Archive for July, 2010

Federal Debt and the Risk of a Financial Crisis

Congressional Budget Office Director’s Blog

In fiscal crises in a number of countries around the world, investors have lost confidence in governments’ abilities to manage their budgets, and those governments have lost their ability to borrow at affordable rates. With U.S. government debt already at a level that is high by historical standards, and the prospect that, under current policies, federal debt would continue to grow, it is possible that interest rates might rise gradually as investors’ confidence in the U.S. government’s finances declined, giving legislators sufficient time to make policy choices that could avert a crisis. It is also possible, however, that investors would lose confidence abruptly and interest rates on government debt would rise sharply, as evidenced by the experiences of other countries.

Unfortunately, there is no way to predict with any confidence whether and when such a crisis might occur in the United States. In a brief (“Federal Debt and the Risk of a Fiscal Crisis“) released today, CBO notes that there is no identifiable “tipping point” of debt relative to the nation’s output (gross domestic product, or GDP) that would indicate that such a crisis is likely or imminent. However, in the United States, the ratio of federal debt to GDP is climbing into unfamiliar territory—and all else being equal, the higher the debt, the greater the risk of such a crisis.

Over the past few years, U.S. government debt held by the public has grown rapidly. According to CBO’s projections, federal debt held by the public will stand at 62 percent of GDP at the end of fiscal year 2010, having risen from 36 percent at the end of fiscal year 2007, just before the recession began. In only one other period in U.S. history—during and shortly after World War II—has that figure exceeded 50 percent.

Further increases in federal debt relative to the nation’s output almost certainly lie ahead if current policies remain in place. The aging of the population and rising costs for health care will push federal spending, measured as a percentage of GDP, well above the levels experienced in recent decades. Unless policymakers restrain the growth of spending, increase revenues significantly as a share of GDP, or adopt some combination of those two approaches, growing budget deficits will cause debt to rise to unsupportable levels, as shown in the figure below. (For more details, see CBO’s recent report The Long-Term Budget Outlook.)…

Over the past few years, U.S. government debt held by the public has grown rapidly—to the point that, compared with the total output of the economy, it is now higher than it has ever been except during the period around World War II. The recent increase in debt has been the result of three sets of factors: an imbalance between federal revenues and spending that predates the recession and the recent turmoil in financial markets, sharply lower revenues and elevated spending that derive directly from those economic conditions, and the costs of various federal policies implemented in response to the conditions.

Further increases in federal debt relative to the nation’s output (gross domestic product, or GDP) almost certainly lie ahead if current policies remain in place. The aging of the population and rising costs for health care will push federal spending, measured as a percentage of GDP, well above the levels experienced in recent decades.  Unless policymakers restrain the growth of spending, increase revenues significantly as a share of GDP, or adopt some combination of those two approaches, growing budget deficits will cause debt to rise to unsupportable levels.

Although deficits during or shortly after a recession generally hasten economic recovery, persistent deficits and continually mounting debt would have several negative economic consequences for the United States. Some of those consequences would arise gradually: A growing portion of people’s savings would go to purchase government debt rather than toward investments in productive capital goods such as factories and computers; that “crowding out” of investment would lead to lower output and incomes than would otherwise occur. In addition, if the payment of interest on the extra debt was financed by imposing higher marginal tax rates, those rates would discourage work and saving and further reduce output. Rising interest costs might also force reductions in spending on important government programs. Moreover, rising debt would increasingly restrict the ability of policymakers to use fiscal policy to respond to unexpected challenges, such as economic downturns or international crises.

Beyond those gradual consequences, a growing level of federal debt would also increase the probability of a sudden fiscal crisis, during which investors would lose confidence in the government’s ability to manage its budget, and the government would thereby lose its ability to borrow at affordable rates. It is possible that interest rates would rise gradually as investors’ confidence declined, giving legislators advance warning of the worsening situation and sufficient time to make policy choices that could avert a crisis.

But as other countries’ experiences show, it is also possible that investors would lose confidence abruptly and interest rates on government debt would rise sharply. The exact point at which such a crisis might occur for the United States is unknown, in part because the ratio of federal debt to GDP is climbing into unfamiliar territory and in part because the risk of a crisis is influenced by a number of other factors, including the government’s long-term budget outlook, its near-term borrowing needs, and the health of the economy. When fiscal crises do occur, they often happen during an economic downturn, which amplifies the difficulties of adjusting fiscal policy in response.

If the United States encountered a fiscal crisis, the abrupt rise in interest rates would reflect investors’ fears that the government would renege on the terms of its existing debt or that it would increase the supply of money to finance its activities or pay creditors and thereby boost inflation. To restore investors’ confidence, policymakers would probably need to enact spending cuts or tax increases more drastic and painful than those that would have been necessary had the adjustments come sooner.

Past and Projected Federal Debt Held by the Public

Compared with the size of the economy, federal debt held by the public is high by historical standards but is not without precedent (see Figure 1).2 Previous sharp run-ups have generally occurred during wars: During the Civil War and World War I, debt climbed by about 30 percent of GDP; in World War II, debt surged by nearly 80 percent of GDP.

In contrast, the recent jump in debt—so far, roughly 25 percent of GDP—can be attributed in part to an ongoing imbalance between federal revenues and spending but, more important, to the financial crisis and deep recession and the policy responses to those developments.

According to the Congressional Budget Office’s (CBO’s) projections, federal debt held by the public will stand at 62 percent of GDP at the end of fiscal year 2010, having risen from 36 percent at the end of fiscal year 2007, just before the recession began. In only one other period in U.S. history—during and shortly after World War II—has that figure exceeded 50 percent.

Looking forward, CBO has projected long-term budget outcomes under two different sets of assumptions about future policies for revenues and spending.3 The extendedbaseline scenario adheres closely to current law, following CBO’s 10-year baseline budget projections through 2020 (with adjustments for the recently enacted health care legislation) and then roughly extending the baseline concept for subsequent decades.

Under that scenario, annual budget deficits would decline over the next few years, and both deficits and debt would remain stable relative to GDP for several years after that. But then growth in spending on health care programs and Social Security would cause deficits to increase, and debt would once again grow faster than the economy. By 2035, the debt would equal about 80 percent of GDP.

However, certain changes to current law are widely expected to be made in some form over the next few years, and other provisions of current law might be difficult to sustain for a long period.

Therefore, CBO also developed an alternative fiscal scenario, in which most of the tax cuts originally enacted in 2001 and 2003 are extended (rather than allowed to expire at the end of this year as scheduled under current law); the alternative minimum tax is indexed for inflation (halting its growing reach under current law); Medicare’s payments to physicians rise over time (which would not happen under current law); tax law evolves in the long run so that tax revenues remain at about 19 percent of GDP; and some other aspects of current law are adjusted in coming years.

