Markell promises boost for small business

Delaware Online by Chad Livengood

View Original Article HERE

DOVER — Delaware will become the first state to partner with Facebook to foster growth in small businesses, Gov. Jack Markell said today in his annual State of the State address.

“This partnership will help our small businesses fully engage the powerful use of social media to market their products and services more effectively,” Markell told a joint session of the General Assembly gathered in the House chamber.

The first-term Democratic governor did not give specifics about the partnership. But it was part of a theme in Markell’s message of focusing on boosting small businesses and entrepreneurs after devoting a lot of time and taxpayers resources in recent years toward helping big businesses get through the recession.

Markell used the annual address to call on lawmakers to build on their past accomplishments and do more to foster job-creation, improve public schools and make government more transparent and cost-effective.

While Markell has recently been vocal about reining in Medicaid costs, the governor was more restrained in specific ways to trim costs from the $600 million program that provides health care to more than 200,000 poor and disabled Delawareans. He demanded better results from the current Medicaid system.

“The expectation is that year after year we will continue to pay more for health care, whether we receive quality results or not,” Markell said.

The governor said his administration has “quietly” made progress in addressing costs. On April 1, seniors getting long-term care in a state institutional facility will be moved into community-based facilities, Markell said.

Markell said his administration will create a database of Medicaid claims and costs to further scrutinize the escalating budget expense.

“This database will allow us to figure out why some providers get better results and why some providers create more costs without better results to show for it,” Markell told lawmakers, who have resisted instituting copays. “We will be in a position to reward what works and change what doesn’t.

The governor called on the General Assembly to pass legislation requiring Legislative Hall lobbyists to disclose which bills they’re lobbying on. Currently, lawmakers have to publicly disclose their clients.

“Citizens deserve to know who is lobbying and what they are lobbying for,” Markell said in prepared remarks. “The trust of people in their state government should not be undermined by a perception that lobbyists have hidden access here in Dover.”

Markell also called for making state government campuses entirely smoke-free. “Otherwise, we are facilitating behavior that is not only harmful to those who engage in it, but that we know, with certainty, will heavily burden future generations of taxpayers,” Markell said.

The governor also sought to portray Delaware’s politicians as more bipartisan than the rhetoric that has deeply divided Democrats and Republicans in Congress and statehouses in Columbus, Ohio and Madison, Wisc.

“At a moment when Washington, D.C., stands for deadlock and dysfunction, Delaware’s strength resides in the capacity of its people, even in challenging times, to work with common purpose, to choose perseverance in place of pettiness and partisanship,” Markell said.

Markell submits $3.54 billion spending plan

Delaware Online by Doug Denison

View Original Article HERE

DOVER – Gov. Jack Markell sent legislators a $3.54 billion spending plan today that accounts for growth in public schools and in the number of Delawareans who depend on the government for health care.

The proposed operating budget fills a $27.4 million gap in school operations spending that was expected to begin in the next school year after one-time federal stimulus funding dried up.

“This was the schools’ No. 1 priority,” said Ann Visalli, director of the Office of Management and Budget.

The budget plan pays for hiring 111 new teachers at a cost of $8.7 million to account for projected growth in public school enrollment next year.

Markell, who is up for re-election this year, proposes no tax or fee increases to pay for a 1 percent increase in spending in the 2013 fiscal year, which begins July 1.

“We believe this budget reflects responsible governing as well,” Markell told reporters.
Medicaid program administrators assume enrollment for the health insurance program for the poor and disabled will grow by 20,000 during the next fiscal year to 234,000 – or one in four Delawareans.

Markell has budgeted $21.7 million extra for Medicaid next year, but he proposed no specific cuts to the program. The increased spending assumes the Department of Health and Social Services will find some internal ways to contain costs, Visalli said.

Last year, the governor’s proposal to trim $5 million from Medicaid was rejected by lawmakers, who enjoyed a short-lived spending spree at the time thanks to a temporary spike in tax and unclaimed-property revenue.

Markell’s proposed budget continues to fund education-related programs that have been his priorities in the past. The spending plan includes $3.5 million more for early childhood and day care programs, up from $22 million that Markell and the Legislature added to programs last year when additional revenue came on the table.

The governor does propose spending cuts throughout state government next year, Visalli said.

But a budget presentation given to reporters in advance of Markell’s 1 p.m. public unveiling of the plan made no mention of actual cuts, unlike past briefings.

Some of the reduced spending were one-time expenditures, Visalli said, such as a $54 million added expense this fiscal year for a rare 27th pay week for state workers. With the calendar returning to 26 paydays next fiscal year, that gave the governor more room to spend.
Other areas did not get fully funded to the levels that agencies or special interest groups requested, Visalli said.
Programs that preserve farmland and open space by purchasing development rights got $4 million in Markell’s capital budget, though the programs were funded at $20 million this year, Visalli said.
Last year, Markell and lawmakers poured tens of millions of surplus funds into one-time initiatives with hopes of spurring job creation and the state’s stagnant economy. 
The Legislature created a new $55 million fund to pay for infrastructure improvements for economic development projects. Last month, a state committee awarded the first $4 million grant to Amazon.com to extend or improve two roads leading up to a regional fulfillment center the online retail giant plans to build in west Middletown.
Markell’s capital improvements budget in the Bond Bill does not include any new money for the New Jobs Infrastructure Fund. But if spring tax collections beat projections, it could be a program that gets more money.
“Hopefully, depending on how things progress in the spring, we’ll be able to do that,” Visalli told reporters.
The governor has also proposed a $30 million boost to the state’s Strategic Fund, which is used to attract businesses to the state with tax breaks, loans and grants. Last year’s Strategic Fund appropriation was $31 million.
On Tuesday, the budget-writing Joint Finance Committee will begin six weeks of hearings on the governor’s spending proposal.

Angela Merkel casts doubt on saving Greece from financial meltdown

The Guardian by Ian Traynor
View Original Article HERE

Angela Merkel, the German chancellor, said efforts by the international community to stabilise the situation in Greece had not worked. Photograph: Michael Sohn/AP

Angela Merkel has cast doubt for the first time on Europe's chances of saving Greece from financial meltdown and sovereign default, conceding that Europe's first ever multibillion euro bailout coupled with savage austerity was not working after a two-year crisis that has brought the single currency to the brink of unravelling.

In an interview with the Guardian and five other leading European newspapers, the German chancellor also insisted – against widespread resistance elsewhere in the eurozone and in the UK – that the European court of justice (ECJ) be empowered to police public spending and budget policies of the 17 countries in the euro.

She also called for the eventual creation of a European political union, with many more national powers ceded to a central government, a strengthened bicameral European parliament, and the ECJ assuming the role of Europe's supreme court.

Days before the latest EU summit, which, at Merkel's insistence and evoking scant enthusiasm elsewhere, is to finalise an international treaty between eurozone governments entrenching German-style fiscal and budgetary rigour in all single currency countries, the chancellor admitted having doubts about the strategy she had pursued during the crisis.

"We haven't overcome the crisis yet. Of course, there's Greece, a special case where, despite all the efforts that have been made, neither the Greeks themselves nor the international community have yet managed to stabilise the situation."

Asked about the European response over the past two years, during which Berlin has often dictated terms and encountered strong resistance in Brussels, Paris, and at the European Central Bank in Frankfurt, Merkel said: "Good politicians always have doubts, as a way of constantly reviewing whether they are on the right track." There were no doubts about her aim – to save the euro and preserve the EU. The reservations concerned the means to those ends.

