What does it mean that China's economy could surpass U.S.'s in 5 years?
(PHOTO CREDIT: MIKE CLARKE/AFP/GETTY IMAGES)
FROM CNN's Jack Cafferty:
The year 2016… Mark your calendars.
It's the year the International Monetary Fund projects China's economy will overtake the U.S. economy. Or as Brett Arends, a columnist for MarketWatch writes, "The moment when the 'Age of America' will end." He says if the IMF is right, whoever wins the presidency in 2012 will be the last U.S. president to preside over the world's largest economy.
Kind of sad... and kind of scary.
Other forecasters have set the date the U.S. falls to second place a decade later. The IMF projections are based on something called "purchasing power parities," what people in both countries earn and spend domestically. Either way, China will pass us by in a matter of years.
It's just another kick in the stomach to this country's already-battered economy. The job market is still beaten down, the housing market remains horrible, and the federal government still can't agree on how to rein in spending or what to do about a debt ceiling that expires in weeks. Last week, Standard & Poor's announced that it was downgrading the U.S. debt outlook from stable to negative over concerns that the White House and Congress will not be able to agree on a deficit reduction plan for 2012.
Congress is still on Spring Break - perfect.
The Obama administration downplayed the S&P announcement, saying it was political and should not be taken too seriously. They're wrong. The markets took it seriously though. The stock market suffered its biggest one day loss since the threat of a nuclear meltdown in Japan last month. And what'll you bet the White House won't have much to say about this new IMF projection either. It's called whistling past the graveyard.
Here’s my question to you: What does it mean that China's economy could surpass the U.S. economy in five years?
Interested to know which ones made it on air?
Should U.S. space program be priority in budget crisis?
(PHOTO CREDIT: NASA VIA GETTY IMAGES)
FROM CNN's Jack Cafferty:
Buried deep in the $38 billion 2011 fiscal budget bill - that one that was hastily passed by Congress before its spring break and hurried over to President Obama to sign - is a $3 billion provision for NASA to build a new rocket and space capsule. That’s $3 billion for a space ship. Wonderful.
While lawmakers fought for six months over nickels and dimes for programs such as the Corporation for Public Broadcasting, Planned Parenthood and Pell Grants for college tuition, billions had been set aside for a space rocket. So much for all that big talk about cutting spending.
But this is nothing new, according to the political news website Politico. Lawmakers from states where NASA and the corporations typically awarded its contracts operate have long pushed for the continuation of space programs, even when they aren't exactly popular. These are states such as Alabama, Maryland, Texas and Utah.
Lawmakers from those states insist their support of projects like this one stems from the overall importance of the U.S. space program, and they say the value goes far beyond job creation in their own states.
But you've got to wonder how much value a trip to the moon can really provide when the growing debt problem is sinking this country to new lows.
Plus there's that old phrase, "Been there, done that."
Oh and those major U.S. companies such as Boeing and Lockheed Martin that stand to be awarded big-time contracts to build this rocket and space capsule? They probably have a little something to do with this.
Boeing reportedly spent about $18 million on lobbying last year, and its political action committee contributed more than $2.2 million in the last election cycle. Lockheed Martin spent about $16 million on lobbyists, and its PAC donated more than $3.5 million in 2009 and 2010.
You want to know who really runs the country?
Here’s my question to you: Should the U.S. space program be a priority during a budget crisis?
Interested to know which ones made it on air?
Why won't Congress and Pres. get serious about debt crisis?
FROM CNN's Jack Cafferty:
The federal government has been operating without a budget for six months, instead lurching from one stop-gap spending measure to the next. And the inability or unwillingness of the president and Congress to do the jobs they were elected to do is starting to have an impact.
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A new report on CNN Money.com highlights some of the growing money woes:
The U.S. military has delayed a total of 75 projects. And the Army has deferred contracts for new equipment like Chinook helicopters and held off on refurbishment projects of war-torn Humvees.
No big deal. We're only fighting three wars.
There are hiring freezes at the Justice Department, Social Security Administration and Congressional Budget Office. And the Army and the Marine Corps have temporarily stopped hiring civilians.
Eight new Social Security offices will not open.
National Institutes of Health officials are underfunding some grants, due to uncertainty over the budget.
Almost one year ago, President Obama launched the National Commission on Fiscal Responsibility and Reform, a bipartisan deficit commission. The group released its final report in December, but the suggestions have been all but ignored.
This week, ten ex-chairs of the President's Council of Economic Advisers wrote an opinion piece on Politico.com urging Congress and the President to act quickly. They said, "The unsustainable long-run budget outlook is a growing threat to our well-being. Further stalemate and inaction would be irresponsible." Want to bet that's ignored too?
Here’s my question to you: Why won't Congress and the President get serious about America's debt crisis?
Tune in to the Situation Room at 6pm to see if Jack reads your answer on air.
And, we love to know where you’re writing from, so please include your city and state with your comment.
Should banks be able to set spending limits on debit cards?
FROM CNN's Jack Cafferty:
One of the largest consumer banks is thinking about putting its customers on a budget. According to a new report from CNNMoney.com, JPMorgan Chase is considering capping purchases you make with a Chase debit card at $50 or $100.
