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(These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission.)

Federal finances are in shambles, and Americans should be amused if not disgusted by the explanations and solutions both political parties offer.

President Obama’s budget plan issued in February projects a $1.6 trillion deficit for 2011 and a cumulative shortfall of $11 trillion through 2021.

Things may get worse, as additional revenue and cost savings from health care reforms don’t materialize and the 4% growth assumed by the president’s budget for the next four years proves Pollyanna.

Time and again, Obama and House Democratic leader Nancy Pelosi have demagogued the problem, blaming two wars and tax cuts instigated by President Bush and the Great Recession.

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These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:

Greece is insolvent. No austerity or new taxes will pay its debts.

Like a homeowner owing four times income, belt tightening and a longer repayment period are not enough. Either, the house is sold to clear the debt or the bank takes back the house.

Greek bondholders don’t have that choice–they can’t repossess the Parthenon.

Greece is a sovereign country, and either it will be the recipient of endless German largess–an unlikely scenario–or European creditors, banks among them, will take a loss.

Now, the International Monetary Fund bluntly warns Spain, to avoid becoming the next Greece, that it must radically overhaul labor laws, pensions and consolidate banks–that’s tough for a sovereign that doesn’t print money in the midst of a market panic.

Germany and European banks can’t take that hit.

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These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:

Goldman Sachs, J.P. Morgan and other big Wall Street banks are awarding multi-million dollar bonuses to the same financiers who pushed the nation to the brink of financial ruin.

President Barack Obama voices outrage but fails to stem the abuse.

Wall Street leaders argue those bonuses were earned, much like jewel thieves refer to a big heist snatched from an impenetrable safe.

Wall Street has kept its mischief legal by salting the pockets of politicians running for Congress and president, and by making certain that key policy makers at the Treasury Department and the Federal Reserve are faithful Goldman Sachs alumni. Continue reading…

These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:

U.S. workers face a jobless recovery and more stimulus spending won’t fix what’s broke.

Unemployment fell to 10% in November, but progress was achieved only because 291,000 more adults did not look for work and were not counted in the monthly tally of jobless Americans.

Though job losses were trimmed, the footprint of the $789 billion dollar stimulus package was not to be found. Construction, despite an uptick in housing starts, shed 27,000 jobs, and governments added a paltry 7,000 new workers.

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These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:

For Democrats, the chickens are coming home to roost. Badly conceived efforts to rescue homeowners facing foreclosure, regional banks and the unemployed are failing.

Bureaucracy and corruption are to blame.

The president’s program to restructure mortgages for homeowners facing payments too large for their incomes or who owe more money than houses are worth has only helped several thousand, not millions as expected.

The Treasury now proposes to shame some banks and invasively monitor, nag and cajole mortgage servicing companies–much like autocratic Beijing abuses Chinese financial institutions.

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These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:

As you read in Wednesday morning’s Wall Street Journal, Sen. Christopher Dodd (D., Conn.) has offered a sweeping bank regulatory reform bill.

The bills introduced in the House and Senate (Dodd) focus too much on who does what–reorganizing who regulates what banks and which activities. Those would regulate banks in a badly and too costly way by imposing too many costly requirements instead of improving the principles of good banking practice and risk management.

For example, imposing a consul of regulators on systemic risk and oversight is a terrible mistake–either it will be management by committee (an interagency group that reaches consensus slowly and badly in crises) or it will be dominated by its chair who will be engaged in tugs of war with the Federal Reserve chairman at times when decisive, surgical and dramatic action is required.

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These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:

Friday’s employment report should provide a key indicator of economic recovery.

Monthly job losses must continue to fall to bolster confidence and consumer spending. In August, the economy shed 216,000 jobs, and the consensus forecast is for another 170,000 jobs lost in September. If job losses exceed 200,000, prospects for strong second-half gross domestic product growth will dim significantly.

Unemployment was 9.7% in August, is expected to rise to 9.8% in September, pierce 10% by year-end and stay there for a long time. Factoring in workers that have left the labor force and those working part-time who would prefer full-time jobs, the real unemployment rate exceeds 17%.

Since December 2007, the economy has lost seven million jobs, and the economy has not added a single private-sector job in the last decade.

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These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:

Wall Street greed and irresponsibility have nearly destroyed the U.S. economy. Big bonuses for bankers encourage reckless risk taking and were a principal cause of the credit crisis and Great Recession.

Pay must be regulated to avoid another calamity.

A generation ago, banks took deposits, made loans and collected payments. Bankers quickly felt the consequences of money lent to folks unlikely to repay.

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