Wednesday, July 28, 2010

7/28/10 Post

Updated Chart Shows Obamacare's Bewildering Complexity
“For Americans, as well as Congressional Democrats who didn’t bother to read the bill, this first look at the final health care law confirms what many fear, that reform morphed into a monstrosity of new bureaucracies, mandates, taxes and rationing that will drive up health care costs, hurt seniors and force our most intimate health care choices into the hands of Washington bureaucrats,” said Brady, the committee’s senior House Republican. “If this is what passes for health care reform in America, then God help us all.”
Brownback, the committee’s ranking member, added, “This updated chart illustrates the overwhelming expansion of government control over health choices and the bewildering complexity facing everyone affected by this law. It doesn’t take long to see how the recently signed health care bill causes a hugely expensive and explosive expansion of federal control over health care. Personal choices that should be between a doctor and a patient will quickly be strangled in a never ending web of bureaucracy.
- Committee News, Joint Economic Committee

Durable-Goods Orders Slide
Demand for U.S. manufactured durable goods slid in June for a second consecutive month in another sign the manufacturing sector expansion is slowing.
Home Prices Rise but Outlook for Sector Dims
Consumer Confidence Dropped Again in July.
Texas Battles Health Law Even as It Follows It
...the law’s advocates argue that Texas stands to gain as much as any state. But leaders in Austin are focused on the fiscal threat it poses, which they estimate could cost the state $27 billion in the 10 years beginning in 2014.
Public Employees Get More Benefits
An annual scorecard on benefits shows that public employees continue to have richer benefits than their private-sector counterparts, but squeezed state and local budgets could push governments to start cutting back.
Earnings Streak Defies Consumer Fears
The profit recovery isn't something that consumers, coping with stagnant wages, a weak jobs market and flat to declining housing values, feel. And it shows in their mood and in recent retail spending declines.
Congress passes trade bill extending tariff relief for manufacturing components
Congress has passed legislation that temporarily reduces or suspends tariffs on 639 items, mostly components that American manufacturers use in their production processes.
SEC: More transparency coming
The Securities and Exchange Commission will make it easier for the public to join in the rulemaking discussion, as required by the new Wall St. reform law.
Home ownership falls to lowest level in 11 years
The Census Bureau said the home ownership rate fell to 66.9% in the second quarter of 2010, down half a percentage point from the previous year. The home ownership rate was 67.1% in the first quarter of the year.
Employers get tough on insuring 'family'
Beginning next year employers will have to provide coverage for dependents of employees 'till age 26. That will further inflate coverage costs for companies at a time when employers are already bracing for a 9% jump in their health care plan expenditures in 2011.
Capital Goods Orders in U.S. Climb, Signaling Investment Pickup
Orders for non-military capital equipment excluding aircraft climbed 0.6 percent last month after jumping 4.6 percent in May.
Toned-down Senate energy bill step in right direction, Obama says
President urges comprehensive bill as Senate, House mull smaller ones. For the time being, the president's goal of a sweeping bill to address climate change and put a cap on carbon emissions looks elusive at best.
BP taking tax credit from Gulf spill
BP PLC will reduce its contribution to U.S. coffers by roughly $10 billion due to a tax credit the company is claiming it incurred from the Gulf of Mexico oil spill.
Cities threaten to cut jobs
Cash-strapped cities and counties have been cutting jobs to cope with massive budget shortfalls -- and that tally could edge up to nearly 500,000 if Congress doesn't step up to help.

