Budget News Dec. 6 - 10

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News
FRIDAY
Treasury: Financial bailout income at $35 billion
The government's heavily criticized $700 billion financial rescue program has earned nearly $35 billion in income over the past two years, according to data obtained by The Associated Press.
Twenty Senators Step up Pressure for a Deficit Reduction Plan
Group includes Democrats Warner and Conrad, and Republican Grassley.
Boehner will cut Hill budgets by 5 percent
Incoming Speaker John Boehner said he will propose to cut nearly every office budget by five percent as one of Congress’ first measures next year.
Poll: Americans Much More Worried About Jobs Than the Debt
Republicans dislike the deficit panel's plan more than Democrats do.
State News Roundup
Here’s a look at some of this week’s most interesting, and consequential, budget- and economy-related issues in the 50 states…

THURSDAY
California Budget Gap May Reach $28.1 Billion Over 18 Months, Brown Says
The deficit estimate takes into account a $2.7 billion drop in projected estate-tax receipts, and compares with the most recent forecast of a $25 billion gap for the period, Brown said today at a public meeting of state officials.
UPDATE: CEOs Press Congress to Cut Spending, Overhaul Tax Code
A group of chief executives spelled out a plan on Wednesday to boost business growth, urging Congress to redesign the corporate tax system, cut government spending and pass pending free trade agreements.
Deficit hawks find tax-cut deal 'exasperating'
Last week was such a happy week for deficit hawks. This week, they're back to beating their heads against the wall.
Preparing for a Debt Ceiling Hike
Republican House leaders have months to prepare for a tough vote on increasing the debt limit.
House approves $1T budget bill
The House narrowly approved a stripped-down budget bill Wednesday evening, cutting nearly $46 billion from President Barack Obama’s requests in order to hold total governmentwide appropriations to no more than the current $1.09 trillion level.
Massive Budget Bill Faces Opposition in Senate
The 423-page measure, opposed by Republicans, conservative Democrats and some anti-war lawmakers, wraps a dozen unfinished spending bills into a single measure.

WEDNESDAY
States Face Budget Shortfalls of $26.7 Billion
Fifteen states are facing combined budget gaps midway through their 2011 fiscal year totaling $26.7 billion, according to a National Conference of State Legislatures report to be released Wednesday. The other 35 states say they are on target with their budgets. At this time last year, 36 states reported a combined $28.2 billion shortfall.
Italy's Parliament Tightens Budget Amid Tensions
The Italian parliament on Tuesday approved €25 billion ($33.3 billion) in budget cuts over the next two years, locking in austerity measures aimed at stabilizing public finances and reassuring jittery sovereign debt markets.

TUESDAY
Schwarzenegger Proposes $9.9B In Cuts
Gov. Arnold Schwarzenegger has declared a fiscal emergency and is asking lawmakers to meet in a special session to save the state $9.9 billion over the next two years.
White House Looking for Billions in Additional CR Spending for Next Year
The White House has asked lawmakers to add more than $11 billion to any long-term continuing resolution cleared by Congress before the end of the year, according to materials circulating on Capitol Hill Monday.
Kingston Has List of Ideas for Capitol Hill Cost Cuts
On the chopping block in a Kingston-led committee: Capitol Police security details, Capitol Visitor Center tour guides and maybe even an entire agency.

MONDAY
Deficit Spending Is Top Worry in New Poll
By 59% to 30%, Americans believe that Congress should cut federal spending rather than raise taxes.
Pension Woes Prompt GOP Move
The new Republican House leadership, whose party benefited in November from public antipathy toward the bailout of banks, is moving to avoid a federal bailout of state and local pension funds
A Whole New Name Game
Parks, Transit, Schools Consider Corporate Monikers in Bid to Plug Budget Gaps.
Senator says deficit needs White House involvement
The chairman of the Senate budget committee on Sunday called on the White House to hold a summit to tackle the federal deficit, saying it is the next logical step in getting the nation's financial house in order.
Flaherty Says Canada May Move Forward the Target Date for Balanced Budget
Canadian Finance Minister Jim Flaherty said he may consider bringing forward a goal of balancing the budget within five years after consulting with various groups over the next few months.

Economist Comments
FRIDAY
Opinion: Want to Balance the Budget? Get Out the Chainsaw
If you wanted to spread the pain around, that would mean cutting every agency budget by 45 percent.

THURSDAY
BACON: Thinking the unthinkable about the national debt
Americans need to know the financial endgame they're trying to avoid.
The Cuts That Weren't
"[T]he commission report doesn't go nearly far enough in reducing the size, cost, and intrusiveness of government."
EDITORIAL: Exposed: TSA's X-rated scanner fraud
Firms hawking this dubious technology have their eyes on the $2.4 billion the Obama administration has allocated for the scanning program. It's not surprising they would leave out mention of its limitations.
The Obama Stimulus Impact? Zero
Liberals are still arguing that the federal spending stimulus wasn't large enough. How many multiples of nothing—its result according to new evidence—would they like?

WEDNESDAY
$200 Billion in Obsolete, Ineffective Federal Programs
Despite all the tough talk by the Tea Party about shrinking the size of government, federal programs usually take on a life of their own and are very hard to kill off.
The end of big government?
One difference between now and the mid-’90s is the magnitude of the numbers. The federal deficit is projected to exceed $1 trillion in 2011, compared with the relatively paltry $152 billion deficit in fiscal 1995.

TUESDAY
This Budget Would Never Pass
A five-part plan to cut the deficit, narrow inequality, and strengthen the economy—and why special interests would block it.
The Deficit Commission: The Good and the Bad
The answer here is to follow the Bowles-Simpson proposals on tax rates and tax subsidies, while ignoring the call for more federal revenues that history shows won't fix the deficit anyway.
FEULNER: Reversing the trend to spend
Debt commission's proposal is a good start.
Enough Talk About Deficit-Cutting; Just Do It
Many of the proposals the Obama commission put forth have been heard before. It's time for action, not more discussion.
How to Balance the Budget Without Raising Taxes
The 19 Percent Solution.

MONDAY
US Budget Experts: Early Next Year Critical For Fiscal Policy
...in the wake of the release of three sweeping reports in the last month about the impending fiscal crisis in the U.S., many budget experts are willing to make this prediction: it will be clear by early next spring if the U.S.'s fiscal debate has turned a corner and is focusing on finding solutions to the nation's increasingly serious fiscal outlook or if a decade-long budget stalemate will continue.
Unions limit state's budget-cutting options
Some say Legislature gave up too much power in 2002.
What the Simpson-Bowles Plan Left Out
They performed an accounting exercise to shrink the deficit without trying to define what government should do and why.
The fiscal commission's omission
A critical element is the question: “What is the proper role of the federal government?”