Under that scenario, deficits would also decline for a few years after 2010 and then grow again, but that growth would occur sooner and at a much faster rate than under the extended-baseline scenario. By 2020, debt would equal nearly 90 percent of GDP. After that, the growing imbalance between revenues and noninterest spending, combined with the spiraling cost of interest payments, would swiftly push federal debt to unsustainable levels.

Debt held by the public would exceed its historical peak of about 110 percent of GDP by 2025 and would reach about 180 percent of GDP in 2035. Indeed, if those estimates took into account the harmful effects that rising debt would have on economic growth and interest rates, the projected increase in debt would occur even more rapidly. Under the alternative fiscal scenario, the surge in debt relative to the country’s output would pose a clear threat of a fiscal crisis during the next two decades.

Some Consequences of Growing Debt

The economic effects of budget deficits and accumulating government debt can differ in the short run and the long run, depending importantly on the prevailing economic conditions when the deficits are incurred. During and shortly after a recession, the higher spending or lower taxes that generate larger deficits generally hasten economic recovery. In particular, when many workers are unemployed, and much capacity (such as equipment and buildings) is unused, higher government spending and lower tax revenues usually increase overall demand for goods and services, which leads firms to boost their output and hire more workers.4 But those short-term benefits carry with them long-term costs: Unless offsetting actions are taken at some point to pay off the additional government debt accumulated while the economy was weak, people’s future incomes will tend to be lower than they otherwise would have been.

More generally, persistent, large deficits that are not related to economic slowdowns—like the deficits that CBO projects for coming decades—have a number of significant negative consequences. Therefore, the sooner that policymakers agree on credible long-term changes to government spending and revenues, and the sooner that those changes are carried out without impeding the economic recovery, the smaller will be the damage to the economy from growing federal debt.

Crowding Out of Investment

One impact of rising debt is that increased government borrowing tends to crowd out private investment in productive capital, because the portion of people’s savings used to buy government securities is not available to fund such investment. The result is a smaller capital stock and lower output and incomes in the long run than would otherwise be the case.

The effect of debt on investment can be offset by borrowing from foreign individuals or institutions. But additional inflows of foreign capital also create the obligation for more profits and interest to flow overseas in the future. Thus, although flows of capital into a country can help maintain domestic investment, most of the gains from that additional investment do not accrue to the residents.

Need for Higher Taxes or Less Spending on Government Programs

Another impact of rising debt is that, as government debt grows, so does the amount of interest the government pays to its lenders (all else being equal). If policymakers wished to maintain government benefits and services while the amount of interest paid grew, tax revenues would eventually have to rise as well. To the extent that additional tax revenues were generated by increasing marginal tax rates, those rates would discourage work and saving, further reducing output and incomes. Alternatively, policymakers could choose to offset the rising interest costs, at least in part, by reductions in benefits and services.

To be sure, slowing the growth of government debt to hold down future interest payments would require increases in taxes or reductions in government benefits and services anyway. However, earlier action would permit the changes in policy to be smaller and more gradual, and it would give people more time to adjust to the changes—although it would also require more sacrifices by current generations to benefit future ones.

Reduced Ability to Respond to Domestic and International Problems

Having a small amount of debt outstanding gives policymakers the ability to borrow to address significant unexpected events such as recessions, financial crises, and wars. A large amount of debt, however, leaves less flexibility for government actions to address financial and economic crises, which, in many countries, have been very costly to the government (as well as to residents).5 A large amount of debt could also harm national security by constraining military spending in times of crisis or limiting the ability to prepare for a crisis.

In the United States, the level of federal debt a few years ago gave the government the flexibility to boost spending and cut taxes to stimulate economic activity, to provide public funding to stabilize the financial sector, and to continue paying for other programs, even as tax revenues dropped sharply because of the decline in output and incomes. If the amount of federal debt (relative to output) stays at its current level or increases further, the government would find it more difficult to undertake similar policies in the future. Moreover, the reduced financial flexibility and increased dependence on foreign investors that would accompany a rising debt could weaken the United States’ international leadership.

An Increased Chance of a Fiscal Crisis

A rising level of government debt would have another significant negative consequence. Combined with an unfavorable long-term budget outlook, it would increase the probability of a fiscal crisis for the United States. In such a crisis, investors become unwilling to finance all of a government’s borrowing needs unless they are compensated with very high interest rates; as a result, the interest rates on government debt rise suddenly and sharply relative to rates of return on other assets.

Unfortunately, there is no way to predict with any confidence whether and when such a crisis might occur in the United States; in particular, there is no identifiable tipping point of debt relative to GDP indicating that a crisis is likely or imminent.  But all else being equal, the higher the debt, the greater the risk of such a crisis.

Fiscal crises around the world have often begun during recessions and, in turn, have often exacerbated them.6 Frequently, such a crisis was triggered by news that a government would, for any number of reasons, need to borrow an unexpectedly large amount of money. Then, as investors lost confidence and interest rates spiked, borrowing became more difficult and expensive for the government.

That development forced policymakers to immediately and substantially cut spending and increase taxes to reassure investors—or to renege on the terms of its existing debt or increase the supply of money and boost inflation. In some cases, the crisis made borrowing more expensive for private borrowers as well, because uncertainty about the government’s policy response to the crisis raised risk premiums throughout the economy.  Higher private interest rates, combined with reductions in government spending and increases in taxes, have tended to worsen economic conditions in the short term.

The history of fiscal crises in other countries does not necessarily indicate the conditions under which investors might lose confidence in the U.S. government’s ability to manage its budget or the consequences for the nation of such a loss of confidence. On the one hand, the United States may be able to issue more debt (relative to output) than the governments of other countries can, without triggering a crisis, because the United States has often been viewed as a “safe haven” by investors around the world, and the U.S. government’s securities have often been viewed as being among the safest investments in the world. On the other hand, the United States may not be able to issue as much debt as the governments of other countries can because the private saving rate has been lower in the United States than in most developed countries, and a significant share of U.S. debt has been sold to foreign investors. Quantifying those factors and the many other factors that could be relevant to how a fiscal crisis would unfold in the United States is beyond the scope of this brief.

Nonetheless, a review of fiscal crises in Argentina, Ireland, and Greece in the past decade reveals instructive common features and differences. For all three countries, the crises occurred abruptly and during recessions. However, the crises occurred at different levels of government debt relative to GDP, showing that the tipping point for a crisis does not depend solely on the debt-to-GDP ratio; the government’s long-term budget outlook, its near-term borrowing needs, and the health of the economy are also important. All three of those crises illustrate the difficulty of formulating effective policy responses once investors lose confidence in a government.


