What Caught My Eye Today

State of the Union - On the off chance that you had not heard, the State of the Union of these United States is "strong". That's good to hear. One less thing to worry about, I guess. The closing theme of President Obama's State of the Union speech was, "We do big things," an idea meant to serve as both a reminder of the enterprising spirit that has long propelled America through tough times as well as an optimistic assurance that the country is up to the enormous challenges it now faces. Obama sought to convince a still-skeptical public that he has a strong plan to spur job growth and the economy. He also tried to re-frame the debate away from one narrowly focused on reducing the deficit and towards the need to invest in the future and maintain America's competitive strength. On other topics, Obama pledged to begin removing U.S. troops from Afghanistan by July, and to finish the job of bringing them home from Iraq. He promised a plan to consolidate and reorganize the federal government to make it more efficient. Having watched the past few State of the Union addresses, I was most intrigued by the dynamics in the House chamber created by the fact that Democrats and Republicans decided to co-mingle rather than sit on opposing sides of the aisle. I found it to be a rather refreshing change in that you actually got to here Obama's address, largely uninterrupted by "spontaneous" standing ovations from his own party that were, no doubt, curbed due to the seating arrangements this time around and the lack of a herd mentality within either party.

National Debt - A new Congressional Budget Office report predicts the U.S. government's deficit will reach a record $1.5 trillion in 2011. The CBO is forecast the economy will grow by 3.1%, but that joblessness will remain above 9 percent this year and drop to a nationwide unemployment rate of 8.2% on Election Day in 2012. The deficit is expect drop to $1.1 trillion in 2012 and to $551 billion by 2015. It's worth mentioning that the current debt ceiling--set by Congress--is $14.3 trillion. Maybe I'm missing something here, but even if the deficits are shrinking, that fact that there are any suggests that the national debt is going to continue to rise. Forget about a "Sputnik moment" (for those of you confused by this, its a sound bite that Obama has been dropping into his speeches for the last couple of months), I'm thinking we're headed more toward a "Titanic moment". Oh, by the way, the CBO had one more ray of sunshine to pass along. Social Security will pay out $45 billion more in benefits in 2011 than it will collect in payroll taxes, further straining the nation's finances. The deficits will continue until the Social Security trust funds are eventually drained, in about 2037. I'm really starting to dislike these guys. Ironically, I turn 65 in 2037. Some birthday present.

Global Economics - Fred's Note: HSBC and Standard Chartered--both are London based banks--have recently release reports on predictions for how the global economic landscape will change between 2010 and 2050. Here are some of the more interesting findings. By 2050, emerging economies, led by China and India will be larger than developed economies. Small European nations, such as Austria, Belgium, Denmark, Norway and Sweden are expected to drop of the list of the 30 biggest economies. How bad is it that I didn't think these countries were currently on the list? By 2030, China and India's combined share of global output will hit 34%, while the U.S. share will slip to 12%. In fairness, we're talking about the output of close to 3 billion people in China and India versus the output of 439 million in the United States. Now if all this seems thoroughly depressing, especially if you are an American, consider the bigger picture. Rich nations grow more slowly than emerging ones because they have slower growing populations and are already close to the leading edge of technology. In other words, when you are already at the top of the heap, there is no place to go but down. But, fear not. As emerging markets become wealthier, their demand for sophisticated goods and services produced by development countries. That sounds promising, though I think the emerging markets are still going to come out ahead, what with most of the goods coming out of the United States having "Made in China" labels stamped all over them.