News
Market Watch | Japan’s industrial output soft in June
Japan’s jobless rate ticked higher in June and industrial output was softer than expected, while consumer prices rose less than forecast, according to data released Friday.
WSJ | Little to Smile About With Growth Outlook
Macroeconomic Advisers estimates real GDP grew at just a 1.3% annualized rate. Capital Economics, which is on the higher end, expects growth of just 2.3%. This follows a similarly disappointing 1.8% growth pace in the first three months of the year.
Market Watch | ‘Great Recession’ even deeper than thought
The U.S. recession was even deeper than previously thought, a new government report showed on Friday.
Bloomberg | Crude Oil Tumbles, Heads for Weekly Decline, on U.S. Debt-Ceiling Dispute
Crude Oil Tumbles, Heads for Weekly Decline, on U.S. Debt-Ceiling Dispute.
Market Watch | You have saved enough for retirement — maybe
There’s a lot of worrisome news lately. Let’s take a moment to focus on something verging on optimistic: According to a new report, the retirement-savings crisis is not as bad as you thought. It turns out that plenty of people have enough money to enjoy a long and well-funded retirement.
CNN: Money | EOG's big gamble on shale oil
It was the winter of 2006, and EOG Resources executive vice president Kurt Doerr had to be wondering what the heck he was doing prospecting for oil in the frigid central plains of North Dakota. Sure, wildcatters had been pumping modest amounts of crude out there for decades. However, nobody had ever found a true gusher, and the timing seemed odd given that EOG's core business -- drilling for natural gas, not oil -- was absolutely booming.
Econ Comments
Pittsburgh Live | Not so simple
Millions of entrepreneurs daily anticipate what consumers want -- and try to outguess each other in the competition to anticipate correctly. Countless investors, business executives, labor-union officials -- just like consumers and entrepreneurs -- attempt to promote their self-interest in a world of innovation, change and, hence, uncertainty.
RCM | The Failure of Central Planning Lite
The failure of Central Planning Lite cannot just be attributed to incompetence or politicization, to shovel-ready jobs that are not shovel-ready, or bailouts organized as favors to political pressure groups.
Washington Times | VERSACE: Figures show economic recovery remains elusive
There are a number of reasons that trace back to uncertainty, whether it be about the strength of the domestic economic recovery, European debt woes, the impact of whatever debt-ceiling and deficit deal brings. With that and more weighing on job creation, the reality is head count reductions are once again back in vogue.
Washington Times | LAMBRO: Economy weakening week after week
The American economy, for some inexplicable reason, has been pushed to the sidelines in the fierce debate over a fiscal crisis that threatens to shut down much of the government.
Blogs
WSJ: Real Time Economics | What Happens to U.S. Companies’ Ratings if Treasury Debt Is Downgraded?.
A reader asks a good question prompted by today’s Capital column on the impact of a downgrade of the U.S. Treasury debt by Standard & Poor’s: If the U.S. loses its AAA rating, will U.S. companies automatically be downgraded too?
WSJ: Real Time Economics | Kansas-City-Area Manufacturing Slows Sharply.
The Kansas City Fed’s manufacturing composite index — an average of the indexes covering production, new orders, employment, delivery times and raw-materials inventories — plunged to 3 this month after jumping to 14 in the month prior. Readings above zero denote expansion.
Heritage Foundation | VIDEO: Growing Red Tape Threatens Economic Growth
As the economy continues to struggle, a new report highlights ways the government may be making things worse by imposing bigger burdens on business. Our new video breaks down the facts and highlights the impact of this creeping government red tape.
Friday, July 29, 2011
Taxes
Econ Comments
Daily Caller | The real-world impact of tax hikes on American jobs
Over the last few weeks, President Barack Obama has adamantly supported raising taxes on corporations and small businesses that employ millions of American workers as a precondition for cutting our bloated federal spending.
Blogs
WSJ | Secondary Sources: Uncertainty, European Crisis, Taxes
A roundup of economic news from around the Web.
Daily Caller | The real-world impact of tax hikes on American jobs
Over the last few weeks, President Barack Obama has adamantly supported raising taxes on corporations and small businesses that employ millions of American workers as a precondition for cutting our bloated federal spending.
Blogs
WSJ | Secondary Sources: Uncertainty, European Crisis, Taxes
A roundup of economic news from around the Web.
Health Care
News
Politico | Medicare at 67: The next big change?
President Barack Obama and House Speaker John Boehner failed to strike a "grand bargain" on the nation's deficit, but they may have pulled off another trick: revolutionizing the debate over Medicare.When they both accepted the idea of increasing the Medicare eligibility age to 67, they gave a controversial idea more legitimacy and high-profile support than it's ever gotten before.
Blogs
Heritage Foundation | Will Taxpayers Foot the Bill to Market an Obamacare Budget Gimmick?
During the health care debate of 2009 and 2010, the Obama administration used a number of accounting tricks to try to get the Congressional Budget Office to score the legislation as deficit neutral. One such trick took the form of a new entitlement: the Community Living Assistance Services and Support (CLASS) program.
Politico | Medicare at 67: The next big change?
President Barack Obama and House Speaker John Boehner failed to strike a "grand bargain" on the nation's deficit, but they may have pulled off another trick: revolutionizing the debate over Medicare.When they both accepted the idea of increasing the Medicare eligibility age to 67, they gave a controversial idea more legitimacy and high-profile support than it's ever gotten before.
Blogs
Heritage Foundation | Will Taxpayers Foot the Bill to Market an Obamacare Budget Gimmick?
During the health care debate of 2009 and 2010, the Obama administration used a number of accounting tricks to try to get the Congressional Budget Office to score the legislation as deficit neutral. One such trick took the form of a new entitlement: the Community Living Assistance Services and Support (CLASS) program.
Monetary
News
Bloomberg | Franc, Yen Rally as Debt Impasse, Moody’s Spain Review Spur Refuge Demand
The dollar erased its gain against the euro, fell to a record versus the Swiss franc and approached a postwar low against the yen as America’s economy grew last quarter less than economists forecast. The Canadian and Australian dollars were the worst performers against the greenback as investors spurned higher-yielding assets.
Bloomberg | European Inflation Unexpectedly Slows to 2.5%
The inflation rate in the 17-nation euro region declined to 2.5 percent from 2.7 percent in the previous month, the European Union’s statistics office in Luxembourg said today in an initial estimate. Economists expected price growth to hold steady, the median of 31 forecasts in a Bloomberg News survey showed.
Blogs
Financial Times | America’s success depends on a sound fiscal regime
It is imperative, for both the nearer term and the longer term, that we meet the deficit commission’s goal of $4,000bn of deficit reduction over roughly 10 years, which would first stabilise and then begin to reduce our debt to gross domestic product ratio.
Bloomberg | Franc, Yen Rally as Debt Impasse, Moody’s Spain Review Spur Refuge Demand
The dollar erased its gain against the euro, fell to a record versus the Swiss franc and approached a postwar low against the yen as America’s economy grew last quarter less than economists forecast. The Canadian and Australian dollars were the worst performers against the greenback as investors spurned higher-yielding assets.
Bloomberg | European Inflation Unexpectedly Slows to 2.5%
The inflation rate in the 17-nation euro region declined to 2.5 percent from 2.7 percent in the previous month, the European Union’s statistics office in Luxembourg said today in an initial estimate. Economists expected price growth to hold steady, the median of 31 forecasts in a Bloomberg News survey showed.
Blogs
Financial Times | America’s success depends on a sound fiscal regime
It is imperative, for both the nearer term and the longer term, that we meet the deficit commission’s goal of $4,000bn of deficit reduction over roughly 10 years, which would first stabilise and then begin to reduce our debt to gross domestic product ratio.
Employment
News
WSJ | New Unemployment Claims Fall Below Key Level
Initial claims for unemployment insurance fell 24,000 to 398,000 in the week ended July 23, the Labor Department said Thursday—the first time since early April that claims have been below the crucial 400,000 mark.
Econ Comments
WSJ | Nurturing Startups
A new study offers ideas to assist job-creating companies.
WSJ | New Unemployment Claims Fall Below Key Level
Initial claims for unemployment insurance fell 24,000 to 398,000 in the week ended July 23, the Labor Department said Thursday—the first time since early April that claims have been below the crucial 400,000 mark.
Econ Comments
WSJ | Nurturing Startups
A new study offers ideas to assist job-creating companies.