With Europe's biggest ever crisis moving into its third year, the chancellor is facing growing resistance to her key aim at Monday's summit – finalising the "fiscal compact" treaty that is the euro's new rulebook, foreseeing quasi-automatic fines for fiscal sinners, empowering the Luxembourg-based ECJ to sit in judgment of the 17 countries' budgets, and establishing legally binding debt ceilings for eurozone governments.

The treaty would enshrine the German model of fiscal and monetarist rigour as binding on the eurozone, in a move that would, in effect, outlaw Keynesian economics.

As global leaders gathered on Wednesday in Davos, Switzerland for their annual deliberations on the world economy, Merkel, delivering the keynote opening speech, sought to shift the debate away from pervasive austerity and spending cuts to promoting growth and jobs, suggesting that labour laws across the EU might be more closely coordinated.

But the prospects for growth in Europe appear abstract and the gloom was deepened by official British figures showing a 0.2% contraction in the UK economy in the last quarter of 2011, pointing the way to the second British recession in three years. Criticism of the pact and the Merkel policy is getting louder. "A lot of time and energy wasted for nothing," Luxembourg's foreign minister, Jean Asselborn, told Der Spiegel this week. "Issues which have more to do with Germany than with Europe are playing an important role." Last week, a Finnish cabinet minister also attacked the treaty as having more to do with German domestic politics than with saving the euro.

But Berlin looks certain to get its way since it says no new permanent euro bailout fund will be established a year early in July without agreement on the treaty.

Opponents say the pact will do little to stem the immediate crisis. The Germans insist in the medium term it will prevent a repeat of the profligacy that caused the near-collapse in the first place.

"There would be no point in promising more and more money without tackling the causes of the crisis," said Merkel. "Amid all the billions in financial assistance and rescue packages, we Germans also need to watch that we don't run out of steam. After all, our capacities aren't infinite, and overstretching ourselves wouldn't help us or the EU as a whole.

"We will only be able to strengthen our common currency if we co-ordinate our policies more closely and are prepared to gradually give up more powers to the EU. If we make loads of promises about debt reduction and sound budgeting, those need to be things that can be enforced or brought to court in the future. The point of the fiscal compact, after all, is to make it possible to check on those commitments. That means giving our [European] institutions more monitoring rights – and more bite."

Merkel again ruled out pooling eurozone debt – eurobonds – as a quick fix to the crisis, but left the option open should the new euro regime produce results.

"Shared liability is something we will only be able to contemplate once the EU has achieved much greater integration. It will not do as a means to resolve this crisis. That greater integration would involve the European court of justice enforcing controls for national budgets, for example, and much more besides. If we at some point have harmonised our financial and budgetary policy, that will be the time to try and find other forms of co-operation and shared liability."

The new pact is an international treaty between participating governments and not European legislation because David Cameron last month took the highly unusual step of vetoing an EU-wide deal.

Despite the prime minister's blockade and the belief in Berlin that he blundered, Merkel sounded conciliatory.

"I am convinced that Great Britain wants to remain a member of the European Union. Of course, it's never easy for 27 states to hold together … We need to find that balance with everyone time and again, including the United Kingdom wherever possible."

On her "vision" for the future of the EU, though, there is unlikely to be any "balance" struck with No 10 because Merkel's hopes for a Europe united politically under a single government are at odds with Britain's views. Besides, Merkel's project would require substantial transfers of powers to Brussels that would run foul of Cameron's EU referendum law.

"My vision is one of political union because Europe needs to forge its own unique path. We need to become incrementally closer and closer, in all policy areas," the chancellor said. "Over a long process, we will transfer more powers to the [European] Commission, which will then handle what falls within the European remit like a government of Europe. That will require a strong parliament. A kind of second chamber, if you like, will be the council comprising the heads of [national] government."

"And finally, the supreme court will be the European court of justice. That could be what Europe's political union looks like in the future – some time in the future, as I say, and after a goodly number of interim stages."

There was no immediate reaction to Merkel's interview from Cameron.

Stefan Kornelius of Süddeutsche Zeitung, Javier Moreno of El País and Bartosz Wielinski of Gazeta Wyborcza contributed to this report

Fed Signals That a Full Recovery Is Years Away

The New York Times by Binyamin Appelbaum

View Original Article HERE

WASHINGTON — The Federal Reserve, declaring that the economy would need help for years to come, said Wednesday it would extend by 18 months the period that it plans to hold down interest rates in an effort to spur growth.

The Fed said that it now planned to keep short-term interest rates near zero until late 2014, continuing the transformation of a policy that began as shock therapy in the winter of 2008 into a six-year campaign to increase spending by rewarding borrowers and punishing savers.

The economy expanded “moderately” in recent weeks, the Fed said in a statement released after a two-day meeting of its policy-making committee, but jobs were still scarce, the housing sector remained deeply depressed and Europe’s flirtation with crisis could undermine the nascent domestic recovery.

The Fed forecast growth of up to 2.7 percent this year, up to 3.2 percent next year and up to 4 percent in 2014, but at the end of that period, the central bank projected that the recovery would still be incomplete. Workers would still be looking for jobs, and businesses would still be looking for customers.

“What did we learn today? Things are bad, and they’re not improving at the rate that they want them to improve,” said Kevin Logan, chief United States economist at HSBC. “That’s what they concluded — ‘We’ve eased policy a lot, but we haven’t eased it enough.’ ”

The economic impact of the low-interest rate extension, however, is likely to be modest. Many businesses and consumers can’t qualify for loans, a problem the Fed’s efforts do not address. Moreover, long-term rates already are at record low levels and, like pushing on a spring, the going gets harder as it nears the floor. Finally, the Fed already was widely expected by investors to hold rates near zero well into 2014, limiting the benefits of a formal announcement.

“I wouldn’t overstate the Fed’s ability to massively change expectations through its statements,” the Fed’s chairman, Ben S. Bernanke, said at a press conference Wednesday after the announcement. “It’s important for us to say what we think and it’s important for us to provide the right amount of stimulus to help the economy recover from its currently underutilized condition.”

The Fed’s plans for interest rates were unveiled amid a barrage of statements the central bank released Wednesday as part of its campaign to improve its transparency. And while it pleased some investors in the markets, it left others befuddled. The Dow Jones industrial average, which had been down in the morning, began rising steadily after the Fed released its statement at about 12:30 p.m. Wednesday. The Dow finished the day up 81.21 points at 12,756.96.

First came the Fed’s traditional statement, released after each meeting of its policy-making committee, which said that the central bank intended to hold short-term rates near zero “at least through late 2014.”

Ninety minutes later, the Fed published for the first time the predictions of the committee’s members on when they would raise interest rates. It showed that 11 of the 17 members expected the Fed to raise rates by the end of 2014. Taken together, the documents suggested that the Fed expected to keep rates near zero until late 2014, but probably not any longer than that.

Since the beginning of the financial crisis in 2007, the Fed has alternated bursts of activity with periods of rest, concluding several times that it had done enough only to find the economy still struggling to recover. The Fed announced last summer that the central bank intended to keep interest rates near zero through at least the middle of 2013, and that it would seek to reduce long-term interest rates through changes in the kinds of investment securities it holds. Since then, two meetings had passed without the introduction of any new programs.


The Fed’s latest action came after a run of better-than-expected economic data, suggesting to some analysts that the pace of growth might begin to rise without any further help. The Fed also is under relentless assault from Republican presidential candidates who have said that its policies are doing little good and will eventually spur inflation.


