One senator is standing tall

“The Republicans have been absolutely determined to make certain that the rich and large corporations not contribute one penny for deficit reduction, and that all of the sacrifice comes from the middle class and working families in terms of cuts in Social Security, Medicare, Medicaid, LIHEAP, community health centers, education, Head Start, nutrition, MILC, affordable housing and many other vitally important programs.

“I cannot support legislation like the Reid proposal which balances the budget on the backs of struggling Americans while not requiring one penny of sacrifice from the wealthiest people in our country. That is not only grotesquely immoral, it is bad economic policy.”

U.S. Senator Bernie Sanders

A sudden reduction of the federal budget will trash the economy

Even though fiscal control is needed in spending, the least traumatic approach for the economy is a combination of budget cuts and tax increases.

We must not forget that 70% of the U.S. economy is consumption and that it depends heavily on the middle and lower class. The upper class, although they may spend more per-capita, represents a too small percentage of the population to have a significant impact on the overall consumption figures.

Even in the case of New Jersey and a number of government reductions I have proposed: If the state economy is excessively weak, it would not be prudent to reduce a large number of political appointees at once. The contraction of government would have to be done at a prudent pace.

Cutting borrowing cold turkey as the TP  is pushing for, will choke off spending and exacerbate unemployment, with dire consequences for the American people and the nation.

Invoke the 14th Amendment if there is no deal today

14th Amendment of the Constitution, Section 4: The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

U.S. Anemic growth in 2nd. quarter

http://www.nytimes.com/2011/07/30/business/economy/us-economy-worse-than-expected-in-second-quarter.html

Consumers are the same people unemployed, underemployed, underpaid, and otherwise deeply in debt. How can anybody expect that we will pull ahead? Economy grew at an annual rate of 1.3%. Do not be surprised if this figure is revised downward later.

As stated in the article, a series of revisions of previous data also show that almost every piece of economic information put out in the past erred by excess. For instance, the growth of the 1st. quarter this year was not 1.7% as previously said but a mere 0.3%

In my opinion, there are structural deficiencies not so much in our economic system but in our political one. Additionally, the tax code is tailored to favor outsourcing of American jobs. Outsourcing is one the most important culprits in the current situation. People do not make enough money to spend and we do not manufacture enough to get out of the recession by exporting goods (yes, I believe this is still a recession; not a recovery, regardless of what the criteria is. It feels like a recession.)

National debt: New Jersey will suffer whether ceiling is raised or not

http://www.nj.com/news/index.ssf/2011/07/debt_talks_in_washington_will.html

Where is the overriding determination to seek the public good?

New unemployment claims drop below 400,000

http://www.bloomberg.com/news/2011-07-28/first-time-jobless-claims-in-u-s-decreased-last-week-to-three-month-low.html

Jobless claims fell by 24,000 to 398,000 in the week ended July 23, Labor Department figures showed today in Washington. The level of claims was fewer than forecast, as the median estimate of economists in a Bloomberg News survey called for a drop to 415,000. There were no special factors associated with the decrease other than the usual volatility that occurs each year in July, a Labor Department spokesman said.