Budget
News
WSJ | Treasury Faces Pressure to Detail Backup Plan
The Treasury Department will face growing pressure Friday to detail its emergency plans to operate the government next week after a House Republican revolt Thursday night complicated efforts for Congress to raise the debt ceiling by Aug. 2.
Econ Comments
Washington Times | MILLER: Economy in the balance
Bipartisan constitutional amendment needed to restore fiscal sanity.
Daily Caller | Ignore the fire alarms
Rather than a danger to the economy or to investors, the debt ceiling is the one thing that is forcing a debate on the size and scope of government.
Washington Times | EDITORIAL: Economics on the brink
Debt-limit debate is about preserving Big Government, not preventing default.
Blogs
Fox Business: Stossel's Take | Take A Chainsaw To The Budget
I don't claim to be a budget expert. But others, such as Chris Edwards at Cato and Stuart Butler at Heritage, are. They found lots of serious cuts.
Atlantic: McArdle | What Happens if We Don't Raise the Debt Ceiling?
I'll start by saying, however, that I have no idea whether we'll get a deal or not. There is one thing I'm sure of: Obama is indeed bluffing with the veto threat, and badly. They could send him a repeal of Obamacare attached to a debt ceiling increase, and he'd sign it. He is not going to endanger our credit rating, or social security checks, in order to prove a point.
Reports
RCM: Wells Fargo Economics Group | With Greece “Stabilized,” Will the Fire Spread?
Under four separate nominal GDP growth assumptions and four interest rate assumptions, we calculate the primary budget surpluses (in some cases, deficits) that would be required to stabilize government debt-to-GDP ratios in each country.
WSJ | Treasury Faces Pressure to Detail Backup Plan
The Treasury Department will face growing pressure Friday to detail its emergency plans to operate the government next week after a House Republican revolt Thursday night complicated efforts for Congress to raise the debt ceiling by Aug. 2.
Econ Comments
Washington Times | MILLER: Economy in the balance
Bipartisan constitutional amendment needed to restore fiscal sanity.
Daily Caller | Ignore the fire alarms
Rather than a danger to the economy or to investors, the debt ceiling is the one thing that is forcing a debate on the size and scope of government.
Washington Times | EDITORIAL: Economics on the brink
Debt-limit debate is about preserving Big Government, not preventing default.
Blogs
Fox Business: Stossel's Take | Take A Chainsaw To The Budget
I don't claim to be a budget expert. But others, such as Chris Edwards at Cato and Stuart Butler at Heritage, are. They found lots of serious cuts.
Atlantic: McArdle | What Happens if We Don't Raise the Debt Ceiling?
I'll start by saying, however, that I have no idea whether we'll get a deal or not. There is one thing I'm sure of: Obama is indeed bluffing with the veto threat, and badly. They could send him a repeal of Obamacare attached to a debt ceiling increase, and he'd sign it. He is not going to endanger our credit rating, or social security checks, in order to prove a point.
Reports
RCM: Wells Fargo Economics Group | With Greece “Stabilized,” Will the Fire Spread?
Under four separate nominal GDP growth assumptions and four interest rate assumptions, we calculate the primary budget surpluses (in some cases, deficits) that would be required to stabilize government debt-to-GDP ratios in each country.
Thursday, July 28, 2011
General Economics
News
USA Today | Political gridlock not so good for markets this time
The mere thought of political gridlock normally makes investors smile. But grins are giving way to frowns and worry lines as the countdown to a U.S. debt default inches closer with divided lawmakers still unable to strike a deal.
CNN Money | Economy still stuck in the mud
Despite a pick-up in growth at the end of last year, the economy has taken a hard turn for the worse in the last few months. On Friday, the government will report how much the economy expanded in the second quarter -- but don't expect much good news.
USA Today | Fed: Growth slows across much of the U.S.
A Federal Reserve survey says seven of the Fed's 12 bank regions reported slower growth in June and early July compared with the spring. That's a worse showing than in the previous survey. Of the remaining five districts, four reported modest growth. A fifth, the Minneapolis district, said its economy was disrupted by bad weather and the shutdown of Minnesota's state government.
CNN Money | Foreclosures fall in most U.S. cities
Foreclosures declined in more than 84% of U.S. metro areas during the first half of the year, according to the latest report from RealtyTrac, an online marketer of foreclosed properties. But that doesn't mean these markets are staging a turnaround.
National Journal | Another Hit for Housing?
The debt-ceiling impasse could make the biggest economic weight even heavier.
Econ Comments
Washington Times | EDITORIAL: Jacking up your electric bill
More regulations on industry will hurt the flickering economy.
WSJ | Chinese Innovation Is a Paper Tiger
A closer look at China's patent filings and R&D spending reveals a country that has a long way to go.
Washington Times | BRADLEY: Renewable energy running scared
This may be the beginning of the end of the energy welfare state.
Reports
Heritage Foundation | Plugged-in Poverty: Half of America’s Poor Have Computers
How poor are America’s poor? The typical poor family has at least two color TVs, a VCR and a DVD player. A third have a widescreen, plasma or LCD TV. And the typical poor family with children has a video game system such as Xbox or PlayStation. Are these government numbers a fluke? Perhaps they’re artificially inflated because working-class families (with lots of conveniences in the home) have lost job+G49s in the recession and temporarily joined the ranks of the poor?
USA Today | Political gridlock not so good for markets this time
The mere thought of political gridlock normally makes investors smile. But grins are giving way to frowns and worry lines as the countdown to a U.S. debt default inches closer with divided lawmakers still unable to strike a deal.
CNN Money | Economy still stuck in the mud
Despite a pick-up in growth at the end of last year, the economy has taken a hard turn for the worse in the last few months. On Friday, the government will report how much the economy expanded in the second quarter -- but don't expect much good news.
USA Today | Fed: Growth slows across much of the U.S.
A Federal Reserve survey says seven of the Fed's 12 bank regions reported slower growth in June and early July compared with the spring. That's a worse showing than in the previous survey. Of the remaining five districts, four reported modest growth. A fifth, the Minneapolis district, said its economy was disrupted by bad weather and the shutdown of Minnesota's state government.
CNN Money | Foreclosures fall in most U.S. cities
Foreclosures declined in more than 84% of U.S. metro areas during the first half of the year, according to the latest report from RealtyTrac, an online marketer of foreclosed properties. But that doesn't mean these markets are staging a turnaround.
National Journal | Another Hit for Housing?
The debt-ceiling impasse could make the biggest economic weight even heavier.
Econ Comments
Washington Times | EDITORIAL: Jacking up your electric bill
More regulations on industry will hurt the flickering economy.
WSJ | Chinese Innovation Is a Paper Tiger
A closer look at China's patent filings and R&D spending reveals a country that has a long way to go.
Washington Times | BRADLEY: Renewable energy running scared
This may be the beginning of the end of the energy welfare state.
Reports
Heritage Foundation | Plugged-in Poverty: Half of America’s Poor Have Computers
How poor are America’s poor? The typical poor family has at least two color TVs, a VCR and a DVD player. A third have a widescreen, plasma or LCD TV. And the typical poor family with children has a video game system such as Xbox or PlayStation. Are these government numbers a fluke? Perhaps they’re artificially inflated because working-class families (with lots of conveniences in the home) have lost job+G49s in the recession and temporarily joined the ranks of the poor?
Taxes
News
MarketWatch | Taxpayers still on hook for $130 bln in TARP funds
Treasury has 77% stake in AIG, 32% stake in GM, 74% stake in Ally Financial.
Econ Comments
RCM | How to Cut Taxes, Boost Revenue
At the heart of the painful negotiations over deficit reduction has been the tension between eliminating tax expenditures, namely tax breaks for individuals and businesses, and cutting tax rates.
WSJ | Warren Buffett Is Wrong On Taxes
Millionaires and billionaires pay a higher share of their income in taxes than the middle class.
Daily Caller | Don’t allow another payroll tax accounting gimmick
Last December, Congress temporarily cut the employee share of the Social Security payroll tax rate from 6.2 percent to 4.2 percent. Tucked away in the legislation, however, was text mandating that the government continue to credit the trust funds as though that payroll tax rate were still 6.2 percent.
Blogs
Cato@Liberty | Debunking the Left’s Tax Burden Deception
Keep in mind, though, that government forecasters assume that higher tax rates have no adverse impact on economic performance, so it’s quite likely that neither tax revenues nor GDP would match the forecast.
