BUSINESS

Constant Deficit Panic Bumming Americans Out, For Some Reason: Seven And A Half Things To Know

01/18/2013 08:00 am ET

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Thing One: The Paniconomy: Sometimes you are just so ungrateful, Americans. Here Washington is keeping itself in a constant state of panic about solving your distant-future deficit problems, and instead of thanking them for it, you're just all bummed out about it.

A new Wall Street Journal/NBC poll finds that Americans are "riddled with pessimism about the economy," the WSJ writes. Only 34 percent of respondents thought the economy was going to be good for their families this year, while a whopping 60 percent see 2013 as a year to "hold back and save, because harder times are ahead." And why all the long faces about the economy? Why, it's Washington: More than half of respondents said never-ending battles over the budget had made them more pessimistic about the economy.

The findings gibe with a recent poll of consumers by the Conference Board, a private research firm, which found that confidence tumbled in December, with expectations about the economy's future absolutely plunging, "most likely caused by uncertainty surrounding the oncoming fiscal cliff," the Conference Board wrote in a press release in December. The cliff was halfway averted at the last minute, but Washington turned immediately to the debt-ceiling fight, which will be followed soon by fights over the government's funding and fiscal-cliff budget cuts that were kicked down the road by a couple of months. The University of Michigan releases its consumer-sentiment index this morning, and it is likely that confidence hasn't exactly come bounding back.

It's starting to look like the debt-ceiling fight, too, will be kicked down the road just a little bit; Rep. Paul Ryan (R-Munster) said House Republicans were thinking of approving a short-term increase in the debt ceiling, the Huffington Post's Sabrina Siddiqui writes. That will be no help to confidence or financial markets, which are edgy about the prospect of a U.S. debt default, according to Reuters. A delay only means our state of deficit-related panic will keep going for months more.

And the hilarious (or depressing) thing about all of this is just how unnecessary and self-defeating it is: You might have missed this, what with all of the people running around with their hair on fire, but the deficit is actually shrinking, writes Paul Krugman in the New York Times this morning. That's happening naturally, as the economy improves. The better the economy, the higher the tax revenue, the lower the deficit. Why, if not for all of this panic -- which led to the economically harmful expiration of the payroll-tax cut, which is why your paycheck looks smaller this year -- then consumers would be happier, the economy would be doing far better, and the deficit would be shrinking even more quickly.

Thing Two: China Wonders What The Hell Is Wrong With Rest Of Us: Partially as a result of the austerity-driven recession in Europe, China's economic growth last year was the worst since 1999, Reuters writes. But growth accelerated at the end of the year, despite America's deficit-panic-driven slowdown. Why did growth rebound? Because China's government spent a butt-ton of money on infrastructure. Turns out expansionary economic policies lead to economic expansion.

Thing Three: Boeing's Battery Drain: Now every Boeing 787 around the world is grounded while aviation regulators try to figure out what's making the newfangled plane's lithium-ion batteries ooze battery juice and smoke in flight. The WSJ reports that the FAA approved the 787 based on data given to it by Boeing that showed the batteries were "essentially foolproof." This despite the fact that air regulators have worried about those batteries for years, the WSJ writes in a separate story. The Washington Post checks with model-airplane enthusiasts, who confirm that, yep, lithium-ion batteries quite often burst into "spectacular fires."

Thing Four: Mortgage Crisis Lingers On: If you're mad at the big banks for destroying the economy a few years back, you can at least take some comfort in knowing that they are still suffering, too. Bank of America and Citigroup yesterday both reported earnings that disappointed Wall Street. Part of the problem for both is that they are still taking losses from bad mortgages, writes the NYT. The big settlements over their various evil doings don't help much. But the news is not all bad for the banks: They get a big tax deduction for their latest settlement, over their foreclosure misdeeds, the Associated Press writes.

Thing Five: Biker's Benighted Banker: Thomas Weisel, the banker who founded and bankrolled Lance Armstrong's cycling team, was apparently the only guy in cycling who didn't know Armstrong was stone-cold doping all the time, the NYT writes. As you might have heard, Armstrong confessed his doping to Oprah last night.

Thing Six: Your Money's No Good Here: The Cayman Islands is apparently kind of tired of being synonymous with shady finances, so it plans to "make public the names of thousands of previously hidden companies and their directors," the Financial Times writes. The move comes after years of withering criticism by politicians in the U.S. and elsewhere over the island's being a haven for people and companies trying to hide money from the IRS and other authorities. Oh, well, Mitt Romney, you've still got Switzerland.

Thing Seven: Samsung Steals Apple's Spotlight: Hype for Samsung's new phone, probably called the Galaxy S IV, is reaching Apple-like levels, the WSJ writes. That adds to a string of recent bad news for Apple, which recently drove its stock price below $500, down from $700 in September.

Thing Seven And One Half: Exploration Day: What is it about January 18 that always has people finding things on it? On this day in 1778, for example, Capt. James Cook became the first European to stumble upon Hawaii. Years earlier, Cook had cruised through Australia's Botany Bay, and on Jan. 18, 1788, the first boatload of English settlers arrived there and immediately started using terms like "shrimp on the barbie." And on this day in 1912, another Englishman, Robert Scott, arrived triumphantly at the South Pole -- only to find that Norway's Roald Amundsen was already there, and had been for a month.

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Calendar Du Jour:

Economic Data:

9:55 a.m. ET: University of Michigan Consumer Sentiment for January

Corporate Earnings:

General Electric

Morgan Stanley

Heard On The Tweets:

-- Calendar and tweets rounded up by Alexis Kleinman.

And you can follow us on Twitter, too: @Alexis Kleinman and @MarkGongloff

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