Friday, January 21, 2011

Budget News Jan. 17 - 21

A Path Is Sought for States to Escape Their Debt Burdens
Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.
Debt crosses $14 trillion mark
The amount of U.S. debt subject to the country's legal maximum has topped $14 trillion for the first time.
Bonus Payments to City Retirees Are Drawing Ire
As San Francisco struggles under ballooning pension and health care costs, the city’s retirees will receive unexpected cost-of-living bonuses totaling $170 million. The city’s anticipated budget deficit for the coming year is $360 million.
Obama Plans $42 Billion Cut in Iraq, Afghanistan War Costs as Troops Leave
The proposed $117 billion for fiscal year 2012, which begins Oct. 1, would be the lowest expenditure for the wars since fiscal 2005.

Conservatives Propose Trillions in Federal Spending Cuts
House conservatives signaled Wednesday that they were serious about making a significant dent in the size of the federal government, offering a proposal that would cut $2.5 trillion from the government’s bankroll over a decade.
Even budget deficits are bigger in Texas
Texas lawmakers unveiled a Spartan budget late Tuesday night that slashes $31 billion in spending to close the state's massive budget deficit. Education, Medicaid and corrections would be hit particularly hard.

Texas House to unveil deep cuts, balance budget without tax increases
Budget writers will have a tough job because spending in the current two-year cycle exceeds $180 billion, though $20 billion of federal stimulus money and increased Medicaid matching funds will not be replaced.
Debt ceiling: Geithner won't let us default
Writing to congressional leaders, Timothy Geithner warned that failing to increase America's debt ceiling, currently $14.3 trillion, "would precipitate a default by the United States."
China: The new landlord of the U.S.
And while the amount of China's debt holdings are roughly the same now as at the start of 2010, the U.K.'s holdings has surged from $208 billion in January to $511 billion in November.
New House Budget Rules Could Cause Problems in the Senate
Conflicting House and Senate budget rules could complicate negotiations on budget and spending legislation, even as both parties call for fiscal discipline.
Toomey: Pay Interest on Debt First
Senator plans to introduce legislation designed to avoid default if Congress doesn't raise debt ceiling.

City Drafts Bankruptcy Exit
Vallejo's Cuts to Pensions and Benefits Viewed as Vital Lesson Plan.
Foreigners bought more U.S. debt in November
Foreign investors bought $93.9 billion in long-term Treasuries in November, increasing their net holdings after purchasing $56 billion the month before, the Treasury Department said Tuesday.
GOP Moves to Cut Spending to 2008 Levels
Proposed measure would give Budget chair unprecedented power to set spending levels.

Economist Comments
JOHN STOSSEL: Will Republicans Really Cut Spending This Time?
America is on a path to bankruptcy. It's easy to get bogged down arguing about lots of small cuts, but we'll only make progress by abolishing whole departments and entire missions. I hope the public understands it has to be done.

Reform, Don't Raise, The Debt Limit
The limit, as currently defined, is meaningless. Here's a solution.
The Budget Process: A Maze Perverted by Trickery
When President Obama unveils a fiscal 2012 budget in February, one can only hope that lawmakers act more quickly than they have in the past. The major legislative accomplishments of the lame-duck session of Congress — including extending the Bush-era tax cuts — should have and could have been consummated months ago. Why are so many issues left to the last minute?

What Congress Should Cut
Let's scrap the Departments of Commerce and Housing and Urban Development, end farm subsidies, and end urban mass transit grants, for starters.
Budget Crisis Rhetoric
Bankruptcy conveys the plain facts that political rhetoric tries to conceal. It tells people who depended on the bankrupt government that they can no longer depend on that bankrupt government. It tells the voters who elected that bankrupt government, with its big spending promises, that they made a bad mistake that they would be wise to avoid making again in the future.
EDITORIAL: Nickel, diming and quartering the public
Windy City privatization scheme props up big government.
The Utah Pension Model
The state adopts 401(k)s for new state employees.
RIEDL: Spending-cut myths can be dispelled by facts
Federal spending has expanded by $726 billion over the past three years, and now exceeds $30,000 per household.
How to Freeze the Debt Ceiling Without Risking Default
Next year, the government will have 10 times more income than it needs to honor its interest obligations.