MarketWatch | Taxpayers still on hook for $130 bln in TARP funds
Treasury has 77% stake in AIG, 32% stake in GM, 74% stake in Ally Financial.
Econ Comments
RCM | How to Cut Taxes, Boost Revenue
At the heart of the painful negotiations over deficit reduction has been the tension between eliminating tax expenditures, namely tax breaks for individuals and businesses, and cutting tax rates.
WSJ | Warren Buffett Is Wrong On Taxes
Millionaires and billionaires pay a higher share of their income in taxes than the middle class.
Daily Caller | Don’t allow another payroll tax accounting gimmick
Last December, Congress temporarily cut the employee share of the Social Security payroll tax rate from 6.2 percent to 4.2 percent. Tucked away in the legislation, however, was text mandating that the government continue to credit the trust funds as though that payroll tax rate were still 6.2 percent.
Blogs
Cato@Liberty | Debunking the Left’s Tax Burden Deception
Keep in mind, though, that government forecasters assume that higher tax rates have no adverse impact on economic performance, so it’s quite likely that neither tax revenues nor GDP would match the forecast.
Health Care
News
WSJ | Uncle Sam to Pay More of the Tab For Health
Federal and state governments will take on a greater portion because the health overhaul will greatly expand the number of Americans on the Medicaid insurance program for the poor, and the federal government will subsidize insurance plans for millions of lower earners through new insurance exchanges. In addition, the growth of Medicare enrollment from an aging population will push up federal health-care spending.
Bloomberg | Health Spending Will Account for 20% of U.S. Economy by 2020, Study Shows
National health expenditures rose 4 percent to $2.6 trillion in 2010 from a year earlier, the Office of the Actuary at the U.S. Centers for Medicare and Medicaid Services estimates today in an article in the journal Health Affairs. Growth will be fueled by demand from 30 million Americans who will receive new subsidies under the health overhaul.
National Journal | Recession Slows Health Costs, but Just Wait Until 2014
The recession helped slow the growth of U.S. health costs in 2010, but expenses will pop up in 2014 when the biggest provisions of the health care law take effect, federal government researchers reported on Thursday. After that, however, rising costs should flatten out.
Reports
Heritage Foundation | If Health Spending Controls Fail, What Are the Options?
Imagine that the 2010 health reform legislation goes into effect as planned. If the skeptics are correct and it fails to control long-term federal health spending, what could a future Congress do to modify it? There are three approaches.
WSJ | Uncle Sam to Pay More of the Tab For Health
Federal and state governments will take on a greater portion because the health overhaul will greatly expand the number of Americans on the Medicaid insurance program for the poor, and the federal government will subsidize insurance plans for millions of lower earners through new insurance exchanges. In addition, the growth of Medicare enrollment from an aging population will push up federal health-care spending.
Bloomberg | Health Spending Will Account for 20% of U.S. Economy by 2020, Study Shows
National health expenditures rose 4 percent to $2.6 trillion in 2010 from a year earlier, the Office of the Actuary at the U.S. Centers for Medicare and Medicaid Services estimates today in an article in the journal Health Affairs. Growth will be fueled by demand from 30 million Americans who will receive new subsidies under the health overhaul.
National Journal | Recession Slows Health Costs, but Just Wait Until 2014
The recession helped slow the growth of U.S. health costs in 2010, but expenses will pop up in 2014 when the biggest provisions of the health care law take effect, federal government researchers reported on Thursday. After that, however, rising costs should flatten out.
Reports
Heritage Foundation | If Health Spending Controls Fail, What Are the Options?
Imagine that the 2010 health reform legislation goes into effect as planned. If the skeptics are correct and it fails to control long-term federal health spending, what could a future Congress do to modify it? There are three approaches.
Monetary
News
Bloomberg | Yen Rises as U.S. Debt Impasse Encourages Demand for Refuge; Euro Slumps
The yen appreciated 0.9 percent to 111.04 versus the euro at 9:15 a.m. in New York, from 112.04 yesterday, after touching 110.83, the strongest level since July 18. The yen gained 0.2 percent to 77.84 per dollar, from 77.98, after advancing yesterday to 77.57, the strongest since it hit a postwar high of 76.25 on March 17. The dollar was little changed at 80.21 Swiss centimes after touching a record low 79.90. The euro slid 0.7 percent to $1.4267 after dropping 1 percent yesterday.
Bloomberg | Yen Rises as U.S. Debt Impasse Encourages Demand for Refuge; Euro Slumps
The yen appreciated 0.9 percent to 111.04 versus the euro at 9:15 a.m. in New York, from 112.04 yesterday, after touching 110.83, the strongest level since July 18. The yen gained 0.2 percent to 77.84 per dollar, from 77.98, after advancing yesterday to 77.57, the strongest since it hit a postwar high of 76.25 on March 17. The dollar was little changed at 80.21 Swiss centimes after touching a record low 79.90. The euro slid 0.7 percent to $1.4267 after dropping 1 percent yesterday.
Employment
News
MarketWatch | Growth slows as labor markets ‘soft’: Beige Book
Soft labor markets and weak real estate offset a slight boost to consumer spending and an encouraging start to the tourism season, the Federal Reserve reported Wednesday in its Beige Book of anecdotal evidence on the U.S. economy.
MarketWatch | Jobless claims hit 3-month low of 398,000
Applications for benefits below 400,000 for first time since April.
Econ Comments
WSJ | The White House vs. Boeing
The Obama Administration opposes a bill to rein in the NLRB.
FT | America’s turbulent jobs flight
US manufacturing has a good story to tell but that story is about technology and productivity rather than jobs for the millions of people out of work and facing a jobless recovery.
WSJ | Want Jobs? Cut Local Regulations
It takes 700 hours of training to become a licensed manicurist in Alabama.
Blogs
Forbes: Unconventional Logic | The Unemployment Situation Is Getting Worse
So, in terms of the rate of employment deterioration, Obama’s presidency has been more than twice as bad as George W. Bush’s. Obama’s jobs regression totals are not (yet) as high as Bush’s, but he has not had nearly as much time in office.
MarketWatch | Growth slows as labor markets ‘soft’: Beige Book
Soft labor markets and weak real estate offset a slight boost to consumer spending and an encouraging start to the tourism season, the Federal Reserve reported Wednesday in its Beige Book of anecdotal evidence on the U.S. economy.
MarketWatch | Jobless claims hit 3-month low of 398,000
Applications for benefits below 400,000 for first time since April.
Econ Comments
WSJ | The White House vs. Boeing
The Obama Administration opposes a bill to rein in the NLRB.
FT | America’s turbulent jobs flight
US manufacturing has a good story to tell but that story is about technology and productivity rather than jobs for the millions of people out of work and facing a jobless recovery.
WSJ | Want Jobs? Cut Local Regulations
It takes 700 hours of training to become a licensed manicurist in Alabama.
Blogs
Forbes: Unconventional Logic | The Unemployment Situation Is Getting Worse
So, in terms of the rate of employment deterioration, Obama’s presidency has been more than twice as bad as George W. Bush’s. Obama’s jobs regression totals are not (yet) as high as Bush’s, but he has not had nearly as much time in office.
Budget
News
WSJ | Debt-Crisis Vote Goes Down to Wire in House
The House was headed for a cliffhanger vote Thursday on a revised debt plan from Republican Speaker John Boehner that could go a long way in determining if the government's borrowing limit is raised in time to avoid a possible default next week.
CNN Money | Debt ceiling: The trillion dollar mystery
House Speaker John Boehner says his bill has $1.2 trillion in discretionary spending cuts over ten years. Senate Majority Leader Harry Reid says his bill has about the same level of such cuts.
WSJ | S&P Stays Mum on Rating for U.S.
Standard & Poor's Ratings Services left the threat of a downgrade hanging over the U.S., declining to tell anxious lawmakers on Wednesday whether rival tax and spending plans floated in Washington would save the U.S.'s triple-A credit rating.
FT | Insurance cost against US default hits record
The cost of buying insurance against a default by the US rose to a record on Wednesday, in a sign of growing unease that gridlock in Washington over raising the federal debt ceiling may result in the Treasury failing to pay interest to bondholders.
Econ Comments
Politico | In pursuit of a balanced budget
As Washington struggles to find a way to raise the debt ceiling, one piece likely left out of a compromise is the Balanced Budget Amendment. That’s a shame.
Bloomberg Businessweek | Why the Debt Crisis Is Even Worse Than You Think
If Washington is deadlocked now, how will it deal with the much bigger debt problems that lurk in the decades to come?
