By John Solomon
How the government's punishing of the exposure of official wrongdoing can linger for years
The sluggish recovery, as GOP candidate Mitt Romney repeatedly notes, pales in comparison to previous comebacks in the U.S. economy since World War II, but studies show that recessions resulting from major financial collapses such as the one in October 2008 usually have slow and difficult recoveries.
Fiscal conservatives unwittingly sabotage themselves by invoking "the children" when explaining the dangers of America's ballooning national debt. They should spend lots more time discussing how federal red ink harms adults today.
The threat of the first downgrade of U.S. government debt - for decades considered the safest investment in the world - came as a jolt to some in Washington last week, but financial markets foreshadowed the move for months.
President Obama's budget, released Monday, was conceived as a blueprint for future spending, but it also paints the bleakest picture yet of the current fiscal year, which is on track for a record federal deficit and will see the government's overall debt surpass the size of the total U.S. economy.
With deficits ranging around $1.5 trillion recently and projected to stay nearly that high for years to come, the fast-growing U.S. debt burden is at the "extreme end of the spectrum" among advanced countries, she said.
Confidence in U.S. bonds slipped well before threat of downgrade →
She said the U.S. is approaching that level and has already exceeded that level if the debts of state and local governments and government-sponsored enterprises by Fannie Mae are added.
Confidence in U.S. bonds slipped well before threat of downgrade →