Year ahead looms as toughest yet for state budgets
States that already have raided their reserve funds, relied on borrowing or accounting gimmicks, and imposed deep cuts on schools, parks and public transit systems no longer can protect key services in the face of another round of multibillion dollar deficits.
A Bankruptcy Law—Not Bailouts—for the States
We can see the fiscal crisis coming from miles away. Congress has no excuse not to act.
BACON: Debt limit opportunities
Educate the public by playing chicken.
The GOP Will Win the Debt-Limit Fight
The national debt has grown by $3.4 trillion since Obama took office. According to the Congressional Budget Office, our public debt is now about 62 percent of our economy--the highest percentage since shortly after World War II--and could reach 87 percent of our economy in just 10 years.
National debt: The ugly facts
The federal debt, which has averaged less than 40% of the total economy, now represents more than 60%. It's likely to hit 100% in a little over a decade.

What Do You Call $2.5 Trillion in Spending Cuts? A Good Start
Altogether, the legislation would create $2.5 trillion in savings over the next decade, significantly reducing the federal budget. But Jordan says this proposal should be seen as the beginning, not the final solution.
Re: Repeal and the Deficit
Also, as Peter Suderman of Reason reminds us, there’s a reason why the CBO alternative scenario assumes that the PPACA’s long-term Medicare savings won’t work.
Give me $1 billion to cut the budget deficit
I have a plan to reduce the budget deficit. The essence of the plan is the federal government writing me a check for $1 billion. The plan will be financed by $3 billion of tax increases.
Debt-Limit Votes Fall on the Party in Power
Donald Marron has a good chart of past votes on raising the debt limit. His conclusion: “Debt limit votes are about politics, not principle.”
Spending Restraint and Red Ink
...these studies largely echo the findings of recent research by the International Monetary Fund, we may have reached a point where even the establishment finally understands that government is too big.

Governors set a new tone for FY 2012
Governors in many states are beginning the calendar year with sobering rhetoric.
Sen. Rand Paul’s Plan to Cut Spending
According to Politico, Sen. Rand Paul (R., Ky.) is about to unveil a plan to cut $500 billion in the upcoming year’s budget.
Swap Debt Limit for ‘Cut and Cap’
The GOP should insist on the $100 billion in initial cuts they promised, and also demand passage of a legal cap on overall federal spending.

Political Ignorance and Federal Spending
The detailed data reveal that only 23% know that Medicare and Medicaid take up between 20 and 30% of federal spending, and only 15% realize that Social Security takes up between 20 and 30%. Some 48% underestimate the extent of Social Security spending, with a much smaller percentage overstating it. Similarly, only 23% recognize that defense spending takes up between 20% and 30% of the budget.
Debt limit will get raised. But who'll vote to do it?
Raising the debt limit is about politics, not economics.
Why the debt ceiling isn't actually a ceiling on debt
Increasing the debt limit guarantees that the US will pay the debt it has – it doesn't stop the government from going deeper into debt. That requires unpopular policy changes.

Making the Federal Budget
How do you spend four trillion dollars? Turns out, you don't; it takes the President and the Congress to allocate, authorize, appropriate, resolve, outlay, sequester, impound, and just plain spend that much in 2011. Such a process is baffling at times. It's so complex that you may marvel that Washington can get any action accomplished and paid for at all. So how does the federal budget happen?

Eleven Ideas for State Legislatures in 2011
Across the country, state legislatures and governors are looking for opportunities to reduce spending and fill revenue holes as state budget deficits totaled some $191 billion and $130 billion in the 2010 and 2011 fiscal years, respectively.