FreedomWorks | Top 10 Reasons to Support 'Cut Cap Balance' over Boehner Plan
This fight is not about raising the debt ceiling. It’s about getting the debt under control. Which means getting Washington spending under control.
RCM | Growth Should Inform Debt-Ceiling Debate
In the last few centuries, the betterment of mankind's lot has resulted from overall economic output increasing-that is, growing not redistributing wealth. And that increase in output has been driven by free market capitalism-an economic system where the entrepreneur can only succeed by serving the needs of others.
Washington Times | MCCLINTOCK: Debt reduction means difficult decisions
Families get what Washington doesn’t: Live within your means.
Blogs
NRO: The Corner | Worried About a Downgrade?
We are not going to address our long-term debt problems without making changes to health-care and retirement spending. We just aren’t. Being worried about a downgrade should mean being willing to talk about reforming entitlements.
Heritage Foundation | The Truth about Obama’s Budget Deficits, in Pictures
The fact is that Obama’s budget would set America on a dangerous fiscal course that leads to massive deficits well into the future—hitting $1.2 trillion in 2012 and, after dipping slightly, rising back to $1.2 trillion again by 2021.
Reports
CRS | Statutory Limits on Total Spending as a Method of Budget Control
Often when there is dissatisfaction with budgetary levels, budget process reforms are proposed to mandate a specific budgetary policy or fiscal objective. This report focuses specifically on one such budget process reform—the concept of creating a statutory limit on total spending.
WSJ | Debt-Crisis Vote Goes Down to Wire in House
The House was headed for a cliffhanger vote Thursday on a revised debt plan from Republican Speaker John Boehner that could go a long way in determining if the government's borrowing limit is raised in time to avoid a possible default next week.
CNN Money | Debt ceiling: The trillion dollar mystery
House Speaker John Boehner says his bill has $1.2 trillion in discretionary spending cuts over ten years. Senate Majority Leader Harry Reid says his bill has about the same level of such cuts.
WSJ | S&P Stays Mum on Rating for U.S.
Standard & Poor's Ratings Services left the threat of a downgrade hanging over the U.S., declining to tell anxious lawmakers on Wednesday whether rival tax and spending plans floated in Washington would save the U.S.'s triple-A credit rating.
FT | Insurance cost against US default hits record
The cost of buying insurance against a default by the US rose to a record on Wednesday, in a sign of growing unease that gridlock in Washington over raising the federal debt ceiling may result in the Treasury failing to pay interest to bondholders.
Econ Comments
Politico | In pursuit of a balanced budget
As Washington struggles to find a way to raise the debt ceiling, one piece likely left out of a compromise is the Balanced Budget Amendment. That’s a shame.
Bloomberg Businessweek | Why the Debt Crisis Is Even Worse Than You Think
If Washington is deadlocked now, how will it deal with the much bigger debt problems that lurk in the decades to come?
FreedomWorks | Top 10 Reasons to Support 'Cut Cap Balance' over Boehner Plan
This fight is not about raising the debt ceiling. It’s about getting the debt under control. Which means getting Washington spending under control.
RCM | Growth Should Inform Debt-Ceiling Debate
In the last few centuries, the betterment of mankind's lot has resulted from overall economic output increasing-that is, growing not redistributing wealth. And that increase in output has been driven by free market capitalism-an economic system where the entrepreneur can only succeed by serving the needs of others.
Washington Times | MCCLINTOCK: Debt reduction means difficult decisions
Families get what Washington doesn’t: Live within your means.
Blogs
NRO: The Corner | Worried About a Downgrade?
We are not going to address our long-term debt problems without making changes to health-care and retirement spending. We just aren’t. Being worried about a downgrade should mean being willing to talk about reforming entitlements.
Heritage Foundation | The Truth about Obama’s Budget Deficits, in Pictures
The fact is that Obama’s budget would set America on a dangerous fiscal course that leads to massive deficits well into the future—hitting $1.2 trillion in 2012 and, after dipping slightly, rising back to $1.2 trillion again by 2021.
Reports
CRS | Statutory Limits on Total Spending as a Method of Budget Control
Often when there is dissatisfaction with budgetary levels, budget process reforms are proposed to mandate a specific budgetary policy or fiscal objective. This report focuses specifically on one such budget process reform—the concept of creating a statutory limit on total spending.
Wednesday, July 27, 2011
Joint Economic Committee hearing on Maximizing America’s Prosperity: How Fiscal Rules Can Restrain Federal Overspending
"The United States is on the precipice of a financial crisis because Washington spends too much relative to the size of our economy. Under President Obama, federal spending has grown far beyond the ability of our tax system to generate revenues from American families and businesses sufficient to pay for Washington’s overspending. The resulting large budget deficits are causing an unsustainable accumulation of federal debt.
Business investment in new buildings, equipment, and software drives job creation, not federal spending. Today, both large corporations and entrepreneurs are not investing because of uncertainty. They fear higher taxes and new burdensome regulations. Consequently, job creation is anemic, the unemployment rate remains stubbornly high, and American families are suffering...
Overspending cannot be cured by a so-called “balanced approach.” A study, Spend Less, Owe Less, Grow the Economy, published by JEC Republican staff on March 15, 2011, found that successful fiscal consolidations by our global competitors were composed of at least 85 percent spending reductions with additional revenues largely from non-tax sources such as asset sales. Balanced approaches that included both spending reductions and tax increases failed in other countries."
Vice Chairman
Kevin Brady's
Opening Statement
See Full Opening Statement Here
General Economics
News
Market Watch | New single-family home sales fall 1% in June
Sales of new single-family homes fell 1.0% in June as purchases in the Northeast dropped to the lowest level since the government began tracking the data in 1973.
National Journal | Insiders: Revenue Sharing and Offshore Drilling Reform Inextricably Linked
Adding a lucrative financial incentive for coastal states that allow energy production off their shores would greatly enhance prospects of congressional passage of a bill to strengthen rules on offshore-drilling safety, National Journal’s Energy and Environment Insiders say. Still, Insiders are pessimistic that Congress would pass any such plan.
Market Watch | U.S. durable-goods orders fall 2.1% in June
Weaker orders for airplanes and automobiles translated into a steeper-than-forecast 2.1% decline in durable-goods orders in June, the Commerce Department estimated Wednesday.
Bloomberg | Growth Slowed in 8 of 12 U.S. Regions: Fed
The Federal Reserve said the economy grew at a slower pace in more parts of the country since the beginning of June as shoppers restrained spending and factory production eased.
Econ Comments
AEI: American | Government Housing Policy: The Sine Qua Non of the Financial Crisis
How did the financial system accumulate an unprecedented number of risky mortgages?
CNN: Money | The American Dream slips even further out of reach
Add stagnant wages to a list of woes hitting American families struggling for a life that was better than their parents had.
National Journal | Moody’s Economist Says Ratings Downgrade Wouldn't Be 'End of the World'
Asked whether it was the state of the economy or Congress’s inability to come together on a deal that was really threatening the credit rating, Zandi said on the Early Show: “The latter. This is just a political decision, right? We are a very large nation. We’re a very prosperous nation. We can pay our bills.”
Minyanville | How the US Economy Would Benefit From a Real Alternative Energy Policy
So far, the United States has positioned itself to be behind history on what could be a very promising industry for a stumbling economy.
Source | Soros's Regulatory Hedge
Another victim of Dodd-Frank.
NYT | How a Debt Downgrade May Affect Consumers
This is not yet one of those stuff-your-money-in-a-mattress moments.
Blogs
Heritage Foundation | Welfare Spending Under the Boehner Plan
Bob Greenstein of the Center on Budget and Policy Priorities claims that the Boehner budget is a form of “class warfare.” He says that “if enacted, it would produce the greatest increase in poverty and hardship produced by any law in modern U.S. history.”
Reports
NBER | How Do Mortgage Subsidies Affect Home Ownership? Evidence from the Mid-century GI Bills
The sharpest increase in U.S. home ownership over the last century occurred between 1940 and 1960, associated primarily with a decrease in the age at first ownership. To shed light on the contribution of several coincident large-scale government interventions in housing finance, I examine veterans' home loan benefits provided under the postwar GI Bills.
RCM: Wells Fargo | Consumer Confidence Posts Surprising Rise in July
Contrary to other sentiment indicators recently, the Conference Board’s index of consumer confidence edged up in July. The number of people expecting their situation to improve in six months rose.