And there is growing criticism that the Fed’s policies are unfairly taking money from savers, including many seniors who planned their retirements around the interest rates that low-risk assets like bank deposits used to pay.

Mr. Bernanke said Wednesday that the Fed was aware of this, but it was acting again because it still did not believe that it has done enough. At the same time, he suggested that the Fed was not on the verge of more drastic measures, like further expanding its portfolio of mortgage-backed securities.

Such purchases remain under consideration, Mr. Bernanke said, but only “if we see that the recovery is faltering or if we see that inflation is not moving towards target.”

As part of its transparency campaign, the Fed also published Wednesday a statement of its long-term goals, formalizing its longstanding commitment to maintain inflation at about 2 percent a year. The Fed also said that it was equally committed to minimizing unemployment, but that its exact goal would vary based on economic circumstances. It said the goal now was to reduce unemployment below 6 percent.

The new forecast showed that the Fed expects to hit its inflation target over the next three years, but to fall well short of its goals for unemployment. The Fed projected that unemployment would drop no lower than 8.2 percent this year, just slightly below the current rate of 8.5 percent, and no lower than 7.4 percent by the end of next year. By the end of 2014, the Fed still expects that at least 6.7 percent of people actively interested in working would not be able to find jobs.

In light of those projections, it was unclear why so many members of the policy-making committee expected to raise interest rates by the end of 2014.

Asked why the committee would seek to raise rates in such a situation, Mr. Bernanke said that he did not imagine it would.

“We’re certainly willing to look for different ways to provide further support for the economy if in fact we have this unsatisfactory situation,” he said.

As for the forecasts, he said, “there is no mechanical relationship between these projections” and the committee’s decisions.

Some analysts cautioned that the Fed’s statements and predictions were being given too much weight.

“Here’s what all Fed promises are worth: nothing, if the data tell them to do something different,” said Ian Shepherdson, chief United States economist at High Frequency Economics.

Furthermore, Mr. Bernanke’s Fed is now making projections about decisions that could be made under the leadership of someone else. Mr. Bernanke’s current term ends in early 2014.

“I wouldn’t feel bound by anything the previous chairman had done,” Mr. Shepherdson said. “And three years is a very, very long time.”

Ambrose Evans-Pritchard: 2012 could be the year Germany lets the euro die

The Telegraph by Ambrose Evans-Pritchard
View Original Article HERE

So we enter Year IV of the Long Slump, the cruelest yet though not the most acute.

There will be no Chinese credit explosion this time, no real help from post-bubble India or over-stretched Brazil.

It will be a global downturn on all fronts, aborting what remains of recovery even before industrial output in the OECD bloc has regained its pre-Lehman peak.

The second wave will hit with youth unemployment already at 45pc in Greece and 49pc in Spain; and with the US labour participation rate already at depression levels of 64pc.

We will hear more about Italy's Red Brigades, Greece's Sect of Revolutionaries, and America's militia groups, and how democracies respond. Proto-fascism in Hungary is our warning.

China's surgical soft-landing will slip control, like Fed tightening in 1929 and 2007, or Japan's squeeze in 1990. Once construction has run amok, bears will have their way.

Since the purpose of New Year predictions is to stick one's neck out, let me hazard that China will devalue the yuan in 2012. It will export yet more spare capacity into a deflationary world, until the West retaliates and starts to turn its back on globalisation. Capital outflows will accelerate. The idea that China can rescue anybody will seem quaint.

The strong yen has already pushed Japan back into deflation, and fresh recession. Public debt has reached one quadrillion yen, as noted acidly by Tokyo's R&I rating agency when it stripped Japan of its AAA rating last month. That is $12.8 trillion, or Italy plus Spain times four.

There is a graveyard full of Gaijin commentators who wrote off Japan too soon. Will the dam break this year at last, with tax covering less than half of spending, public debt at 237pc of GDP, ever fewer workers, and a state pension fund now selling government bonds? Perhaps. As R&I warns, Europe's woes have brought sovereign debt into very sharp focus.

America will look resilient for a few months. The payroll tax deal has averted a fiscal shock, but that is all. Money growth (M3) has sputtered out, and velocity is falling.

Politics on Capitol Hill will restrain Ben Bernanke from launching QE3 until the Tea Party can see the eye-whites of deflation. Six-month PCE inflation was 2.9pc in August, 2.4pc in September, 1.6pc in October, and 1.2pc in November. Not there yet. Prepare for a Wall Street squall first.

Whether the scare of early 2012 turns seriously ugly depends on the nerve of policy-makers. Shock absorbers are worn thin, but not exhausted.

Central banks have the means to prevent a 1930s outcome, even with rates at zero, if willing to deploy Fisher-Friedman monetary stimulus with conviction, buying assets from non-banks and targeting nominal GDP growth of 5pc. But policy defeatism is in the air, and Austro-liquidationists are winning the popular debate.

The second leg of our Kondratieff Winter comes at an awful moment for Euroland, just as the North-South split turns deadly.

The European Central Bank has guaranteed trouble by letting M3 money contract. Fiscal tightening into the downward slide will make matters worse. A credit crunch as banks shrink loan books by €1 trillion to meet capital ratios will do the rest. All policy levers are set on deep recession, and deep recession is what Europe will get.

Monetary union is too damaged to parry these blows. The ECB's Mario Draghi will cut interest rates to 0.5pc by February, just to keep pace with passive tightening. Half-hearted purchases of Italian and Spanish bonds will drift on, doing more harm than good. By reducing existing bond-holders to junior status, the ECB will ensure a slow exodus. Draghi knows this. His hands are tied.

The Bundesbank will wage guerrilla war against money printing through the pages of Die Welt and Handelsblatt, paralyzing the ECB's Council until Angela Merkel orders Jens Weidmann to desist.

By then it will be too late, deliberately so. Contraction will play havoc with budgets in Italy, Spain, Portugal, and France. Austerity alone will seem a Sisyphean task. Club Med leaders will not be able to command popular assent for such 1930s scorched-earth strategies.

Politics will fracture further, splintering to the hard Left and Right. The Front National's Marie Le Pen's will beat Maréchal Sarkozy into the French run-off invoking 'terroir' and the ancient franc. Escalating levels of coercion will be needed to uphold the Project, with EU commissars eating alone in the administered territories of Greece and Italy.

Far from protecting credit ratings, Europe's self-defeating policies will bring a blizzard of downgrades. France's AAA will go, obviously. So will Austria's as banking woes deepen in Hungary, Ukraine, and Croatia. Vigilantes will take a closer look at Holland's household debt, off the charts at 270pc of disposable income.

The shrinking AAA core will leave Germany propping up the EFSF bail-out fund, until the weight of contingent liabilities endangers Germany itself. That will concentrate minds.

France's President Hollande will "triangulate", playing the pan-Latin card to discomfit Berlin and force a policy change. Portugal's Troika sacrifices will prove as futile as Greek efforts before. Lisbon's second bail-out will come just as Greece graduates from riots to insurrection, and Italy's Silvio Berlusconi will try to snatch power again by whipping up fury against Tedeschi. Bundestag patience will snap at such disorder everywhere.

Germany will not be able to fudge EMU any longer. It must either immolate itself, accepting a debt union and internal inflation to save a currency it never wanted and doesn't love; or opt instead to uphold fiscal sovereignty and the essence of its own democracy, and let the Project die.

The shrewd, equivocating, ice-cold Chancellor will quietly oust arch-europhile Wolfgang Schauble and let the Project die, always pretending otherwise.

Just an idle hunch. Guten Rutsch.