Blogs
FRIDAY
Cut the deficit, but not my programs
The majority of Americans think the federal deficit needs to be reduced, according to a new poll from the Pew Research Center for the People & the Press. They just don’t like many of the ways of doing it.
How Can States Limit Spending?
What can states do to arrest the rapid growth in state spending? What tools do state legislators have to limit the growth of their budgets?
Social Security Doesn’t Contribute to the Deficit? That Was Then…
The $116 billion 10-year cost of the payroll tax cut is effectively added to the deficit and the debt, although it remains to be seen if the credit will survive.

THURSDAY
Policymakers Needn’t Fear Spending Cuts
A recent study by economists Alberto Alesina, Dorian Carloni, and Giampaolo Leece looked at 19 OECD countries from 1975 to 2008 and found no evidence that “governments which quickly reduce budget deficits are systematically voted out office.” Therefore, the authors conclude that governments can “decisively” reduce deficits and be returned to office by voters.
False Choice
This thesis rests on several dubious assumptions, but none more questionable than the one that equates higher government spending on education with better education.
A Leaner Leviathan
Unfortunately, balancing the federal budget won't require radical change.
Where’s the Tax Bill?
A developing problem with this secret compromise among leaders in the House, Senate and White House with regard to extending tax cuts for all is the fact that nobody has seen the agreement.

TUESDAY
Crisis in the States
We have a triple-whammy of rising health care costs, a demographic bulge, and the historical legacy of a major expansion of government.
The Deficit Commission’s Plan and Balancing the Budget
Also, the commission’s plan increases spending by $1.6 trillion between today and 2020.
How Much Federal Spending Can Americans Afford?
...the median household income in the U.S. would have to rise to be $70,097 in order for this level of government spending to not produce a significant budget deficit. That's about 41% higher than the actual median household income in 2009 of $49,777!
Fiscal Fitness
And as far as I can tell, the only thing it tells us about fiscal policy is that tax revenues are really remarkably stable outside of recessions, even though we've had many different tax regimes over the years.
Morning Bell: Freeze Taxes, Freeze Spending, and Go Home
Then after the 111th lame duck has frozen taxes and frozen spending, they should just go home. They have done enough damage already.

MONDAY
The Zero Deficit Line
if we assume the median household income in 2011 will be $49,000, that means that any federal spending over $20,592.91 per household will only add to the national debt and make the nation's fiscal situation worse. How much worse will depend upon how much over that figure the spending figure will work out to be.
The hidden truth about the deficit
What nobody wants to say: the real looming deficit problems are medical. Health costs must be controlled. The rest is peanuts.
VIDEO: Congress Must Cut Spending
...while this issue has garnered increased scrutiny, some continue to ignore the real cause of our debt and deficit problems—rampant spending—focusing instead on raising taxes.

Reports
TUESDAY
TEL It Like It Is: Do State Tax and Expenditure Limits Actually Limit Spending?
This study combines the two approaches described above to evaluate TELs based on where they are applied (high- vs. low-income states) and based on how they are structured.

Employment News Dec. 6 - 10

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News
FRIDAY
You don't want to be unemployed in Vermont
Jobless Americans everywhere are running out of federal unemployment benefits as Congress debates whether to extend the safety net as part of a Bush tax cut compromise.
TJX to Cut 4,400 Jobs, Shutter Stores
T.J. Maxx and Marshalls parent TJX Cos. (TJX) announced plans on Friday to slash more than 4,000 jobs and shut down its A.J. Wright division.

THURSDAY
U.S. Initial Jobless Claims Fell 17,000 to 421,000 Last Week
The number of workers filing first- time claims for unemployment insurance payments fell last week in the U.S., showing the labor market continues to improve.
How states fared on jobless claims, at a glance
Unemployment claims fell for the second time in three weeks last week to their second-lowest level this year. That's an encouraging sign that companies are cutting fewer workers and may be ready to accelerate hiring.
Job openings rise in October to most in 2 years
Businesses and government advertised nearly 3.4 million jobs at the end of October, up about 12 percent from the previous month, the Labor Department said Tuesday. That reverses two months of declines and is the highest total since August 2008, just before the financial crisis intensified.

WEDNESDAY
Unemployment benefits: Extension won't help '99ers'
Unemployment benefits in Nevada, which leads the US in unemployment, won't be extended for those at are near the 99-week cutoff for benefits.

TUESDAY
Hiring Intentions at U.S. Employers Improving, Manpower Says
The U.S. labor market outlook is improving, with more employers planning to boost payrolls at the start of 2011 and fewer expecting to cut headcounts compared with the same time this year, a private survey showed today.
Type the Title You Want People to See
Unemployment also falling among women, 30- to 49-year-olds, those with no college education.

MONDAY
Obama to Push Unemployment Benefits as Condition of Extending Tax Rates
Visiting a technical college in North Carolina, President Obama is set to speak Monday on the need for private-public cooperation to make the U.S. more competitive while also laying down conditions on expiring tax rates, even as a deal between the White House and Congress is said to be in the works.
Jobs Setback Clouds Recovery
Hiring Slows Down, Stirring Doubt on Economy's Strength
Gop, Dems Nearing Deal on Taxes and Jobless Benefits
An outline of a bipartisan economic package is emerging that would temporarily extend the Bush-era tax rates for all taxpayers, while extending jobless benefits for millions of Americans.
Why employers won't hire
The problem with bringing down the stubbornly high unemployment rate is that employers are learning to do more with less.

Economists Comments
FRIDAY
Tale Of Two Recoveries
A mainstream media guru says the president is channeling Ronald Reagan but risks becoming Jimmy Carter. Reagan's policies worked, Carter's didn't and Obama's haven't. Wake up and smell the tax cuts.

THURSDAY
Jobless Benefits' Effect on Unemployment
A likely rise in the U.S. jobless rate is the unfortunate reality of the government's move to fund extended unemployment benefits for another 13 months.
Are We Subsidizing Unemployment?
The stimulus plan may have actually worsened unemployment. New data suggest a large share of those without jobs remain on the sideline because of increasingly generous jobless benefits.
Do Jobless Benefits Raise Unemployment?
Extending benefits, a key to the tax deal, may keep some at home, but it will also boost growth

WEDNESDAY
Many jobs are gone forever: What now?
The issue is complicated, to be sure. Millions of Americans are exhausting their 99 weeks of unemployment insurance while, in the fight for talent in Silicon Valley, Google has decided to raise salaries by 10 percent across the board. But if the economists and politicians can work together, we can benefit from the effort and innovation of highly productive workers while supporting the adjustment of the rest.

MONDAY
Jobless Report Is Death of Keynesianism
President Obama may have pulled "the car out of the ditch," but he left the jobs engine behind, judging from November's weak jobs report. Yet he remains wedded to a job-killing tax hike?

Blogs
FRIDAY
Is There an Inflation-Unemployment Trade-off?
Much of what drives the policy choices of Ben Bernanke and the Federal Reserve is a belief in the ability to trade higher inflation for lower unemployment, known within the economics profession as the “Phillips curve.” But does this trade-off actually exist?