Argentina’s experience offers an example of the very serious consequences that can arise from a fiscal crisis. Although interest rates on Argentina’s debt had been comparable for many years with those on debt of other countries in emerging markets, Argentina’s fortunes changed quickly when it found itself suffering from a significant recession in 2000 and 2001. During the first half of 2001, with government debt equal to about 50 percent of the country’s GDP, investors became increasingly worried about Argentina’s fiscal situation—in part because of the country’s earlier defaults on its debt. As a result, investors demanded premiums for holding government debt that increased interest rates by more than 5 percentage points.7 A few months later, as it became clear that Argentina was not able to afford (or willing to make) the interest payments on its debt, interest rates jumped again to levels so high that the government was effectively unable to borrow. Subsequently, Argentina ceased paying its creditors, and ever since it has been unable to raise funds in international markets. Argentina’s fiscal crisis accentuated its underlying economic problems, and from 2001 to 2002, the country’s GDP dropped by nearly 11 percent.


In spite of a good credit history and a relatively small amount of government debt, Ireland experienced a fiscal crisis after being overwhelmed by large spending obligations, including those related to the recent financial crisis.  As recently as 2007, Ireland carried a central government debt of only about 20 percent of output; interest rates on Irish bonds at the time suggested that investors considered those bonds to be almost as safe as German bonds, which are generally perceived as stable and reliable investments.  Over the next two years, however, Ireland’s debt grew very rapidly as the country dealt with massive failures of financial institutions and a major economic downturn. Investors began to lose confidence that Ireland could manage its rapidly expanding obligations, and by March of last year, investors in 10-year Irish bonds demanded almost 3 percentage points in extra annual interest relative to the rate for German bonds of the same maturity (see Figure 2).

Starting in April 2009, Ireland responded with an aggressive fiscal austerity program in which it raised taxes and reduced spending significantly. The program included cutting wages for public-sector employees by 15 percent, levying additional taxes, and sharply trimming a number of social programs. Investors initially responded with renewed confidence, which was reflected in reduced interest rates on Irish debt and lower rates for insurance on Irish bonds (although those measures of perceived risk remained less favorable than they had been before the crisis).8

However, the budget deficit in Ireland remains large and the Organisation for Economic Co-operation and Development (OECD) projected late last year that Ireland’s debt would increase to approximately 70 percent of GDP by the end of 2010.9 Some observers believe that the austerity program may not be sufficient to put Ireland’s debt on a sustainable path, and investors may share that view, because interest rates on 10-year Irish bonds have risen again to almost 3 percentage points above those on comparable German bonds.10


In 2008, before the recent global recession, the central government in Greece owed its creditors an amount equal to approximately 110 percent of the country’s GDP, a ratio that rose further as the recession lowered output and increased the deficit by weakening the country’s tax base.  In early 2009, interest rates on 10-year Greek bonds jumped by 2 percentage points over rates on comparable German bonds (see Figure 2). Investors’ confidence, as measured by both interest rates on Greek government debt and the cost of buying insurance against a default on such debt, deteriorated throughout 2009. By January 2010, Greece was forced to pay an interest rate on 10-year bonds that was 4 percentage points higher than Germany was paying.

Greece’s crisis continued to worsen as interest rates climbed higher in the spring. In May 2010, a consortium of European countries and the International Monetary Fund pledged to lend to the Greek government up to 120 billion euros (an amount equal to just over 50 percent of Greece’s GDP last year). Greece also adopted a fiscal austerity program that includes significant reductions in benefits and public services as well as increases in taxes.

The actions by the Greek government and other governments caused the crisis to abate temporarily. However, it is unclear whether investors will be convinced that spending will be cut or taxes increased sufficiently to put the country on a sustainable fiscal path. Moreover, the amount of maturing debt that the country needs to refinance in the next few years, in addition to the debt that it needs to sell to finance its ongoing deficit, has reinforced investors’ concerns that Greece will be unable to make all of the required payments on its debt. As a result, interest rates on 10-year Greek bonds have climbed to percentage points above the rates on 10-year German bonds.

How Might a Fiscal Crisis Affect the United States?

In all three of those fiscal crises in other countries, sharp increases in interest rates on government debt forced the affected governments to make difficult choices. The U.S.  government would also face difficult choices if interest rates on its debt spiked. For example, a 4-percentagepoint across-the-board increase in interest rates would raise federal interest payments next year by about $100 billion relative to CBO’s baseline projection—a jump of more than 40 percent. As longer-term debt matured and was refinanced at such higher rates, the difference in the annual interest burden would mount; by 2015, if such higher-than-anticipated rates persisted, net interest would be nearly double the roughly $460 billion that CBO currently projects for that year.11

Moreover, if debt grew over time relative to GDP, the effect of a spike in interest rates would become increasingly pronounced.  A sudden increase in interest rates would also reduce the market value of outstanding government bonds, inflicting losses on investors who hold them. That decline could precipitate a broader financial crisis by causing losses for mutual funds, pension funds, insurance companies, banks, and other holders of federal debt—losses that might be large enough to cause some financial institutions to fail.12

Foreign investors, who owned nearly half of U.S. debt held by the public in May 2010 (or about $4.0 trillion, $1.7 trillion of which was held by Japan and China alone), would also face substantial losses.13 If a fiscal crisis occurred in the United States, policy options for responding to it would be limited and unattractive. In particular, the government would need to undertake some combination of three actions: restructuring its debt (that is, seeking to modify the contractual terms of existing obligations); pursuing inflationary monetary policy (that is, increasing the supply of money); and adopting an austerity program of spending cuts and tax increases.

Restructuring Debt

Governments can attempt to change the terms of their existing debt—for example, by changing the payment schedule—but that approach tends to be very costly for countries that try it.14 Any discussions or actions by U.S. policymakers that raised the perceived likelihood of that outcome would cause investors to demand higher interest rates immediately, if they were willing to extend additional credit at all.15 Furthermore, investors would demand a large interest premium on subsequent loans for many years.

Inflationary Monetary Policy

An alternative approach is to increase the supply of money in the economy. But as governments create money to finance their activities or pay creditors during fiscal crises, they raise inflation. Higher inflation has negative consequences for the economy, especially if inflation moves above the moderate rates seen in most developed countries in recent years.16

Higher inflation might appear to benefit the U.S. government financially because the value of the outstanding debt (which is mostly fixed in dollar terms) would be lowered relative to the size of the economy (which would increase when measured in dollar terms).17 However, higher inflation would also increase the size of future budget deficits. Specifically, if inflation was 1 percentage point higher over the next decade than the rate CBO has projected, budget deficits during those years would be roughly $700 billion larger.18

Several factors contribute to that estimate. Investors, after having their investments devalued by the rise in prices in the economy, would demand higher interest rates in the future, even if inflation was eventually reduced; thus, as debt matured, it would be refinanced at higher rates. Indeed, even raising the perceived likelihood of higher inflation during a fiscal crisis would trigger immediate further increases in interest rates.

