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In a public speech to the Department of Defense, Defense Secretary Donald Rumsfeld announces that the Department of Defense “cannot track $2.3 trillion in transactions.” CBS later calculates that 25 percent of the yearly defense budget is unaccounted for, and quotes a long-time defense budget analyst: “[Their] numbers are pie in the sky. The books are cooked routinely year after year.” Coverage of this rather shocking story is nearly nonexistent given the events of the next day. [US Department of Defense, 9/10/2001; CBS News, 1/29/2002] In April 2002 it will be revealed that $1.1 trillion of the missing money comes from the 2000 fiscal year. Auditors won’t even quantify how much money is missing from fiscal year 2001, causing “some [to] fear it’s worse” than 2000. The Department of the Army will state that it won’t publish a stand-alone financial statement for 2001 because of “the loss of financial-management personnel sustained during the Sept. 11 terrorist attack.” [Insight, 4/29/2002] This $1.1 trillion plus unknown additional amounts continues to remain unaccounted for, and auditors say it may take eight years of reorganization before a proper accounting can be done. [Insight, 8/21/2003]

Entity Tags: US Department of Defense, US Department of the Army, Donald Rumsfeld

Timeline Tags: Complete 911 Timeline, 9/11 Timeline

Group of 8 (G-8) leaders from across the globe release a statement from their meeting in L’Aquila, Italy, saying that economic recovery from the worst recession since World War II is too frail for them to consider repealing efforts to infuse money into the economy. US President Barack Obama, British Prime Minister Gordon Brown, European Commission President Jose Barroso, German Chancellor Angela Merkel, Canadian Prime Minister Stephen Harper, French President Nicolas Sarkozy, Japanese Prime Minister Taro Aso, Italian Prime Minister Silvio Berlusconi, and Russian President Dmitriy Medvedev assembled for the annual gathering where Obama pressed to maintain an open door for additional stimulus actions. A new drop in stocks generated global concern that, to date, the $2 trillion already sunk into economies had not provided the economic bump that would bring consumers and businesses back to life. “The G-8 needed to sound a second wakeup call for the world economy,” Brown told reporters after the gathering’s opening sessions. “There are warning signals about the world economy that we cannot ignore.” A G-8 statement embraces options ranging from a second US stimulus package—advocated by some lawmakers and economists—to an emphasis by Germany on shifting the focus to deficit reduction.
What Next? - Disagreements over what to do next, as well as calls from developing nations to do more to counteract the slump, emphasize that the Group of 8 has little if any room to maneuver, since the largest borrowing binge in 60 years has, so far, failed to stop rising unemployment and has left investors doubting the potency of the recovery. Even as G-8 leaders held their first meeting, the Morgan Stanley Capital International (MSCI) World Index of stocks continued a five-day slide, and the 23-nation index had dropped 8 percent since its three-month rally that ended on June 2. The International Monetary Fund (IMF) upgraded its 2010 growth forecast, saying the rebound would be “sluggish,” and urged governments to stay the course with economic stimuli. The IMF also said that emerging countries such as China would lead the way, with an expansion of 4.7 percent in 2010, up from their April prediction of 4 percent. “It’s a very volatile situation,” said European Commission President Barroso in a Bloomberg Television interview from L’Aquila. “We are not yet out of the crisis, but it seems now that the free fall is over.”
Exit Strategems Discussion - “Exit strategies will vary from country to country depending on domestic economic conditions and public finances,” the leaders conclude, but deputy US National Security Adviser Mike Froman tells reporters, “There is still uncertainty and risk in the system.” Froman says that although exit strategies should be drawn up, it’s not “time to put them into place.” The IMF forecasts that, in 2014, the debt of advanced economies will explode to at least 114 percent of US gross domestic product because of bank bailouts and recession-battling measures. German Chancellor Merkel, campaigning for re-election in September and the leading opponent of additional stimulus, warned against burgeoning budget deficits, which the IMF has predicted will rise to an average of 6 percent of the EU’s 2009 gross domestic product, from 2.3 percent in 2008. At last month’s European Union summit, Merkel pushed through a statement that called for “a reliable and credible exit strategy,” and insisted, “We have to get back on course with a sustainable budget, but with the emphasis on when the crisis is over.” [G8 Summit 2009, 7/2/2009; Bloomberg, 7/9/2009]