THURSDAY
Worth more than a thousand words
One reason Keynesian stimulus is so ineffective is the aggregation problem. Boosting “aggregate demand” hides the complexity of the economy and the fact that parts of the economy are fine and parts are sick.
About 6 Million Didn’t Work at All Last Year
Nearly 6 million Americans looked for work but weren’t able to find employment at all last year, a new report shows.
Payroll Tax Increase and Iowa Jobs
Iowa Job-seekers and wage-earners will feel the sting of the longest running unemployment benefits extension in U.S. history.
Secondary Sources: Unemployment Extension, Tax Deal, Job Openings
A roundup of economic news from around the Web.
"Why work?"
A one-parent family of three making $14,500 a year (minimum wage) has more disposable income than a family making $60,000 a year.
Do Tax Cuts for the Wealthy Create Jobs?
Over at The Economist's Democracy in America blog, Matt Steinglass is pondering the differential stimulus effect of tax cuts for the wealthy, and tax cuts for everyone else.
Oldest Workers Hardest Hit in November 2010
In the now three years since the total level of employment peaked in the U.S., some 7,595,000 fewer people were employed in November 2010 than had jobs in November 2007, as the latest data suggests that the U.S. job market has seen no sustained improvement since March 2010.

MONDAY
Where the jobs are
THE Bureau of Labour Statistics released two interesting reports this morning that shed a little more light on the state of the American recovery. The first updated metropolitan-level employment data through October, providing a sense of exactly where things are improving, and where they aren't.
Job creation remains near-stagnant: New hires barely exceed job separations
Job hires (3.6 percent) only barely exceed total job separations (3.5 percent, including firings, resignations, and layoffs).
What costs $919 Billion but Isn't Likely to Create Many Jobs?
Could the answer to this question be the just announced tax deal and the so-called "doc fix"?
Unemployment benefits and tax cuts: 'compromise' as usual
Unemployment benefits extended, payroll taxes cut, and all Bush tax cuts extended: an all-too-typical Washington 'compromise' where everybody gets what they want – while the deficit deepens.

TUESDAY
Taxpayer Calculator: Extending Unemployment Benefits
There are two schools of thought when it comes to extending unemployment benefits: one is economic and the other is emotional. If Congress does not prolong the payments, two million Americans will lose their benefits right away, and the Obama administration estimates seven million Americans will be affected if a year-long extension isn't passed.
BLS: Job Openings increase sharply in October, Labor Turnover still Low
From the BLS: Job Openings and Labor Turnover Summary
Secondary Sources: Underwater Homeowners, Austerity Alternatives, Job Creation
A roundup of economic news from around the Web.
How the Weak Jobs Report Can Actually Help the Economy
Congress might now see that the Bush tax cuts and unemployment benefits need to be extended.

MONDAY
Economists React: ‘Painful Reality Check’ on Jobs
Economists and others weigh in the disappointing employment report.
Participation Rate of 25 to 54 Age Men at Record Low
The collapse in the labor force participation rate has been one of the key stories of the great recession. The participation rate is the percentage of the working age population in the labor force.
The Jobs at Stake in the Tax Cut Fight
Last Friday the Labor Department reported that private sector employers added an anemic 50,000 net jobs to the U.S. economy in November. That is far fewer than what is needed to absorb discouraged workers reentering the workforce or population growth. As a result, unemployment rose to 9.8 percent, marking the 19th consecutive month that our nation’s unemployment rate topped 9 percent, a post–World War II record.

Reports
MONDAY
How Many Jobs Will Congress Choose to Lose? The Economic Effects of Various Legislative Options for Addressing Expiring 2001 and 2003 Tax Policy
There is near-universal agreement among economists that raising marginal tax rates during slow economic times only makes the economy weaker. Higher tax rates reduce employment, cut investment activity, and soften household demand for goods and services. Even so, Congress is considering right now a number of tax proposals, most of which raise tax rates starting on January 1, 2011. All but one of these legislative options would result in higher unemployment.
Heritage Employment Report: Little Cause for Thanksgiving in November Jobs Report
The November employment report threw a bucket of cold water on hopes for an accelerating recovery. The Bureau of Labor Statistics reported that private sector employers added only 50,000 net jobs. Unemployment rose to 9.8 percent and has remained above 9 percent for 19 consecutive months. This ties the record for the longest such stretch since World War II. Weekly hours were flat in November, and average wages increased by just one cent.

Monetary News Dec. 6 - 10

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News
FRIDAY
Ron Paul, Author of `End the Fed,' to Lead Panel Overseeing Central Bank
Paul, in an interview last week, said he plans a slate of hearings on U.S. monetary policy and will restart his push for a full audit of the Fed’s functions.

THURSDAY
Bond Prices Plunge for 2nd Day on Deficit Fears
U.S. Treasurys plunged Wednesday, extending Tuesday's sharp losses and pushing benchmark yields to a six-month high, after a deal in Washington to extend tax cuts fueled fears of inflation and a swelling budget deficit.
More Than Half of Americans Want Fed Reined In or Abolished
A majority of Americans are dissatisfied with the nation’s independent central bank, saying the U.S. Federal Reserve should either be brought under tighter political control or abolished outright, a poll shows.

WEDNESDAY
Bernanke: US 'close to border' of recession, Federal Reserve may intervene
Federal Reserve Chairman Ben Bernanke says that the US economic recovery is 'not far' from losing momentum. If the recovery slips further, the Federal Reserve is prepared to act again.

TUESDAY
Everybody hates the Fed
The Fed is taking heat from just about everyone lately. But it's not just conservatives joining together to criticize the Fed and its boss. Some on the left are also starting to show disdain for the Fed's controversial plans to spend an additional $600 billion on long-term Treasuries, known as quantitative easing.

MONDAY
US could need third dose of quantitative easing, says Ben Bernanke
The chairman of the Federal Reserve defended his decision to launch a second $600bn (£382bn) stimulus program – dubbed QE2 – last month. Appearing on CBS News's 60 Minutes, Bernanke said it was "certainly possible" that the Fed would open the QE floodgates again, if the US recovery does not pick up pace.
Bernanke defends bond buys, citing at-risk economy
Critics, from Republicans in Congress to some officials within the Fed, say they fear the Fed's intervention could spur inflation and speculative buying on Wall Street while doing little to aid the economy.

Economists Comments
FRIDAY
Why Are the Fed's Actions Surprising Anyone?
Bernanke is often inaccurate, but propping stock prices was never something the Fed overtly lied about.
A European Economic Tsunami?
In 2007, the chairman of the Federal Reserve, Ben Bernanke, spent most of the year assuring markets that the U.S. sub-prime mortgage loan problem would be contained. In an all-too-similar manner, the European Central Bank president, Jean-Claude Trichet, now keeps asserting that Europe's sovereign debt crisis does not pose a significant threat to the overall European economy, let alone to the global economy.