Dover Downs 2011 Profits Down 20%

Delaware Online by Aaron Nathans

View Original Article HERE

Dover Downs reported a bump in casino and hotel profits during the fourth quarter, due to better weather and a shuffling of the NASCAR schedule.

But the gambling company’s profits were down for the year.

Profits for the fourth quarter of 2011 were $2.1 million, or 7 cents per diluted share, compared with $501,000, or 2 cents per diluted share for the fourth quarter of 2010.

It helped, the company reported, that there were more rooms in the hotel, which boosted food and beverage revenues during the quarter. There was more convention business, too, the company said.

Dover Motorsports' fall NASCAR race weekend was held in October this year; it was held in September, which falls in the third quarter, last year.

Profits for the full year declined 20 percent, to $5.4 million, or 17 cents per diluted share, compared with $6.7 million, or 21 cents per diluted share for 2010.

Gambling revenue for the full year was up just $148,000. Expenses were $4.4 million higher for the year.

“Our year-end results emphasize that increasing competitive challenges and high taxes will require us to continue to find efficiencies -- a formidable task considering that we are in a customer centric business that necessitates continued investment in our facility and in our promotions and marketing initiatives,” said Denis McGlynn, Dover Downs president and CEO.

Because of the NASCAR schedule shift, Dover Downs Motorsports reported fourth-quarter profits of $8.6 million, compared to a loss of $6.6 million during the same quarter in 2010.

The company’s net loss for the year was $9.2 million, compared to a net loss of $8.2 million in 2010.

Adjusted for discontinued operations, including raceways in Memphis, Tenn. and near St. Louis, the company made profits of $2.4 million, or 7 cents per share, in 2011, compared to $1.2 million, or 3 cents, in 2010.

Delaware development finance council eyes funding requests by DuPont, Delaware City refinery

The Republic
View Original Article HERE

DOVER, Del. — A state economic development panel is considering whether to approve a $10 million grant to the owners of the Delaware City refinery to help pay for new pollution control measures.

Delaware City Refining Co. asking for the strategic fund grant to help offset the expense of converting combustion turbines at the refinery to natural gas, resulting in reduced emissions of nitrogen oxide and sulfur dioxide.

The Council on Development Finance was to consider the request Monday at its meeting at the Buena Vista conference center in New Castle.

The council also will consider a request from the DuPont Co. for a $920,000 grant to test a manufacturing process for a new product. DuPont says the project involves manufacturing new organic light emitting diode materials for use in electronic displays.

George Soros: Collapsing US Economy to Spark Street Violence

MoneyNews.com by Forrest Jones
View Original Article HERE

As the U.S. economy worsens, protests such as those carried out by the Occupy Wall Street movement will turn ugly, breaking down into waves of violent unrest across the nation, says billionaire financier George Soros.

"It will be an excuse for cracking down and using strong-arm tactics to maintain law and order, which, carried to an extreme, could bring about a repressive political system, a society where individual liberty is much more constrained, which would be a break with the tradition of the United States," Soros tells Newsweek.

Unrest in the United States will serve as one of many symptoms of a worsening global economy, which makes wealth preservation a priority over getting rich.

"At times like these, survival is the most important thing," Soros tells Newsweek.

"I am not here to cheer you up. The situation is about as serious and difficult as I’ve experienced in my career," says Soros, made famous by betting against the pound in 1992 and pocketing $1 billion in the process, he said.

"We are facing an extremely difficult time, comparable in many ways to the 1930s, the Great Depression. We are facing now a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation, or worse," he said.

"The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system."

European policymakers have no choice but to keep all the currency zone alive in its present form.

A messy default and exit from the block from even one country would send major shockwaves across the world.

"The euro must survive because the alternative — a breakup — would cause a meltdown that Europe, the world, can’t afford," says Soros, who owns $2 billion in European government debt he bought from MF Global, the securities firm run by former Goldman Sachs chief John Corzine that went bankrupt in October.

"The collapse of the Soviet system was a pretty extraordinary event, and we are currently experiencing something similar in the developed world, without fully realizing what’s happening."

At the heart of the global uncertainty lie countries like Greece and Italy, who are carrying such hefty debt burdens that many fear they will default and abandon the euro as its currency, which would roil financial systems worldwide similar to the Lehman Brothers collapse in 2008.

While some see default as inevitable, avoiding a messy one while allowing Greece to stay in the currency zone is the best option.

Others point out that they aren't hoping for a best-case scenario out of the crisis and just want to avoid total disaster.

European policymakers owe the world just that.

"It's not that the market needs Europe completely solved," says John Gerspach, Citigroup's chief financial officer, according to The Telegraph.
"It's just that they need assurance it won't be a complete disaster." Until then, investors are likely to avoid risk, Gerspach says.

While Soros agrees that a Greek default is likely, a messy one needs to be avoided at all costs.

"If you have a disorderly collapse of the euro, you have the danger of a revival of the political conflicts that have torn Europe apart over the centuries — an extreme form of nationalism, which manifests itself in xenophobia, the exclusion of foreigners and ethnic groups," Soros says.

"In Hitler’s time, that was focused on the Jews. Today, you have that with the Gypsies, the Roma, which is a small minority, and also, of course, Muslim immigrants."

Soros adds he's staying out of U.S politics despite his arguably well-known Democratic tendencies — and donations.

"I would prefer not to be involved in party politics. It’s only because I felt that the Bush administration was misleading the country that I became involved," Soros says.

"I was very hopeful of a new beginning with Obama, and I’ve been somewhat disappointed. I remain a supporter of the Democratic Party, but I’m fully aware of their shortcomings."

Can Obama be re-elected?

"Obama might surprise the public. The main issue facing the electorate is whether the rich should be taxed more. It shouldn’t be a difficult argument for Obama to make."

This makes it easy to understand.

(Democrats and Republicans share the blame equally!!) This rather brilliantly cuts thru all the political doublespeak we get. It puts it into a much better perspective.

Lesson # 1:

* U.S. Tax revenue: $2,170,000,000,000
* Fed budget: $3,820,000,000,000
* New debt: $ 1,650,000,000,000
* National debt: $14,271,000,000,000
* Recent budget cuts: $ 38,500,000,000

Let's now remove 8 zeros and pretend it's a household budget:

* Annual family income: $21,700
* Money the family spent: $38,200
* New debt on the credit card: $16,500
* Outstanding balance on the credit card: $142,710
* Total budget cuts: $385

Got It ?????

OK now Lesson # 2: Here's another way to look at the Debt Ceiling:

Let's say, You come home from work and find there has been a sewer backup in your neighborhood....and your home has sewage all the way up to your ceilings. What do you think you should do ......

Raise the ceilings, or pump out the crap?

Your choice is coming Nov. 2012

State of the State 2012 Transcript – Delaware’s Time to Lead

News.Delaware.Gov
CLICK HERE TO VIEW VIDEO

Lt. Governor Denn, President Pro Tem DeLuca, Speaker Gilligan, members of the 146th General Assembly, other elected officials, members of the Judiciary, members of the Cabinet, our employees, Carla and the people of Delaware.

In my previous reports on the State of the State, I spoke to you of turbulent seas and winter blizzards. These images captured the moment, as we fought through the worst economic downturn since the Great Depression.

This economic storm posed particular challenges for Delaware industries upon which we had depended for decades, like financial services and automotive manufacturing, but it made landfall in almost every corner of our nation. While Delaware was not alone in facing this storm, the way we responded was unique.

