Economic News: Economy Slowing, Debt Accelerating
Recently, a guy who never had a real job until a mind-bogglingly unaware and unconcerned nation elected and then re-elected him President said that the US economy was ready to take off. Today the Federal Reserve, stacked to the gills with high level economists and regional bankers, said “Um, no, not really.”
The Federal Reserve tweaked its forecasts for the U.S. economy Wednesday, predicting slightly slower growth ahead and barely any change in the unemployment rate next year from current levels.
The central bank predicts the U.S. economy will grow 2.3% to 3% next year, down from its September forecast of at least 2.5% growth.
The weak prediction fueled the Fed to expand its stimulus program, in an effort to improve the job market in particular.
Meanwhile, the Fed expects the unemployment rate will fall to between 7.4% and 7.7% by the end of next year, marking little improvement from where it stands now.
In other news, in November, the second month of the government’s new fiscal year, the federal budget deficit increased 15% from last year to $172 billion.
In November, the government spent $334 billion and took in $162 billion in revenue.
For the fiscal year to date, the deficit is up 24% compared to the first two months of fiscal 2012.
If we confiscated ALL, as in 100%, of the wealthiest 1%’s income (roughly $1.4 trillion), we could run these deficits for eight months before we’d have to move on and confiscate 100% of the next group of folks’ incomes. And then the next, and then the next…
We’re broke and we’re gonna crash. Don’t believe me? Take it from this guy.
It’s mid-October, and Jeffrey Gundlach is giving a stump speech to a luncheon crowd of about 200 financial advisers and investors at Los Angeles’s City Club. The renowned money manager’s theme: the financial catastrophe on the horizon.
In the ominous third phase, he predicts another crisis: Deeply indebted countries and companies, which Gundlach doesn’t name, will default sometime after 2013. Central banks may forestall these defaults by pumping even more money into the economy — at the risk of higher inflation in coming years.