voice on fiscal matters, said he was making an early departure from the US Government Accountability Office (GAO) to head a new public interest foundation.
“As Comptroller General of the United States and head of the GAO, there are real limitations on what I can do and say in connection with key public policy issues, especially issues that directly relate to GAO’s client — the Congress,” Walker said in a statement.
He did not elaborate but Walker last year issued an unusually downbeat assessment of his country’s future in a report that drew parallels with the end of the Roman empire.
He had warned that the US government was on a “burning platform” of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action was not taken soon.
There were “striking similarities” between America’s current situation and the factors that brought down Rome, he had said.
These included “declining moral values and political civility at home, an over-confident and over-extended military in foreign lands and fiscal irresponsibility by the central government.”
Not only are people unable to pay for their homes, they’re increasingly unable to pay for their vehicles:
Car and truck repossessions this year are headed for the highest level in at least a decade, thanks to easy credit and a faltering economy, says an economist for one of the largest wholesale auto auction services.So many vehicles are being snatched from owners who stop making payments that some repo operators and auto auctioneers say lots are overflowing.
This year’s predicted 10% rise in vehicle repos to 1.6 million would be a third higher than 10 years ago, says Thomas Webb, chief economist for a unit of Atlanta-based Manheim, which sells cars to dealers worldwide. The increase comes atop a 10% rise in repos last year.
Economist Thomas Palley points out the structural problem that the US economy is based on:
A second big American interest-rate cut in a fortnight, alongside an economic stimulus plan that united Republicans and Democrats, demonstrates that US policymakers are keen to head off a recession that looks like the consequence of rising mortgage defaults and falling home prices. But there is a deeper problem that has been overlooked: the US economy relies upon asset price inflation and rising indebtedness to fuel growth.
Therein lies a profound contradiction. On one hand, policy must fuel asset bubbles to keep the economy growing. On the other hand, such bubbles inevitably create financial crises when they eventually implode.
This is a contradiction with global implications. Many countries have relied for growth on US consumer spending and investments in outsourcing to supply those consumers. If America’s bubble economy is now tapped out, global growth will slow sharply. It is not clear that other countries have the will or capacity to develop alternative engines of growth.
they’re certainly feeling our pain in England:
TWO in every five employers plan redundancies (layoffs) over the next three months, according to an influential survey to be published tomorrow. It comes as two leading business groups warn of weak business confidence and a sharp slowdown in growth.
British Retail Consortium (BRC) figures will show, however, that consumers remain resilient in spite of economic worries. The BRC retail sales monitor, in conjunction with KPMG, is set to show total sales last month almost 5% up on a year earlier. Like-for-like sales – adjusted for new floorspace – have risen more than 2%.
Retailers had been very downbeat about prospects for January following a poor December, with like-for-like sales rising only 0.3%. This week’s figures will come as a relief, but the BRC is likely to warn that any strength is likely to be temporary.
This will be the big fear if the warning of many redundancies from the Chartered Institute of Personnel and Development comes true. Its winter labour market outlook, also in conjunction with KPMG, is set to show that 38% of the more than 1,500 employers surveyed plan redundancies over the next three months, with a quarter intending to let go at least 10 employees.
Although it is normal for a proportion of employers to be planning redundancies, the latest figure is sharply up on the 17% number three months ago.
“Employers’ initial reaction to talk of an economic slowdown was to hold fire and take stock of the situation,” said John Philpott, the institute’s chief economist. “But a substantial number now expect to trim their workforces.”
And it looks like the worst is just beginning:
Consumer spending is down (excluding food and fuel) and consumer confidence is falling at the fastest pace since the 1990-91 recession. Also, $2 trillion has been wiped out from falling home prices and another $600 billion will vanish this year from mortgage equity withdrawals (MEWs). Traffic to the shopping malls has slowed to a crawl and retail shops had their worst January on record. Homeowners are hoarding their earnings to cover basic expenses and to make up for their lack of personal savings. The spending spigot has been turned off. America’s consumer culture is in full-retreat.
…. So, where’s the political leadership? Does anyone in Washington even have a game plan?
In the fourth quarter of 2007, new foreclosures averaged 2,939 a day, double the pace of a year earlier. Business inventories are on the rise. This week’s release of the Institute for Supply Management’s Non-Manufacturing Index (ISM) showed steep declines in all areas of the nation’s service sector — including banks, travel companies, contractors, retail stores etc. The Business Activity Index, the New Orders Index, the Employment Index, and the Supplier Delivery Index have all contracted at a historic pace.
These are the classic signs of overproduction. The next shoe to drop will be rising unemployment. Layoff notices have already gone out in new construction, retail, car manufacturing and financial services. This is all the predictable outcome of low interest” bubble-making. It invariably ends in a painful deflationary spiral.
So, what’s the Bush junta’s response?
Bush Administration Hides More Data, Shuts Down Website Tracking U.S. Economic Indicators
The U.S. economy is faltering. Family debt is on the rise, benefits are disappearing, the deficit is skyrocketing, and the mortgage crisis has worsened. Conservatives have attempted to deflect attention from the crisis, by blaming the media’s negative coverage and insisting the United States is not headed toward a recession, despite what economists are predicting.
The Bush administration’s latest move is to simply hide the data. Forbes has awarded EconomicIndicators.gov one of its “Best of the Web” awards. As Forbes explains, the government site provides an invaluable service to the public for accessing U.S. economic data:
This site is maintained by the Economics and Statistics Administration and combines data collected by the Bureau of Economic Analysis, like GDP and net imports and exports, and the Census Bureau, like retail sales and durable goods shipments. The site simply links to the relevant department’s Web site. This might not seem like a big deal, but doing it yourself–say, trying to find retail sales data on the Census Bureau’s site–is such an exercise in futility that it will convince you why this portal is necessary.
Yet the Bush administration has decided to shut down this site because of “budgetary constraints,” effective March 1….
when all else fails, shoot the messenger…..
Open Announcement
Economic Indicators Continued by SGS. The Department of Commerce (DOC) has decided to discontinue its economic indicators service economicindicators.gov (effective March 1st) “due to budgetary constraints.” Shadow Government Statistics is pleased to announce that it will provide — at no charge to the public — a continuation of the basic link service heretofore provided by the DOC’s Economics and Statistics Administration.
The existing government service provides links to the Web pages and recent releases of the Bureau of Economic Analysis and the U.S. Census Bureau. We eventually plan to extend the service to other government or quasi-government reporting agencies, including the Bureau of Labor Statistics, the U.S. Treasury and the Federal Reserve, as well as to provide links to other major economic data providers. We plan for the new service to be operational by Wednesday, February 20, 2008.
