Past 15 months have resulted in a $2 trillion loss on retirement savings.

The one upside to the fact that I still don’t have any retirement plan in place is the fact that I didn’t lose any money from it over the past year:

The stock market’s prolonged tumble has wiped out about $2 trillion in Americans’ retirement savings in the past 15 months, a blow that could force workers to stay on the job longer than planned, rein in spending and possibly further stall an economy reliant on consumer dollars, Congress’s top budget analyst said yesterday.

For many Americans, pensions and 401(k) plans are their only form of savings. The dwindling of these assets—about a 20 percent decline overall—is another setback just as many people are grappling with higher gas and food prices, more credit card debt, declining home values and less access to loans.

“Unlike Wall Street executives, American families don’t have a golden parachute to fall back on,” said Rep. George Miller (D-Calif.), chairman of the House Committee on Education and Labor. “It’s clear that Americans’ retirement security may be one of the greatest casualties of this financial crisis.”

This is one of the ways that the meltdown is going to affect the average American taxpayer and it’s all thanks to the deregulation policies of the Bush Administration.

As for myself, I keep meaning to start a 401K “real soon now” but never get around to it. Perhaps this downturn in the market is a good time to start thinking about it again. Once it appears things are on an upswing might be a good time to get one rolling in hopes it’ll make the 401K grow faster. That’s probably simplistic thinking on my part though as I’ve never had a good head for investment.

Republicans bail on the $700 billion bailout bill. Dow drops another 700 points.

Despite a much hyped bipartisan agreement being reached on Sunday apparently it was still too much for some Republicans to stomach and enough of them voted no that they managed to kill the bill:

A four-hour debate included impassioned pleas for and against the measure from Democrats and Republicans alike. Even some of those arguing the legislation must be approved were quick to point out problems with it.

But the vote began with both Democratic and Republican leadership telling their members the only way to protect the economy from a spreading credit crunch was to vote for the difficult to swallow measure.

After the defeat, Republican leaders accused Nancy Pelosi, the Democratic speaker of the House, of giving a “partisan speech” which “poisoned” Republican support.

Pelosi said the $700 billion “is a number that is staggering, but tells us only the costs of the Bush administration’s failed economic policies.”

But Barney Frank, the top Democrat on the House Financial Services Comnmittee, demanded: “Because somebody hurt their feelings, they decided to punish the country?”

Sure, why not? They’re already rich.

Though I must admit that I don’t know enough about economics to know if this is a good thing or a bad thing. Even with the amendments that were added to the $700 billion bailout plan I was still uncomfortable with hastiness it was being pushed through Congress so, in a way, I’m kind of glad the Republicans were their usual petty and selfish selves and blocked it from passing. I’m particularly bothered by the news reports that the Treasury came to the determination that it needed $700 billion by plucking a number out of their ass as opposed to, say, basing it on an actual need. I’m not against using taxpayer money to help resolve the crisis so long as we’re not using more than we really need to and there’s some guarantees that the government will get it back once Wall Street starts making profits again.

I don’t have any stocks to worry about at the moment, hell, I don’t even have a 401K (haven’t been able to put money into one for a few years now). As it stands we’re keeping our heads above water, but it’s been tight ever since the first layoff back in 2005. I haven’t a clue what’s really going to happen in terms of the economy as a whole, but I think a few more institutions on Wall Street feeling the repercussions of their idiocy aren’t entirely unwarranted. At this point the best I can hope for my family is that we manage to continue treading water until things improve. That makes all the noise and fuss surrounding the bailout hard to wrap my head around, but I’d be lying if I didn’t admit that there’s a little sense of satisfaction in seeing so many rich people freaking out over what their future has in store for them.

NYT on the Wall Street Meltdown, what happened, and why it’ll affect all of us.

If, like me, your knowledge of economics is only slightly better than John McCains then you may be wondering just what the hell happened on Wall Street recently that has everyone freaking out. The New York Times Freakonomics Blog have kindly put together a F.A.Q. to help us out. The whole thing is worth a read, but here’s the gist of why it matters:

I do not work at Lehman or A.I.G. and do not own much stock; why should I care?