Employment News Jan. 17 - 21

The Phantom 15 Million
Taming unemployment starts with solving the mystery of the jobs that were supposed to have been created in the past 10 years but weren’t.
A real-time look at who's hiring and where
Want to find out which companies have announced they're planning to add to their ranks? While job location, required skills and pay run the gamut, a new web resource is providing just that.
Union Membership in Companies Slumps to Record Low 6.9% in 2010
Union membership in U.S. companies slumped to a record low last year as the recession eroded employment in industries where organized labor represents the workforce, the Labor Department reported.

Weekly Claims Turn Lower as Hope Rises for Jobs Market
The number of Americans filing for first-time unemployment benefits dropped sharply to 404,000 from a downwardly revised reading of 441,000 in the prior week.

Gordon Brown to warn against global youth unemployment epidemic
Former prime minister will call for Barack Obama to take the lead in helping the 81 million people under the age of 25.

Economist Comments
Why Jobs Haven't Come Back
Many laid-off workers are not being hired back because they were not adding much value to their companies in the first place.

No Job? No Income? No Problem for Consumers
Faced with these not insignificant hurdles, what did the U.S. consumer do? Why, he spent like there was no tomorrow.

Does disability insurance discourage employment?
What's the success rate on coming out of disability and finding a decent job? What percent of the disabled, permanently unemployed are truly unable to engage in productive work? I was put onto this question by a tip from Larry Katz.
State and Local Governments: Real Wage Gains from 2000 to 2009
Here is the data of the gains and losses.

Underemployed vs. Unemployed
The unemployment rate isn’t as closely tied to how rich or poor a country is as its underemployment rate, according to new international data from Gallup.
The Rise and Fall of the Labor Force
Before the 1990s, recessions seemed to have a clear pattern--jobs would be lost during the downturn, then roar back along with the rest of the economy.  Since then, we've seen a different pattern: the jobs go away, and the workers take a long time to find another.

If They Had Asked Me
The New York Times asks various folks for their view of why jobs have not come back during this recovery. I recommend taking a longer view of the process.
Why is labor hoarding diminishing?
Paul Krugman offers three good explanations of why today's recessions are involving larger labor losses than in the past.  Bubble-based recessions are tougher to get out of, unions are weaker, and many leading firms face more volatility.  All taken together, these mean the incentive for labor hoarding is weaker than before

Why Is Employment Becoming a Lagging Indicator?
Tyler's impressed that spending and output are up, but employment isn't.  But the simplest story is just that employment is becoming a lagging indicator.*  Consider: After the last "jobless recovery," the unemployment rate still fell to 4.9% by the end of 2005. 
Unemployment Rates, A Detailed Look
In 2010, the Labor Dept. tracked unemployment rates for more than 500 occupations--from travel agents (11% unemployed) to taxi drivers (10.7%). See how each occupation stacks up.
Mind the gap
Any discussion of continued high unemployment in America would be incomplete without bringing in this piece of data:

Declining Unionization Calls for Re-Envisioning Workplace Relations
Union membership has fallen because traditional collective bargaining does not appeal to most workers. Polls show that only one in 10 non-union workers want to organize. This makes sense: in the competitive private sector, unions can do little to raise their members’ pay. Additionally, most workers like their jobs and believe they are on the same side as their employers.

Monetary News Jan. 17 - 21

Hu's Visit: Can Timothy Geithner Prevent a U.S.-China Trade War?
Is a trade war possible? Geithner was asked. "A very low probability," he replied, "and I think it's completely avoidable."
Yuan: Under or overvalued?
The yuan could be undervalued by as much as 35%. Or it actually could be overvalued. Critics have long accused China of keeping its currency artificially low, making its exports cheaper and more competitive against foreign competitors.

The Latest American Export: Inflation
In 2010, prices rose by more than 5% in major emerging markets such as China, Brazil and Indonesia.
Fed Officials Indicate Growth Pickup Won't Alter Bond Purchases
Federal Reserve policy makers, who see unemployment falling too slowly for their liking, are giving no indication that signs of an accelerating recovery will dissuade them from carrying out record monetary-stimulus plans.
AIG repays the Fed
Let no one say the government and AIG are dragging their feet on the road to their eventual separation.
Schumer, Democrats time new currency war for Hu's White House visit
Schumer and two other Democrats announced Monday they will introduce legislation hitting China for currency manipulation just as Chinese President Hu Jintao is set to arrive in the United States for a critical summit with President Obama.