THURSDAY
Teflon Bernanke?
Yes, yes, people hate the Fed. But believe it or not, they're sort of OK with Ben Bernanke.
The Farm Belt Boom
Land prices are soaring. Is this another Fed asset bubble?
Don't Be Fooled: Inflation Has the Upper Hand
Citing declining credit as proof we're in deflation is overly simplistic; base money creation, velocity, and the level of market participants' faith in monetary policy must also be considered.
Euro Falls Amid Fears of Sovereign Default
The ECB and several eurozone nations are urging Portugal to follow Ireland's lead by applying for a bailout.
Is Deflation on the Horizon?
Todd Harrison and Michael Pento discuss the ongoing inflation vs. deflation debate.

WEDNESDAY
Bernanke: 60 Minutes, 2 Big Lies
This past Sunday on the CBS program "60 Minutes", Americans received a massive dose of mendacity from our Fed Chairman. Mr. Bernanke's shaky delivery, and even shakier logic may cause faith in America's economic leadership to evaporate faster than the value of our dollar. In particular, Bernanke delivered two massive distortions:
What I Would Have Asked Bernanke
After 60 Minutes was gentle with Ben, here are some tougher questions for the Fed chief.
Great Expectations for Ben Bernanke
Forget legacies; world history hangs in the balance.
The Fed: From Central Banking to Central Planning
The American public takes a back seat to the banks; the Fed has gone from smoothing the business cycle to mircomanaging the markets.

TUESDAY
Knowing the Limits of Monetary Policy
U.S. monetary policy has become a tool of fiscal policy, and uncertainty characterizes both.
Folding the Fed
Central bank isn't equipped to save the economy.
The Federal Reserve: America's Fourth Branch of Government
The Fed alone determines how much money should be in the economy, yet its powers aren't defined by the Constitution, and neither the chairman nor the senior officials are elected by the people.
Why the Argument for Imminent Inflation Is Flawed
It is futile to expect inflation because of a liquidity rally within a larger deflationary wave.
U.S. Unloads Citi Stake for $12 Billion Profit
The U.S. Treasury sold the last of its Citigroup Inc. common shares in a $10.5 billion offering that capped the government's biggest bank bailout of the financial-market meltdown.

MONDAY
Bernanke 1, inflation hawks 0
Like it or not, history shows Ben Bernanke is right to say inflation isn't knocking at the door.
With Economy on the Brink, Bernanke Sees Path to Recovery
Federal Reserve Chairman Ben Bernanke said the United States is still four to five years away from a more normal unemployment rate, between 5 and 6 percent, and cautioned that a prolonged period of joblessness could result in a changed workforce.
Wasn't QE2 Supposed to Make Rates Lower?
That's what they told us. But it hasn't exactly worked out that way.

Blogs
FRIDAY
Inflation, Inflation Everywhere
Before conservatives give up on arguing against QE, there are a few things to note

THURSDAY
Jon Stewart Catches Bernanke’s Lie
You are going to love this. Even our favorite mugging slapstick news sources gets it that quantitative easing is the same as “printing money.”

WEDNESDAY
The Face of Qualitative Easing
The question isn't whether or not the Fed buys assets, but what kind of assets the Fed buys. Or in this case, what kind of assets the Fed accepts as collateral for its facilities.
Thinking the unthinkable: Let the euro-chips fall
French and German banks hold nearly a trillion euros worth of other European nations' debt: Ireland, Spain, Portugal, Italy, France, Greece. What would happen if they were allowed to collapse?

MONDAY
No Doubt Ben Bernanke is Sincere, But What If He is Sincerely Wrong?
I have increasingly come to the opinion that the data that individuals are pointing to as an example of the down-turn in 2008 is merely the manifestation of the market correcting for the previous distortions caused by the policy error of the manipulation of money and credit of the previous period.
Boehner to Protect the Fed?
With Republicans taking control of the House in January, long-time Federal Reserve critic Rep. Ron Paul is in line to take over chairmanship of the House Financial Service Committee’s Subcommittee on Domestic Monetary Policy and Technology.  This is the subcommittee with direct oversight of the Federal Reserve.

The public really hates inflation, probably due to money illusion, which is one of the reasons we are in the current situation. Circa 1996 Robert Shiller asked a group of 113 randomly chosen responders the following questions:
Japan Failed at Deflation Management
Not only did printing money fail to break deflationary expectations, it failed to keep the yen from rising.

Reports
MONDAY
The Great Recession and Its Aftermath From a Monetary Equilibrium Theory Perspective
We argue that the primary source of business fluctuation is monetary disequilibrium. Additionally, we claim that unnecessary intervention in the banking sector distorted incentives, nearly resulting in the collapse of the financial system, and that policies enacted to remedy the recession and financial instability have likely made things worse. Finally, we offer our own prescription to reduce the likelihood that such a scenario occurs again by better ensuring monetary equilibrium and eliminating moral hazard.

Tax News Dec. 6 - 10

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News
FRIDAY
Obama Weighs Multi-Year Effort to Overhaul Tax Code
President Obama has instructed his economic team to draft options to close loopholes and lower income-tax rates ahead of what would be a multi-year effort to overhaul and simplify the U.S. tax code, administration officials said Thursday.
Obama predicts success for tax deal
President Barack Obama said Friday he's confident that Congress will pass a compromise tax package despite the objections of House Democrats.

THURSDAY
Businesses racing against the tax clock
In December 2009, nearly 150 companies made extra payments. Experts expect this December to be a banner month and easily top those numbers.
Tax Plan Spurs Deal Making
The sweeping tax package negotiated by President Barack Obama and Republican lawmakers gained new momentum toward passage in the Senate, building pressure on balking House Democrats to accept the controversial deal.
Bush tax cuts 101: Would extension boost the economic recovery?
The short answer is yes. Forecasters anticipate that extending the Bush tax cuts, as well as other measures in the Obama-GOP deal, will breathe life into the economic recovery.
Yields Push Higher on Tax-Deal Fallout
Treasurys extended their slump on Wednesday, sending the 10-year yield to its highest since June, amid a steam of negative news for bonds.
Tax Deal Is Key to Avoid Recession, Obama Adviser Says
One of President Obama’s top economic advisers warned on Wednesday that the nation could slip back into recession if Congress did not pass the administration’s tax cut deal with Republicans, as the White House sought to press Democrats into backing the plan.
Estate-Tax Passage Is Likely
The plan put forward by Republicans and accepted by Mr. Obama would reinstate the estate tax at 35% for two years starting next year, with the first $5 million of a person's estate exempted.

WEDNESDAY
Tax cut deal and surprise stimulus - the cost
The compromise on the Bush tax cuts announced Monday night between President Obama and Republicans could cost between $700 billion and $800 billion if ultimately signed into law as is -- no sure thing given opposition from many Democrats.
Tax-Cut Deal Results in Turmoil for Bonds
The tax deal in Washington led investors to dump government bonds on Tuesday, with yields on Treasurys hitting their highest level in six months and municipal bonds getting hit by the sell-off and by the news that federal subsidies for local debt would not be extended.
Tax deal: Rich aren't the only ones who benefit
...other provisions in the $800 billion deal, including the payroll tax holiday and child tax credit, will greatly assist ordinary Americans. And those who are unemployed will benefit from an extension to file for federal jobless benefits through 2011.

