1115.org

The state of the economy, encapsulated in an AP report yesterday:

No good news today on the economic front. Consumer confidence plunged, the wholesale inflation rate soared, the number of homes being foreclosed jumped, home prices fell sharply and a report predicts big increases in health care costs.

And they go on to spell out each one of those developments:

Consumer confidence weakened significantly as Americans worry about less-favorable business conditions and job prospects. The New York-based Conference Board says in a report released on Tuesday that its Consumer Confidence Index plunged in February to 75.0 from a revised 87.3 in January.

The reading — the lowest since the index registered 64.8 in February 2003 — is far below the 83.0 analysts expected.

The index measures how consumers feel now about the economy. It has been weakening since July, suggesting that wary consumers may retrench financially, which could fatigue the economy further.

Inflation at the wholesale level soared in January, pushed higher by rising costs for food, energy and medicine. The monthly increase carried the annual inflation rate to its fastest jump in a quarter century.

The Labor Department said Tuesday that wholesale prices rose 1 percent last month, more than double the 0.4 percent increase that economists had been expecting.

The January surge left wholesale prices rising by 7.5 percent over the past 12 months, the fastest pace in more than 26 years, since prices had risen at a 7.5 percent pace in the 12 months ending in October 1981. (Just three days ago, a financial journalist I respect said to me that inflation was going to start having a bigger footprint in the-economy-is-screwed-isn’t-it stories.)

The number of homes facing foreclosure jumped 57 percent in January compared to a year ago, with lenders increasingly forced to take possession of homes they couldn’t unload at auctions, a mortgage research firm said Monday.

Nationwide, some 233,001 homes received at least one notice from lenders last month related to overdue payments, compared with 148,425 a year earlier, according to Irvine, Calif.-based RealtyTrac Inc. Nearly half of the total involved first-time default notices.

The worsening situation came despite ongoing efforts by lenders to help borrowers manage their payments by modifying loan terms, working out long-term repayment plans and other actions

U.S. home prices lost 8.9 percent in the final quarter of 2007, Standard & Poor’s said Tuesday, marking a full year of declining values and the steepest drop in the 20-year history of its housing index.

“We reached a somber year-end for the housing market in 2007,” said one of the index’s creators Robert Shiller. “Home prices across the nation and in most metro areas are significantly lower than where they were a year ago. Wherever you look things look bleak.”

The S&P/Case-Shiller home price indices, which include a quarterly index, a 20-city index and a 10-city index, reflect year-over-year declines in 17 metropolitan areas with double-digit declines in eight of them.

By 2017, total health care spending will double to more than $4 trillion a year, accounting for one of every $5 the nation spends, the federal government projects.

The 6.7 percent annual increase in spending — nearly three times the rate of inflation_ will be largely driven by higher prices and an increased demand for care, the Centers for Medicare and Medicaid Services said Monday. Other factors in the mix include a growing and aging population. The first wave of baby boomers become eligible for Medicare beginning in 2011.

With the aging population, the federal government will be picking up the tab for a growing share of the nation’s medical expenses. Overall, federal and state governments accounted for about 46 percent of health expenditures in 2006. That percentage will increase to 49 percent over the next decade.

But there’s no cause for alarm. The president is right on top of the situation. Here’s the inimitable La Perino responding to the opening question at yesterday’s press briefing:

Q There was some bad economic news today. Consumer confidence plunged, the home prices fell — had their steepest decline in the 20 years that the Standard & Poor’s has been keeping records, and wholesale inflation rose at its fastest pace in a quarter century. What’s the White House reaction to this economic — spate of economic news?

MS. PERINO: The President has been briefed on all these numbers. He gets a regular briefing; he’s very interested in making sure that he is kept up to date. There is no doubt, as he has said, that we are in a softening of the economy, we’re in a slowdown. What the President has worked to do with bipartisan members of Congress is to pass a short-term stimulus package of $157 billion, checks of which will be headed to taxpayers within the next couple of months; in addition to that, giving small business owners and other businesses tax incentives that they can put into — that they can start using right now, so that they can get that into their operations and help us — help the whole economy prevent how deep the cycle will be.

As you know, economies cycle. When the President took office, the economy was in a downturn. Then we had 52 consecutive months of job growth, starting in August of 2003, and now we’re in a softening period. And the question is how soft is it going to be, and how steep is the downturn going to be. And the President believes that one of the ways to make sure that it’s not as steep as it could be is to do the stimulus package, and to make sure that we have pro-growth policies, including making sure that Congress does not raise taxes on the American people.

Feel better already?

Bush has been briefed, because he’s very interested in making sure he gets regular briefings. And he’s watching right along with the rest of us to see how soft and how steep this downturn will be. Because he doesn’t really, like, know what he can actually, you know, do. There isn’t apparently any magic pill. Apparently, cutting taxes for the rich — which Bush and Bushies have sworn by for years, and which is supposed to have been working like a charm all the time they’ve been swearing by it — isn’t going to help. So we’re invited to clutch at straws. And truth be told, to share in the blame. Because it is every person who uses his stimulus package check to pay off his credit card balance (instead of, for example, rushing out to buy Viagra) who will be responsible for the failure of the President’s Grand Bipartisan Stimulus Package Economy Rescue Plan.

And remember that the stimulus package is “one of the ways to make sure that it’s not as steep as it could be”. Except that there aren’t, apparently, any other ways. The stimulus package is not just “‘one of the ways”, it’s the only one. That’s the Bush administration for you. Keeping it real. By using the English language in truly stimulating ways.

(Of course, it is entirely posible that some intrepid member of the White House press corpse will go back to this today and ask Perino: “Yesterday you said ‘And the President believes that one of the ways to make sure that it’s not as steep as it could be is to do the stimulus package’. What are some of the others, Dana?”)