Market Watch | New single-family home sales fall 1% in June
Sales of new single-family homes fell 1.0% in June as purchases in the Northeast dropped to the lowest level since the government began tracking the data in 1973.
National Journal | Insiders: Revenue Sharing and Offshore Drilling Reform Inextricably Linked
Adding a lucrative financial incentive for coastal states that allow energy production off their shores would greatly enhance prospects of congressional passage of a bill to strengthen rules on offshore-drilling safety, National Journal’s Energy and Environment Insiders say. Still, Insiders are pessimistic that Congress would pass any such plan.
Market Watch | U.S. durable-goods orders fall 2.1% in June
Weaker orders for airplanes and automobiles translated into a steeper-than-forecast 2.1% decline in durable-goods orders in June, the Commerce Department estimated Wednesday.
Bloomberg | Growth Slowed in 8 of 12 U.S. Regions: Fed
The Federal Reserve said the economy grew at a slower pace in more parts of the country since the beginning of June as shoppers restrained spending and factory production eased.
Econ Comments
AEI: American | Government Housing Policy: The Sine Qua Non of the Financial Crisis
How did the financial system accumulate an unprecedented number of risky mortgages?
CNN: Money | The American Dream slips even further out of reach
Add stagnant wages to a list of woes hitting American families struggling for a life that was better than their parents had.
National Journal | Moody’s Economist Says Ratings Downgrade Wouldn't Be 'End of the World'
Asked whether it was the state of the economy or Congress’s inability to come together on a deal that was really threatening the credit rating, Zandi said on the Early Show: “The latter. This is just a political decision, right? We are a very large nation. We’re a very prosperous nation. We can pay our bills.”
Minyanville | How the US Economy Would Benefit From a Real Alternative Energy Policy
So far, the United States has positioned itself to be behind history on what could be a very promising industry for a stumbling economy.
Source | Soros's Regulatory Hedge
Another victim of Dodd-Frank.
NYT | How a Debt Downgrade May Affect Consumers
This is not yet one of those stuff-your-money-in-a-mattress moments.
Blogs
Heritage Foundation | Welfare Spending Under the Boehner Plan
Bob Greenstein of the Center on Budget and Policy Priorities claims that the Boehner budget is a form of “class warfare.” He says that “if enacted, it would produce the greatest increase in poverty and hardship produced by any law in modern U.S. history.”
Reports
NBER | How Do Mortgage Subsidies Affect Home Ownership? Evidence from the Mid-century GI Bills
The sharpest increase in U.S. home ownership over the last century occurred between 1940 and 1960, associated primarily with a decrease in the age at first ownership. To shed light on the contribution of several coincident large-scale government interventions in housing finance, I examine veterans' home loan benefits provided under the postwar GI Bills.
RCM: Wells Fargo | Consumer Confidence Posts Surprising Rise in July
Contrary to other sentiment indicators recently, the Conference Board’s index of consumer confidence edged up in July. The number of people expecting their situation to improve in six months rose.
Taxes
News
National Journal | 'Fair Tax' Faces Bipartisan Opposition From Ways and Means
The partisan battle over raising the debt limit may be reaching a critical level, but House Ways and Means Committee members found common skepticism on Tuesday on a conservative plan to restructure the tax code around a flat sales tax.
Econ Comments
AEI | Waxman-Rockefeller Tax Is a Bad Deal for Senior Citizens
President Barack Obama and key congressional Democrats want a better deal on prescription drugs sold to seniors. But if they get it, seniors will pay billions of dollars more for their medicines.
WSJ | Robin Hood Can't Lead Us Out of the Debt Hole
Obama's obsession with higher tax rates on the rich is not helpful.
Blogs
ThinkMarkets | Tax Baseline Key to Debt Fight
But even if there are no new obligations, taxes are primed to go up. That baseline, biased in favor of a growing tax burden, is key to proposed deals and will no doubt remain the pivotal point in budget negotiations long after the current debt ceiling is broached.
National Journal | 'Fair Tax' Faces Bipartisan Opposition From Ways and Means
The partisan battle over raising the debt limit may be reaching a critical level, but House Ways and Means Committee members found common skepticism on Tuesday on a conservative plan to restructure the tax code around a flat sales tax.
Econ Comments
AEI | Waxman-Rockefeller Tax Is a Bad Deal for Senior Citizens
President Barack Obama and key congressional Democrats want a better deal on prescription drugs sold to seniors. But if they get it, seniors will pay billions of dollars more for their medicines.
WSJ | Robin Hood Can't Lead Us Out of the Debt Hole
Obama's obsession with higher tax rates on the rich is not helpful.
Blogs
ThinkMarkets | Tax Baseline Key to Debt Fight
But even if there are no new obligations, taxes are primed to go up. That baseline, biased in favor of a growing tax burden, is key to proposed deals and will no doubt remain the pivotal point in budget negotiations long after the current debt ceiling is broached.
Health Care
News
National Journal | Insurance Exchanges Will Lead to Fights With State Legislatures
When it comes to getting health insurance exchanges up and running, there’s no question that states have a lot of work to do between now and 2014. But the heaviest lifting might come between state health officials and legislatures, experts said on Wednesday.
National Journal | Medicare Deficit Cost-Savers Don’t Help the Big Picture
Increasing the Medicare eligibility age from 65 to 67 or increasing the co-pays or the deductibles seniors have to pay—both items included as cost-savers in various deficit-reduction plans—don’t solve the big problem: stemming the rising cost of health care, the experts said on Tuesday.
Blogs
Heritage Foundation | Making Obamacare Bureaucrats Play by the Rules
Laws set norms to regulate conduct. Obamacare, like most major laws, does not really do this. Instead, it authorizes administrators to make laws, insofar as they make the rules and regulations to govern our conduct. The public will not know the full implications of Obamacare until after unelected—and usually unknown—agency officials make the rules.
National Journal | Insurance Exchanges Will Lead to Fights With State Legislatures
When it comes to getting health insurance exchanges up and running, there’s no question that states have a lot of work to do between now and 2014. But the heaviest lifting might come between state health officials and legislatures, experts said on Wednesday.
National Journal | Medicare Deficit Cost-Savers Don’t Help the Big Picture
Increasing the Medicare eligibility age from 65 to 67 or increasing the co-pays or the deductibles seniors have to pay—both items included as cost-savers in various deficit-reduction plans—don’t solve the big problem: stemming the rising cost of health care, the experts said on Tuesday.
Blogs
Heritage Foundation | Making Obamacare Bureaucrats Play by the Rules
Laws set norms to regulate conduct. Obamacare, like most major laws, does not really do this. Instead, it authorizes administrators to make laws, insofar as they make the rules and regulations to govern our conduct. The public will not know the full implications of Obamacare until after unelected—and usually unknown—agency officials make the rules.
Monetary
Econ Comments
Bloomberg | Bernanke May Need to Stay ‘Above Politics’ in Debt Standoff
The central banker would risk angering politicians and roiling markets should he get involved in talks, recommend a specific tax and spending plan or repeat the force of his 2008 pleas for a financial rescue, members of Congress from both parties said.
Market Watch | Fed’s Hoenig criticizes easy-money policy
The retiring president of the Kansas City Federal Reserve told U.S. lawmakers on Tuesday that the central bank’s aggressive efforts to help the economy might be hurting it instead.
Bloomberg | Bernanke May Need to Stay ‘Above Politics’ in Debt Standoff
The central banker would risk angering politicians and roiling markets should he get involved in talks, recommend a specific tax and spending plan or repeat the force of his 2008 pleas for a financial rescue, members of Congress from both parties said.
Market Watch | Fed’s Hoenig criticizes easy-money policy
The retiring president of the Kansas City Federal Reserve told U.S. lawmakers on Tuesday that the central bank’s aggressive efforts to help the economy might be hurting it instead.
Employment
News
WSJ | U.S. Business Leaders Press Senate Panel for More Work Visas
U.S. business leaders on Tuesday urged a Senate panel to implement immigration-law changes that would allow companies to hire more highly skilled workers.
CNN Money | Employers to hike pay, but only for a select few
Despite ongoing economic uncertainty, companies are betting on their best workers -- and are willing to pay more to prove it, according to a report Wednesday.
WSJ | CEOs in Their Own Words: Don't Plan on Much Hiring
The CEOs are speaking. And the message isn't encouraging: Don't expect many new U.S. jobs anytime soon.
