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  • On The Economy & The CBO's Credibility

    I felt really bad about sending out last week's E-Letter in which I predicted that we will face another serious financial crisis and perhaps another depression sometime in the next several years. But later that same day, the latest poll by Fox News/Opinion Dynamics showed that 79% of registered voters believe that an economic collapse is still possible. 84% of Republicans, 80% of Independents and 71% of Democrats all agree that the worst may not be over. Obviously, there are a LOT of Americans that agree with me that Obama's trillion-dollar deficits and the skyrocketing national debt represent the biggest threat to our economic and financial futures.

    This week, we take a look at the latest economic reports, most of which suggest that growth this year will fall well short of the 5.6% rise in GDP in the 4Q. We also review the recent actions in the stock and bond markets, both of which have had their share of surprises. And finally, we will review how the non-partisan Congressional Budget Office 'scores' major pieces of legislation in terms of their overall cost. You may be surprised to learn that Congress can game the system and get just about any CBO score they want - as was the case with ObamaCare.

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  • On the Economy & Obama's Trillions

    Most (but not all) of the economic reports over the last month or so have been positive, and more and more forecasters now believe that GDP growth will be slightly positive in the 3Q. Unfortunately, we don't get our first 3Q GDP estimate until the end of October. The latest GDP estimate for the 2Q was unchanged at -1.0%, which was better than expected. I will cover the latest encouraging (and not so encouraging) economic news just below.

    Next, on Friday, August 21, the Obama administration quietly announced that the White House Office of Management & Budget revised upward its long-term federal deficit projections to fall in line with those of the Congressional Budget Office. The White House finally admitted that its economic assumptions were too optimistic - to the tune of $2 trillion over the next 10 years. So now it's official - even President Obama admits he will more than double the national debt in the next 10 years, which will likely lead to another financial crisis.

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