Moreover, the amounts of many government benefits rise when prices rise, and much of the income tax system is indexed to inflation. On balance, the increase in tax revenues resulting from higher inflation would be more than offset by higher payments for benefit programs and higher interest payments as the outstanding debt rolled over and ongoing deficits required the issuance of more debt.19

Increasing Taxes and Reducing Spending

Austerity programs generally include both tax increases and spending reductions. When fiscal crises occur during recessions, as they often do, such policy changes can exacerbate the economic downturns—although some studies suggest that certain types of fiscal austerity programs tend, at least in some circumstances, to stimulate economic growth.21

The later that actions are taken to address persistent budget imbalances, the more severe they will have to be.  CBO’s long-term projections for the federal budget indicate that an immediate, permanent cut in spending or increase in revenues equal to about 1 percent of GDP (relative to the policies assumed for the extended-baseline scenario) or about 5 percent of GDP (relative to the policies assumed for the alternative fiscal scenario) would prevent a net increase in the U.S. debt-to-GDP ratio over the next 25 years.

The latter would be equivalent to roughly 20 percent of all of the government’s noninterest spending this year. Actions taken later, particularly if there was a fiscal crisis, would need to be significantly greater to achieve that same objective. Larger and more abrupt changes in fiscal policy, such as substantial cuts in government benefit programs, would be more difficult for people to adjust to than smaller and more gradual changes.

Related Links:

Ludwig von Mises Institute: Markets and Data

Bloomberg: IMF Says U.S. Financial System May Need $76 Billion in Capital

The Heritage Foundation: Federal Spending by the Numbers 2010

HotAir: Underneath the GDP report

The Daily Caller: Clinton comptroller blasts government workers’ accrual of benefits at expense of private sector workers

NY Times: With Recovery Slowing, the Jobs Outlook Dims

American Thinker:  What Can’t the U.S. Afford?



Memo outlines backdoor ‘amnesty’ plan

Immigration staffers cite tools available without reform

Wash Times – By Stephen Dinan

With Congress gridlocked on an immigration bill, the Obama administration is considering using a back door to stop deporting many illegal immigrants – what a draft government memo said could be “a non-legislative version of amnesty.”

The memo, addressed to U.S. Citizenship and Immigration Services Director Alejandro Mayorkas and written by four agency staffers, lists tools it says the administration has to “reduce the threat of removal” for many illegal immigrants who have run afoul of immigration authorities.

“In the absence of comprehensive immigration reform, USCIS can extend benefits and/or protections to many individuals and groups by issuing new guidance and regulations, exercising discretion with regard to parole-in-place, deferred action and the issuance of Notices to Appear,” the staffers wrote in the memo, which was obtained by Sen. Charles E. Grassley, Iowa Republican.

The memo suggests that in-depth discussions have occurred on how to keep many illegal immigrants in the country, which would be at least a temporary alternative to the proposals Democrats in Congress have made to legalize illegal immigrants…

Rosemary Jenks, government relations manager for NumbersUSA, an organization that advocates for stricter immigration limits, said the memo is “an outrageous usurpation of congressional authority. It is unconstitutional, and a slap in the face to the American people.”

She said that the memo could explain why the push for an immigration bill has faltered in Congress.

“This makes sense of the fact that [Senate Majority Leader Harry] Reid and [House Speaker Nancy] Pelosi and Obama are sitting back calmly content with not moving immigration reform this year – because they know Obama is trying to take care of it for them, without Democrats having to be tied down to a vote before the election,” she said…

Related Previous Posts:

Nothing Else I Can Say…

Immigration Reform: What A Helpless Speech !!!

Only In America

American Politics: Cheap Labour, Cheap Votes, and Cheap Tomatoes…

Democrats Conceptual Proposal For Immigration Reform: New Amnesty Bill

John McCain: A “Real” Republican

E-Verify: Sí, podemos! Es La Ley! (Yes, We Can! It’s The Law)

Related Links:

AZ Central: Brewer: 1070 may need ‘tweaking’

The Heritage Foundation:  Time to Stop the Rush for “Amnesty” Immigration Reform

Yahoo News (AP): Ariz. files appeal as sheriff launches new sweep

Immigration Laws (USCIS Links)

USCIS testimonies to Congress


HOUSTON CHRONICLE:   Feds moving to dismiss some deportation cases


Obama Flip-Flops: Does He Know Who Snooki Is, Or Not?

Gawker – By Maureen O’Connor

Barack Obama has been caught in a contradiction. Asked about Jersey Shore star Snooki on The View today, the President replied, “I don’t know who that is.” But two months ago he knew who she was! Nitpicky video analysis ahead.

Asked for his opinion on Snooki (who voted for John McCain) the president claimed ignorance. But two months ago he dropped Snooki’s name in a White House Press Correspondents Dinner punchline about a health care provision named in honor of the hit MTV show. “It [the provision] reads, ‘The following individuals shall be excluded from the indoor tanning tax within this bill: Snooki, JWOWW, The Situation and House minority leader John Boehner.'” So which is it, Obama? Do you know Snooki, or don’t you? Clearly, this is the Watergate of our time, and America demands an answer.

We believe there are three possible explanations for Snooki-gate:

1. He forgot Snooki. (Which is odd, because she’s the kind of person who tends to get seared into your mind forever.)

2. He is as ashamed of partaking in television’s guiltiest pleasure as you are. His ignorance on The View was feigned.

3. Obama’s famously hip speechwriters got ahead of him and dropped a cultural reference he didn’t understand for the sake of Beltway chuckles. He recited the joke without getting it, and promptly forgot its context as soon as it was over.

Obama Flip-Flops: Does He Know Who Snooki Is, Or Not?

Snooki v. Obama, cont’d

G.M.’s Electric Lemon


GENERAL MOTORS introduced America to the Chevrolet Volt at the 2007 Detroit Auto Show as a low-slung concept car that would someday be the future of motorized transportation. It would go 40 miles on battery power alone, promised G.M., after which it would create its own electricity with a gas engine. Three and a half years — and one government-assisted bankruptcy later — G.M. is bringing a Volt to market that makes good on those two promises. The problem is, well, everything else.

For starters, G.M.’s vision turned into a car that costs $41,000 before relevant tax breaks … but after billions of dollars of government loans and grants for the Volt’s development and production. And instead of the sleek coupe of 2007, it looks suspiciously similar to a Toyota Prius. It also requires premium gasoline, seats only four people (the battery runs down the center of the car, preventing a rear bench) and has less head and leg room than the $17,000 Chevrolet Cruze, which is more or less the non-electric version of the Volt.