Econ Comments
Washington Times | GHEI: Obamacare, a death panel for jobs
Government health care takeover imperils economic recovery
Cato Institute | Solving the Long-Term Jobs Problem
The problem today is that government policy is impeding innovation and job creation.
Blogs
American: Enterprise Blog | Solving the Long-Term Jobs Problem
Stimulus has failed. It’s time to unleash entrepreneurs in the new commanding heights of the economy: healthcare and education.
WSJ | U.S. Business Leaders Press Senate Panel for More Work Visas
U.S. business leaders on Tuesday urged a Senate panel to implement immigration-law changes that would allow companies to hire more highly skilled workers.
CNN Money | Employers to hike pay, but only for a select few
Despite ongoing economic uncertainty, companies are betting on their best workers -- and are willing to pay more to prove it, according to a report Wednesday.
WSJ | CEOs in Their Own Words: Don't Plan on Much Hiring
The CEOs are speaking. And the message isn't encouraging: Don't expect many new U.S. jobs anytime soon.
Econ Comments
Washington Times | GHEI: Obamacare, a death panel for jobs
Government health care takeover imperils economic recovery
Cato Institute | Solving the Long-Term Jobs Problem
The problem today is that government policy is impeding innovation and job creation.
Blogs
American: Enterprise Blog | Solving the Long-Term Jobs Problem
Stimulus has failed. It’s time to unleash entrepreneurs in the new commanding heights of the economy: healthcare and education.
Budget
News
Washington Times | ‘Wiggle room’ seen on Aug. 2 debt deadline
For one, federal revenues came in stronger than expected in recent weeks, giving the Treasury an extra $14 billion in cash to spend on Social Security and other payments after Aug. 2, one analysis found.
WSJ | Companies Bracing for U.S. Default
The unthinkable is finally becoming reality for U.S. companies, who are beginning to take real steps to prepare for the possibility of a U.S. debt default.
CNN Money | Betting $4.8 billion on a U.S. default
A small camp of investors are betting that the U.S. government will default on its debt, and they're putting $4.8 billion of their chips on the table.
WSJ | Facing a Hit Over Debt in Alabama
In a move to avoid the largest municipal bankruptcy in U.S. history, holders of more than $3 billion in debt issued by Jefferson County, Ala., are working on a rescue that would leave them with steep losses.
Econ Comments
Washington Times | BIRNBAUM: Devilish details of the debt debate
Cutting spending is easy in the abstract but hard when people gripe.
Daily Caller | Cut, Cap and Balance: Seven reasons the GOP must hold the line
The passage of “Cut, Cap and Balance” in the House of Representatives is a game-changer. It is also the ground on which the GOP must stand, fight and win, especially now that a July 18-21 CNN poll shows that two-thirds of Americans support the House’s approach.
WSJ | For Obama, Golden Opportunity Is Fading
President Aimed to Broker Grand Deficit-Reduction Deal but Now Finds Himself Scrambling to Marshal Public Opinion.
Politico | Why we need 'Cut, Cap, and Balance'
The debt is our problem, not the debt limit. The consequences of not aggressively attacking it now are severe.
Cato Institute | Some Austerity
The Reid plan would theoretically cut spending by $2.7 trillion over ten years. Even if that were true, it would still allow our national debt to increase by some $10 trillion over the next decade.
Barron's | A Fate Worse Than Debt
Downgrade may pose as great a threat as a U.S. default if Washington destroys Hamilton's legacy.
WSJ | The GOP's Reality Test
Republicans who oppose Boehner's debt deal are playing into Obama's hands.
Blogs
NRO: The Corner | The Size of Our Debt and Why It Matters
Basically, while it is true that raising the debt ceiling soon will allow Treasury to continue to pay all of its bills (most of them stemming from past spending and commitments), it won’t address our inability to pay our future bills and avoid future default.
Reports
CBO | Analysis of the Impact on the Deficit of the Budget Control Act of 2011 as Proposed in the Senate
The Congressional Budget Office (CBO) has estimated the impact on the deficit of the Budget Control Act of 2011, as proposed in the Senate on July 25, 2011.
CBO | Analysis of the Impact on the Deficit of the Budget Control Act of 2011 as Proposed in the House
The Congressional Budget Office has estimated the impact on the deficit of the Budget Control Act of 2011, as posted on the Web site of the Committee on Rules on July 25, 2011.
Washington Times | ‘Wiggle room’ seen on Aug. 2 debt deadline
For one, federal revenues came in stronger than expected in recent weeks, giving the Treasury an extra $14 billion in cash to spend on Social Security and other payments after Aug. 2, one analysis found.
WSJ | Companies Bracing for U.S. Default
The unthinkable is finally becoming reality for U.S. companies, who are beginning to take real steps to prepare for the possibility of a U.S. debt default.
CNN Money | Betting $4.8 billion on a U.S. default
A small camp of investors are betting that the U.S. government will default on its debt, and they're putting $4.8 billion of their chips on the table.
WSJ | Facing a Hit Over Debt in Alabama
In a move to avoid the largest municipal bankruptcy in U.S. history, holders of more than $3 billion in debt issued by Jefferson County, Ala., are working on a rescue that would leave them with steep losses.
Econ Comments
Washington Times | BIRNBAUM: Devilish details of the debt debate
Cutting spending is easy in the abstract but hard when people gripe.
Daily Caller | Cut, Cap and Balance: Seven reasons the GOP must hold the line
The passage of “Cut, Cap and Balance” in the House of Representatives is a game-changer. It is also the ground on which the GOP must stand, fight and win, especially now that a July 18-21 CNN poll shows that two-thirds of Americans support the House’s approach.
WSJ | For Obama, Golden Opportunity Is Fading
President Aimed to Broker Grand Deficit-Reduction Deal but Now Finds Himself Scrambling to Marshal Public Opinion.
Politico | Why we need 'Cut, Cap, and Balance'
The debt is our problem, not the debt limit. The consequences of not aggressively attacking it now are severe.
Cato Institute | Some Austerity
The Reid plan would theoretically cut spending by $2.7 trillion over ten years. Even if that were true, it would still allow our national debt to increase by some $10 trillion over the next decade.
Barron's | A Fate Worse Than Debt
Downgrade may pose as great a threat as a U.S. default if Washington destroys Hamilton's legacy.
WSJ | The GOP's Reality Test
Republicans who oppose Boehner's debt deal are playing into Obama's hands.
Blogs
NRO: The Corner | The Size of Our Debt and Why It Matters
Basically, while it is true that raising the debt ceiling soon will allow Treasury to continue to pay all of its bills (most of them stemming from past spending and commitments), it won’t address our inability to pay our future bills and avoid future default.
Reports
CBO | Analysis of the Impact on the Deficit of the Budget Control Act of 2011 as Proposed in the Senate
The Congressional Budget Office (CBO) has estimated the impact on the deficit of the Budget Control Act of 2011, as proposed in the Senate on July 25, 2011.
CBO | Analysis of the Impact on the Deficit of the Budget Control Act of 2011 as Proposed in the House
The Congressional Budget Office has estimated the impact on the deficit of the Budget Control Act of 2011, as posted on the Web site of the Committee on Rules on July 25, 2011.
Tuesday, July 26, 2011
General Economics
News
CNN: Money | Recession worsens racial wealth gap
The study, from 2009 data compiled by the Pew Research Center, found the median wealth of white households was 20 times that of black households and 18 times that of Hispanic households.
Bloomberg | Oil Rises as U.S. Debt Concern Weakens Dollar, Countering Demand Concern
Oil advanced as the U.S. President’s warning that the country’s debt stalemate may damage the economy weakened the dollar, boosting the appeal of commodities and countering concern that the crisis will hurt demand.
Fox News | Treasury secretary says economy may have slowed
Treasury Secretary Timothy Geithner (GYT'-nur) says the economy may have slowed during the second quarter of the year, but he's looking for it to pick up.The economy grew at a rate of 1.9 percent from January to March. The April-to-June figures for the gross domestic product aren't yet in, but some economists have forecast them to be lower.Geithner says growth for the first half of 2011 will probably come in at 2 percent, perhaps even slightly lower.
Bloomberg | Roubini Sees Reduced Threat of Euro Breakup, Deflation in Advanced Nations
The risk of a breakup in the euro area is lower than a year ago, Nouriel Roubini, the economist who predicted the global financial crisis, said. The risk of deflation in advanced economies has also fallen, Roubini, the co-founder and chairman of New York-based Roubini Global Economics LLC, said at a conference in Shanghai today.