Economist Comments
Inflation Is Coming to US and Beyond
If you see and feel inflation, know that you're not alone. But also know that it's only the first wave and the inflation pumps are being primed.

The Mounting Inflation Pressure in New Zealand
The market's expectation for another immediate raise in the official interest rate in the next few weeks is set to grow.

Euro's Spanish Battle Needs Some Shock and Awe: Eric Chaney
The major battle in the fight for the survival of the euro will be fought on Spanish soil. Greece, Ireland and soon Portugal should be regarded as skirmishes. But Spain is different, in terms of scale and solvency.
Fed Tune-Up Would Silence Calls to Trash It: Terrence Keeley
The 112th Congress is shaping up to be quite prickly for the Federal Reserve, and for good reason. The time has come to amend, but not end, the Fed.
Taylor Rule II Shows Which Fed Moves Work Best: Amity Shlaes
the reason Hu Jintao decided to visit the U.S. this month is that the Chinese leader wants to know when the U.S. economy and its currency will be stable and strong again. It’s good the Chinese are known for patience because Hu may have to wait a while.
There's No Doubt the Fed Is Creating Inflation
Incessant money printing is discouraging the use of labor by making capital cheaper and technology more efficient.

Portuguese Bailout Will Make Euro Crisis Worse: Matthew Lynn
New year, new crisis. No sooner had Europe’s bond traders, politicians and central bankers gotten back to their desks than it was time to begin tussling over the fate of a small economy on the periphery of Europe.
10 ways to play the spike in global inflation
Inflation is on the rise in many parts of the world, but there are ways to profit from it through key trades in commodities, currencies and global equities.
The Fed's Third Mandate, the Threat of the Irish, and China's "Miracle" Business Cycle
In 2011, world GDP growth will likely be much better. Here, a look at the downside risks in Europe and China to this prediction.
QE2 and the Commodities That Cause Riots
Commodity markets reacted so strongly to QE2 because a number of global weather problems reduced harvest forecasts and, with global food stockpiles already tight, grain prices had a running start before QE2 even started.
Sources of Pressure on US Interest Rates
Rising interest rates are bad news for bondholders, especially those who hold longer term maturities, and will only make economic growth more difficult to achieve.

A Terminological Suggestion
People who have studied monetary economics seriously understand it, as should anyone who was an economics major.  Simply put, it means that people's demand to hold real money balances at the current price level is in excess of the supply of such balances.  Hence, an excess demand for money.

"QE1" and Monetary Disequilibrium
Before people shoot their mouths off, it would behoove them to know what they are talking about.  In this case, it would be helpful to know exactly what QE1 was and what I've actually said about what the Fed should and should not have done.

The Fed Has No Clothes
Plosser enumerates impossible goals of monetary policy.
Appreciating China’s Currency
China’s President Hu Jintau arrives in Washington today for a state visit, turning the spotlight once again on U.S.-China trade and China’s allegedly undervalued currency, the yuan. Not one to let such an opportunity go to waste, Sen. Charles Schumer (D-N.Y.) is introducing legislation that would threaten to impose duties on imports from China if the yuan does not appreciate quickly.


Tax News Jan. 17 - 21

Administration officials and House Lawmakers Eye Corporate Tax Reform
Much interest in both parties, but tremendous obstacles would lie ahead.
Tax Reform Hearing Spurs Deep Congressional Rift
As the House Ways and Means Committee kicks off its first hearing on overhauling the tax code, the focus is on business taxes and the push to lower the corporate tax rate.

Tech firms tie repatriation to job growth
Tech companies are urging Congress this year to consider a tax break designed to entice corporations into bringing billions of dollars in offshore earnings back to the United States.

Sweeteners added to recession-battling tax breaks
Congress in December also approved a patch for the alternative minimum tax that will protect about 20 million middle-income families from an additional tax bill of $3,900 or so.

