Summary â€“ The Registerâ€™s Editorial group pointed us once again to the â€œnonpartisan fiscal agencyâ€, the Congressional Budget Office (CBO).Â Â They quoted the CBOâ€™s â€œdire warning about unsustainable federal deficitsâ€, but cautioned that the report also â€œwarned that steep cuts right now could make the nationâ€™s fiscal condition even worse by kicking the legs out from under the economyâ€.Â Â Also on June 27th, The Wall Street Journalâ€™s front page led off with an article titled â€œDebt Hamstrings Recoveryâ€.Â Â The WSJâ€™s Tom Lauricella notes â€œAround the globe, the inability of governments and households to reduce their debt continues to cast a shadow over Western economiesâ€â€¦â€Unlike the aftermath of typical recessions, simply lowering interest rates hasnâ€™t been enough to get growth back on trackâ€¦Quite the opposite has been the caseâ€¦Â The lowered cost of borrowing has enabled individuals and government to delay taking measures to change the way they spend and save.â€
Comment on the DSM Registerâ€™s Selective Reporting â€“ I have noticed a pattern of inconsistency in the DSM Registerâ€™s and WSJâ€™s reporting.Â Â Many featured articles in the WSJ, arguably a far more competent source of economic analysis than Gannettâ€™s network, are minimized or never presented in the DSM Register.Â In addition to the â€œDebt Hamstringâ€ analysis, another recent example would be the study released by management consultant McKinsey.Â They surveyed 1,300 companies and found that one third (1/3) of them will â€œdefinitelyâ€ or â€œprobablyâ€ stop offering health insurance after 2014. Â Since candidate Obama guaranteed us that we would be able to keep our current insurance, this seems like a worthwhile piece of news.Â If the DSM Register featured it, I must have overlooked it.Â I wonder if the nonpartisan CBO is aware of it?
Analysis of the â€œSpend Now, Save Later Strategyâ€Â -Â If we were in the position of China,Â over $3 trillion in foreign exchange reserves, I would not have a big issue with spending some of those reserves to shore up a short term slump in the economy.Â Â However Government debt as a % of GDP has increased from 30% in the early 2000â€™s to 35% by the end of the Bush presidency (increasing under both Republican and Democrat congresses).Â During the Pelosi-Reid-Obama era, that % is now approaching 60%.Â Â Meanwhile consumer debt and mortgage debt has more than doubled since 2000 (from $10 to about $20 trillion combined).Â Given the state of our debt, any increase in interest rates (almost a certainty the way the Fed has increased the money supply) will quickly multiply the consequences of our excessive debt.Â Â Â For my entire adult life I have heard politicians claim that we will â€œsave later, when the economy is strongerâ€.Â That day never comes.Â The Clinton-Gingrich era budgets were a nice anomaly but were not based on sustainable structural changes.Â The Register is wrong.Â We must cut government spending substantially and quickly.
 WSJ 27 June 2011, Debt Hamstrings Recovery
 WSJ, 26 June 2011, â€œChina Pledges Continued Support for European Debtâ€