In short, the Volt appears to be exactly the kind of green-at-all-costs car that some opponents of the bailout feared the government might order G.M. to build. Unfortunately for this theory, G.M. was already committed to the Volt when it entered bankruptcy. And though President Obama’s task force reported in 2009 that the Volt “will likely be too expensive to be commercially successful in the short term,” it didn’t cancel the project.

Nor did the government or G.M. decide to sell the Volt at a loss, which, paradoxically, might have been the best hope for making it profitable. Consider the Prius. Back in 1997, Toyota began selling the high-tech, first-of-its-kind car in Japan for about $17,000, even though each model cost $32,000 to build.

By taking a loss on the first several years of Prius production, Toyota was able to hold its price steady, and then sell the gas-sippers in huge numbers when oil prices soared. Today a Prius costs roughly the same in inflation-adjusted dollars as those 1997 models did, and it has become the best-selling Toyota in the United States after the evergreen Camry and Corolla.

Instead of following Toyota’s model, G.M. decided to make the Volt more affordable by offering a $350-a-month lease over 36 months. But that offer allows only 12,000 miles per year, or about 33 miles per day. Assuming you charged your Volt every evening, giving you 40 miles of battery power, and wanted to keep below the mileage limit, you would rarely use its expensive range-extending gas engine. No wonder the Volt’s main competition, the Nissan Leaf, forgoes the additional combustion engine — and ends up costing $8,000 less as a result.

In the industry, some suspect that G.M. and the Obama administration decided against selling the Volt at a loss because they want the company to appear profitable before its long-awaited initial stock offering, which is likely to take place next month. For taxpayers, that approach might have made sense if the government planned on selling its entire 61 percent stake in G.M. But the administration has said it will sell only enough equity in the public offering to relinquish its controlling stake in G.M. Thus the government will remain exposed to the company’s (and the Volt’s) long-term fate.

So the future of General Motors (and the $50 billion taxpayer investment in it) now depends on a vehicle that costs $41,000 but offers the performance and interior space of a $15,000 economy car. The company is moving forward on a second generation of Volts aimed at eliminating the initial model’s considerable shortcomings. (In truth, the first-generation Volt was as good as written off inside G.M., which decided to cut its 2011 production volume to a mere 10,000 units rather than the initial plan for 60,000.) Yet G.M. seemingly has no plan for turning its low-volume “eco-flagship” into a mass-market icon like the Prius.

Quantifying just how much taxpayer money will have been wasted on the hastily developed Volt is no easy feat. Start with the $50 billion bailout (without which none of this would have been necessary), add $240 million in Energy Department grants doled out to G.M. last summer, $150 million in federal money to the Volt’s Korean battery supplier, up to $1.5 billion in tax breaks for purchasers and other consumer incentives, and some significant portion of the $14 billion loan G.M. got in 2008 for “retooling” its plants, and you’ve got some idea of how much taxpayer cash is built into every Volt.

In the end, making the bailout work — whatever the cost — is the only good reason for buying a Volt. The car is not just an environmental hair shirt (a charge leveled at the Prius early in its existence), it is an act of political self-denial as well.

If G.M. were honest, it would market the car as a personal donation for, and vote of confidence in, the auto bailout. Unfortunately, that’s not the kind of cross-branding that will make the Volt a runaway success.

Obama runs Volt at ‘crawling speed’

Baby Boy Drowns During Baptism Ceremony in Moldova


A shocking incident occurred in the village of Mihaileny of Rishcansky district of Moldova with a boy named Laurentiu, who was born six weeks ago in the family of 24-year-old Ludmila and Dmitry Gaydeu.

The parents decided to baptize the child on July 22. The priest of the local church, who is also the chief of all priests of the district, was not going to be there, so he asked priest Valentine Tsaralunge from the village of Taul to perform the ceremony.

“We have not figured out yet why he invited this father Valentine and not another priest from Riscani district,” Valery Moskalu, the district police officer, told Komsomolskaya Pravda.

Approximately twenty of the closest relatives and friends came to the church at 4:30PM. Father Valentin began the baptism ceremony.

“He dipped the baby in the water without even covering the baby’s mouth with his hand to prevent him from drowning,” recalls Dmitry Gaydeu, the father of the six weeks-old Laurentiu. “He put his hand on his stomach and dipped him in the water three times.”

The Godparents saw that the boy was not well and warned father Valentine. He answered it was not the first time that he was conducting the ceremony and knew what he was doing. When they saw that the child showed no signs of life, he was immediately taken to the district hospital.

“We went along with the father,” continues Dmitry Gaydeu. ”The physician-pathologist Sergei Railean said that my son has suffered mechanical asphyxia by drowning, there was bruising and bleeding in the soft tissues of his neck. The doctor said the baby was healthy.”

“After that, father Valentine disappeared for some time,” the police officer said. “Then he came to us. We believe that during his absence he went to Chisinau, to the archdiocese.”

Six-weeks-old Laurentiu was buried on Saturday, July 24.

“This is the case of homicide through reckless imprudence. Father Valentine is facing up to three years of imprisonment. However, he claims he is not guilty.

“We will do everything to find out the truth,” s aid Dmitry Gaydeu” The boy was healthy, so the priest who conducted the rite of baptism is to blame for his death.”

Will Meghan McCain’s book cover tempt Republicans?

LA Times – By Carolyn Kellogg

The Daily Beast has gotten a preview of the cover of Meghan McCain’s upcoming book, “Dirty Sexy Politics.” That’s it at right — although the final version won’t have a red Daily Beast logo in the corner.

McCain, a blogger and columnist for The Daily Beast, is a lifelong Republican and the daughter of former Republican Presidential candidate John McCain.

McCain’s publisher, Hyperion, describes her as “extremely mediagenic,” which is a euphemism for — what, exactly? She’s a pretty blonde? That if she Tweets a picture of herself in pajamas some people will get hot and bothered? Could they mean that McCain has a gift for sparking media controversy with her words?

If it’s the last, then it’s not the cover of the book that matters, but what’s inside. Hyperion explains what we can expect from “Dirty Sexy Politics,” due to hit shelves Aug. 31:

She’s become a model for what a moderate, progressive conservative really is. She doesn’t shy away from serious issues, while her humor and down-to-earth style keep her positions accessible. She’s ideally poised to discuss the future of the GOP from the perspective of its young, creative, and vocal members. And now, in Dirty Sexy Politics, she does exactly that.