TUESDAY
Payroll Tax Cut: A Short Primer
The proposed 2% rollback of individuals' payroll taxes used to fund Social Security is the latest iteration of an idea that's been kicked around for years as a way to supplement incomes and boost economic growth.
Debt Ceiling Enters Tax Debate
The outlines of a deal to prevent a walloping tax increase from taking effect on January 1 are becoming clearer and may also include a sooner-than-expected vote to raise the federal debt ceiling.

MONDAY
Tax Deal Within Reach
Cuts Could Be Temporarily Extended in Exchange for Unemployment Benefits.
Tax Fear May Move Bonuses Earlier
Congress is debating tax rates, and that has Wall Street nervously eyeing the calendar.
Obama Signals Openness to a Tax-Cut Deal
The U.S. Senate on Saturday defeated two attempts by Democrats to extend the Bush-era tax cuts for the middle class permanently.
In Interview, Bernanke Backs Tax Code Shift
The Federal Reserve chairman, Ben S. Bernanke, said in an interview broadcast on Sunday evening that rising inequality was eroding social cohesion and that Congress could help economic growth by making the tax code more efficient.

Economist Comments
FRIDAY
Pelosi and the Hostage Fakers
Republicans shouldn't make a single new tax concession.
Some Year-End Tax-Planning Tips
If President Obama's tax-cut compromise passes Congress, the investor class can breathe a sigh of relief, says Wall Street tax pro Bob Willens.

THURSDAY
Bond Vigilantes May Thwart Tax Deal
Higher interest rates could offset effect of proposed fiscal measures.
Cheers To Obama On Taxes
A permanent tax plan would have given consumers and businesses more confidence.

WEDNESDAY
Ireland's Low-Tax Path to Fiscal Health
Parliament has endorsed the 12.5% corporate rate as 'an indispensable tool' for job growth.
Tax cut deal: Why it isn't enough
Veronique de Rugy, senior research fellow at the Mercatus Center at George Mason University in Arlington, Va., argues that the biggest shortfall of the tax cut compromise is that there was nothing done to address the nation's mammoth budget deficit.
A Taxpayer Bonus
One undiluted piece of good news in the Obama-GOP tax deal is that an extension of the Obama Administration's Build America Bonds (BAB) program is not included.
DeMint Says He Will Filibuster Tax Compromise
In explaining his opposition, DeMint cited the lack of permanency in tax rates, as well as a provision to extend unemployment insurance.
The Bush Tax Cuts Never Went Far Enough
A permanent reduction in capital taxes would increase productivity and wages. Postwar Britain shows how higher capital tax rates reduce investment and damage economic growth.
While His Base Rages, Obama Faces Tax-Cut Reality
The tax deal is certainly better for the economy than political gridlock over extending the tax cuts. How much better is uncertain.
Obamanomics Takes a Holiday
A two-year tax reprieve is better than current law but far from ideal.
The Tax Deal: Budget and Tax Mavens React
Conservative analysts like it; many others don't.

TUESDAY
What will deal on Bush tax cuts mean for the federal deficit?
Extending the Bush tax cuts will prevent as much as $300 billion a year from going into federal coffers, continuing the current federal deficits.
Deal Adds to Uncertainty, Debt
The great uncertainty, bemoaned by Republicans and business groups, is if anything greater than ever.
Did you get your money’s worth from Congress last week?
Last week, taxpayers spent roughly $107 million on Congress.

MONDAY
3 reasons why the mortgage tax break isn't a break
The plan to eliminate the mortgage tax deduction was widely criticized, but the industry overreacted to the proposal. Turns out it's not that great for most of us.
Bush's tax cuts: How did they affect you?
For nearly a decade, the Bush tax cuts — including a second, $350 billion dose in 2003 — have fueled debate in Washington about the proper role of government.

Blogs
FRIDAY
Secondary Sources: Local Governments, Europe, Tax Calculator, Grinchonomics
The Tax Foundation has an interesting calculator that uses several inputs to determine your taxes under several scenarios, including the latest compromise plan.
Morning Bell: There is No Tax Deal
The deal originally cut by Republicans had some good economic policy in it, but it also had a lot of harmful provisions.

THURSDAY
Tax cuts for the rich
It’s also good to remember that payroll taxes are not personal investments and add to the tax burden.
Payroll Tax Cut is Poorly Structured
Greg Mankiw and Bryan Caplan make the same point about Obama's payroll tax: it might better have been done on the employer side.
The rich are harder to stimulate than the poor
...total spending by both low-income and high-income recipients increased more than total spending by average recipients. In other words, though it's not a statistically significant result, both poor people and rich people seem to have been more likely to spend their stimulus checks than average people were.
Taxes in the real world
"When your uncle’s name is Sam, you learn that life in a doghouse is preferable to life in a squirrel cage."

WEDNESDAY
A Good Deal for Democrats on Tax Cuts
Some of the tax cuts, especially the temporary cut in the payroll tax, might even be stimulative. Nonetheless, I would much rather they had expired entirely than that we re-fight this battle in two years, when most of the parties are up for re-election.
Tax Negotiations: No help for 99ers
Just to be clear, the "extension of the unemployment benefits" is an extension of the qualifying dates for the various tiers of benefits, and not additional weeks of benefits. There is no additional help for the so-called "99ers".
How to Think about the Tax Deal
While lamenting the fact that the agreement includes an extension of the 35 percent rate for married couples with incomes above $250,000 (singles above $200,000), the White House is spinning this as the “cost” for getting unemployment benefits extended and for extending certain smaller tax policies created in the stimulus bill.
Right Cut, Wrong Side: Obama Botches the Payroll Tax Holiday
Instead of giving the tax cut to employers, where it would do the maximum good, or splitting it evenly, where it would do intermediate good, he's giving all of it to employees, where it does the minimum good…
The Tax Deal
...the plans for short-run recovery are very definitely consumption-based.
Economists React: Pros, Cons of Tax Deal
Economists and others weigh in on the agreement between the White House and congressional Republicans on a broad tax package.
Tax cuts could hurt Moody's U.S. rating: report
Moody's lead analyst for U.S. sovereign debt, Steven Hess, told Reuters he is not concerned by an extension of the Bush tax cuts on the U.S.'s AAA rating over the next 18 months to two years, but he is worried about what happens after two years when the extensions are set to expire again.
Does Preserving the Bush Tax Rates Doom Us to Massive Deficits? Nope!
...it would be quite easy to balance the budget in 2020 if the government would start early with small, systematic cuts designed to get government outlays about equal to the historic average of government revenue.

