Prices stable and federal revenues stable

This chart from Mish.  Now with government revenue stable, the ideal would be to cur budget to balance debt, but not so.  We are just passing through a mild down turn, nothing to worry. Growth should be right back up to 2% by third quarter.




On the local level around California what we are seeing is a scramble to raise sales taxes to the maximum allowed by law.

Consumer and produce in one graph.  The graph tells me the consumer had been getting the shaft lately with consumer prices rising faster than producer prices.

Consumers are tapped out, they cannot afford another Keytnesian cycle, and the wealthy ain't funding another cycle.

Something is going to give away here, and I think the loser might be California and Illinois pensions. When, as Jerry says, the economics profession gives up a chunk of its public sector pensions, then economists will realize they should have acted like economists many years ago.