Market Watch | U.S. home prices rise for second month in May
U.S. home prices rose for a second straight month in May, according to data released Tuesday, though the gains could be more reflective of the new buying season than of revived demand in the struggling housing market.
Econ Comments
CNN: Money | Household debt reduction: We've only just begun
Consumers have made great strides in reducing their debts, but spending hasn't picked up. Is the borrow and spend mentality gone forever?
Washington Times | FEULNER: What really is poverty?
Most ‘poor’ are surprisingly well off.
WSJ | Twin Paralyzing Factors Keep Washington Divided
The inability, after eight months' warning, to agree on any plan to deal with deficits and raise the nation's debt ceiling isn't some freak accident. Instead, it is the logical culmination of two giant trends in American politics: an unresolved debate over the size of government and the growing hyper-partisanship of Congress, particularly the House of Representatives.
Blogs
Econlog | Resolving Financial Crises
Another challenge with today's debt crises is that there may no longer be a government with the credibility and desire to back a bank big enough to buy up all the shaky debt, which, may include the debt of a number of banks with exposure to sovereign debt.
Political Calculations | Charity in America: The Donors
Type the sentence(s) summarizing the link here.Who donated money to U.S. charities in 2010? And how much money did they give?
Heritage Foundation | Exporting Natural Gas Benefits America
Natural gas prices in the United States have been low in the past few years, and increased estimates in natural gas reserves from shale formations in Pennsylvania, New York, Texas, Oklahoma, Arkansas, and Louisiana are opening opportunities to increase exports to other nations. In some countries, natural gas prices are three times as high as they are in the United States.
Financial Times | Regulators must risk more, and intervene less
Since the devastating Japanese earthquake and, earlier, the global financial tsunami, governments have been pressed to guarantee their populations against virtually all the risks exposed by those extremely low probability events. But should they? Guarantees require the building up of a buffer of idle resources that are not otherwise engaged in the production of goods and services. They are employed only if, and when, the crisis emerges.
Reports
Heritage Foundation | Red Tape Rising: A 2011 Mid-Year Report
Following a record year of rulemaking, the Obama Administration is continuing to unleash more costly red tape. In the first six months of the 2011 fiscal year, 15 major regulations were issued, with annual costs exceeding $5.8 billion and one-time implementation costs approaching $6.5 billion.
Heritage Foundation | Will Obama Ever Learn Economics from Reagan?
Type the sentence(s) summarizing the link here.Leading the nation through hard times wasn't easy. We'd like to suggest that President Obama take a closer look at how President Reagan dealt with that "economic hardship," and how he steered the nation toward what would turn into its longest peacetime economic expansion. It's a cautionary tale — one that involves the greatest domestic error of his administration.In 1981, President Reagan's plan for revitalizing the economy was a four-fold one:
CNN: Money | Recession worsens racial wealth gap
The study, from 2009 data compiled by the Pew Research Center, found the median wealth of white households was 20 times that of black households and 18 times that of Hispanic households.
Bloomberg | Oil Rises as U.S. Debt Concern Weakens Dollar, Countering Demand Concern
Oil advanced as the U.S. President’s warning that the country’s debt stalemate may damage the economy weakened the dollar, boosting the appeal of commodities and countering concern that the crisis will hurt demand.
Fox News | Treasury secretary says economy may have slowed
Treasury Secretary Timothy Geithner (GYT'-nur) says the economy may have slowed during the second quarter of the year, but he's looking for it to pick up.The economy grew at a rate of 1.9 percent from January to March. The April-to-June figures for the gross domestic product aren't yet in, but some economists have forecast them to be lower.Geithner says growth for the first half of 2011 will probably come in at 2 percent, perhaps even slightly lower.
Bloomberg | Roubini Sees Reduced Threat of Euro Breakup, Deflation in Advanced Nations
The risk of a breakup in the euro area is lower than a year ago, Nouriel Roubini, the economist who predicted the global financial crisis, said. The risk of deflation in advanced economies has also fallen, Roubini, the co-founder and chairman of New York-based Roubini Global Economics LLC, said at a conference in Shanghai today.
Market Watch | U.S. home prices rise for second month in May
U.S. home prices rose for a second straight month in May, according to data released Tuesday, though the gains could be more reflective of the new buying season than of revived demand in the struggling housing market.
Econ Comments
CNN: Money | Household debt reduction: We've only just begun
Consumers have made great strides in reducing their debts, but spending hasn't picked up. Is the borrow and spend mentality gone forever?
Washington Times | FEULNER: What really is poverty?
Most ‘poor’ are surprisingly well off.
WSJ | Twin Paralyzing Factors Keep Washington Divided
The inability, after eight months' warning, to agree on any plan to deal with deficits and raise the nation's debt ceiling isn't some freak accident. Instead, it is the logical culmination of two giant trends in American politics: an unresolved debate over the size of government and the growing hyper-partisanship of Congress, particularly the House of Representatives.
Blogs
Econlog | Resolving Financial Crises
Another challenge with today's debt crises is that there may no longer be a government with the credibility and desire to back a bank big enough to buy up all the shaky debt, which, may include the debt of a number of banks with exposure to sovereign debt.
Political Calculations | Charity in America: The Donors
Type the sentence(s) summarizing the link here.Who donated money to U.S. charities in 2010? And how much money did they give?
Heritage Foundation | Exporting Natural Gas Benefits America
Natural gas prices in the United States have been low in the past few years, and increased estimates in natural gas reserves from shale formations in Pennsylvania, New York, Texas, Oklahoma, Arkansas, and Louisiana are opening opportunities to increase exports to other nations. In some countries, natural gas prices are three times as high as they are in the United States.
Financial Times | Regulators must risk more, and intervene less
Since the devastating Japanese earthquake and, earlier, the global financial tsunami, governments have been pressed to guarantee their populations against virtually all the risks exposed by those extremely low probability events. But should they? Guarantees require the building up of a buffer of idle resources that are not otherwise engaged in the production of goods and services. They are employed only if, and when, the crisis emerges.
Reports
Heritage Foundation | Red Tape Rising: A 2011 Mid-Year Report
Following a record year of rulemaking, the Obama Administration is continuing to unleash more costly red tape. In the first six months of the 2011 fiscal year, 15 major regulations were issued, with annual costs exceeding $5.8 billion and one-time implementation costs approaching $6.5 billion.
Heritage Foundation | Will Obama Ever Learn Economics from Reagan?
Type the sentence(s) summarizing the link here.Leading the nation through hard times wasn't easy. We'd like to suggest that President Obama take a closer look at how President Reagan dealt with that "economic hardship," and how he steered the nation toward what would turn into its longest peacetime economic expansion. It's a cautionary tale — one that involves the greatest domestic error of his administration.In 1981, President Reagan's plan for revitalizing the economy was a four-fold one:
Taxes
Econ Comments
AEI | Should Groceries Be Exempt from Sales Tax?
As I explained in my other articles, the taxation of business purchases and the disparate treatment of consumer goods and services are irrational policies that lack coherent justification. In contrast, the exemption of groceries serves the essential purpose of easing the fiscal burden on those with limited economic means.
Blogs
Heritage Foundation | Conservatives Beware: The Boehner Plan Leads to Tax Increases
The Boehner plan has two steps. The first step cuts spending by $1.2 trillion — but over ten years, and, as usual with these plans, the deep cuts come in the later years, which makes it less likely that they will ever occur.
American: Enterprise Blog | Means Tests as Marginal Tax Increases
My gut is that an explicit means test, like that proposed by the Heritage Foundation, which would reduce Social Security and Medicare benefits by around 45 cents for each dollar of a retiree’s income above $55,000, would have its largest effect on earnings of retired individuals.
AEI | Should Groceries Be Exempt from Sales Tax?
As I explained in my other articles, the taxation of business purchases and the disparate treatment of consumer goods and services are irrational policies that lack coherent justification. In contrast, the exemption of groceries serves the essential purpose of easing the fiscal burden on those with limited economic means.
Blogs
Heritage Foundation | Conservatives Beware: The Boehner Plan Leads to Tax Increases
The Boehner plan has two steps. The first step cuts spending by $1.2 trillion — but over ten years, and, as usual with these plans, the deep cuts come in the later years, which makes it less likely that they will ever occur.
