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New information shows a crisis is developing in higher education as student debt passes $1 trillion with the unrelenting rise in the cost of college. Higher debt levels is leading to higher droput rates. According to think tank Education Sector, 30 percent of college students taking out loans dropped out of school, compared to 25% ten years ago. And work can be a large factor as students take parttime jobs to lower the loan burden- half of college dropouts attributed dropping out to work, according to a 2009 study by Public Agenda. It also adds another burden to the productive potential of the U.S. economy. The director of the Center on Education and the Workforce at Georgetown University, Anthony Carnevale, estimates the cost to the U.S. economy at half a trillion dollars in terms of skills not available for increasing economic output and income lost for dropouts.

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Gillespie lists the myths and describes the reality about Ron Paul. Ron Paul is not a "top tier" candidate- with many Republican candidates assuming top tier status and fizzling out this has become a term that has lost meaning. Paul is a doctrinaire libertarian- he has positions similiar to libertarians but also has his own views on immigration and abortion. His views on the U.S. central bank, the Federal Reserve, such as "ending the Fed" are crazy- actually Ron Paul's legislation on auditing the Fed is gaining credibility, and Fed policy is viewed skeptically by both the Tea party and Occupy movement, as well as some in the Federal Reserve such as Kansas City Fed chairman, Thomas Hoenig, and respected economists such as Alan Meltzer of Carnegie-Mellon University.Ron Paul is anti-military- Paul has support from servicemen in the military and raised more money from them than any other candidate including Obama. Ron Paul has youth support because he is against the war on drugs- the war on drugs has not worked that well and new approaches are needed. His support among youth comes from a believing that individuals are better at making the right decisions, his idealism, and his faith in making the U.S. a better place. ...

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Janet Napolitano, president of the University of California, says the Obama plan for ratings of colleges in the U.S. will not add much value because much of the information is already available. More important she says is to tackle the bad actors in education leading to high student debt. She says she will cut costs by a couple of hundred million dollars in the next few years, and will keep pushing on costs as there is a natural tendency to revert back. With less state support the UC system is admitting a larger number of students from out of state who pay higher tution.

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Immigration, welfare and membership in the E.U. emerge as issues in Britain's 2015 election, making it harder for the Conservative party under Cameron to get a majority. Polls show Labor running neck and neck with the Conservative party at 36%, and UKIP at 12%, the Greens at 5%. The Conservatives introduced proposals to make it difficult for E.U. citizens to get welfare payments, but this is seen as not enough action. E.U. rules allow free movement making it harder to curb immigration. Prime minister Cameron has higher personal popularity than Ed Milliband, and is campaigning on the theme of having set Britain on the right path to economic recovery after spending by Labor had increased the national debt.

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After years of rapid growth and rapid rate of credit creation China's economy is stalling. Each $1 of new credit generates only 17 cents in GDP growth, according to Bloomberg. This compares with 83 cents of GDP growth for each credit dollar in 2007. Local governments cannot find projects that are worthy of investment. Financial repression with low interest rates for savers is further depressing consumer spending when it is needed to rebalance the economy away from exports.

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With the effects of the government tax credit fading, Commerce Department numbers show a 33% drop in sales of new single-family homes from 446,000 units in April to 300,000 annual rate in May 2010. The supply of homes for sale went up by 47% to 8.5 months in May from 5.8 months supply in Aprill 2010.

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How inflation is affecting people who thought themselves to be in the middle class like postal workers and teachers and public sector emplyees. Wages are stagnant in many parts of the European economy as inflation picks up and the price of basic necessities like bread and fueling the family car cost more as the year progresses. A study by the German Institute of Economic Research in Berlin finds that the broad middle of the German workforce defined as workers earning 70 to 150% of the median income shrunk to 54% of the population in 2007 from 62% in 2000. Something is clearly going on with wages not keeping up with inflation and it does not look good just as a global slowdown that started in the USA is affecting the rest of the world. In Britain striking teachers closed schools as proposed wage raises of 2.5% were not enough to meet the rising cost of living, with food up 7% and oil up 20% since this time last year. German workers have already staged a series of strikes for a greater share in the increased wealth after years of making concessions and the mood in Germany is that a lot of the senior business people are making too much at the expense of workers who are being asked to sacrifice too much....