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That's because new laws are going into effect this summer as part of Wall Street reform legislation that will limit how much a financial institution can make off your debit purchases.
Right now banks charge merchants something called an interchange fee every time you use your debit card. Those fees bring in about $16 billion for the banks each year and about $0.44 for each purchase you make. If the new limits take effect in July as scheduled, the banks would make just $0.12 per transaction. So being the crafty creatures that they are, they have decided if they limit your purchase amount, it will force you to do more transactions, and presto – they don't wind up losing a dime. Not exactly reform from the consumer's point of view.
Banks say the higher fees are necessary to cover the costs associated with debit cards. So they are playing around with some options:
Bank of America and Chase both say they are testing out adding monthly fees to checking accounts – up to $15 a month in some states if you're a Chase customer. Chase is also floating the idea of $3 monthly fees for just owning a debit card; and they may also consider that cap on individual debit card purchases.
Representatives from HSBC and Wells Fargo declined to comment on plans to add fees to their debit accounts. A Citi spokesman says the bank does not have any plans for additional consumer fees at this time.
Of course, the bank and credit card lobbyists are fighting this tooth and nail – and a new bill being introduced this week in the Senate by Democrat Jon Tester of Montana will try to delay those fee limits being put on banks. However it sorts itself out, be assured of this: The banks will get theirs.
Here’s my question to you: Should banks be able to set spending limits on debit cards?
Interested to know which ones made it on air?
Do you feel poor?
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FROM CNN's Jack Cafferty:
With gasoline expected to reach $3 a gallon soon and unemployment stuck at just under 10% - not to mention the added expenses of the holiday season - it's easy to see why many Americans are feeling strapped for cash these days.
But in a piece called "Are Americans as Poor as They Feel?", Businessweek.com takes a look at the cost of living today versus 30 years ago.
They find that a lot of things aren't as expensive as we think, and that many items actually cost less in relative terms today than in 1980.
For starters, the piece suggests nominal income has increased more than overall consumer prices. Also, the price of many daily expenses – things like food and even energy – increased at a slower pace than overall consumer prices.
On the other hand, the cost of some bigger ticket items – things like education and health care – have more than doubled. We're talking big bucks, when it comes to college tuitions and health insurance.
Researchers have also found that compared with the 1970s, more families now have two full-time incomes. But, this change in lifestyle has added new costs – things like a second car and day care.
In fact, after an average two-income family makes its monthly payments, it can now have less money left over... even though both the husband and wife are working.
Finally, there are additional costs today that people didn't have to account for decades ago – including buying computers and software, Internet and cell phone service.
Here’s my question to you: Do you feel poor?
Interested to know which ones made it on air?
Lowest pay raise for military in nearly 50 years?
(PHOTO CREDIT: AFP/GETTY IMAGES)
FROM CNN's Jack Cafferty:
As our government plans to extend tax cuts to the wealthiest Americans, they're also proposing the lowest pay raise for the military in almost 50 years.
You heard right. As our servicemen and women return to the battlefield for their third or fourth tours of duty, the people who represent us think it's a good time to cut corners there. Extend tax breaks for millionaires and the middle finger for the armed forces.
The Obama administration has proposed a 1.4 percent pay raise for the military in 2011 – the lowest since 1962, when they got no raise.
The administration claims a 1.4 percent raise would match the average for the private sector, and they say it's on top of other increases in housing and food subsidies.
But many in the military aren't buying it. And it's easy to see where they're coming from when rich Americans will be saving billions in tax breaks.
One Marine Corps sergeant who just got back from his fourth deployment in Afghanistan calls it "absolute garbage."
He asks USA Today how the government can bail out the auto industry and other major corporations, yet not give a larger pay raise to those putting their lives on the line for the U.S.
Some senators want to give bonuses to troops doing the most fighting. And an organization representing 32 military groups is pushing for a 1.9 percent pay raise.
It's estimated that an increase from 1.4 to 1.9 percent would cost taxpayers $350 million next year – compare that to the tax break deal which some say will cost $900 billion.
Here’s my question to you: In light of the economy, do members of the military deserve the lowest pay raise in nearly 50 years?
Interested to know which ones made it on air?
Spend more or less on holiday gifts this year?
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FROM CNN's Jack Cafferty:
As soon as the Thanksgiving turkey, stuffing and pumpkin pie are polished off – millions of Americans turn their attention to Black Friday, one of the biggest shopping days of the year.
What's yet to be seen is how the shaky economy and troubling forecasts are going to effect holiday spending this year.
The Federal Reserve now says to expect weak economic recovery for several years. Some policy makers say it could take 6 years – or longer – before unemployment, growth and inflation return to more normal levels.
Meanwhile, taxes are set to go up for 90 percent of Americans if the "Making Work Pay" tax credit expires at the end of the year.
Never mind all that. The American consumer is apparently ready to spend.
A survey by the National Retail Federation shows people plan to spend about $689 on holiday-related shopping this year. That's up about $7 from last year.
