Trillion

SELF-denial has never been the strong suit of the baby boom generation, which for years ranked its priorities as sex, drugs and rock 'n' roll, and only recently added IPOs and SUVs.But history, with its eternal fondness for irony, now is offering the boomers an opportunity to leave a very different political legacy. As the country debates what to do with the federal budget surplus, the question largely may turn on whether the baby boomers, as the nation's largest voting bloc, want to spend it on themselves -- or are willing to make the kind of sacrifice for the future that lastingly marked their parents, the GI generation that came of age during World War II.Over the next 15 years, the federal surplus is expected to total a staggering $5.9 trillion -- $3 trillion in the Social Security accounts and $2.9 trillion in the rest of the federal budget.

Among economists, the belief that the Federal Reserve will announce a quarter-point increase in interest rates after its Tuesday meeting is close enough to unanimous that Mitchell Held, a managing director at New York City-based Salomon Smith Barney, quips that "the only people who don't think so are Mrs. Smith's third-grade class -- and they're recalcitrant."With that settled, the question becomes: How will America's vaunted Goldilocks Economy be affected by a quarter-point bump, coupled with the one in June and the one that will or won't occur in October.

WASHINGTON -- President Clinton and the Republican-controlled Congress are squaring off for another battle over elderly health care and tax cuts, and once again, the president serendipitously holds the high cards.The latest White House economic forecasts say the booming economy will produce an additional $1 trillion surplus for the U.S. treasury over the next 15 years, giving Mr. Clinton much more breathing room in his efforts to cope with anticipated Social Security and Medicare shortfalls, and still enabling him to consider a modest tax cut.Republicans are already talking about a huge, $775 billion tax cut over 10 years, a politically questionable pitch these days, when voter complaints against federal spending are muted by an era of general economic content.

WASHINGTON -- President Clinton announced yesterday that he will send to Capitol Hill next month a federal budget that is in balance for the first time in 30 years -- and three years ahead of schedule."

Ten trillion dollars is a lot of money.It's about equal to the combined gross national products of the United States, France and the United Kingdom.It's 15 times the total assets ($648 billion) of the world's largest bank (Bank of Tokyo-Mitsubishi Ltd.). It's 60 times the 1996 total revenue of General Motors Corp. ($168 billion).And it's in the process of changing hands through inheritance -- from America's senior citizens to their baby boomer children -- in the largest intergenerational transfer of wealth in history.

It has come to seem as common as a light bulb, but neither its inventors nor the events surrounding its creation are much remembered:On March 21, 1924, a shoe salesman named Edward G. Leffler and met with two stockbrokers Hatherly Foster Jr. and Charles H. Learoyd in downtown Boston to sign some some papers. And thus was born the first mutual fund. There were imitators within a few months, and the offspring include names known to almost every household with a few thousand dollars to invest Fidelity Investments, the Vanguard Group and T. Rowe Price Associates Inc.Seventy-three years since its invention, the mutual fund has revolutionized the way people manage their money.

Spending busts budgets more than tax cutsYour lead editorial July 14 misrepresents the size of the proposed federal tax reductions and argues the wrong side of the balanced budget equation.You state that the total value of the tax cuts ''comes to roughly $137 billion over five years and a staggering $360 billion over 10 years.''You also used adjectives and phrases like mushroom, huge, mega-deficits, blow to smithereens in describing the reduction and their effects on the budget.But from a big-picture perspective, the $137 billion figure over five years equals only a 1.6 percent cut in the $8.175 trillion of federal spending; and the $360 billion over 10 years represents a 2.2 percent reduction in a staggering $16.350 trillion of federal outlays.

Washington -- PRESIDENT Clinton's weak effort to get back in the budget ballgame does not alter one big political fact.Whatever he has to say about the budget is of little consequence.Its fate lies with the Republican Congress.Not only will Congress draft a budget that reflects its own philosophy, but also it wields enormous leverage over the president and will likely get its way in the end.Unless Congress approves appropriations, most discretionary programs will halt on Oct. 1, when the new fiscal year starts.

Gand Cherokee, Wagoneer recallChrysler Corp. said yesterday that it is recalling 115,000 Jeep Grand Cherokees and Grand Wagoneers to repair a defect that could lead to the loss of steering control.The recall, the third in 10 months for the vehicles, affects about half of the Grand Cherokees and Wagoneers Chrysler sold last year. This week, Chrysler began sending the recall notices to owners of Grand Cherokees and Wagoneers built between December 1992 and July 1993.Mutual funds pass $2 trillionThe mutual fund industry broke the $2 trillion barrier in assets last month, propelled by a record influx of money into stock funds, the Investment Company Institute said yesterday.

Better tried by 12 than carried by sixTo paraphrase Dickens, our justice systems is an ass. It only works when it feels like it, or when you force it to, and then only with much prodding and struggle.The villains are protected while the victim is a bound, gagged and blindfolded so as not to violate anyone's rights.When a perpetrator is convicted, the sentence is usually light. Rape will get you 18 months, armed robbery two years, murder eight years.If you kill someone while driving intoxicated you get three years supervised probation and no record under probation before judgment.