Secondary Sources: Stimulus Effects, Federal Debt, Forecasts
A roundup of economic news from around the Web.
‘Public Employees Get More Benefits’
Comparing salaries between public- and private-sector employees is a relatively straightforward process. Comparing benefits is much less so. Nevertheless, despite some shoddy reasoning in today’s Wall Street Journal article, there’s a good case to be made that public-sector benefits are significantly more generous than those paid to the typical American worker.
Housing, Rental Vacancies Flat From Year Ago
The data are just the latest to show that home vacancies remain high despite low interest rates and federal tax credits designed to spur home sales.
Durable Goods orders fall 1% in June
This was well below expectations, and is further evidence of a slowdown in the manufacturing sector.
Words, Not Deeds, Are Central Bank’s Main Power
New research on monetary policy is reinforcing the idea that when it comes to the Federal Reserve, watching what officials say is as much or maybe even more important than watching what they do.
MyTaxBurden Calculator Review
The bottom line? The MyTaxBurden calculator is a very well done tool that will allow its users to obtain high quality information of special relevance to them.
MBA: Mortgage Purchase Applications increase slightly last week
Although the weekly applications index increased slightly, the 4-week average is still near the levels of 1996.
Ross Douthat's case against cap-and-trade
The bill seems to bureaucratize the energy sector, forgo most of the revenue opportunities, produce massive time consistency problems (postpone real adjustment and then give out more permits over time), and all without getting public buy-in to the idea of higher carbon prices.
No, There Are NOT “Five Job Seekers for Every Job Opening” “There are now roughly five unemployed people for every available job.” Regardless how often you hear this, the statement is completely false.
Ready for the Next Trillion-Dollar Bailout?
Obamacare has been rightly blasted as fiscally irresponsible, yet few have noticed what may be Obamacare’s largest ticking entitlement time-bomb: the CLASS Act.
100 Days Later, Obama Still Failing the Gulf
President Obama’s administration has turned a crisis into a disaster, and someone needs to be held accountable.
The Good, the Bad, and the Early in the Senate Spill Bill
At the very least, Senators should refrain from the instinct to “do something” on the oil spill and take a close look at the legislative proposal on the table.
Contract on America, Parody Actually Sounds Pretty Good
The Democratic National Committee is announcing today the “Republican Tea Party Contract on America.” Echoing Newt Gingrich’s 1994 “Contract with America,” the faux manifesto contains the following ten points:

Research, Reports & Studies
U.S. Long-Term Debt Situation Is One of the World’s Worst
This year, the U.S. public debt is projected to reach 62percent of the economy—up from 40 percent in 2008 and nearly double the historical average, according to recent CBO estimates.
Spain Is Caught Up in Self-Delusion
Spanish authorities have deluded themselves into believing that their economy is about to rebound and that Spain can muddle through, but as Greece painfully learned earlier this year, it is better to get ahead of the policy curve than wait for a full-blown financing crisis.
Dividends, Share Repurchases, and Tax Clienteles: Evidence from the 2003 Reductions in Shareholder Taxes
This paper jointly evaluates firm-level changes in investor composition and shareholder distributions following a 2003 reduction in the dividend and capital gains tax rates for individuals.

Economists’ Comments & Opinions
Atlas Didn't Shrug
He's just sitting on his hands while he confronts regulatory and tax uncertainty.
Arizona's Immigration Surprises
The new law will be a boon to lawyers and a burden on police and businesses.
Government Austerity: The Good, Bad And Ugly
Spending cuts: good; tax hikes: ugly.
The last gasp of
Commentary: History doesn't always repeat itself but it often rhymes.
World economy: Vulnerable to vertigo
The picture is one of slow underlying growth coupled with austerity in the public sector in advanced economies and much faster growth in the emerging world.
88 keys to economy
Our little piano fable takes us to where we are in America today. It's too bad that the voices of the lonely souls are being drowned out by the cacophonous screams of the stimulus crowd.
Financial Reform Bill Means Job Losses on Wall Street
The President signed a new law last week governing financial services. The measure is projected to destroy jobs on Wall Street. The Business Roundtable estimates that this new law may discourage investment and job growth. It says the law “takes our nation in the wrong direction.”
What's Their Plan?
There are really only three options for Social Security reform: raise taxes, cut benefits or invest privately.

Graph of the Day
JEC: Your New Health Care System
See: What a Toxic Asset looks like
See Also: President Obama Job Approval

Book Excerpts
"On the visible level—the result of years of increasingly irrational government manipulation of the economy—the diagnosis was inflation, recession, and unemployment. This diagnosis was easily made and communicated to the public because everyone could see… On the invisible level—which is to say, the long-range casual level—the diagnosis was more extensive and even more disturbing, but it was rarely talked about at all." –Former Treasury Secretary William E. Simon, A Time for Truth (1978)

Did You Know
Releasing criminals back into society increases crime. Former prisoners have high arrest rates after returning to society. A Justice Department Bureau of Justice Statistics study of 272,111 state prisoners released in 1994 found that two-thirds of prisoners are rearrested within three years. After release, these offenders generate:
• Over 744,000 total arrests,
• 2,871 arrests for murder,
• 2,362 arrests for kidnapping, rape, kidnapping,
• 2,444 arrests for rape,
• 3,151 arrests for other sexual assaults, assaults,
• 21,245 arrests for robbery
• 54,604 arrests for assault.