Hot Docs: Grim State of the U.S. Economy, the Fed’s Historic Rate Cut

State of the U.S. Economy:More financial news from the Treasury Department and the White House Office of Management and Budget: They've just released their financial report of the U.S. government for fiscal year 2008, and the economic downturn has made it a grim picture. The government's net operating cost for 2008 was $1 trillion, more than three times what it was in 2007. Meanwhile, the report details a 1 percent rise in revenues from the year before—but a 25 percent increase in costs. The deficit is up to $455 billion as of the end of September. The report also outlines the challenges the economy has seen in the past year, and the efforts the government is taking to try to remedy them. However, long term challenges remain. For example, Medicare, Medicaid, and Social Security will be a costly burden. In his introduction to the report, Treasury Secretary Henry Paulson writes that "the projected long-term costs are much greater than the resources that will be available to pay for them, particularly as health care costs continue to rise and the population continues to age."

Fed Drops Interest Rate to Record Low: Citing the "weakened" economic outlook in the United States, the Federal Reserve announced that it would cut the interest rate for federal funds to nearly zero. The new rate, between zero and one-quarter percent, is an all-time low. Announcing the change, the Federal Open Markets Committee said that it will use "all available tools" to spur economic growth, but it still "anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time." The committee announced other steps it plans to consider, including purchasing mortgage-backed securities and other debts.

Defining the Nation's Nuclear Posture: Nuclear terrorism and proliferation are a "growing" threat, and the United States must set its nuclear policy carefully to discourage the use of such weapons by nations and non-state actors alike. The Congressional Commission on the Strategic Posture of the United States has issued an interim report on its work in evaluating the United States' strategic nuclear posture. It is working "to define a nuclear program that contributes to decreasing the global dangers of proliferation, including maintaining the needed reliability, safety and security of our nuclear weapons and maintaining the role they play in overall stability and the reassurance of allies." The commission warns that nuclear efforts by Iran and North Korea could be the start of a dangerous trend, concluding, "There is a serious possibility of a cascade of proliferation following. And as each new nuclear power is added the probability of a terror group getting a nuclear bomb increases." The commission's final recommendations and report are scheduled to be completed in April.

Fact-Checking Campaign Misinformation: Political advertising has a long lifespan, a new poll reveals— people tend to keep believing campaign claims once the election is over, even if they've been debunked. Kathleen Hall Jamieson and Brooks Jackson dissect the results of the Annenberg Public Policy Center's post-election poll. They don't find the results encouraging. Large percentages of those surveyed agreed with misleading statements about the positions of both Barack Obama and John McCain, even after the accusations were widely discredited. The authors believe the fact that campaign ads are repeated so frequently may make their messages seem more credible, but they also see "deeper reasons" for the misinformation: "We humans all have a basic disposition to embrace our side's arguments and reject or ignore those offered by an opponent." Jamieson and Jackson note that misleading campaign ads continue to reverberate after the election, warning that "spending hundreds of millions of dollars on campaigns that systematically disinform the public can only make the task of governing harder for the eventual winner."

Making Sense of Prescription Information: A new study finds that about a quarter of "consumer medication information" leaflets, or the information packets that come with prescription drugs, are not "useful." The Food and Drug Administration sponsored the research as a follow-up to a 2001 study in which experts looked at the printed leaflets that accompany new prescriptions to warn patients about side effects and other important information. The quality of the offerings "continued to vary considerably from pharmacy to pharmacy," but they found that many of the packets did not adequately advise the patient about how to use the drug safely. Another big problem, and one which hasn't improved since 2001, is readability. Researchers point out that many of the leaflets they evaluated used small print and technical terms, making it harder for patients to understand key medical information.

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