Bankrupting America Keeping An Eye on the Debt
With the national debt projected to reach $16 trillion any day now, Bankrupting America (BA) wants to ensure that our elected representatives don’t miss this milestone. The RNC’s decision to include a debt clock at its convention allowed attendees and viewers to see the size of the debt and its rate of growth throughout the convention. Since the DNC has not announced plans to use a debt clock, BA will track how often the debt is referenced throughout their convention. Each morning, we will post an updated tally of references to the debt, the deficit or the need to cut government spending in speeches from the night before. We will also track how long into each speech it took to reference the debt. The first step on the road to recovery is admitting you have a problem. Let’s see who’s willing to admit it!  For updates throughout the Convention, follow Bankrupting America’s twitter feed, @BankruptingAM, and become a fan on Facebook.

GSA ‘s “Virtual Employees” Cost Taxpayers $7.7 Million “Real Dollars”
CNNreports, “The General Services Administration — already under scrutiny for excessive spending — spent $7.7 million over the past four years to transport hundreds of employees who work full-time from their homes to various government conferences and meetings across the country, according to records released this week by the federal agency.

The GSA is currently reviewing its so-called ‘virtual employee’ program as part of a top-down review of all of its practices.

The GSA made headlines this year after a scathing inspector general’s report showed that it spent $823,000 on a 2010 conference in Las Vegas. Reports and video clips of the lavish conference sparked taxpayer indignation over the wasteful spending, the resignation of the GSA’s top leaders and a congressional investigation into the agency’s spending practices. Since then, reports of more wasteful spending at the government agency have surfaced.”

Debt Expected to Hit $16 Trillion This Week
The Washington Times reports, “Just as Democrats are gaveling in their convention Tuesday, the federal government likely will announce another dubious milestone — $16 trillion in total federal debt. In an election already focused on domestic issues of jobs, spending and deficits, the $16 trillion number is likely to underscore just how much is at stake in November for both parties, which are offering dramatically different ways to begin to eat away at the deep hole. Gross federal debt has been flirting with $16 trillion for the past two weeks, and the government ended Thursday $15.991 trillion in debt. … The Obama campaign didn’t respond to a message seeking comment on the milestone, but, speaking on ‘Fox News Sunday,’ David Axelrod, a top adviser to Mr. Obama, said the president has a ‘plausible plan’ to stabilize the debt, but acknowledged the plan doesn’t actually begin to reduce it.”

Politico: “DNC 2012: Even Democratic Party faithful want more on economy”
Politico reports, “Delegates at the Democratic National Convention here are the truest of true believers, decked out in red, white and blue ‘Obama ’12′ buttons and energized for the fall campaign. But even they are echoing the question Mitt Romney and the Republicans posed at their convention: Are Americans better off than they were four years ago? These delegates are worried about the still-sluggish state of the economy and want to know what President Barack Obama is going to do about it in a second term. As they arrived at a convention set against a backdrop of 8.3 percent unemployment and tepid economic growth, a half-dozen delegates said in interviews that they won’t be satisfied to hear more of the same attacks on Romney’s plans and business background. They want new details from Obama on Thursday night about how he’ll persuade businesses to start hiring again and put more money in people’s wallets. And they want some clear promises that better days lie ahead.”

Cochrane: CBO’s Fiscal Cliff Warnings Worth Closer Look
John H. Cochrane editorializes in Bloomberg, “Last month, the Congressional Budget Office released a report warning that the ‘fiscal cliff’ would cause a new recession. It came to the right conclusion for all the wrong reasons. … This is the cliff: Unless Congress acts, the Bush-era income-tax cuts will expire, Social Security payroll taxes will increase, and capital-gains and dividend tax rates will rise sharply. … How does the CBO come up with these numbers? Its projections are Keynesian. If the government borrows $1 billion and spends it, the CBO will project that this action raises gross domestic product by $1.5 billion. Government workers are counted as ‘producing’ what they cost, so borrowing money to keep them employed generates the same GDP as building a bridge. If the government just gives the money to people, this also raises the CBO’s GDP estimate. Reducing government spending and transfers has the opposite effect. If, like me, you think that spending less money on useless projects is good for the economy, or that taking money from A and giving it to B has little overall effect, you would come to much different conclusions from the CBO’s.”

Bankruptcy for Rhode Island City Means Tax Hikes, Pension Cuts
Reuters reports, “Central Falls, in Rhode Island, is close to emerging from bankruptcy with a plan that hammers its retired municipal employees but leaves bondholders unscathed, in a contrast with other recent U.S. municipal bankruptcies. On Thursday, a state-appointed receiver overseeing the finances of the tiny, impoverished city is expected to win court approval for a plan that rescues Central Falls from financial collapse and should balance its budget for at least the next five years. Unlike the approach of some other U.S. states such as California, which left struggling cities to try to fix their finances on their own, the plan for Central Falls reassured the credit markets, but scarred the city. The smallest city in Rhode Island and the only one ever to file for bankruptcy will emerge with powerless elected officials, property owners facing tax hikes every year and retired public employees irate about having their pensions slashed. … The cuts drove home the message to public sector pensioners in other Rhode Island cities that if they didn’t agree to renegotiate their retirement benefits, they could be facing even steeper cuts if their city goes bankrupt.”

Bernanke: “gravely high unemployment” May Prompt Fed Action
The Wall Street Journal reports, “A defiant Ben Bernanke sought to shoot down criticism of the Federal Reserve’s easy-money policies and strengthen the case for new efforts by the central bank to bring down what he described as gravely high unemployment. Markets have been on edge for months about whether the Fed will launch another large bond-buying program. Fed Chairman Bernanke, speaking Friday at the central bank’s annual retreat here, offered a vigorous defense of the Fed’s $2.3 trillion in bond purchases since 2008, estimating they helped lead to more than two million jobs—and signaled that he is strongly considering another installment. … It is a high-stakes moment for the Fed. The U.S. recovery remains weak and unemployment high more than three years after the recession ended.”

Economic Slowdown and Fiscal Cliff Hindering Growth
Bloomberg reports, “Business activity in the U.S. expanded at a slower pace in August, indicating companies may hold the line on production until sales pick up. … Companies may lack the confidence to invest in new equipment and hire as they face a global economic slowdown and the so-called fiscal cliff threat of more than $600 billion in government spending cuts and higher taxes. Manufacturing, which helped spur the recovery, is providing less of a boost for the three-year-old expansion.”

Unemployed European Youth Dubbed “lost generation”
The Washington Post reports, “More than 5.5 million young people across Europe are unemployed, the European Commission reports, part of what scholars are dubbing a lost generation.The youth unemployment rate in Greece and Spain has climbed to a staggering 53 percent. That rate is 36 percent in Portugal, 34 percent in Italy and 23 percent in France, according to the Organization for Economic Cooperation and Development. That compares with 15 percent in the United States. Globally, one in eight people under the age of 25 is unemployed. In the euro zone, the unemployment rate is 26 percent — the highest since the creation of the common currency. In a report in July, the OECD, a group made up of 34 democratic countries, warned that youths are bearing the burden of the economic crisis in Europe. While many of these young people have their families to fall back on and can often live at home for free, the OECD warned of the lifetime damage — or ‘scarring effect’ — that comes with derailing career plans and earnings potential at such an early age. And the problem isn’t confined to those who lack education or skills. Even those with college degrees are finding themselves stuck without work or in temporary, dead-end jobs.”