American: Enterprise Blog | Means Tests as Marginal Tax Increases
My gut is that an explicit means test, like that proposed by the Heritage Foundation, which would reduce Social Security and Medicare benefits by around 45 cents for each dollar of a retiree’s income above $55,000, would have its largest effect on earnings of retired individuals.
Health Care
News
National Journal | Small-Business Survey Suggests Suspicion of Health Care Law
It found that 20 percent of employers with 50 or fewer workers expect to change what they offer those workers, with nearly all expecting to either raise costs for their employees or reduce benefits.
Econ Comments
WSJ | A Dangerous Medicare Proposal
Price controls on Part D drugs would cripple medical innovation and undermine a successful federal entitlement program.
Blogs
Heritage Foundation | Rasmussen: 57 Percent of Americans Favor Repeal of Obamacare
A new poll reveals that 57 percent of Americans favor the repeal of Obamacare, including 46 percent who strongly favor its repeal. Meanwhile, 53 percent think the law will be bad for the country, and only 31 percent think it will be good–the lowest finding since the law’s passage.
National Journal | Small-Business Survey Suggests Suspicion of Health Care Law
It found that 20 percent of employers with 50 or fewer workers expect to change what they offer those workers, with nearly all expecting to either raise costs for their employees or reduce benefits.
Econ Comments
WSJ | A Dangerous Medicare Proposal
Price controls on Part D drugs would cripple medical innovation and undermine a successful federal entitlement program.
Blogs
Heritage Foundation | Rasmussen: 57 Percent of Americans Favor Repeal of Obamacare
A new poll reveals that 57 percent of Americans favor the repeal of Obamacare, including 46 percent who strongly favor its repeal. Meanwhile, 53 percent think the law will be bad for the country, and only 31 percent think it will be good–the lowest finding since the law’s passage.
Monetary
News
Bloomberg | Declining U.S. Growth Forecasts Keep Rates Low
With third quarter growth looking weaker than before, the probability that the Fed will ease monetary policy has risen, Hatzius said in a July 15 report. Fed Chairman Ben S. Bernanke told Congress on July 13 the central bank is prepared to take additional action, including buying more government bonds, if the economy appears to be in danger of stalling.
Market Watch | How the dollar could rise if no debt deal
It’s certainly counterintuitive, but the U.S. dollar could actually appreciate if the U.S. government doesn’t raise the debt ceiling by the Aug. 2 deadline, some strategists say.
Econ Comments
WSJ | Why the Fed Is Not Independent
The Fed's foray into fiscal policy makes for a volatile political mix that all but guarantees control from without..
Bloomberg | Declining U.S. Growth Forecasts Keep Rates Low
With third quarter growth looking weaker than before, the probability that the Fed will ease monetary policy has risen, Hatzius said in a July 15 report. Fed Chairman Ben S. Bernanke told Congress on July 13 the central bank is prepared to take additional action, including buying more government bonds, if the economy appears to be in danger of stalling.
Market Watch | How the dollar could rise if no debt deal
It’s certainly counterintuitive, but the U.S. dollar could actually appreciate if the U.S. government doesn’t raise the debt ceiling by the Aug. 2 deadline, some strategists say.
Econ Comments
WSJ | Why the Fed Is Not Independent
The Fed's foray into fiscal policy makes for a volatile political mix that all but guarantees control from without..
Budget
News
WSJ | IMF Sees Global Impact From U.S. Debt Woes
Downgrade Would Be 'Very Damaging'.
WSJ | Downgrade Threat Looms
U.S. Could Lose Top Rating; Obama Issues Stark Warning as Boehner Slams Spending.
Econ Comments
Washington Times | MILLER: Congress agrees: Keep spending
Democratic and Republican leaders preserve status quo on Capitol Hill.
Daily Caller | Don’t expect promised spending cuts to materialize
Voters should be wary of congressional promises to cut spending or taxes at some future date. Even when such promises are embedded in current legislation, politics, not law, will determine whether they are kept.
RCM | The Truth About the Debt-Ceiling Fight
The federal government can and will continue making all its payments on the debt whether it is authorized to spend past the current debt ceiling or not. The Obama administration is not telling the truth when it claims that the government will run out of money to make debt payments on August 2. It will cut spending elsewhere before it defaults.
Bloomberg | History Suggests Debt-Ceiling Fights May Be Good for Us: Echoes
...perhaps, debt-ceiling fights force presidents who would rather not focus on the glum details of economics to look more closely into the abyss of debt, rather than spending away and passing on the bill yet again.
Blogs
EconLog | Hennessey on the Debt Ceiling and the Budget Process
Keith Hennessey of Stanford University's Hoover Institution talks with EconTalk host Russ Roberts about the debt ceiling and the budget process.
Heritage Foundation | Lessons for Today from Reagan’s 1982 Deficit Reduction Compromise
You might want to consider a cautionary tale dating back to 1982 when President Ronald Reagan agreed to a deficit-reduction compromise—and a result he didn’t bargain for.
American: Enterprise Blog | Only in Washington
So what does Washington do with the money that citizens send in to reduce the debt? Turns out the federal government … spends it.
Atlantic: McArdle | The Subliminal Message of Tonight's Speeches: We're Doomed
Coupled with Boehner's rebuttal, the most plausible explanation to my mind is also the most troubling: both sides have given up making a deal, and are now just working on fixing the blame.
WSJ: Real Time Economics | Vital Signs: Increasing Wariness of U.S. Default
The spread on five-year credit default swaps on U.S. debt rose to 0.57 percentage points Monday — the highest since early 2010 — meaning the annual cost of insuring $10 million in U.S. debt against default is $57,000.
Reports
RCM: Wells Fargo Economics Group | Is the Greek Debt Problem “Solved”?
Our calculations show that the package should stabilize the government’s debt-to-GDP ratio at approximately 160 percent over the next few years. However, the calculations are sensitive to assumptions about nominal GDP growth and the government’s primary budget surplus.
WSJ | IMF Sees Global Impact From U.S. Debt Woes
Downgrade Would Be 'Very Damaging'.
WSJ | Downgrade Threat Looms
U.S. Could Lose Top Rating; Obama Issues Stark Warning as Boehner Slams Spending.
Econ Comments
Washington Times | MILLER: Congress agrees: Keep spending
Democratic and Republican leaders preserve status quo on Capitol Hill.
Daily Caller | Don’t expect promised spending cuts to materialize
Voters should be wary of congressional promises to cut spending or taxes at some future date. Even when such promises are embedded in current legislation, politics, not law, will determine whether they are kept.
RCM | The Truth About the Debt-Ceiling Fight
The federal government can and will continue making all its payments on the debt whether it is authorized to spend past the current debt ceiling or not. The Obama administration is not telling the truth when it claims that the government will run out of money to make debt payments on August 2. It will cut spending elsewhere before it defaults.
Bloomberg | History Suggests Debt-Ceiling Fights May Be Good for Us: Echoes
...perhaps, debt-ceiling fights force presidents who would rather not focus on the glum details of economics to look more closely into the abyss of debt, rather than spending away and passing on the bill yet again.
Blogs
EconLog | Hennessey on the Debt Ceiling and the Budget Process
Keith Hennessey of Stanford University's Hoover Institution talks with EconTalk host Russ Roberts about the debt ceiling and the budget process.
Heritage Foundation | Lessons for Today from Reagan’s 1982 Deficit Reduction Compromise
You might want to consider a cautionary tale dating back to 1982 when President Ronald Reagan agreed to a deficit-reduction compromise—and a result he didn’t bargain for.
American: Enterprise Blog | Only in Washington
So what does Washington do with the money that citizens send in to reduce the debt? Turns out the federal government … spends it.
Atlantic: McArdle | The Subliminal Message of Tonight's Speeches: We're Doomed
Coupled with Boehner's rebuttal, the most plausible explanation to my mind is also the most troubling: both sides have given up making a deal, and are now just working on fixing the blame.
WSJ: Real Time Economics | Vital Signs: Increasing Wariness of U.S. Default
The spread on five-year credit default swaps on U.S. debt rose to 0.57 percentage points Monday — the highest since early 2010 — meaning the annual cost of insuring $10 million in U.S. debt against default is $57,000.
Reports
RCM: Wells Fargo Economics Group | Is the Greek Debt Problem “Solved”?
Our calculations show that the package should stabilize the government’s debt-to-GDP ratio at approximately 160 percent over the next few years. However, the calculations are sensitive to assumptions about nominal GDP growth and the government’s primary budget surplus.
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