TUESDAY
Taxpayer Calculator: Extending Unemployment Benefits
Forty percent of those unemployed right now have been out of work for six-plus months and unemployment has risen to 9.8 percent.
The Good, the Bad, and the Ugly of the Tax Deal
...grading this package depends on your benchmark. This is why reaction has been all over the map, featuring dour assessments from people like Pejman Yousefzadeh and cheerful analysis from folks such as Jennifer Rubin.
On the Tax Burden
In 2008, for the typical household in the top one-percent of income-earning households in America, the percent of its adjusted gross income that it paid in federal income taxes was 23.27. Middle-income households paid less. For households whose earnings put them in the top 50 percent, but below the top 25 percent, of income earners, the percent of their adjusted gross income paid in income taxes was, on average, 6.75.
Holiday Treat for the Bush Tax Cuts?
In exchange, the President got a 13 month extension of Unemployment Insurance benefits — without having to offset the cost – as well as a temporary 2 percentage point reduction in the payroll tax in lieu of an extension of Obama’s ghastly “Make-Work-Pay” tax credit left over from the failed stimulus bill.

MONDAY
The Obama Debt Commission: Too Much Taxes, Not Enough Cuts
While the commission deserves credit for addressing this problem, the report contains far too many tax hikes, and far too little spending cuts to be a workable solution.
The Mortgage Deduction Should Be Done Away With--But It Won't
The reason that we have a special deduction for mortgage interest is not that politicians sat down and calmly, reasonably, worked out a way to reach certain social goals they thought were desirable. The mortgage interest deduction is an artifact of changes to the tax code in the 1980s.
Eugene Robinson Thinks the Government Already Owns Your Entire Paycheck
When the government fails to raise taxes, no one “writes a check.” People who are not taxed don’t get a check from the government, they simply get to keep the money they have already earned.
Obama’s November Jobs Deficit One More Reason to Extend Bush Tax Cuts
President Obama promised during the 2008 campaign (and after) that under his policies the economy would create millions of new jobs by the end of 2010. Well, we’ve reached the end of 2010.

Reports
WEDNESDAY
RCM: Wells Fargo Economics Group: Tax Cut Deal Reduces Uncertainty
The extension of the Bush-era tax cuts has improved our U.S. outlook for next year. The result of this policy decision should be increased consumer spending, business investment, corporate profits and GDP growth.

Health Care News Dec. 6 - 10

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News
THURSDAY
Senate approves bill to stave off rate cut for Medicare docs
The Senate approved a bipartisan bill Wednesday that would prevent a 25% cut in doctors' Medicare reimbursement rates in 2011. The bill, which would cost $19.3 billion over 10 years, would be paid for by changing a provision of the health reform act that provides tax credits for people who buy coverage.
More Big Companies, Unions Win Health Care Waivers
The Obama administration has allowed 222 employers, insurers and unions to opt out of a key mandate in the new health care law – a number that has grown exponentially in the past two months.

WEDNESDAY
Senate bill would stave off rate cut for Medicare docs
The Senate on Tuesday introduced a bipartisan bill that would prevent a 25% cut in doctors' Medicare reimbursement rates in 2011. The bill, which would cost $19.3 billion over 10 years, would be paid for by changing a provision of the health reform act that provides tax credits for people who buy coverage.
More Health Waivers
The Obama Administration has quietly granted even more waivers to one provision of the new federal health reform law, doubling the number in just the last three weeks to a new total of 222.
Approved Applications for Waiver of the Annual Limits Requirements of the PHS Act Section 2711 as of December 3, 2010
Applications for waivers from annual limit requirements are reviewed on a case by case basis by Department officials who look at a series of factors including whether or not a premium increase is large or if a significant number of enrollees would lose access to their current plan because the coverage would not be offered in the absence of a waiver.
Medicaid Could Save Billions with Medicare-Like Changes
Medicaid could save more than $30 billion over the next decade on prescription drugs by adopting practices used in Medicare Part D, a new study argues.

TUESDAY
Investigation Finds Millions in Medicare Dollars Wasted on Stents
According to the investigation by the Senate Finance Committee, Abbott Laboratories, a Chicago-based pharmaceutical company, rewarded a Baltimore-based doctor with more than $30,000, trips, and crab feasts for performing medical procedures that were potentially unnecessary.
GOP's odd bid to kill health reform
If there is one more thing your typical Republican politician does not care for, it is frivolous lawsuits that clog the courts and unfairly burden innocent doctors and small-business persons as they go about trying to create jobs. “The rule of law does not mean the rule of lawyers,” the 2008 GOP platform wittily observed.
Deal reached to fix Medicare doc pay
Senate leaders have reached a tentative, one-year deal on the Medicare “doc-fix,” sources close to the negotiations say.

MONDAY
Haley Asks Obama to Repeal Health Care
South Carolina Republican Gov.-elect Nikki Haley isn’t wasting time making a name for herself. In a meeting with the new class of governors and President Obama, Haley frankly asked Obama if he would repeal health care reform.
Medicare Chief Gets Ovation, Security Escort
Centers for Medicare and Medicaid Services Administrator Donald Berwick got a standing ovation after his speech Friday at the National Committee for Quality Assurance.conference in Washington, and then got help from security to exit the building.
Doc fix new weapon vs. health reform
Despite rampant repeal rhetoric, Republicans have so far struggled to dismantle any part of health reform. Now, they see a new path forward: pilfer health reform dollars to pay for the next "doc fix," the must-pass patch to Medicare doctor payments.

Economist Comments
THURSDAY
America Wants Congress to Repeal Obamacare -- Now It's Time to Get to Work
The American people have spoken, and the message they have sent to Washington is clear: Americans want Obamacare ripped out of the U.S. Code by the roots. With their actions, America’s voters have shown that they want the 112th Congress to make Obamacare repeal a reality.

WEDNESDAY
Medicare needs sustainable 'doc fix'
It's no surprise then that doctors are up in arms about the latest "doc fix" — the fourth temporary postponement of a 23% cut in their Medicare reimbursement.

TUESDAY
How to Save Medicaid
States are desperate to control costs. What works and what doesn't?
Ken Blackwell and Ken Klukowski: Striking down individual mandate would mean ending Obamacare
Litigation over Obamacare's individual mandate has captured the public's attention. But the ultimate goal in challenging the constitutionality of President Obama's health care law is not the mandate; it's severability.

MONDAY
Flexible Spending Accounts: New Rules
With one month left to exhaust any money remaining in flexible spending accounts, it’s time for the annual ritual of stocking up on aspirin, re-ordering contact lenses and squeezing in one more round of skincare treatment . But starting next year, new rules will make that drugstore shopping spree a lot harder -- which means re-thinking how you spend this year’s money, and how much you allocate for 2011.

Blogs
FRIDAY
Emergency Rooms: The Canary in the Health Care Coal Mine
 I've spent a lot of time in some pretty crowded ERs in some pretty poor areas, but I've never experienced a 12 hour wait time.
Congress Does a 'Doc Fix'
During the run-up to health care reform, a number of conservatives argued that the Democrats were dishonestly excluding from the cost of legislation the "doc fix".