The concern for the man on Main Street is not the bankruptcy of Lehman, per se. Rather, it is the collective inability of major financial institutions to find funding.

As their own funding dries up, the remaining financial firms will be much more cautious in extending credit to normal firms and individuals. So even for people whose own circumstances have not much changed, the cost of the credit is going to rise. For an individual or business that falls behind on payments or needs an increase in short-term credit because of the slowing economy, credit will be much harder to obtain than in recent years.

This is going to slow growth. We have not seen this much stress in the financial system since the Great Depression, so we do not have any recent history to rely upon in quantifying the magnitude of the slowdown. A recent educated guess by Jan Hatzius of Goldman Sachs suggests that G.D.P. growth will be just about 2 percentage points lower in 2008 and 2009. But as he explains, extrapolations of this sort are highly uncertain.

In short the American financial market is in deep shit at the moment and it’s going to affect all of us in one way or another.

Bush’s Presidential legacy: A $407 billion deficit.

Eight years under the Bush Administration will leave America $407 billion in the hole:

The budget deficit shot up 153% from last year’s shortfall of $161 billion. The government’s fiscal year ends Sept. 30. The agency attributes the jump to “a substantial increase in spending and a halt in the growth of tax revenues.”

That drop in revenue is driven in part by an estimated 15% decline in corporate tax receipts. They fell as a result of lower corporate profits and tax rules governing how businesses depreciate their investments this year. A second factor is the rebates provided to tax filers from the economic stimulus law Congress passed earlier this year.

The spending hike is partly due to efforts by the government “to cover the insured deposits of insolvent financial institutions,” the agency said.

[…] The CBO said it expected the deficit to exceed $400 billion – or 3% of gross domestic product – for each of the next two years if current policies remain in place. It also forecast several more months of “very slow” economic growth.

“The nation is experiencing a significant period of economic weakness,” said Peter Orszag, director of the CBO, in a press briefing.

Meanwhile John McCain repeats the same bullshit Bush has been pushing:

I still believe the fundamentals of our economy are strong. We’ve got terribly big challenges now, whether it be housing or employment or so many of the other — health care. It’s very, very tough times. It’s very tough. But we’re still the most innovative, the most productive, the greatest exporter, the greatest importer.

He’s just more of the same stupidity we’ve been dealing with for the past almost decade. We can’t afford another Bush Administration, but that’s just what McCain will give us.

Almost two-thirds of companies in the U.S. don’t pay income taxes.

This is annoying to say the least:

Most companies in US avoid federal income taxes – News from The Associated Press

More than 38,000 foreign corporations had no tax liability in 2005 and 1.2 million U.S. companies, or 66.7 percent of them, paid no income tax, the GAO said. Combined, the companies had $2.5 trillion in sales. About 25 percent of large U.S. corporations – those with at least $250 million in assets or $50 million in receipts – did not pay corporate taxes.

The GAO said it analyzed data from the Internal Revenue Service, examining samples of corporate returns for the years 1998 through 2005. For 2005, for example, it reviewed 110,003 tax returns from among more than 1.2 million corporations doing business in the U.S.

Of course this has been the case for awhile and being reminded of it now probably won’t change anything, but there’s always the hope that it’ll annoy enough people to maybe get a few laws changed. Imagine how well the economy would be doing if the tax burden wasn’t solely carried by citizens.

Bush’s Legacy: Record debt of $490 billion for the next President to fix.

I remember a couple of years back, I think it was shortly after Bush won re-election, an old friend of mine challenged me to consider the possibility that President Bush just might be a good thing for this country and, more specifically, for me. Some of you may recall that as it occurred here in an SEB thread. I was, shall we say, dubious of the suggestion and time has only borne that skepticism out.

Now comes word that the Bush Administration is updating a previous forecast of next year’s deficit to an all new record:

WASHINGTON — The White House has increased its estimate for next year’s deficit to nearly $490 billion, a record figure that will saddle the next president with deepening budget problems in his first year in office, a report due out Monday shows.