States eye 'sin' taxation as salvation for budgets
Cash-strapped state lawmakers across the country are looking at raising "sin" taxes on everything from traditional vices, like smoking cigarettes and imbibing alcohol, to more recently vilified habits like drinking sugary sodas and hitting the tanning salon.
Average tax refund in 2010: $3,003
Taxpayers received an average refund of about $3,000 last year -- a 5% boost from the previous year.

Economist Comments
MINTON: Assault on alcohol
Proposed Maryland tax would cost drinkers and nondrinkers alike.

Tax reform: Spur jobs, reduce deficit
Today, the House Ways and Means Committee is meeting to discuss reforming the U.S. tax code. Though in its early stages, I believe tax reform can be one of the most promising areas for bipartisan cooperation in this new Congress. Members of both parties can agree that a tax code that unleashes economic productivity, creates middle-class jobs and reduces the deficit would be a major boost to our economic future.
Will Idaho Inch Away From Gov's "No New Taxes" Pledge?
For anyone still trying to get the taste of the Illinois tax hikes out of their mouth, the case of Idaho may prove a welcome palate cleanser. The state, which balanced its budget last fiscal year without raising taxes, may actually begin to reduce income tax rates starting in 2013.

FEULNER: Restoring economic freedom
Taxes are at burdensome levels, and the corporate rate here is one of the highest among developed nations.
The Anti-Illinois
Georgia debates a tax reform with lower rates.
RAHN: Corporate taxes are self-defeating
America's anti-business taxes have put it at a competitive disadvantage.

New Health-Care Reform: Taxing Us All to Death
Starting this month, the $5 billion medicine cabinet tax goes into effect. This means Americans can't use pre-tax accounts - such as HSAs, or FSAs for over-the-counter meds.

State, Local Government Revenue Growth Poised to Accelerate
State and local tax revenues, which have resumed growing after a long slide, are poised to accelerate as consumer spending recovers and the job market continues to mend, according to a research note by Joseph A. LaVorgna at Deutsche Bank.
America's Most Bizarre Taxes
The one thing that is safe to assume, is that there are a number of taxes in America (typically unique to just one State) that tend to be on the weirder side. From pets to bagels, to candy to crack, here’s a look at some of America’s slightly bizarre taxes...
Taxes May Go Up This Year for Higher-Income Households and Businesses
State government officials, recently deprived of the huge transfers to their coffers under the first Obama stimulus plan, are now exploring legislative changes to permit them to declare bankruptcy, which they are now prohibited from doing.

Reid: Taxes, spending and immigration reform top Senate agenda
Taxes, spending and immigration reform top Senate Majority Leader Harry Reid's (D-Nev.) goals for this Congress, he said Tuesday night.

Revisiting Bush 2008 Stimulus: Maybe It Did Spur Spending After All
...on average, households spent between 12% and 30% of their rebates on nondurables — things that don’t last for more than three years — and another chunk on cars and other durables, bringing the amount spent (as opposed to saved or used to pay down debt) to between 50% and 90% in the six months following receipt of the stimulus.
How About Tax Reparations For The Rich?
The predominant attitude has been: let a person make as much money as he can, provided he earns it. The reason class warfare rhetoric has been effective of late is because the practitioners of class warfare have largely succeeded in painting the rich as unproductive parasites.

On “Tax Expenditures”
Given that in this world we are cursed with the necessity to suffer the existence of government, it is certainly the case that some patterns of taxation are morally better – or “fairer” – than others. It is also certainly the case that some patterns of taxation have worse consequences on the private economy than do others.
The IRS Run Amok
On January 7, the tax-collection bureaucracy proposed a regulation that, if implemented, would force American financial institutions to put foreign tax law above US tax law.

Obamacare and New Taxes: Destroying Jobs and the Economy
The Patient Protection and Affordable Care Act (PPACA)[1] imposes numerous tax hikes that transfer more than $500 billion over 10 years—and more in the future—from hardworking American families and businesses to Congress for spending on new entitlements and subsidies.