The politics of blame and division, the rhetoric of distrust, and the partisan warfare witnessed elsewhere never found a home in our state. Instead, we pulled together and prepared for the future. Leaning on Speaker Gilligan’s forty years of experience, the leadership of both parties in this General Assembly worked with us and we made tough decisions to balance our budgets, while still making investments necessary to keep moving forward. We cut where it was possible and invested where it was important — to create jobs, improve schools, and build infrastructure.

At a moment when Washington, D.C. stands for deadlock and dysfunction, Delaware’s strength resides in the capacity of its people, even in challenging times, to work with common purpose, to choose perseverance in place of pettiness and partisanship. As our economy recovers — albeit more slowly than any would like — we must resist the temptation to rest satisfied with the status quo. As Thomas Friedman and Michael Mandelbaum write in their book, That Used to Be Us, the best organizations “win in the turns.” When there are big shifts in the marketplace, when others are overwhelmed and in disarray, they put distance between themselves and their competitors. As tempting as it might seem to take this moment to pause and catch our breath, this is not the time to stand still. This is the time for Delaware to leap ahead, to lead.

Capitalizing on Our Economic Strengths

The capacity to build on existing strengths and to adapt successfully to change is the quality that distinguishes companies that surge to the head of the pack from those that languish. Capitalizing on its strength in science and innovation, DuPont today is a bioscience company, not the same chemical company that it was 20 years ago, or the gunpowder company it was 200 years ago. W.L. Gore, Ashland, AstraZeneca, ILC and our financial services companies have all evolved to keep up with changing markets and technologies. Consider Amazon, which is soon to be one of our larger employers. It has become an all-purpose online retailer by leveraging the distribution capability it originally developed to deliver books. Our employers are changing – capitalizing on their strengths and thinking about tomorrow. And to lead, to be the place where these companies grow – Delaware must be ready to do the same. We must be ready to “win in the turns.”

In Delaware, our economy directly benefits from our leading employers. Thanks to your financial support of the Strategic Fund, we have attracted and retained significant employers: PBF Energy, Sallie Mae, Baltimore Air Coil, Fisker Automotive, Miller Metal, Bloom Energy, Mountaire Farms and Capital One. We must continue these efforts, and remain nimble, opportunistic and aggressive when large employers present job opportunities. That is why I will again recommend significant funding for the Strategic Fund next year.

But to do more than just keep pace — to put distance between ourselves and our competitors — we must look beyond the direct benefits our larger employers provide; we must capitalize on their presence to build our competitive edge. We already have terrific small businesses but we aspire to see more created and to see them grow quickly. To accomplish that, we must nurture the small businesses and new companies that will thrive in the hospitable soil for job creation that our leading employers and our world-class workforce create around them.

Following up on the recent “Imagine Delaware” forum sponsored by the News Journal, we are finding new ways to support entrepreneurs. Over the last months, we studied best practices at entrepreneurial support centers around the country in places as far away as Silicon Valley and as nearby as the Science Center in Philadelphia, the CoinLoft in Wilmington and the Tech Park in Newark. The best tend to have a few things in common — flexible incubator spaces, wraparound services like free or discounted legal and accounting assistance, educational opportunities for potential entrepreneurs and investors and outstanding opportunities for collaboration. Working with Representatives Lavelle and Bryon Short and groups like First State Innovation, we will apply what we have learned to further support emerging start-ups and growing companies in Delaware. Not every company that uses these resources will be successful and it will take those that succeed time to achieve results. Our goal, though, is not to capture a headline tomorrow; it is to facilitate the creation of jobs for a generation.

While nurturing the businesses of the future, we must also focus on growing our small businesses today. Small businesses need access to credit and we will utilize the federal Small Business Credit Initiative to help more creditworthy businesses get the loans they need to expand and create jobs. We are also pleased to be the first state to announce a partnership with Facebook. This partnership will help our small businesses fully engage the powerful use of social media to market their products and services more effectively.

We must put ourselves in the shoes of those who create jobs. We’ve got to understand the industries in our State better than any other state. And we’ve got to be more committed to the success of businesses in our state than any other state. We have most of the ingredients that businesses are looking for – good schools and institutions of higher education, reasonable taxes, a high-quality workforce, a wonderful quality of life, and a responsive government. Companies considering expansion or investment also value great infrastructure. Whether they are accessing just-in-time supplies, moving products to market, or transporting employees between home and office, we want them to know they’ll find what they need in Seaford, not Shanghai, in Bear, not Bangalore.

That is why last year we made the decision together to invest $40 million to further support our roads and bridges and we created the Delaware Infrastructure Fund, which has already paid off with Amazon’s decision to expand in Delaware. That is also why we invested $10 million in the Port of Wilmington. In the coming months, we will consider opportunities for a public/private partnership to expand and modernize the Port, significantly increasing our capacity to handle global trade. Doing so will not only protect those jobs currently at the Port but will sow the seeds of future growth as we leap ahead of our competitors.

When companies decide whether to invest their next dollar in Delaware, it is not just the quality of our roads, bridges and port that they care about; they also want to know that our air and water are clean; that our communities offer the parks and recreational trails that make life for employees and their families healthy and rewarding. Talk with business leaders on a regular basis and it quickly becomes apparent. Quality of life matters deeply to them because it matters to their workforce. Overlook it, and your state is likely to get overlooked.

Our focus on quality of life is proving that economic development and environmental protection are compatible goals. This focus resulted in NRG transforming the Indian River power plant from one of the dirtiest coal-fired power plants in the country into one of the cleanest and is leading to the conversion of the Energy Center in Dover from coal to cleaner-burning natural gas — all the while creating hundreds of construction jobs in the process. Calpine has converted the Edge Moor plant in Wilmington from coal to natural gas. Taken together, these and other improvements are modernizing our energy fleet and reducing air pollution by 8,600 tons per year of nitrogen oxide and 33,000 tons per year of sulfur dioxide, which is the equivalent of taking 450,000 cars off the road.

Our efforts to promote a high quality of life are not limited to reducing pollution from our power plants. We seek opportunities to connect Delawareans and visitors to all the history and natural beauty that the First State has to offer. Through an innovative public/private partnership, we are helping Yorklyn rebound from NVF’s bankruptcy, transforming it into a revitalized area retaining its mill town roots. Our Bayshore Initiative is enhancing Delaware’s spectacular coastal region and boosting the economy by restoring critical wildlife habitat and improving access for world-class hunting, fishing, kayaking and hiking.

But one of the best ways we can improve our quality of life, and promote healthy lifestyles at the same time, is to make our state more walkable and bikeable. In the next year, working with Representative Keeley and Senator Venables, we will launch the First State Trails and Pathways Plan. I am proposing that we dedicate $13 million to build miles of new and enhanced trails throughout our State for every Delawarean to enjoy. Building on the strong foundation of existing trails and greenways already in place, we can make Delaware one of the most walkable and bikeable states in America.

Employers looking to create jobs also care about the availability and cost of electricity. That is why we reduced the utility tax last spring and why we provided incentives for businesses to invest in energy-saving technology. We need to continue to promote energy-saving investments but when I talk with business leaders about investing in Delaware; I sometimes hear concerns about municipal power rates and the lack of any choice and competition to hold down prices. Let me be clear. I have been approached by a number of businesses which, because they are located in the service area of a municipal power system, are required to procure their electricity from those municipalities at rates that are uncompetitive with those charged elsewhere in Delaware and — importantly — uncompetitive with other parts of the country where they have similar facilities. I am sensitive to the revenue needs of our municipalities, but if these businesses leave our state, those jobs may well be lost forever. As expressed to me by Senator Simpson and Representative Dan Short, we need to work together to meet the expectations of companies choosing to do business here that the rates they will be charged for municipal power generation will be fair and competitive. I am ready to begin that conversation with our municipalities.