The projected deficit for the fiscal year that begins Oct. 1 is being driven higher by the continuing economic slowdown and larger-than-anticipated costs of the two-year, $168 billion fiscal stimulus package passed by Congress, said two senior administration officials with direct knowledge of the report. In February, President Bush predicted the 2009 deficit would be $407 billion.

The budget update shows this year’s deficit headed under $400 billion, at least $10 billion less than projected, according to the two officials. That’s partly because tax revenue held up reasonably well despite the weaker economy.

Keep in mind that the above is just the current estimate, the actual deficit could end up much higher – and it probably will – as this doesn’t reflect the full funding of the wars in Iraq and Afghanistan and if the economy gets any worse, well, that’ll just add to the red ink.

I’ve said before that I’d take Bill Clinton back in a heartbeat if it were possible and the following USA Infographic pretty much shows why:


Click to embiggen!

Oh my but that’s fascinating, eh? It shows the “deficit or surplus as a percentage of the economy” which is probably why W’s chart isn’t just a long downward slide as the economy was doing pretty good for awhile in spite of Bush’s antics. We have a Republican, Republican, Tax-and-Spend Democrat, and a Republican. I don’t know about you, but that tax-and-spend democrat is looking pretty damn good in comparison.

I suppose we should try to look on the bright side, though. The current projected deficit for 2009 as a share of the economy is only 3% to 4% which is still below the post-World War II record of 6% set in 1983 during the time of one of the most beloved Presidents of the Republican party, Ronald Reagan.

Bush submits record breaking $3 TRILLION budget plan.

Man, it’s a good thing we don’t have a tax-and-spend Democrat in the White House. Who knows what kind of an outrageous budget proposal they’d submit to Congress? Certainly nothing as restrained as what President Bush has submitted:

WASHINGTON – President Bush sent the nation’s first-ever $3 trillion budget proposal to Congress on Monday, contending that the spending blueprint will fulfill his chief responsibility to keep America safe.

The $3.1 trillion proposed budget projects sizable increases in national security but forces the rest of government to pinch pennies. It seeks $196 billion in savings over five years in the government’s giant health care programs – Medicare and Medicaid.

But even with those restraints, the budget projects the deficits will soar to near-record levels of $410 billion this year and $407 billion in 2009, driven higher in part by efforts to revive the sagging economy with a $145 billion stimulus package.

So let’s get this straight: He wants to cut funding to Medicare and Medicaid, programs that help the most vulnerable in our society, and yet that won’t stop the deficits from soaring to new highs that will impact our children’s children in the long run. This so he can protect the tax cuts he put in place that benefit the wealthiest folks least in need of a helping hand and then he has the audacity to call it a “a good, solid budget.”

Democrats called Bush’s final spending plan a continuation of this administration’s failed policies which wiped out a projected 10-year surplus of $5.6 trillion and replaced it with a record buildup in debt.

“Today’s budget bears all the hallmarks of the Bush legacy – it leads to more deficits, more debt, more tax cuts, more cutbacks in critical services,” said House Budget Committee Chairman John Spratt, D-S.C.

“This budget is fiscally irresponsible and highly deceptive, hiding the costs of the war in Iraq while increasing the skyrocketing debt,’ said Senate Majority Leader Harry Reid, D-Nev.

“The president proposes more of the same failed policies he has embraced throughout his time in office – more deficit-financed war spending, more deficit-financed tax cuts tilted to benefit the wealthiest and more borrowing from foreign nations like China and Japan,” said Senate Budget Committee Chairman Kent Conrad, D-N.D.

Yeah, well, no surprise there. Once an idiot always an idiot.

President Bush went on to reveal just how truly delusional he really is:

Bush defended his record, saying it supported a strong defense and, if his policies are followed, will produce a budget surplus of $48 billion in 2012.

“Two key principles guided the development of my budget – keeping America safe and ensuring our continued prosperity,” Bush said in his budget message to Congress.

Reviewing the budget with his Cabinet, Bush said it would keep the economy growing and protect the U.S. militarily. He called it “innovative” because it was dispatched to Congress electronically.

The only way that Bush’s policies will produce a budget surplus of $48 billion is if the next President finds some way of undoing the damage Bush’s time if office has caused to our economy. In which case it won’t actually be Bush’s policies that produce the surplus.