THURSDAY
What caused outpatient spending growth?
Outpatient spending took off around 1983. What caused it to grow and why 1983? A shift in the proportion of surgeries from the inpatient to the outpatient setting and an increase in ambulatory treatment seems to be the general answer.
If You (Insurers) Pay, They (Docs) Will Charge
Devon Herrick, looked at rates of increase of prices and found that the price of cosmetic surgery, one of the few medical procedures which is almost entirely paid for by the people getting it, increased at less than one third the rate for medical care in general.

WEDNESDAY
Doctors Avoid Medicare Pay Cut for Another Year—but Then What?
Senate leaders reached an agreement Monday to delay cuts to physician reimbursement rates under Medicare for one year. The details of the negotiations have yet to be ironed out, but if the deal makes it through Congress, doctors will avert a 23 percent pay cut scheduled for January 1.
What Doctors Have to Say About Obamacare
No one is more familiar with the health care system than doctors. So what do they have to say about Obamacare? Nothing good, according to a recent survey.

TUESDAY
How to Save Medicaid
While I understand that people become dependent on government payment, it seems that one of Medicaid’s main problems is the fact that over the years, the program has moved away from its original mission, which was to provide health care for the poorest members of society.

Reports
WEDNESDAY
New Health Affairs Study Suggests That Private Insurers Control Health Care Spending Better Than Medicare
The study, shows that in two Texas cities, sharp differences in Medicare's per-capita health care spending were significantly diminished when private insurance paid the bill.

General Economic News Dec. 6 -10

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News
FRIDAY
Households slow Treasury binge
U.S. households have taken a breather in their two-year-long Treasury-buying binge.
Household wealth grows $1.2 trillion
Americans got richer in the third quarter even as home values hit the skids after more than a year of increases.
Foreigners flock to Treasuries
If foreigners have had their fill of Treasuries, they sure have a funny way of showing it.
Exports push trade deficit to 9-month low in October
The U.S. trade deficit fell to its lowest level in nine months, as growing demand for American goods overseas pushed exports to their highest level in more than two years.
Act II for American Manufacturing?
Say bye-bye to the likes of River Rouge, and hello to smaller, smarter factories surrounded by industrial ecosystems that nourish innovation. But the next wave of manufacturing may require government’s helping hand.
Bank of America to resume foreclosures
Bank of America said Friday it was ending its hiatus on foreclosure sales, and promised to get its act together after a series of sloppy home seizures prompted the bank to back off and re-examine its process.

THURSDAY
U.S. fiscal health worse than Europe's: China adviser
The U.S. dollar will be a safe investment for the next six to 12 months because global markets are focused on the euro zone's troubles but America's fiscal health is worse than Europe's, an adviser to the Chinese central bank said on Wednesday.
Fitch Downgrades Ireland
Fitch Ratings downgraded Ireland to triple-B plus on Thursday, citing the costs of the restructuring of the banking system and the loss of access to affordable funding in the market.

WEDNESDAY
Consumer credit jumps by most in more than 2 years
Consumer borrowing rose in October by the largest amount in more than two years, led by a big rise in the category that includes student loans.
3 Northeast states are home to most fiscally responsible
In what is being billed as an unprecedented look at financial behavior in all 50 states, a study out today rates New York, New Jersey and New Hampshire as having the most fiscally responsible residents.
Fannie Mae: Mortgage delinquencies down in 2010
Serious mortgage delinquencies for single-family homes continue their slide from 2009 highs.

TUESDAY
U.S. Mortgage Delinquency Rate Could Fall to 5% in '11
The percentage of U.S. consumers who are delinquent on their mortgages could fall to about 5% by the end of 2011, from an expected 6.2% at the end of this year, according to a leading credit bureau.
Could Abolishing the Death Penalty Help States Save Money?
State Legislators and Reformers Argue Cost in Push to End Capital Punishment
Fumbling the ball
Did Jean-Claude Juncker, Luxembourg's prime minister who is also head of the euro zone's finance ministers, score an own-goal yesterday? With the markets savaging bonds issued by “peripheral” countries such Greece, Ireland and Portugal, he proposed that euro-zone members should issue collective “E-bonds” for up to 40% of the euro zone's GDP. The idea came out of the blue in an article written with Giulio Tremonti, the Italian finance minister. Common Eurobonds, they claimed, would “send a clear message to global markets and European citizens of our political commitment to economic and monetary union and the irreversibility of the euro.” Their fellow finance ministers, though, do not seem to have received it particularly well.
Gold, silver, oil in rally mode
Commodity prices continued to soar for a second day in a row Tuesday as the euro pushed higher against the U.S. dollar.
The 'tax' you can't avoid: Oil prices rising
The price of crude is perilously close to $90 a barrel and the average cost for a gallon of gas is inching toward $3 nationwide. If they keep climbing, that could put a serious dent in economic recovery hopes for 2011.
IMF chief backs Greek loans extension
The International Monetary Fund is backing plans to extend Greece's repayment of bailout loans but is urging the European Union to seek a "comprehensive solution" to its debt crisis, the head of the agency said Tuesday.

MONDAY
Motorists could see $3 gas at pumps by Christmas
Barring a steep drop in crude prices, U.S. motorists can expect to see gas prices exceeding $3 per gallon, if they are not seeing such prices already, according to a new survey of filling stations.
Proposed 1.4% pay raise for military draws fire
Military servicemembers are fighting what would be their lowest pay raise in decades as the nation wages two wars, including a 10th year of combat in Afghanistan.
U.S., South Korea reach free trade agreement
The United States has reached a tentative free trade agreement with South Korea, the White House said Friday.
Economy is making steady gains despite weak hiring
The economy is starting to fire on almost every cylinder these days but the one that matters most: Job creation.

Economist Comments
FRIDAY
Accounting for Public Pensions
There has been talk of shared sacrifice, in which employees accept lower benefits, taxpayers pay more and bondholders also take hits. You can argue that is what happened in New York City a quarter of a century ago, when some bondholders were forced to extend maturities. But widespread expectations that such a thing was possible could drive up borrowing costs for all localities, making their fiscal problems that much worse.
Ethanol: Let Protectionism Expire
The best thing President Obama and Congress could do for ethanol policy this year is nothing — let the tax credit and tariff expire.

THURSDAY
European debt crisis tests unity -- and global economy
Fears that the debt crisis will spread to a big economy like Spain should compel Europe to come together to meet this challenge.
Make Congress obey the Constitution
Bills should be blocked for exceeding legislative authority
Congress should rein in the regulators
Increasingly, American families find they have a permanent and rather demanding house guest: Uncle Sam.
Consumerism Is Keynesianism
Free-marketeers focus on production.

WEDNESDAY
What a Drag: Mortgage-Refi 'Cash-Ins'
During the boom, homes in the U.S. were functioning like veritable ATMs. Lately, they are acting more like vacuums.