In this witty, candid, and sometimes raucous book, Meghan touches on topics ranging from what the party needs to do to attract others like her, to the importance of blogs and Twitter in reaching out to younger voters, to what must happen to keep young people passionately engaged by politics in the future.

Will Republicans be drawn to the modestly attired Meghan McCain of the book’s cover? Does it have crossover appeal?

Feds Charge New Russian Bombshell

CBS – Posted by Naimah Jabali-Nash

Good-bye, Anna Chapman; hello, Anna Fermanova.

Fermanova, 24, is the newest bombshell targeted by federal authorities. She is accused of attempting to smuggle high-tech night vision scopes from the United States to Russia.

An arrest affidavit obtained by Crimesider states that Fermanova, along with others, tried to “intentionally attempt to export” defense articles listed on the United States Munitions List without having the required license to do so.

The document says that when Fermanova attempted to board a plane at New York’s John F. Kennedy International Airport bound for Moscow on March 1, Customs & Border Protection seized her luggage, finding three night vision devices.

When Immigration & Customs Enforcement (ICE) agents approached Fermanova regarding the cutting-edge devices, she claimed that she purchased the scopes online, stated the affidavit.

The scopes reportedly cost approximately $15,000 total, according to The Smoking Gun.

When ICE agents further questioned Fermanova, asking if she was aware of the regulations regarding such items she claimed that she “signed something about that,” but was “not really sure what she was signing.”

According to ICE special agent David Mondanaro, one of the devices found in Fermanova’s luggage was a Raptor 4X, which is considered a “generation 3” night vision device that allows the user to locate a target in “low light conditions.” The Raptor 4X is engineered to be attached to a rifle, stated the affidavit.

Though Fermanova claimed she was unaware of such guidelines, the devices appeared to have “no visible identification stickers or markings” and several ID numbers “had been covered with black marker pen,” indicated Mondanaro.

The agents confiscated the three devices, but allowed Fermanova to board her scheduled flight, according to the affidavit. She returned to the U.S. and was arrested July 15 on a warrant signed by a federal magistrate in Brooklyn.

Scott Palmer, Fermanova’s lawyer, said the allegations were “really silly,” and claimed that Fermanova’s husband simply intended to resell the night vision scopes, possibly to hunters, according to The Smoking Gun.

The Smoking Gun reports that Fermanova divides her time between Russia and Texas, where her parents reside. Her Facebook page states that Fermanova graduated from Ogle School of Hair Skin and Nails in 2005. She reportedly has a cosmetology license that expires next August.

According to the Daily News, Fermanova is currently under house arrest.

Coming soon: Alvin Greene, the movie

Yahoo News – By Michael Calderone

Alvin Greene didn’t stop to chat with reporters who recently trekked to Manning, S.C., to watch his first campaign speech. But the Democratic candidate did talk to Leslie Beaumont after the event.

That’s because Beaumont and writer David Garrett are making a documentary on the unlikely Senate hopeful: “Who Is Alvin Greene?”

There’s been no shortage of Greene coverage lately. As The Upshot reported Monday, Greene received more media attention than any 2010 candidate in the six weeks after his unexpected primary win. However, Beaumont says the documentary will provide another perspective on the unlikely candidate.

“It’s more about this evolution of this private citizen seeking higher office,” Beaumont told The Upshot. “I wanted to show a side of him that hasn’t been seen.”

Both Beaumont and Garrett live in Los Angeles, and they have never made a campaign documentary. The filmmakers became interested in Greene after he came out of nowhere to win the primary.

“We’re really fascinated with the story of this ordinary private citizen living in obscurity and then thrown in the limelight,â€

So they contacted Greene by email and phone. Initially he wasn’t interested, she said. But they set up a meeting in South Carolina to try convincing him to let cameras follow him around.

“You have a great story,” Beaumont recalled telling him. “This is a historic moment in time that needs to be documented.”

Beaumont acknowledges that Greene was “very unprepared” for his first media interviews. But she says that Greene’s gaining confidence and the campaign is growing from a single man to at least a small circle of advisers.

“It’s interesting,” she said, “to see this evolution of Alvin Greene into politician.”

Still, Greene is far from a polished candidate. He makes comments that seem somewhat bizarre, like telling the Guardian that one way to create jobs is to employ people to make Alvin Greene toys.

Beaumont said she asked Greene about that widely mocked comment, and he claimed it was sort of a joke that’s geared for a British audience. (The Upshot isn’t quite sure why the British would find that funny, but maybe that, too, will be explained in the documentary.)

The Guardian’s not the only news outlet to seek out Greene, and Beaumont says her phone rings throughout the day with media requests. She said that Greene’s been generally positive about the attention, but also can seem overwhelmed at times.

“He’s never had an experience like this before,” she said. “I don’t think he realized what would happen if he ran to be a U.S. senator. After he won that primary, there is going to be this explosion of media attention around him.”

Beaumont said she’s heading to South Carolina next week to resume filming. She and Garrett are currently self-funding the project, but hope to get some outside financial backing for the remaining months of the campaign. She’s currently editing a trailer for the film in hopes of sparking more interest.

Related Links:


Townhall: Russia Spies; America Apologizes

WSJ: Gibbs Takes on Rush Limbaugh


Georgia Election Results

Unofficial And Incomplete Results of the Tuesday, August 10, 2010 Primary Election Runoff

Governor Republican

99% of precincts reporting Total Precincts: 2860

Deal 290,580 Handel 288,091 Totals 579,036
50.2% 49.8%


Breaking news: Handel calls Deal, concedes GOP nomination for governor

They All Have One Thing In Common

Peach Pundit – By Ron Daniels

[…For purposes of this post, I will only reach back to the past hundred or so years – but if you are really interested in the subject I would recommend a book by James Cook that details all of Georgia’s Governors. (The Governors of Georgia, 1754-2004, for those of you who are interested)

Roy Barnes: Most of our former Governors have never been ousted from Office. And typically our former Governors who have ran for office after having departed for at least a term have failed to capture the office again. Several have tried, the most recent likely being Lester Maddox and Ellis Arnall. Barnes would join Eugene Talmadge as a “comeback” Governor. Like many former Governors, Barnes is a lawyer.

Nathan Deal: Typically the pathway to the Governor’s mansion has not involved a stint in Congress. Deal is considered more “rural” than the other candidates, which such a description would put him in line with a majority of former Governor’s. Nathan is outside the median age of the average Georgia Governor, however he would not be the oldest elected. Governor Hardman was 71 when first elected – Hardman served two two-year terms, making him 75 when he left office. If elected to two terms, Deal would become the oldest serving Governor as he is presently 68. Deal, like Barnes, is a lawyer.