And if he thinks he’s ensuring our continued prosperity then, please, stop trying to ensure our continued prosperity cause it looks a lot like a recession to those of us in the reality-based community.

Mike Huckabee’s solution to the nation’s economy troubles? Pray.

It’s a good thing it’s looking less and less likely that Mike Huckabee will get the Republican nomination because he keeps getting more and more delusional. Now he’s asking Jesus to stimulate the economy:

Mr. Huckabee has invoked Jesus’ name at many points in the primary season, but his extraordinary request marks the first time a presidential candidate has directly asked a deity to provide the nation with an economic stimulus package.

In a press conference in Mobile, Alabama today, Mr. Huckabee said that he had asked Jesus to stimulate the U.S. economy with “a fresh infusion of loaves and fishes.”

The former Arkansas governor was not specific about the exact dollar amount of the loaves and fishes that he had asked Jesus to inject into the U.S. economy, but advisors later said that it was somewhere in the ballpark of $70 billion.

Mr. Huckabee said that he had also asked Jesus to solve the nation’s mortgage crisis by “casting out the money lenders.”

Though I suppose if all he did was pray it would be at least somewhat better than what the current President has tried to do. The thing that cracks me up is that Huckabee gets all huffy anytime a reporter questions him on his religious beliefs claiming those are private matters that won’t affect his ability to be President. Then he goes and does something goofy like this which points all the attention on his religious beliefs.

The budget deficit looks to jump to $250 to $350 billion this year.

U.S. budget deficit estimated at $250 billion. – Think Progress

A new Congressional Budget Office estimate released today concluded that the “budget deficit for the current budget year will jump to about $250 billion,” which includes the cost of the Iraq war. This figure, however, does not factor in the “at least $100 billion in additional red ink from an upcoming deficit-financed economic stimulus measure.”

UPDATE: Senate Budget Commitee Chairman Kent Conrad’s (D-ND) statement:

    CBO’s new projections show that the deficit will worsen in 2008. This short-term deterioration is due, at least in part, to our slowing economy. And it is important to note that CBO’s baseline projections actually understate the likely short-term deficit levels, because they exclude expected costs such as a stimulus package and additional war funding requested by President Bush.  Once these costs are added in, the deficit in 2008 is likely to exceed $350 billion, and the debt is likely to increase by over $600 billion.

Remember to thank the Bush administration for that classic Conservative fiscal responsibility, eh? Democrats are often tarred as “tax and spend” and that’s portrayed as being worse than the “spend money we don’t have” that the Republicans like to engage in.

Why “Fair Use” is important: It’s good for the economy.

I think the following pretty much speaks for itself…

Fair Use Worth More to Economy Than Copyright, CCIA Says—Copyright—InformationWeek

Fair use exceptions to U.S. copyright laws account for more than $4.5 trillion in annual revenue for the United States, according to a report issued on Wednesday by the Computer and Communications Industry Association.

“Much of the unprecedented economic growth of the past 10 years can actually be credited to the doctrine of fair use, as the Internet itself depends on the ability to use content in a limited and nonlicensed manner,” CCIA president and CEO Ed Black said in a statement. “To stay on the edge of innovation and productivity, we must keep fair use as one of the cornerstones for creativity, innovation, and, as today’s study indicates, an engine for growth for our country.”

By one measure—“value added,” which the report defines as “an industry’s gross output minus its purchased intermediate inputs”—the fair use economy is greater than the copyright economy.

Recent studies indicate that the value added to the U.S. economy by copyright industries amounts to $1.3 trillion, said Black. The value added to the U.S. economy by the fair use amounts to $2.2 trillion.

The fair use economy’s “value added” is thus almost 70% larger than that of the copyright industries.

The $4.5 trillion in annual revenue attributable to fair use represents a 31% increase since 2002, according to the report, which claims that fair use industries are responsible for 18% of U.S. economic growth and almost 11 million American jobs.

The fair use doctrine allows the use of copyrighted material without a license from the copyright owner.

Keep that in mind the next time someone tells you that Fair Use is just another form of piracy that hurts the economy.