STAFF NEWS & ANALYSIS
DB Briefs: Housing Slump Over? / Obama's Super Congress / Give the Government More!
By Staff News & Analysis - August 10, 2011

End in Sight for Housing Slump? … Home prices will slip further over the rest of the year, before beginning to rebound in 2012, according to a forecast by a leading housing market analyst. … The fate of the housing market is crucial for the economy as a whole. The Great Recession was triggered by a massive loss of housing wealth following the bursting mortgage bubble, which led consumers to cut back on spending.

Reid Taps Sen. Murray to Co-Chair Debt Committee … Senate Majority Leader Harry Reid, D-Nevada, said Tuesday that he would appoint Sen. Patty Murray, Sen. Max Baucus of Montana and Sen. John Kerry of Massachusetts to the congressional “super committee,” charged with crafting a plan to cut the country’s deficit. … “As the events of the past week have made clear, the world is watching the work of this committee. I am confident that Senators Murray, Baucus and Kerry will bring the thoughtfulness, bipartisanship and commitment to a balanced approach that will produce the best outcome for the American people,” he said.

Tough Decisions Ahead to Get AAA Rating Back … Credit rating agency opinions always provide the steps a company or government needs to take in order to improve its grade. … S&P has already rebuked the political system that prevented the Administration from increasing taxes to begin to balance the budget. This rating agency made it clear that budget cuts alone are not sufficient but that taxes must be increased in order for the U.S. to regain its former credit rating.

End in Sight for Housing Slump?

Home prices will slip further over the rest of the year, before beginning to rebound in 2012, according to a forecast by a leading housing market analyst. … The fate of the housing market is crucial for the economy as a whole. The Great Recession was triggered by a massive loss of housing wealth following the bursting mortgage bubble, which led consumers to cut back on spending. That spending still hasn’t picked up, which has prevented a robust recovery from taking hold. – Yahoo News

Dominant Social Message: The experts can identify the industries that are important for the economy; those are the industries that deserve the government’s support.

Free-Market Analysis: Even in bad times, housing is a big industry. But its fate is not crucial for the economy as a whole. The severe slump in housing is a signal that housing got to be too big – much too big – for the industry’s own good and for the good of the economy. The industry’s giantism didn’t come for free. It drew resources away from other uses. Continued shrinkage in housing may be part of what the economy needs now, to free up resources that other industries can use for expansion. But don’t take our word for, and don’t take the word of the experts. The only correct answer is the one that would come from an unfettered economy, where people demonstrate confidence in their judgments by what they are willing to invest in and pay for with their own money.


Reid Taps Sen. Murray to Co-Chair Debt Committee

Senate Majority Leader Harry Reid, D-Nevada, said Tuesday that he would appoint Sen. Patty Murray, Sen. Max Baucus of Montana and Sen. John Kerry of Massachusetts to the congressional “super committee,” charged with crafting a plan to cut the country’s deficit. … “As the events of the past week have made clear, the world is watching the work of this committee. I am confident that Senators Murray, Baucus and Kerry will bring the thoughtfulness, bipartisanship and commitment to a balanced approach that will produce the best outcome for the American people,” he said. … In a joint statement issued soon after their appointments, Sens. Murray, Baucus and Kerry said that Americans want the committee to operate without “the red hot partisanship and brinkmanship of the last months.” – CNN

Dominant Social Theme: If the politicians would just work together, all the big problems would quickly be solved.

Free-Market Analysis: When government produces a mess, the fans of big government always blame it on partisan bickering. If only the politicians would work together! In fact, the source of the problems that government produces isn’t a lack of cooperation. The source is the decades of cooperation between the two parties in making government grow – serving the will of international Money Power, which is in total control of the US political process. If all the politicians were persuaded to work together as a team, the little freedom that now remains would soon be extinguished. Bickering and back-stabbing in Washington is your friend. Besides being unconstitutional as Ron Paul points out (watch video here), the committee is just another diversion meant to pacify a dumbed-down populous into believing that the government is working to solve the coutnry’s economic ills. It is not and it cannot. Why would anyone expect the people in government and over at the Federal Reserve to fix the problems when they created them in the first place?


Tough Decisions Ahead to Get AAA Rating Back

Credit rating agency opinions always provide the steps a company or government needs to take in order to improve its grade. … S&P has already rebuked the political system that prevented the Administration from increasing taxes to begin to balance the budget. This rating agency made it clear that budget cuts alone are not sufficient but that taxes must be increased in order for the U.S. to regain its former credit rating. … It may take a financial catastrophe – a day when America actually cannot raise money in the global capital markets – for voters to acquiesce to real austerity and higher taxes. – 24/7 Wall Street

Dominant Social Theme: It’s the government’s budget that matters, not yours.

Free-Market Analysis: When government becomes the focus of social discourse, the individual becomes invisible. The government has a budget problem – but so do millions of Americans. The thought that the convenient solution for the government might bring further hardship for the public never comes up. The government’s credit rating has been cut, but so have the credit ratings of legions of taxpayers, who are now being told they should pay more to the government instead of using the money to pay down their own debts.

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