U.S. house prices have risen for the past year, provoking calls that the market has stabilised; But American investment broker Peter Schiff – the famous ‘Dr Doom’ who accurately predicted the 2007 crisis – says the correction is temporary and he predicts big falls to come as the U.S. economy stagnates and interest rates rise.
The U.S. Internal Revenue Service (IRS) last year paid a record $125.4 million to whistleblowers who provided evidence of tax cheating, reported Reuters on Wednesday, though most of the sum went to a former UBS banker who reported on his firm’s misdeeds.
According to an IRS statement, 332 whistleblowers had come forward in fiscal year 2012, compared to 312 the year before, though the number was still well below the high water mark of 472 in 2009.
The nonpartisan Congressional Budget Office said it projects the federal deficit will total $845 billion this year, a modest improvement compared to last year’s $1.1 trillion. However, the CBO warned that national debt will deepen and swell to unsustainable levels through 2023 unless lawmakers take remedial action.
On Tuesday, the CBO projected that the economy will grow just 1.4 percent this year, hindered by the tax rise on incomes over $400,000 passed January as well about $85 billion in automatic spending cuts due to take effect from March 1.
The U.S. Justice Department is preparing to file civil charges against the nation’s largest credit-ratings agency, Standard & Poor’s, for over-inflated mortgage ratings leading to the 2007 subprime crisis, reported the New York Times on Monday.
At his second inaugural address on January 21, U.S. President Barack Obama promised more progressive politics for America – shifting away from the Reagan-era policies, led by corporate special interests, over the last three decades. And while it is too early to declare the start of a progressive new era for American politics, more government activism may help to address America’s – and the world’s – most urgent challenges, including building the infrastructure for a sustainable future.
In the wake of the Great Recession, there is little doubt that the American middle class is in distress. From falling incomes to rising job insecurity, weak improvements in the American economy have flowed mainly to the small percentage of affluent households, leaving the middle class and the poor with declining standards of living.
In a move aimed at pressuring the Senate, which has not debated a budget since 2009, members of the Republican-controlled House are threatening to bring to vote a debt measure to withhold pay for either House or Senate members if the chamber in which they serve fails to pass a budget plan by April.
Even as warning signs of a looming global financial crisis appeared, Federal Reserve officials were confident that the U.S. economy would be able to withstand the subprime mortgage crisis, grossly underestimating the severity of the current economic slump, released transcripts from 2007 meetings show.
The transcripts, made public last Friday after a customary five-year lag, provide fresh insight on the central bank’s decision making process even as it was on the brink of historic economic crisis.
Besides its economic and social implications, the persistent decline of the American middle-class also poses a significant geopolitical threat: Can the U.S. really maintain its status as a global superpower when half of the country is either stagnant or already losing ground to the rest of the world?
Chairman of the Federal Reserve Ben Bernanke yesterday urged Congress to raise the nation’s borrowing limit to avoid a potential default on U.S. debt, warning that the economy is still at risk from political gridlock over the deficit.
Speaking at the University of Michigan, Bernanke likened Congress to a family arguing that it can improve its credit rating by not paying its bills and also pointed out that raising the country’s legal borrowing limit did not constitute an authorisation for new government spending.
