We've made our list and checked it twice. These groups should be embarrassed to receive any gifts, after the way they've behaved this year.
You Better Watch Out
At the top of our worst-behaved list are the spendthrift national governments that have racked up huge budget deficits and national debts that their citizens will be forced to pay for. Government overspending has also contributed to the credit rating downgrade of several countries' national debt securities. To the extent that investors have faith in the credit ratings, lower credit ratings can mean higher borrowing costs and additional expenses that cash-strapped governments and their taxpayers can't afford. The United States, Italy, Spain, Greece, Ireland and Portugal all make this list.
At the top of our worst-behaved list are the spendthrift national governments that have racked up huge budget deficits and national debts that their citizens will be forced to pay for. Government overspending has also contributed to the credit rating downgrade of several countries' national debt securities. To the extent that investors have faith in the credit ratings, lower credit ratings can mean higher borrowing costs and additional expenses that cash-strapped governments and their taxpayers can't afford. The United States, Italy, Spain, Greece, Ireland and Portugal all make this list.
There are good reasons to be wary of credit ratings' accuracy. Credit downgrade or not, however, the general consensus is that these countries' governments have serious problems with debt and their ability to repay it. In the U.S., the problem is not just the amount of debt, but politicians' inability to agree on what do to about it.
The U.S. government's Super Committee is therefore the next troublemaker on our list for failing to agree on a way to cut the deficit. Before Thanksgiving, a group of 12 Republican and Democratic legislators was supposed to find a way to cut the federal budget deficit by $1,200 billion over the next 10 years. The two parties couldn't agree on a single issue.
Does the stalemate matter, since spending will be automatically cut by $1,200 billion anyway? That depends on how you feel about the cuts, half of which are to military spending and the rest of which are to entitlement programs, such as Medicare. The automatic cuts would seem to indicate that we're no worse off than when we started, but the Super Committee's failure actually puts U.S. government bonds at risk of a further credit downgrade. It also means further dithering about how to cut spending, since there are measures that allow Congress and the President to effectively continue the debate.
National governments aren't the only ones in trouble. Numerous state governments come in third on our list for racking up deficits and pension liabilities they can't afford. According to Moody's California, New York and New Jersey have the highest levels of tax-supported debt in the country. Most states don't have the agency's top credit rating, and the mean state tax-supported debt is almost $10 trillion.
You Better Not Cry
Fourth on our list is the Occupy Wall Street (OWS) protest, which began on Sept. 17 and quieted down significantly when police cleared Zuccotti Park in New York Nov. 15 to 17. OWS spawned related Occupy movements nationwide such as Occupy Oakland, where protesters managed to shut down the Port of Oakland. Evictions and reoccupations are ongoing in cities such as Washington, D.C. and San Francisco.
Fourth on our list is the Occupy Wall Street (OWS) protest, which began on Sept. 17 and quieted down significantly when police cleared Zuccotti Park in New York Nov. 15 to 17. OWS spawned related Occupy movements nationwide such as Occupy Oakland, where protesters managed to shut down the Port of Oakland. Evictions and reoccupations are ongoing in cities such as Washington, D.C. and San Francisco.
The Occupy protesters are unhappy about a number of issues and have been criticized for their lack of cohesion and direction. "Adbusters" magazine started the movement with the idea that tens of thousands of Americans could join together in a central location, collectively agree on a single demand and repeat it incessantly until the government was forced to act. "Adbusters'" OWS webpage states that their one single demand is "a presidential commission to separate money from politics." We're not sure this message has made it to the general public.
Despite claims of incohesion, official OWS statements are, in fact, centered on a single idea of "democracy not corporatocracy." On its OWS webpage, "Adbusters" states that it chose Wall Street for the protest because Wall Street is "the financial Gomorrah of America" and "the greatest corrupter of our democracy." According to OWS' Declaration of the Occupation of New York City, the protesters are upset about foreclosures, bailouts, exorbitant executive bonuses, employee rights, student loan debt, economic policy and corporate political donations, among other issues.
While the protesters have attracted plenty of attention, it's not clear that they have accomplished anything productive. The American public has been painfully aware of the country's most pressing political and economic problems since the financial crisis hit more than three years ago. In the areas near the protests, protesters have disturbed residents, workers and business owners, most of whom the protesters probably would categorize as belonging to "the 99%," and Occupy encampments gave rise to crime and violence. The protest had also cost New York City taxpayers at least $5 million in police overtime as of Oct. 27. A lot of people have been pepper sprayed and arrested, but all the perceived problems remain.
You Better Not Pout
To no basketball fan's surprise, there was an NBA lockout starting in July as the league's existing collective bargaining agreement (CBA) with the NBA Players' Association (the players' union) expired and no new agreement had been negotiated. NBA team owners "locked out" the players until a new CBA was put in place, which took five months to negotiate and caused the cancellation of the entire preseason, as well as the first six weeks of the regular season.
To no basketball fan's surprise, there was an NBA lockout starting in July as the league's existing collective bargaining agreement (CBA) with the NBA Players' Association (the players' union) expired and no new agreement had been negotiated. NBA team owners "locked out" the players until a new CBA was put in place, which took five months to negotiate and caused the cancellation of the entire preseason, as well as the first six weeks of the regular season.
Often thought of as "millionaires vs. billionaires," the lockout battle between the players and owners didn't resonate with fans; people didn't root for one side or the other to win, and instead just got sick of hearing about it. When the new CBA was announced, it seemed that the negotiated terms were exactly what everyone had expected would they would be, back in July, only the owners and players had wasted five months and several weeks of games to get to this same conclusion.
Fans needlessly missed out on the NBA games, but more tangibly, many basketball-related employees and businesses suffered. Catering companies, bars, retail stores, stadium employees, stadium parking lot attendants, team attendants and trainers that depend on revenue generated by the NBA games all suffered substantial economic losses while the owners and players quibbled over the division of basketball-related income. So, coal goes to those responsible for the NBA lockout for wasting everyone's time and hurting the livelihoods of so many workers.
The Bottom Line
If there is a bright side to some of this year's most significant problems, it's that more people understand why government debt is a problem, a lot of people got to publicly vent their frustrations and the basketball season will finally start up on Christmas day.
If there is a bright side to some of this year's most significant problems, it's that more people understand why government debt is a problem, a lot of people got to publicly vent their frustrations and the basketball season will finally start up on Christmas day.
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