Creating jobs must remain our number one priority and this is particularly true when it comes to our returning veterans. I was privileged to visit recently with our troops in Kuwait and Afghanistan. We have with us today Sergeant Bruce Stevens of Dover and Senior Airman Jason Duricek of Wilmington, both of whom served admirably in Afghanistan. The first thanks we owe all of our veterans when they come home is the chance to partake in the abundance of opportunity that they make possible for the rest of us. Their mission puts them in harm’s way, but their morale is high and their skills are exceptional. Let’s work together to ensure they have the opportunity to put those skills to work when they come home.

We ensure that state employees who serve are able to return to their jobs. But we should be, and we are, going further. Thanks to the advocacy of Representative Jaques and others, we added representation of veteran-owned Delaware businesses to our Supplier Diversity Council, to ensure they have a fair opportunity to compete for state business. One of our biggest private-sector employers, JP Morgan Chase, is leading in this area, hiring thousands of returning veterans and providing incentives for its vendors to do the same. To encourage others in the private sector to follow their lead, we will propose expanding tax credits to Delaware businesses that hire veterans.

Creating the Workforce of Tomorrow

The biggest driver for a business when deciding where to locate and expand is the quality of the workforce. That talent will determine whether the business becomes an innovation leader or gets left behind in the creative dust of its competitors. The late Steve Jobs put it bluntly: “Apple employs seven hundred thousand factory workers in China because it can’t find the thirty thousand engineers in the U.S. that it needs on site at its plants.” We need to do something about that. This is why, when the history of our time here is written, the determined push we are making to raise student achievement will prove to be the biggest game-changer of all.

Because we have come together – parents, teachers, administrators, private employers, foundations and public officials — to develop and implement a carefully crafted plan that aims high and puts children first, we have been recognized as a national leader in education, winning the nationwide Race to the Top competition. Together, we are making great strides. We have established high standards to ensure that we are being honest with our children about what they need to learn to succeed in the global economy. We have put in place an improved assessment system so parents and teachers can track student progress and identify quickly when students risk falling behind. We are supporting our teachers with resources that help them raise student achievement, and we are moving forward to evaluate our teachers in part on the basis of the progress their students make.

In today’s global knowledge economy, those who are not pushing forward are falling behind. For Delaware to maintain its position of leadership, it is absolutely vital that we keep pressing ahead and I thank Senator Sokola and Representative Schooley for their leadership in this area. I realize there are those who are uncomfortable with the changes that are being made and that not all of these changes will work exactly as intended on day one. We will learn from our mistakes and continue to maintain an open dialogue to improve. But even if you believe what we did in the past was sufficient for those times, it will not be sufficient going forward. Around the world, young people are working hard in schools that are dramatically improving and if we stop our own efforts now, it will be to the detriment of our kids and their future.

So pressing ahead means implementing without additional delay our Performance Appraisal System, with its focus on student progress. These implementation plans have benefited considerably from the advice of hundreds of Delaware teachers and we are grateful to them for their help. This is a challenging process and it is one that must succeed.

As a parent and as someone who has visited dozens of our State’s schools, I want to ensure our changes help our children not only to score well on tests but also to develop a love for learning that will inspire their imaginations and creativity. This is a difficult balance, but one that is already being achieved in many classrooms throughout the State and one we should work together to expand. Because I have visited all of those schools and talked with principals, teachers, and other school staff, I know firsthand that there are truly great things going on in Delaware’s classrooms. But we need to do a better job of getting the word out. Howard Weinberg of the Delaware State Education Association asked me to join with him and his association and the business community to let the people of our State know how many great things are going on in Delaware schools. It’s an invitation I’m excited to accept.

Pressing ahead also means moving forward with our World Language Expansion Initiative. Our students need to master world languages to work with — and compete effectively against — workers around the world. We’ve already made completion of a world language a graduation requirement. Over the next five years, we’re going to create partial immersion programs in twenty schools, where students will spend half the school day learning in another language.

Finally, pressing ahead means acknowledging what research has clearly established — raising student achievement begins before children enter kindergarten. I’ve heard this message from hundreds of teachers — children receiving quality early care and education are more likely to be successful in school and in life. Investments that promise high yields get my attention and, in the realm of public policy, there is no higher-yield investment than this one. Last spring, we joined together to make some of the most significant investments in early childhood education in our State’s history.

As it turns out, those investments are paying dividends sooner than we expected. The judges of the national Race to the Top Early Learning Challenge noted our commitment and rewarded us with significant additional federal funds. Here is our plan: (1) the professionals who care for our children will have the proper training; (2) the early childcare facilities where our children spend their days will have the best teaching and learning tools; and (3) the successes and challenges of centers will be closely monitored to ensure continual improvement. That is our formula for success and we expect to raise the percentage of high-need children in quality-rated programs from 20 percent to nearly 80 percent over the next four years. To let us know where our kids stand when they start school, we will introduce a new kindergarten assessment. I thank DSEA and our kindergarten teachers for their work with us on this initiative.

Governing Responsibly

Companies that don’t invest wisely wither away and perish. To succeed, we invest in our business-supporting infrastructure, our quality of life, our children, and our workforce. We will only be able to make these necessary investments, though, if we govern responsibly. This requires a state government that is innovative, efficient and transparent.

Governments that are open and transparent are more likely to manage taxpayer resources responsibly. That is why we launched the “I found it cheaper” website to make it easy for state employees to report when our contracts don’t offer the best value to taxpayers. And that is why we are making it easier for all Delawareans to access information about their government. When citizens want information, they should get answers, not bureaucratic barriers. Thanks to legislation passed by this General Assembly and an executive order I signed a few months ago, “you’ve come to the wrong place” will no longer be an acceptable answer to requests for public records from the executive branch of government. I urge our counties, towns and school districts to join us in this commitment to transparency.

Thanks to the leadership of all four caucuses, the General Assembly has made significant progress over the last three years in making the legislative branch more transparent. Legislative committees are now subject to open meeting requirements and last year our budget was completed and posted on line well before June 30^th. Transparency also needs to extend to the way lobbyists do business here at Legislative Hall, which is why my administration will team up with President Pro Tempore DeLuca and Speaker Gilligan, and Majority Leaders Blevins and Schwartzkopf to propose some common sense measures that we hope you will support.

Citizens deserve to know who is lobbying and what they are lobbying for. We will make it so with a new online reporting tool where citizens can see, by piece of legislation, which lobbyists are advocating for their clients. We have been successful in pulling together in tough times in no small part because of faith in the responsiveness of Delaware government. The trust of people in their state government should not be undermined by a perception that lobbyists have hidden access here in Dover.

Governing responsibly means governing efficiently. Working closely with the Joint Finance Committee under the leadership of Representative Williams and Senator McDowell, we eliminated more than a thousand positions in the executive branch, slashed our vehicle fleet, renegotiated our leased space to save millions, and stopped unnecessary printing. Last year, we confronted the unsustainable long-term costs associated with our state employee pension and health plans. The prospect of these looming costs gave rise to shrill rhetoric and pitched battles in other states. Here, we worked together — my administration, representatives from both parties in both chambers, the leadership of major public employee and public education unions — and we achieved results, a package of reforms that will save the taxpayers more than $480 million over the next 15 years.