Karen Handel: Would join only three other Governors as having been not been “Georgia born and raised.” Obviously, she would be the first female elected Governor. She would also be one of a very few of our past Governors who did not have a college degree. Handel has served in County government and as Secretary of State, neither of which present the usual pathway to the Governor’s mansion. She does however fit the typical age profile of our past Governors…]

Savannah Republican urges Johnson supporters to back his former congressional colleague for governor

Savannah Now – By Larry Peterson

U.S. Rep. Jack Kingston has endorsed former House colleague Nathan Deal for governor.

Runner-up in the July 20 Republican primary, Deal faces the top vote getter, former Secretary of State Karen Handel, in an Aug. 10 runoff.

Earlier, Kingston, a Savannah Republican, had supported his longtime friend and ally Eric Johnson, a former Savannah state senator. Johnson ran third in the seven-way primary.

“For those who supported Eric Johnson,” Kingston said, “Nathan is the natural fit for the … runoff.”

He praised Deal’s record on taxes, immigration and curbing Medicaid fraud, as well as his “perfect” score from the American Conservative Union

“Kingston is known and trusted in Southeast Georgia and his endorsement carries a lot of weight,” said Deal spokesman Brian Robinson.

It also signals Chatham County and nearby areas Johnson carried that conservatives are re-aligning behind Deal, Robinson said.

Robert Eisinger, dean of the School of Liberal Arts at the Savannah College of Art and Design, said Kingston’s blessing could help Deal if the runoff is close.

“Kingston is a respected conservative and Republican locally,” said Eisinger, a former political science professor.

“Those who know him may think that, if Kingston is behind Nathan Deal, then ‘Deal is my man.'”

He questioned whether many supporters of Johnson – yet to back Deal or Handel – will assume the endorsement implies Johnson’s support.

“That’s pretty inside baseball,” he said…

UPDATE:   Huckabee gives late support to Deal

UPDATE II: Herman Cain supports Deal’s Economic Policy

Deal says he’s not a target of federal probe

AJC – By Aaron Gould Sheinin

A federal investigation into a meeting at the Georgia Capitol last year involving Nathan Deal, then a member of Congress, has not targeted Deal, his chief of staff or his Gainesville business partner, Deal said Wednesday.

None of the parties to the meeting, in which Deal sought to preserve a lucrative longstanding business relationship with the state, is the subject of the investigation, those parties or their spokesmen said. The Atlanta Journal-Constitution reported Wednesday that the grand jury had subpoenaed state Revenue Commissioner Bart Graham, with whom Deal and others met to talk about Deal’s business, to give evidence relating to the meeting.

Deal, who is in the Aug. 10 runoff for the Republican nomination for governor, said the timing of the grand jury revelation is suspect.

“I think it is somewhat ironic that this surfaces after the original primary and just a couple of weeks before the runoff,” he said in an interview with the Associated Press Wednesday. “I think you recognize that it is being used as a political tool.”

Deal’s campaign spokesman told The Times of Gainesville Wednesday that “all of this has been put behind us.”

“Neither Nathan, nor anyone who worked for him, nor Ken Cronan, is under federal subpoena,” said spokesman Brian Robinson. “After we found out about this, we talked to the U.S. attorney’s office and they have assured us that Nathan nor anyone else is the target or the subject of a federal investigation. The timing of this is suspicious, but Nathan is not the subject or the target of a federal investigation.”

Deal and Cronan operate a salvage yard in Gainesville that for nearly 20 years enjoyed a no-bid agreement with the state to provide space for inspections of rebuilt vehicles. The AJC reported in August 2009 that Deal intervened with Graham and other state leaders to stop Graham from changing the program that earned Deal and Cronan’s company nearly $300,000 a year.

The newspaper’s report led to a congressional ethics investigation that found Deal possibly violated U.S. House rules. Deal resigned from Congress in March before any formal accusation was made…

Related (PDF):  OFFICE OF CONGRESSIONAL ETHICS – Review No. 09-1022 – SUBJECT: Representative Nathan Deal

Handel, Deal race for runoff cash


Former Georgia Secretary of State Karen Handel and former Rep. Nathan Deal, competing in a Republican runoff primary for governor, have both pulled in about half a million dollars since the first round of primary voting last week, their campaigns said Wednesday.

Handel adviser Robert Simms notified fundraisers of the total in an e-mail message Wednesday morning, writing that Handel “raised $500,000 in one week, surpassing our total for the last fundraising quarter.” Deal spokesman Brian Robinson told POLITICO that as of Tuesday night, the former congressman had raised $498,000 since the July 20 vote.

Both Handel and Deal depleted their campaign accounts before last week’s election: Handel finished with just $66,648 in the bank and Deal had $43,590.

The new influx of campaign funds will allow Handel to go on the air for the first time since the primary, and a campaign source confirmed she has a television ad — only her second of the cycle — planned for Thursday. Deal has already aired one television ad in the runoff, a spot that featured the congressman criticizing federal spending, alongside his young grandsons.

Neither candidate has been in full control of their message, however, and Deal’s campaign was rocked Tuesday evening by an Atlanta Journal-Constitution report that a federal grand jury had called one state official to testify in an investigation of Deal’s vehicle salvage business and its work with the state government.

Robinson dismissed the story, insisting that Deal “is not under subpoena and further, we have been assured that we are not the target of an investigation. There’s not a fire burning here.”

A political blogger also filed an ethics complaint against Handel, alleging that she illegally paid her gubernatorial campaign staff with funds from an old campaign account — from her secretary of state bid — before she officially announced her plans to run for higher office.?

Handel spokesman Dan McLagan dismissed the complaint, saying the charges were meritless and calling the source a “rabid anti-Karen person” who is “literally a blogger who lives in his mom’s basement.”

Related Previous Posts:

Review: Top Republican Candidates For Georgia Governor 2010


I’m Not Bitter…

Ocmulgee River Tranquility: Good For The Soul…

President Obama To Visit Savannah March 2, 2010

2010 Georgia Congressional District 12: Can John Barrow Be Taken Down?

Savannah History: War, Music, And Southern Sophistication

Related Links:

Rasmussen Reports: Election 2010: Georgia Governor



Democrats Draw Up Blueprints For Summer Messaging Campaign

Democrats will highlight a specific theme each week of the recess. The first will be the party’s “Make it in America” manufacturing initiative, followed by Social Security, consumer protection, small businesses, troops and veterans, and jobs and the economy. The party is trying to brand its agenda as one centered around “fighting for the middle class.”

The Hill


Kingston endorses Deal for governor

U.S. Rep. Jack Kingston has endorsed former House colleague Nathan Deal for governor. “For those who supported Eric Johnson,” Kingston said, “Nathan is the natural fit for the … runoff.”