They say most of that money will be spent on gifts for friends and family. The rest of it will go to co-workers, decorations, food, candy and flowers.
The survey shows the $393 that consumers plan to spend on family and friends is the highest it's been since before the recession hit.
But partly because of the recession, consumers are still looking for bargains, which is why many stores started promoting their Black Friday sales right after Halloween. These discounts usually drop prices by 20 to 30 percent.
Here’s my question to you: Do you plan to spend more or less on holiday gifts than in years past?
Interested to know which ones made it on air?
FULL POST
A quarter of parents using retirement funds to pay for college tuition
FROM CNN's Jack Cafferty:
Yet another sign of how the troubled economy is forcing Americans to make tough choices:
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A new study shows almost a quarter of parents plan to raid their own retirement accounts in order to pay for their kids' college education.
The Sallie Mae survey, conducted by Gallup, shows 24 percent of parents say they plan to save for college by dipping into accounts like 401(k)s, IRAs and pension plans.
Twenty-four percent. This is the money that people have set aside for their golden years.
Experts call the trend disturbing and a "desperation move." And it can be risky. That's because there are tax penalties and other fees if you withdraw money from these accounts early. There also are restrictions on how quickly you must pay back money you borrow from a retirement plan.
Financial experts point out that there are other options - like 529 college savings plans - that can be spent tax-free on college education.
Nonetheless, the survey finds that despite the shaky economy, education is still a priority for Americans. Sixty percent of parents say they're saving for their children's college education. By the time their children are ready for college, most parents will have saved close to $50,000.
The most common way parents say they're saving for college are CDs or saving accounts, followed by investments like stocks, mutual funds and money market accounts.
Interested to know which ones made it on air?
Should Congress adjourn early when they haven't passed a budget?
FROM CNN's Jack Cafferty:
Our lawmakers ought to be ashamed of themselves:
[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2010/images/02/17/art.debt.clock.jpg caption="A 2009 file photo of the National Debt Clock. That number now stands at over $13 trillion."]
They've yet to pass a federal budget, but some in Congress still think it's a good idea to leave town early to go home and campaign for the upcoming midterm elections. You know - go home and tell the folks what a great job they're doing.
The new fiscal year starts on October 1, and there are no signs Congress will have a new budget in place by then. This is inexcusable. Our national debt now tops $13 trillion. Annual deficits are running at more than $1 trillion. And without a budget it is impossible to have any idea what the hell the government is doing with our money. Our money.
In place of a budget, Congress usually passes what are called "continuing resolutions" for a month or two at a time. This prevents the federal government from shutting down. At this rate, Congress might not finalize a budget until after January - when the new Congress is sworn in. Four months from now.
So far, neither the House nor the Senate has even passed a formal budget resolution - which usually happens in the spring - last spring.
It's not to tough to figure out why there's no budget. Congress doesn't want to vote on a budget that could mean tough spending cuts right before an election. Heaven forbid. In other words, they are cowards.
But, no matter. Nancy Pelosi and the rest of the so-called House leaders are thinking about adjourning October 1 - a week earlier than scheduled - so they can go campaign for re-election. It's just disgraceful.
Here’s my question to you: Should Congress consider adjourning early to campaign when they haven't passed a federal budget?
Tune in to the Situation Room at 5pm to see if Jack reads your answer on air.
And, we love to know where you’re writing from, so please include your city and state with your comment.
Pres. Obama's economic plan too little too late?
President Obama is pictured yesterday in a speech about the economy at the Milwaukee Laborfest in which he unveiled plans to spend at least $50 billion to expand and renew roads, railways and airports in a bid to fire up economic growth. (PHOTO CREDIT: GETTY IMAGES)
FROM CNN's Jack Cafferty:
As Recovery Summer draws to a close and all the polls are suggesting the Democrats are about to suffer a crushing defeat in the midterm elections, President Obama has decided now is the time to roll out a new economic plan.
Some Democrats are worried it's all too little, too late.
The president wants to spend up to $350 billion in new stimulus money to jump-start the shaky economy.
There's a $200 billion tax cut for businesses to buy new equipment in the next year and a $100 billion permanent extension of the business tax credit for research and development.
Plus, there's a $50 billion infrastructure plan to try and create jobs in the long term. This would include rebuilding 150,000 miles of roads, 4,000 miles of rails and 150 miles of airport runways.
But officials acknowledge that no new jobs will actually be created until 2011.
All told, this $350 billion would total nearly half the size of the initial stimulus plan passed when President Obama first took office. And of course at the moment there is no money available to pay for any of this.
It's highly unlikely any of this will get through Congress. They come back from their summer break next week and will be in session for less than a month before heading out of town - again - for the midterm elections.
Meanwhile - Americans aren't feeling much recovery when it comes to the economy
A new CNN/Opinion Research Corporation Poll shows 81 percent rate economic conditions as poor, only 18 percent say they're good. About half of the country says conditions have not improved in the last two years.
Here’s my question to you: Is President Obama's latest economic plan too little too late?
Interested to know which ones made it on air?
@jackcafferty on Twitter
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