Our search for greater efficiency continues with an extensive examination of the criminal justice system. Under the leadership of Lt. Governor Denn and with the participation of Attorney General Biden, law enforcement and the judiciary, we are conducting a thorough review to figure out how we can get the most for the taxpayer dollars we spend on public safety. We look forward to receiving the recommendations of the Justice Reinvestment Initiative task force later this spring and to working with you to implement those reforms that can have the most positive impact.

One cost driver looms above all others and will swamp all the savings we achieve elsewhere if not addressed. That is the cost of health care. Last year we increased spending on Medicaid by $56 million and my budget will recommend an additional $21.7 million increase for next year. Over the last 10 years, this program alone has grown 127 percent, to the point where federal and state spending together exceeds $1.2 billion each year. The total commitment of taxpayer dollars on health care is staggering. Yet the expectation is that year after year we will continue to pay more for health care, whether we receive quality results or not.

The incentives we have in place in our health care system reward neither efficiency nor quality. These incentives encourage more services and tests, not better results. We have a system that doesn’t encourage healthy behavior in patients and doesn’t discourage unhealthy behavior. In essence, we don’t have a health care system; we have a sick care system.

We are not going to solve the national health care debate here in Dover but we can reduce our costs and improve quality by focusing on how the State procures health care. The idea may sound far-fetched, but we have been quietly making progress. For example, we know seniors requiring long-term care often prefer to stay in their homes and that, so long as they get the care at home that they need, the results are often better and less costly. Starting April 1st, we will replace our traditional reliance on institutional care for seniors with a strong emphasis on community living. This will improve care and save money. I want to thank Secretary Landgraf and her staff for making progress on this important issue.

Our Housing Authority, Department of Health and Social Services, and Kids Department are using this same approach to improve the quality and reduce the cost of care we provide to those who have traditionally been cared for in our state hospital and to young people aging out of foster care – like Mindy and Matt Stevenson, who join us here today because when it comes to issues affecting teenagers aging out of foster care, we will make “no decisions about them without them.” These three agencies are partnering to provide housing and supportive wrap-around social services so these individuals achieve independence and we will propose to expand this initiative.

The use of technology in health care is critical to improved quality and reduce costs. When you go to the doctor or the hospital in Delaware today, you may find your doctor can access recent lab work and pathology reports instantaneously. Soon your doctor may be able to pull up your prescriptions, x-rays and MRIs. This allows your doctor to make quicker and better medical judgments and makes it less likely that your doctor will order unnecessary tests. This use of information technology to provide better, less costly care is increasingly a reality.

A next step to leverage technology is to create a claims and cost database. Business leaders have come to understand the key to improving performance is harnessing the capacity of information technology to aggregate and analyze data. This database will allow us to figure out why some providers get better results and why some providers create more costs without better results to show for it. We will be in a position to reward what works and change what doesn’t.

While this innovative technology is important, Delaware’s biggest purchaser of health care, the State, needs to insist on incentives for providers that are aligned to improve quality and discourage waste. Taken together, our Medicaid population and our State employees and retirees represent nearly 40 percent of the health insurance market here, accounting for a total of $1.7 billion of taxpayer expenditures. We look forward to working with the provider community to get these incentives right because the incentives at work today are the wrong ones. We are pleased that the Delaware Medical Society and Delaware Healthcare Association are already active on this issue and have agreed to work with us.

Providers are not the only ones who have roles to play here. Moving from a sick care system to a health care system requires the people that we insure to take responsibility for making healthy choices. We need to encourage them in these choices, for their own sake, and for the sake of all of us who end up absorbing higher health care costs in the form of higher premiums and higher taxes. About two years ago, I created the Governor’s Council on Health Promotion and Disease Prevention. They have done some terrific work, as has the Sussex Outdoors Initiative. Some of our institutions of higher education are also working to incent their employees to take better care of themselves. We will build on much of this work. And within state government, it’s time to make all of our campuses, in their entirety, smoke-free. Otherwise, we are facilitating behavior that is not only harmful to those who engage in it, but that we know, with certainty, will heavily burden future generations of taxpayers.

Turning around this cost curve will not be easy and it will take time. But it is work to which we must commit — urgently and earnestly — if we are to put ourselves on a sustainable financial course and retain the freedom to invest in our children and our future.

Closing

This is Delaware’s time to lead. Creating more and better jobs. Improving our quality of life. Providing the best schools and learning opportunities for our children. Getting the most out of each tax dollar. Strengthening the trust of our people in their government. These are challenges even in ordinary times. We don’t live in ordinary times.

Change and challenge accompany us each day. Allen’s Family Foods is no longer selling chickens across our region. Now it is part of Harim, selling Delaware poultry into Korea and across Asia. On the former Chrysler site, Delawareans will be building Bloom energy servers to provide clean energy where they once built SUVs and tanks. We can shrink from these challenges, or we can do as a business destined for industry leadership would do and see in this moment an opportunity to change the game in our favor.

The economic ground is shifting under everyone’s feet. Others are finding it difficult to adapt. They are pointing fingers rather than pulling together. They are holding each other back rather than lifting each other up. Our history and our culture demonstrate that we do better than that in Delaware. But to take advantage of this moment and build a lasting competitive edge for our State and its people, we must do more than simply work with, rather than against, each other. Together, we must act with confidence and imagination.

We cannot settle for an economy that is dependent on a handful of major employers. We will nurture an environment where start-ups and small businesses can experiment and thrive.

We cannot settle for schools that are better-funded versions of the schools we remember from 20 years ago. We will help the schools that will prepare our children for the jobs 20 years from now.

We cannot settle for the sick care system we inherited from our parents. We will create a health care system that pays for performance and delivers quality care at a price that families and taxpayers can afford.

I thank each of you, the people of Delaware and the state employees who serve them, for your support over these past three difficult years.

Working together, we’ve kept Delaware moving forward. Now it is time that we forge ahead. With our own hard work as elected leaders, guided by sound judgment and God’s blessings, we can secure a better future for our citizens. We can “win in the turns”.

This is our time. To look ahead. To leap ahead. To lead.

Thank you.

Survey Shows Small Businesses' Economic Outlook Not Improving

As Election Year Begins, Poll Shows Small Businesses Want Lawmakers Held Accountable for Votes on Economic Issues

WASHINGTON, D.C.—Small businesses’ outlook for the national economy showed that the vast majority think our country is on the wrong track and nearly two out of three do not plan to hire in the year ahead, according to a poll conducted for the U.S. Chamber of Commerce by Harris Interactive.
“The policies coming out of Washington are only exacerbating the economic uncertainty that small businesses continue to cite as their greatest challenge,” said U.S. Chamber President and CEO Thomas J. Donohue. “Heading into an election year, our country’s job creators are speaking with a unified voice in saying that we need a change of course in Washington. With government spending and regulations out of control, small businesses don’t know what’s going to hit them next.”
The poll of 1,322 small business executives – conducted between December 30, 2011 and January 6, 2012 – found that more than eight out of ten (85%) now believe the U.S. economy is on the wrong track. Eight out of ten say they would rather have Washington stay out of the way than provide a helping hand. Similarly, nearly nine out of ten (86%) say they would rather have more certainty from Washington than more assistance (6%) to deal with the economy. The survey defined a small business as a company with fewer than 500 employees and annual revenues of less than $25 million.As the election year begins, small businesses offered a clear recognition of the importance of politics in polices that impact their businesses. The vast majority of small business members surveyed (93%) find the Chamber’s work in educating the public on political issues and candidates valuable. Nearly all of the small businesses polled (98%) consider a candidate’s position on free enterprise and business issues as important in how they vote.
“It’s clear that small business owners want lawmakers to be held accountable for how they voted on critical business issues,” said the Chamber’s Senior Vice President and National Political Director, Rob Engstrom. “That’s why this year the Chamber is committing to launch our most aggressive voter education effort in this institution’s 100 year history.”
To read a complete copy of the Q4 Small Business Outlook Survey, please visit: http://www.uschambersmallbusinessnation.com/community/quarterly-survey-2
Survey MethodologyThe Q4 U.S. Chamber of Commerce Small Business Study was conducted online between December 30, 2011 and January 6, 2012 by Harris Interactive among 1,322 U.S. Chamber of Commerce members and non-U.S. Chamber members. Data was weighted to be representative of the small business population. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. This report contains data from this survey and references data collected in the Q2 and Q3 U.S. Chamber of Commerce Small Business Study.
The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.