Entity Tags: Morgan Stanley Capital International (MSCI) World Index, Mike Froman, Jose Manuel Barroso, International Monetary Fund, Taro Aso, National Security Council, Nicolas Sarkozy, Silvio Berlusconi, Angela Merkel, Gordon Brown, Barack Obama, Standard & Poor’s, Stephen Harper, Dmitriy Medvedev

Timeline Tags: Global Economic Crises

A list of 10 companies that have avoided paying US income taxes is provided by Senator Bernie Sanders (I-VT), who is pushing for legislation that will close the legal tax loopholes that allow large corporations to avoid the bulk of their tax responsibilities. Chicago Sun-Times reporter Lynn Sweet writes, “Some people call the income tax system with generous loopholes for big companies corporate welfare or corporate entitlements.” Sanders’s list, based on returns and Securities and Exchange Commission (SEC) documents filed in 2009 and earlier, includes:
bullet ExxonMobil. The oil giant made $19 billion in profits in 2009, but paid no federal income taxes, and received a $156 million tax rebate.
bullet Bank of America (BoA). The financial corporation made $4.4 billion in profits in 2009, and received nearly $1 trillion in Federal Reserve and Treasury Department “bailout” funds. The bank received a $1.9 billion tax refund.
bullet General Electric. This multinational conglomerate made $26 billion in profits in the US, and over the last five years has received $4.1 billion in tax refunds.
bullet Chevron. The oil giant made $10 billion in profits in 2009, and received a $19 million refund from the IRS.
bullet Boeing. The defense contractor received a $30 billion contract from the US Department of Defense in 2009 to build 179 airborne tankers, and received a $124 million tax refund.
bullet Valero Energy. This energy corporation, the 25th largest company in the US, garnered $68 billion in sales in 2009, and received $157 million in tax refunds. Over the last three years, Valero has received a $134 million tax break from the oil and gas manufacturing tax deduction.
bullet Goldman Sachs. The financial giant paid only 1.1 percent of its income in taxes in 2008, though it recorded $2.3 billion in profits. It also received nearly $800 billion from the Federal Reserve and the Treasury Department.
bullet Citigroup. The financial conglomerate made over $4 billion in profits in 2010, but paid no federal income taxes. It received a $2.5 trillion “bailout” from the Federal Reserve and Treasury.
bullet ConocoPhillips. The oil conglomerate garnered $16 billion in profits from 2007 through 2009, paid no taxes, and received $451 million in tax breaks through the oil and gas manufacturing deduction.
bullet Carnival Cruise Lines. This entertainment giant made over $11 billion in profits between 2006 and 2011, but paid only 1.1 percent of its income in taxes during that period.
In a press release calling for “shared sacrifice,” Sanders writes: “While hard working Americans fill out their income tax returns this tax season, General Electric and other giant profitable corporations are avoiding US taxes altogether.… [T]he wealthiest Americans and most profitable corporations must do their share to help bring down our record-breaking deficit.” Sanders writes that “it is grossly unfair for Congressional Republicans to propose major cuts to Head Start, Pell Grants, the Social Security Administration, nutrition grants for pregnant low-income women, and the Environmental Protection Agency while ignoring the reality that some of the most profitable corporations pay nothing or almost nothing in federal income taxes.” Sanders calls for closing corporate tax loopholes and eliminating the deductions for oil and gas companies. He is also introducing legislation that would impose a 5.4 percent surtax on millionaires that would garner as much as $50 billion a year in tax revenues. Sanders says: “We have a deficit problem. It has to be addressed, but it cannot be addressed on the backs of the sick, the elderly, the poor, young people, the most vulnerable in this country. The wealthiest people and the largest corporations in this country have got to contribute. We’ve got to talk about shared sacrifice.” [Chicago Sun-Times, 3/27/2011]

Entity Tags: Boeing Company, Carnival Cruise Lines, Citigroup, Bernie Sanders, Bank of America, ConocoPhillips, Goldman Sachs, Chevron, Lynn Sweet, Valero Energy Corporation, General Electric, ExxonMobil

Timeline Tags: Global Economic Crises

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