Every horror movie comes with interludes in which the stalker appears to be dead, the demon exorcised, the vampire staked. "Our business momentum is strong," Wells Fargo CEO John Stumpf said Thursday after the big banking company released an unexpectedly brilliant profit report. "We're starting to see progress," President Barack Obama said Friday. "U.S. Economy Could Recover Much Sooner Than Expected," said the headline from CNBC.com. Slasher-film auteurs know exactly how to write the next scene.

If members of Congress have any doubt about the need to quickly pass an economic stimulus package, here are some persuasive reasons: (diamond) Unemployment increased by 500,000 jobs in December, bringing total jobs lost to 2.6 million since 2007. That's the largest annual job loss since World War II, and the unemployment rate of 7.2 percent is the highest in 18 years. (diamond) Americans lost more than $8 trillion in the stock market and $6 trillion in housing wealth in 2008. Over the last year, the Dow Jones industrial average lost 34 percent of its value, and home sale prices declined nearly 20 percent through the third quarter, as measured by the S&P Case Shiller national home price index.

SEPT. 24, 2028 Dear grandchildren: Now that you're old enough to begin understanding the world you have inherited, let me try to explain what happened. By rights, the United States should be in far better shape for you. But your elders failed to deliver "what is due to their posterity," in the words of a conservative British politician who thought about these things a long time ago. It didn't happen all at once. Nobody intended to leave the country to the next generation diminished in influence and avoiding calls from debt collectors.

It certainly doesn't feel this way to people who have lost their homes or jobs, but so far the historic economic trauma on Wall Street has left Main Street relatively unscathed. Whether the two boulevards soon collide will give a good idea about how much trouble the country is really in. Let's hope this is a 1987-style Wall Street collapse, which largely spared the economy as a whole. Root against the 1931 or 1974 varieties, which presaged years of high unemployment and consumer misery.

With the daily din of bad news about the state of the housing market, it's easy to lose sight of some larger economic realities: Despite declining prices in many markets, homeowners still control near-record equity holdings, just under $11 trillion. In its latest quarterly "flow of funds" statistical report, the Federal Reserve calculated that American homeowners' equity accounts totaled $10.9 trillion by mid-2007. That was the net difference between total home mortgage debt ($10.1 trillion)

How do you get a sense of $2.4 trillion? That's how much the Congressional Budget Office says the wars in Iraq and Afghanistan could cost over the next 10 years. It's an awful lot of money. But not, in principle, impossible to imagine. Consider some comparisons: Hurricane rainfall, gallons per day 2.4 trillion Passenger miles flown in 2006 2.4 trillion Gallons of water used in Florida every year 2.4 trillion Estimated barrels of oil in the world before drilling began 2.4 trillion Annual flow of Indus River, in cubic feet 2.4 trillion (That's three times as much, by the way, as that of the Tigris and Euphrates combined.

The investment bankers were busy yesterday. Companies announced a flurry of proposed mergers and acquisitions, unrelated save for the fact that they come at a time when there's tons of money in search of firms to buy. At least five deals or offers, valued at $1 billion or more each, were unveiled yesterday. OSI Restaurant Partners Inc., parent of Outback Steakhouse and other brands, said it agreed to be acquired by a private investor group for about $3 billion. Health care products maker Abbott Laboratories said it will buy drugmaker Kos Pharmaceuticals Inc. for about $3.7 billion.

ARLINGTON, VA. -- Not so long ago, in a country that now seems far, far away, Ronald Reagan told the nation: "We don't have deficits because people are taxed too little. We have deficits because big government spends too much." He uttered those words in a year when Democrats controlled the House (the body in which spending legislation originates) and the national debt, according to the Bureau of Public Debt, was $2.3 trillion. Last week, a Republican Senate voted to raise the debt ceiling to nearly $9 trillion.

WASHINGTON -- The $2.77 trillion budget President Bush sent Congress yesterday reflects his priorities, with big increases for defense and homeland security, the extension of more than $1 trillion in tax cuts and what aides described as belt-tightening in social programs and entitlements. But it does not acknowledge the full price tag of all of Bush's goals, such as the continuing cost of the war in Iraq or fixing a quirk of the tax code that snags a growing segment of the American middle class each year.

Formerly pessimistic experts are already bumping up estimates for holiday spending. The usual explanations are dragged out. Consumers are blowing the proceeds of loans secured by greatly appreciated McMansions and townhouses goes one answer. Lower energy prices freed up cash for the malls. Americans are just naturally profligate; go figure! But there is another, powerful force affecting what's going on, and it almost never gets discussed as a consumer-spending factor. The continuing wealth transfer from Depression-era savers to their baby boomer children may be supplying "dark energy" to the economy, an X-factor that helps explain short-term and long-term consumer resilience.