Click Here For: The Q4 U.S. Chamber of Commerce Small Buisness Study

Delaware's economic performance

Whether you will be watching Governor Markell giving the annual State of the State address this Thursday, or reading about it later, here are a few very interesting FACTS to keep in mind.

Click the link below, print out the document, and keep it at hand while you listen or read of our governor's future plans...



I want to see what the numbers say

Dr John E. Stapleford, Director
Center for Economic Policy and Analysis
Caesar Rodney Institute

New Navy budgets may sink plans for aircraft carriers

The Washington Times by Rowan Scarborough

View Original Article Here

COMMENT: Here's what happens when your nation get too far into debt. National security will suffer. If we can't get our fiscal house in order, we will be at great risk. The lessons of history tell us what is likely to happen then.

On the surface, the Navy’s cherished fleet of 11 active aircraft carriers seems safe from President Obama’s budget slashers.

Conventional wisdom says the requirement to cut $488 billion from the Pentagon within 10 years will not necessitate banishing a single carrier because the president’s military strategy focuses on two carrier-dependent regions: Asia, where China is building a robust navy, and the Persian Gulf, where Iran threatens to block international oil shipping.

As Defense Secretary Leon E. Panetta prepares to introduce the strategy’s first budget next month, the Navy has been in a furious fight behind the scenes to protect only 10 carriers, sources familiar with the issue told The Washington Times.

The sources say that, while the fiscal 2013 budget may well continue 11 carriers, the Navy will be down to 10 or even nine carriers within in the next five years.

A carrier typically transports about 80 aircraft and leads a battle group comprising 7,500 sailors, a guided-missile cruiser, two guided-missile destroyers, an attack submarine and a supply ship. Eliminating one carrier battle group would save billions of dollars.

In addition, the Navy complements its carriers with amphibious-ready groups of warships, helicopters, fighter jets and Marines for sea-land operations. Some of those groups also might be scrapped.

A scenario discussed inside the Navy: Reduce the carrier fleet by retiring the flattops short of their 50-year life spans, and continue to build more advanced carriers at the Newport News, Va., shipyard at seven-year intervals instead of launching one every five years.

Reducing one carrier would set off a fight in Congress, which under law has required the Navy to maintain 11 active flattops. A source familiar with the discussions said the Obama administration would not want to take up that fight until after November’s presidential election, given the importance of Virginia and its 13 electoral votes.

In general, the Navy has three carriers at sea, three returning from six-month deployments, three preparing to be deployed and two in some type of overhaul. For example, the USS Ronald Reagan, commissioned less than 10 years ago, is going into dry dock this month for a year of extensive repairs.

Under Mr. Panetta, the Pentagon has clamped down on the release of any details about the budget — following the model of predecessor Robert M. Gates, who forced senior officials to sign nondisclosure forms.

But sources say a $488 billion in mandated savings will come from two principal sources: cutting the Army and Marine Corps ground forces by more than 100,000 troops combined and reducing the purchase and delaying the procurement of big weapons systems, such as the F-35 fighter.

Cutting back to 10 carriers would save the Pentagon additional billions of dollars. A carrier’s payroll for a crew of officers and sailors, not counting its air wing, is about $225 million annually.

“I think the United States will continue to operate at least 10 carriers over the next five years,” said Loren Thompson, who heads the Lexington Institute defense think tank. “But over the long run, it’s likely the cost and operating concept will gradually shift the Navy away from carriers.”

In fact, the Navy will soon undergo a 10-carrier trial. When the USS Enterprise is retired in November, 10 carriers will be active until the USS Gerald R. Ford becomes operational in 2015. Congress granted the Navy a waiver for the 33-month breach of the law.

“They’re going down to 10 for programming reasons,” Mr. Thompson said. “It is supposed to be temporary, but I think during the period the Enterprise is gone and the Ford class has not arrived, the Navy may grow accustomed to operating with only 10 carriers.”

Story Continues →

Evans Says Jobless Rate May Rise as Progress ‘Transitory’

BLOOMBERG by Joshua Zumbrun

VIEW ORIGINAL ARTICLE HERE

Federal Reserve Bank of Chicago President Charles Evans said the drop in the unemployment rate to 8.5 percent may be partially reversed in coming months.

“I’m a little concerned that the most recent improvement is going to be transitory and it might move up above 8.5 percent,” Evans said in response to audience questions after a speech today in Carmel, Indiana.

Evans said he forecasts that “at the end of the year, we’re not going to be very different from 8.5 percent unemployment.”

Fed policy makers will discuss at their Jan. 24-25 meeting in Washington whether more steps are needed to bolster an expanding U.S. economy. Employers last year added 1.64 million workers, the best year for the American worker since 2006. Even with the gain, little headway has been made in recovering the 8.75 million jobs lost as a result of the recession that ended in June 2009.

The Labor Department said last week that the unemployment rate dropped to 8.5 percent, down from 8.7 percent in November, 8.9 percent in October and 9.4 percent in December 2010.

Speaking to reporters after his speech, Evans said he “can’t discount the possibility” that the “headwinds” facing the economy could cause growth to slow, as happened in the summer of 2010 and 2011.

Policies in Place

“I’d prefer to have accommodative policies in place to make sure we don’t have to do that again,” he said. “If we behave very aggressively, we could find improved economic performance one or two years faster than if we didn’t take those actions.”

Evans said that after seeing “reasonably decent growth” in the fourth quarter of 2011, the expansion could slow to a 2 percent to 2.5 percent pace, which would be too weak to lower unemployment. If people return to the labor force, that could cause unemployment to increase, he said.

The weakness in the economy means that “substantial” monetary stimulus is called for, he told reporters, and that $600 billion in purchases “would be quite a good place to start.”

Mortgage-backed securities “could be a perfectly fine choice for those asset purchases,” Evans said. “Mortgages might have a more direct effect on the economy.”

The Fed purchased $1.25 trillion in mortgage-backed securities in its first round of large-scale asset purchases, or quantitative easing. Including both rounds of asset purchases, the Fed purchased a total of $2.3 trillion in assets.

Too Early

The speech Evans gave to the Indiana Bankers Association was the same as one he delivered two days ago in Lake Forest, Illinois. Evans said that central bankers in the past have withdrawn stimulus too early, causing the economy to relapse.

“Such errors happened in 1937 when the Fed prematurely withdrew accommodation,” Evans said at a meeting of the Indiana Bankers Association. “More recently, the Bank of Japan made the same mistake. Therefore, it is essential that the Fed clearly commit to a policy action that is measurable against our goals.”

To contact the reporter on this story: Joshua Zumbrun in Carmel, Indiana at jzumbrun@bloomberg.net