TUESDAY
Does President Obama Understand Economics?
Neither government spending nor tax cuts automatically provide an economic stimulus. But President Obama has continued to make this mistake. Take a look at much of what he insisted be included in his tax cut deal with congressional Republicans.
President Obama's next two years
A choice between free-market principles and more class warfare
Government micromanages your fonts
DOT caves to lobby, mandates costly signage change nationwide

MONDAY
Charitably inclined Americans contribute generously abroad
critics have charged that the U.S. is miserly when it comes to helping people in the developing world. Currently, the U.S. federal government gives approximately $26 billion (0.2 percent) of our gross national income (GNI) to support development efforts around the world. This money often comes with bureaucratic stipulations and measurements that must be met in order to secure this government-to-government funding. But critics argue that all economically developed nations should be giving around 0.7 percent of their GNI to development efforts.
Obama's phony federal freeze
The federal worker pay freeze President Obama announced last week was promoted as a move in the right direction toward deficit reduction. But weighed against the historic fiscal damage his administration has inflicted on the country, it's nothing more than a symbolic gesture.
The Week in the European Crisis
Financial professionals with every perspective weighed in. Here, Minyanville offers a recap of this week's hottest debate

Blogs
FRIDAY
The Stimulus Worked, Kind of
So why my title of this post? Why do I say stimulus worked? Because I don't judge it by Keynesian criteria. I judge it by efficiency criteria.
Consumer Sentiment increases in December
The preliminary Reuters / University of Michigan consumer sentiment index increased to 74.2 in December from 71.6 in November.
Capital markets vs. Wall St.
Until the relationship between large financial institutions and Washington changes, we will have crony capitalism rather than the real thing.

THURSDAY
Reflections on Freddie Mac
No matter how impregnable the regulations seem when you first put them in place, eventually a government guarantee leads to disaster. For me, that is the main lesson of the Freddie Mac story.
Exploding the bubble cycle
Market crashes spur a new round of frenzied securities regulation. Then the market recovers, regulators get lax, and the unscrupulous find a new loophole to exploit.
Ricardian Equivalence and Stimulus Failure
There is a graph which explain stimulus failure.
Economics Experiment: Pick The Cutest Animal
Help us settle a big debate in economics. (And see some painfully cute videos.) Participate in our economics experiment.
What’s Wrong with Keynes
The bottom line for me is that Keynes was very right about one thing–people’s perception of the future plays a big role in their willingness to take risks. What he was wrong about is the ability to use government spending as a way to encourage a positive perception of the future or to produce real economic results that lead to prosperity and increased employment.
Reagan Recovery vs. Obama Recovery in Pictures
No two recessions are the same. And no two recoveries are going to be exactly the same either … especially when the presidents that preside over them have diametrically opposed philosophies about what government can or should do. But as Ronald Reagan once said: “Shouldn’t we expect government to read the score to us once in a while?”

WEDNESDAY
Let's Call a Stamp a Stamp...
...and a debit card a debit card.
Genius
Public Pension Reform Parody
Credit-Card Borrowing Dips, but Student Loans Jump
U.S. consumer borrowing unexpectedly climbed again in October as a jump in student loans offset the 26th consecutive decline in credit-card use.
What Is Happening With Banks, Lending, and Credit?
Things are trending up, but slowly and weakly, which should continue for quite some time.
Food Stamp Rolls Continue to Rise
More people tapped food stamps to pay for groceries in September as the recession and lackluster recovery have prompted more Americans to turn to government safety net programs to make ends meet.
Mortgage Purchase Applications increase slightly last week
Even with the increase in applications (seasonally adjusted), the four-week moving average of the purchase index is about 17% below the levels of April 2010 and suggests weak existing home sales through the end of the year and into January.

TUESDAY
No Recession in Washington
Forbes looks at new data on household income in different metro areas:
Research Highlights Slowest Price Increases Since 1981
Price increases are decelerating at the greatest pace in nearly 30 years, a paper from the Federal Reserve Bank of San Francisco said.
The Cost of Sugar Subsidies
Even in a season characterized by candy canes and cookies waiting for Santa, protectionism, specifically the U.S. sugar program, hurts American consumers and workers. The U.S. sugar program provides a classic example of a special interest group benefiting from political connections, to the detriment of American consumers.

MONDAY
Bank Failures per Week in 2010
There have been 314 bank failures in this cycle (starting in 2007).
Close the Washington Monument
The National Park Serivce wants to add airport level security to the Washington Monument. Critics say we should close it.
Schedule for Week of December 5th
A light week for economic releases. The trade report on Friday is probably the key release ...
Big Banks as Bootleggers
Here is a post on how the actions of the Fed and Treasury in the last few years have benefited the large banks and eroded the advantages of the smaller banks. Wouldn’t surprise me–it’s a perfect bootleggers and baptists scenario.
Unofficial Problem Bank list increases to 920 Institutions
Here is the unofficial problem bank list for Dec 3, 2010.
Democrats, Republicans, and the Upward March of Government Spending
But the bottom line is: If we have two parties for a reason, because they believe in different things, why don’t we some real differences in the growth of federal spending?
Cuts, Slashes, and Savings at the Pentagon
Although the Bowles-Simpson deficit reduction commission has come up short of the 14 votes among its members that it needs to force Congress to vote up-or-down vote on implementing its recommendations, the debate over ways to cut spending will certainly continue. Of particular note is the emerging consensus that military spending cannot be held sacrosanct in the search for savings.
'Chasing Rainbows': New economic solutions for climate change
Both thought-provoking and laugh-out-loud funny, 'Chasing Rainbows' proposes fighting climate change through globalization and freer markets, not government interventions like cap-and-trade.

Reports
FRIDAY
Wholesale Inventories Continued to Rise In October
Wholesale inventories continued to rise in October, increasing 1.9 percent led by inventory building in nondurable goods. The gain in September inventories was revised upward to 2.1 percent from 1.5 percent.

THURSDAY
Annual Economic Outlook 2011
Turning the Corner in 2011

TUESDAY
Online Privacy Regulation
Likely More Complicated (And Costlier) Than Imagined.
The Myth of Isolationism, Part 1: American Leadership and the Cause of Liberty
There are many misconceptions about America’s early foreign policy. Perhaps no misunderstanding is as widespread as the belief that the Founding Fathers of the United States were isolationists who made non-interventionism their guiding principle.
KORUS FTA: A Good Deal Unnecessarily Delayed
After three years of needless delay, the South Korea–U.S. free trade agreement (KORUS FTA) may finally be submitted for legislative approval. On December 3, U.S. and South Korean negotiators produced a supplementary agreement that rewarded narrow U.S. special interests but still maintains the significant benefits of the original accord. While capitulating to U.S. auto demands may help President Obama with his political base, it concurrently makes South Korean ratification more difficult.

MONDAY
Why Is Africa Poor?
Sub-Saharan African countries have not fulfilled their potential since independence. While other developing countries and regions have grown over the past 50 years, much of Africa has stagnated. African leaders have become adept at externalizing blame, holding others responsible for Africa's failings. Yet African leaders — not a lack of capital, access to world markets, or technical expertise — are to blame for the continent's underdevelopment.