Crisis

The disaster everyone feared for several months finally occurred yesterday – Greece’s credit rating was reduced to junk status and financial markets slumped. Moreover, Portugal’s debt has also been downgraded, Spanish stocks plunged more than four percentage points and in Italy it was difficult to sell government bonds.

The Debt Clock will tour around the whole country, stopping off at national landmarks and key cities to raise awareness of the national debt amongst the taxpayers who will have…

This is the GDP growth expected in Euroland this year. Comparing with the 3% of growth estimated for the United States, it proves that the euro was not a shield…

Constant attacks on tax havens and hedge funds by some politicians and statesmen is at least inappropriate. As a matter of fact, it is thanks to “speculators” that we have learnt about the pitiful state of public finance in several states (for example in Greece). On the other hand, international financial markets are the unique source of liquidities for troubled States. This is the point of view of Nicolas Lecaussin, Director of Development at IREF.

Several European countries have used complex fiscal instruments and aggressive bookkeeping in order to meet the euro zone fiscal ceilings, according to an article published in the Wall Street Journal. Indeed, the caps of a debt level below 60% of the GDP and of a budget deficit below 3% is apparently source of trouble even for countries with a reputation of rigorous public finances.

The renewed interest in Fannie Mae and Freddie Mac is premature. They are currently the mainstays of the U.S. housing market–more important now than they were before being placed in a government conservatorship in September 2008. Many observers do not believe the two government-sponsored enterprises (GSEs) can survive the immense losses they will cause taxpayers, but this is far from true.

If governments continue to pile on more and more debt, when will they reach the tipping point? The Greeks appear to be close to the tipping point, and it is only a matter of time before other European countries, and eventually even the United States, begin their fiscal death spiral. The Greek government’s unwillingness to make the hard choices necessary to put its fiscal house in order in the past few weeks has caused investors to demand a 2.5 percent premium on its government-issued Eurobonds over those issued by the German government.

The Obama administration has just proposed a new fee — otherwise known as a tax — on the country’s largest financial institutions. The tax aims to recover the difference between the bailout funds provided to these institutions a year and a half ago and the amounts ultimately returned to the Treasury. In so doing, the tax will allegedly reduce the federal deficit by some $90 billion.

Despite decades of repeated failure, President Obama and Congress continue to promote the myth that government can spend its way out of recession. Heritage Foundation economic policy expert Brian Riedl…

In this CF&P Foundation video entitled, “Deficits are Bad, but the Real Problem is Spending,” Dan Mitchell of the Cato Institute explains that huge deficits and skyrocketing debt are rightly causing worry, but these are merely symptoms of the real problem of excessive government spending. “Fiscal responsibility is lacking in Washington.