He praised Deal’s record on taxes, immigration and curbing Medicaid fraud, as well as his “perfect” score from the American Conservative Union

“Kingston is known and trusted in Southeast Georgia and his endorsement carries a lot of weight,” said Deal spokesman Brian Robinson.

It also signals Chatham County and nearby areas Johnson carried that conservatives are re-aligning behind Deal, Robinson said.

Savannah News

This election season has seen a former female vice presidential candidate’s endorsements sway voters and keep two Republican women alive in the race for governor in Georgia and South Carolina.

The Augusta Chronicle – By Susan McCord

Left up to Augusta, there would be no runoff between Karen Handel and Nathan Deal on Aug. 10. Handel carried a swath of 12 counties around metro Augusta resembling the support she had in metro Atlanta, and she got more than 50 percent of Republican primary votes in Richmond, Columbia, Jefferson and Burke counties.

From Augusta’s position on the Savannah River, with Nikki Haley’s victory over Gresham Barrett in the South Carolina Republican primary and Handel’s strong performance Tuesday, it might appear to be “the year of the woman,” or a good year for Republican women at the least.

Augusta Republican Janice McDonald called it that at a Handel rally in Evans, where most in the crowd were women and many were members of Columbia County Republican Women.

“Change for the better” came in the form of female leadership to clean up politics, McDonald said.

Handel, a former Georgia secretary of state, compared herself to Haley, California Senate candidate Carly Fiorina and governor hopeful Meg Whitman.

“They are business women, they are outsiders, and they’re not career politicians. They are reformers,” Handel said.

Putting the Georgia governor’s race into the national spotlight was Sarah Palin’s endorsement of Handel as the “mama grizzly” of choice for voters, eight days before the primary. Following Palin was Newt Gingrich’s endorsement of Deal; then came Mitt Romney’s Handel endorsement.

Palin’s endorsement of Haley aided the primary runoff “slam dunk” of a candidate who led by a wider margin than Handel in the primary, said University of Georgia political scientist Charles Bullock.

Palin’s endorsement led to the surge of support for Handel in the week before the primary, particularly outside metro Atlanta, but it remains to be seen whether it will carry Handel to a win in November.

With each victory by a Palin candidate increasing the strength of the brand, Georgia might see its first woman governor, he said.

Women have had greater success running for statewide office in Georgia as Republicans, beginning with trailblazer and former superintendent of schools Linda Schrenko, who was followed by Kathy Cox. Democrat Cathy Cox is the only other woman to hold statewide elected office, that of secretary of state, in Georgia.

In the original “year of the woman,” 1992, women gained several seats in the U.S. Senate and the number has steadily increased. Georgia has had only one, Rebecca Felton, who served for a few months of 1922, and five U.S. congresswomen…

[…Palin’s stance poses a challenge to the Tea Partiers and the larger conservative movement. Is the Right finally serious about limiting government and reducing spending, which must include at least addressing the fact that our now bankrupt country has a larger military budget than every other nation combined, or will conservatives simply revert to the same old, Bush-style, Kristol-approved and Palin-suggested, neocon statism?

Kristol freely admits that he would prefer a pro-war president John Kerry, or Obama, than a figure like Buchanan, Paul or any traditional conservative who might question American foreign policy.

Ann Coulter asks, rightly, “Bill Kristol and Liz Cheney have demanded that Steele resign as head of the RNC for saying Afghanistan is now Obama’s war — and a badly thought-out one at that. (Didn’t liberals warn us that neoconservatives want permanent war?)…

I thought the irreducible requirements of Republicanism were being for life, small government and a strong national defense, but I guess permanent war is on the platter now, too.”

Coulter makes the distinction that Palin and her adviser, Kristol, ignore—that there is a difference between support for a strong national defense and support for nonsensical permanent war…]

SA (Jack Hunter): Is Palin a Neocon Puppet?

The good news? She’s a solid fundraiser, hauling in more than $2.5 million in the second quarter. The bad news? Er, most everything else. Lest you think this is a hit piece by CQ Politics — and given the recent polling trends, you shouldn’t — Matt Lewis tweeted a few hours ago that he’s also hearing grumbling from conservatives about her lackluster campaign.

Weak organization wouldn’t matter much against an incumbent as loathed as Reid, I think, if she were a more conventional candidate. But as a tea-party star with an eye to eliminating Social Security and the Department of Education (positions which have now been quietly revised on the campaign website), her staff has its work cut out for it…]

HotAir (Allahpundit): GOP starting to worry about Angle’s campaign against Reid

How Haley, Sheheen could win in the fall

Haley has the numbers; Sheheen needs swing counties

The State – By JOHN O’CONNOR

Keys to November

The Coast: If Haley sweeps Beaufort, Horry and, most importantly, Charleston counties, it is unlikely Sheheen can win, observers say. Plus for Sheheen? President Barack Obama had a strong showing in Charleston in 2008, and Democrats have worked hard to make gains in the city’s suburbs. Plus for Haley? Both Haley and Sheheen hail from the Midlands, but Charleston donors seem to be leaning to Haley. Haley has kept Gov. Mark Sanford of Sullivan’s Island at arms-length while embracing his former wife, Jenny. Haley could benefit by convincing Sanford’s supporters she is their de facto hometown candidate.

The Upstate: For Sheheen to stay close in the Upstate, his campaign needs to motivate Spartanburg Democrats while seeding doubts about Haley among Greenville’s business community. The question isn’t whether Haley will win the Upstate. The question is: By how much? If Haley wins by a blowout, it’s over. If it’s tight, Sheheen can win.

Swing counties: More than a third of S.C. counties are swing counties, up for grabs. To win, a Democrat must take most. But the influence of the swing counties is waning. Since the last Democrat was elected governor, in 1998, many dependably Republican counties — Beaufort, Horry, Lexington, York — have been growing faster.

Congressional races: If all politics is local, will competitive U.S. House races in the 2nd and 5th districts help one party over the other? Republican primary voters clearly turned out for crowded June primary races in the 1st, 3rd and 4th districts. Meanwhile, Democrats had no similar primary battles to boost their vote numbers. In the 5th District, for example, U.S. Rep. John Spratt, D-York, has long attracted moderate Republican and independent voters. Will those voters also vote for Sheheen in November? Or will angry voters throw out Spratt and carry Haley to a win?

Obama voters: Will the 2008 Democratic Primary voters return to the polls two years later? Many of the same staff that built Obama’s 2008 S.C. network are working for Sheheen. But Republican voters are more energized this year. The Tea Party also has shown it can get its members to the polls.

Related Links:

CQ Politics:  After Palin Endorsement, N.H. Voters Sour On Ayotte For Senate

Bloomberg:  Palin Shows Limits of Woman Wisdom: Amity Shlaes (Correct)