Today’s economic news was shocking. Wholesale prices were up 1.6% on a steep rise in food cost. It was the steepest rise in food prices in 36 years. High energy costs were blamed for it and the AP noted: “Excluding those volatile categories, inflation was tame.”
Exclude those categories? Are they kidding? What’s left?
Food and energy are the most basic elements of life. When those are inflated, people suffer. You wonder how a reporter can write this with a straight face.
Of course, there’s housing, another life necessity. But that’s not faring too well either. Housing starts posted their biggest decline in 27 years in February – 22.5% – it was announced today. Also, building permits dropped to their lowest level on record. The AP astutely observes here, too, that this is a hint of future construction activity. Genius! Who’d have thought that?
Then I read in the Weekly Standard that “we have now gotten to the point where if national defense, interstate highways, national parks, homeland security and all other discretionary programs somehow became absolutely free, we’d still have a budget deficit,” writes Jeffrey Anderson. “The White House Office of Management and Budget projects that in the current fiscal year (2011), mandatory spending alone will exceed all federal receipts. So even if we didn’t spend a single cent on discretionary programs, we still wouldn’t be able to balance our budget this year – let alone pay off any of the $14 trillion in debt that we have already accumulated.”
He goes on to show that in 2007, federal revenues exceeded mandatory spending by more than $1 trillion. Still, the Bush administration released a report warning that “if left unchanged, mandatory spending alone is projected to exceed total projected government receipts in approximately 50 years.”
Well, that 50 years went by in a hurry. It’s here.
If I were a young person I would be seriously concerned that all these facts put my future in a dire light.
None of this even takes into account the current crisis in Japan and the ripple effect it will have across the globe.
And what if the unthinkable happens here? What if an earthquake/tsunami hits the West Coast? Lots of scientists predict it very likely. We have no rainy day funds and the world is tapped out.
People complaining about the minor cuts governors like Walker is trying to make in Wisconsin or Kasich in Ohio; House Republicans like Bachmann and Ron Paul; and Jim DeMint and Mike Lee in the Senate have lost the macro picture.
They want their cake. We can’t afford bread.