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Krauthammer says it has become a cliche for people to say "politics is broken" in the U.S. John Beers, head of the Standard & Poors sovereign ratings committtee, also cited a broken political system in his rationale for the U.S. credit downgrade to AA+. This happened even as S&P repeatedly emphasized the triple A rating for France during this weeks (early August 2011) tumult in the markets over French credit risks. But in reality when you look closely and have a sense about the serious changes being discussed, says Krauthammer, something exceptional has happened, and the system is working. For the U.S. Congress and the government to come to grips with an ever expanding debt -with 39 cents of every dollar spent being borrowed as Alan Simpson of the Simpson-Bowles Commission never tires of pointing out- when both branches of government have ignored or shunted off the question with a "deficits are ok" attitude for decades- is a significant achievement. When one looks closely contrary to what S&P's and other opinion says there is actually a political process that is working in the U.S. compared to the process in Europe. In difficult situations when strong opinions are bare knuckling it with each other this process can be boisterous, but it only suggests an effort to wrap ones hands around the problems in a serious way. This is actually one of the strengths of the U.S. system with its checks and balances and its spirited dialogue. In business management Intel's Andy Grove called it "constructive confrontation," and he described this as positive and essential for business institutions to survive and grow....

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India's Foreign Investment Board clears investments by Vodafone and Tesco.

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Sales of autos once at 14 to 24% increase year after year was down to essentially flat in the latter part of the year with full year growth at about 6.7% over 2007. And 2009 could be flat or see declines in sales. Consumers are feeling the effects f drop in the stock market and drop in housing prices as well as a slowing economy.

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Turkey increases security at its borders limiting the flow of refugees and to control terrorism.

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Email exchanges between OMB staffers and Obama administration officials, released exclusively to the Washington Post, show the Obama administration urging the OMB to speed up its decision on the half a billion dollar loan to Solyndra. This was part of stimulus funds to the solar industry. Solyndra was a favorite of the Obama administration according to the Washington Post, and aides to Rahm Emmanuel and other officials sent emails urging speeding up approval. OMB officials in their replies stated they were under pressure. One email by a senior OMB staffer sent to McSweeney, Biden's domestic policy advisor, Aug 31, 2009, said: "we have ended up with a situation of having to do rushed approvals on a couple of occasions (and we are worried about Solyndra at the end of the week)... we would prefer to have sufficient time to do our diligence reviews." Other emails referred to "the time pressure we are under to sign-off on Solyndra," and indicated "there isn't time to negotiate." Solyndra had large investments by the funds operated for the family foundation of George Kaiser, an Obama fundraiser....

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The military and the old order in Egypt, including the lack of an imaginative Muslim Brotherhood party, remains a stumbling block for Egypt's return to democracy and the constructive channelling of the people's energy.

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Krugman points out the gains on three fronts evident from the Census Bureau report of 5.2% gain in median income of households in the U.S. He says the first is the growth in incomes of ordinary working class and middle class families, second the large decline in the poverty rate, and third the further rise in insurance coverage in 2015 for people without health insurance. He points to the steady efforts of the Obama administration to improve lives of ordinary families as working based on the Census report though results have taken time, and could have been better. The Stimulus, says Krugman could have been larger following the blow of the 2009 financial crisis and increased unemployment at the time. Janet Yellen at the inequality conference of the Boston Fed in 2014 pointed out the problems of 62 million households having net worth of about $10,000, and why this was running against the American idea of a better life for all Americans. In that sense the Census report is a movement in the right direction but a lot remains to be done.   ...

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Saudi inflation went up by close to 9% in February, from January's 7% figure. Rents increased in February by 18% and food costs by 13%. The peg of the Saudi currency to the dollar accounts for 35% of inflation. Saudi peg is at 3.75 riyals to the dollar. The Saudi Monetary Agency cut interest rates 0.75 % in line with the Federal Reserve to maintain its peg, even while the Saudi are pouring money into construction of new cities in the desert and building new refinig and aluminium plants so the liquidity in the economy gets a further boost from lower interest rates when it does not need one. And the lower rates will only create more pressures on inflation in addition to those already present from all the money the governmet is spending from increasing oil revenues.

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Deutsche Bank's auto analyst raises concern that the $24 billion that GM has now may not be enough to weather the coming downturn in the economy and spending. Some additional losses are expected in GMAC's mortgage unit Rescap. And the American Axle and Delphi situation need watching for som additional GM money needed there. A big factor in all this is the declining market. For a long time GM has considered 17 million vehicles a year as how the industry would do in N. America, but sales may be less than 15 million. And if much lower that GM may face more losses and its not clear for how long markets in emerging markets like Brazil and China will continue to show strong gains as the US weakening may spread to emerging markets and also to Europe.

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Raghuram Rajan warns about the difficulty of central bankers worldwide to escape from the scenario of ultra low interest rates.