The stock market tumbled this week in the wake of growing job layoffs, weaker consumer spending and tepid retail sales, declining auto sales, a slowing manufacturing sector, home prices that have fallen more than in the Great Depression, and an economy that is sputtering at a mediocre growth rate of less than 2 percent.
The Institute for Supply Management's latest index, which tracks factory production, showed it was growing at the slowest rate of expansion since September 2009.
Wall Street economists were scrambling to lower their economic forecasts for the year, and University of Maryland economist Peter Morici says "the economy is in danger of slipping into a second recession."
If Obama and his advisers really think the last three years of trillion-dollar budget deficits occurred because we're not taxing Americans enough, they haven't been reading the polls. Or maybe they have but couldn't care less.
When the Gallup Poll asked Americans in April, "Which do you think is more to blame for the federal budget deficit, spending too much money on federal programs that are either not needed or wasteful, or not raising enough money in taxes," the answer came back loud and clear.
Seventy-three percent said the deficits and debt were the result of "spending too much" versus 22 percent who said it was due to "not raising enough money in taxes." Five percent had no opinion.
When Americans were asked last month if they wanted their own representative in Congress to vote in favor of increasing the debt limit or vote against it, a hefty 47 percent said vote against raising it, versus 19 percent who said vote to raise it. Thirty-four percent said they didn't know enough about the issue to say.
Treasury Secretary Timothy Geithner says the government has until August before the Treasury will run out of money to pay its bills, unless the debt limit is raised.
The stunning House vote laid down the GOP's marker, and the White House has few options other than to cut a budget deal on spending cuts that will be the largest spending reduction in U.S. history.
If budget negotiations work out as Republicans hope, it will give their party bragging rights heading into the 2012 elections that they have delivered on their pledge to cut spending. That'll be a novelty -- a party that keeps its promises.
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