Health Care News Jan. 17 - 21

Repeal 'onerous' IRS rule: Lawmakers
Now that House Republicans have had their token show-vote on the health care law, Congress is turning its attention to one small provision that everyone agrees should be repealed.
HHS Announces Grants for Insurance Exchanges
Despite repeal of the health care overhaul passing the House earlier this week, Health and Human Services Secretary Kathleen Sebelius is pushing forward with making grants available to states to get health insurance exchanges up and running.
House Republicans Plan Their Own Health Bills
Less than 24 hours after voting to repeal the new health care law, House Republicans said Thursday that they would pass discrete bills to achieve some of the same goals, but with more restraint in the use of federal power.
Democrats Keep Pushing Overhaul's Benefits
Senate Democrats and the Obama administration continued touting early benefits rolled out under the health care law today, two days after the Republican-led House voted to repeal the statute.

GOP Has Tools to Force Senate Vote on Repeal
While the health care repeal that the House passed Wednesday has little chance of passage in the Senate, Republicans will probably succeed in eventually forcing a vote on the measure -- albeit with at least a 60-vote threshold.

Taxpayer Calculator: Health Care Repeal
In order to expand coverage, the bill expands eligibility for Medicaid and the Children's Health Insurance Program. Slightly more than half of the individuals to be insured (16 million) will come from this group. The CBO estimates that it will cost $434 billion over ten years to cover the new enrollees. What's your share?
House set to vote on health care repeal
The House of Representatives plans to vote Wednesday on whether to repeal President Barack Obama's controversial health care overhaul, a priority for the House's new Republican majority.
Small Business Group Urges Repeal on Health-Care Overhaul
SBE Council delivered a Key Vote letter to every member of the U.S. House, which urges a vote in favor of H.R. 2.  Following the vote on H.R. 2, which is expected to pass, SBE Council will then begin working with Republicans and Democrats on an alternative reform framework that will bring more choice, affordability and innovation to our nation's health care system.
Republicans Already Moving Past Health Repeal
Even before today's vote on repealing the health care reform law, House Republicans were moving on.
The Health Care Numbers Fight that Won't Die
House Republicans insist their math is better than official budget estimates.

UK Government Plans Major Health Care Reform
British government plans major health care overhaul, but critics say changes could cause chaos.
With House set to debate healthcare, government finds up to half of Americans under 65 have preexisting conditions
As many as 129 million Americans under age 65 have medical problems that are red flags for health insurers, according to an analysis that marks the government's first attempt to quantify the number of people at risk of being rejected by insurance companies or paying more for coverage.
Democrats rip GOP health care repeal push
Top Democrats tore into the Republican effort to repeal President Barack Obama's health care overhaul Tuesday, warning that such a move would be catastrophic to small businesses and unfair to millions of Americans depending on the reform to guarantee coverage.
Repeal vote is just Republicans' first step on health care
The real work begins immediately afterward, with Republicans using every legislative and political tool at their disposal to wage a two-year campaign against the overhaul. And there won’t be anything subtle about this slow-drip strategy as Republicans aim to erode public confidence in the law and, they hope, make it so politically unpalatable that even some Democrats turn against it.

Economist Comments
The Republic Has Spoken on Health Care
"The real story is that a majority of states now want out. Twenty six out of 50 states have joined the lawsuit to repeal the linchpin that holds ObamaCare together: the insurance mandate. And when the majority of states in a republic want something changed, chances are it will be changed.

The Repeal Vote
An historic repudiation of an entitlement that is only 10 months old.
NHS reform a necessity, says Lansley
A wholesale restructuring of the National Health Service is “a necessity, not an option”, Andrew Lansley, the health secretary, said on Wednesday as he published the biggest bill in the 62-year history of the NHS.
The GOP's Health-Care Offensive Has Just Begun
The longer this issue is around, the worse it's likely to be for Democrats.
Getting the Right Kind of Health Reform
It's time supporters of this law stop playing with smoke and mirrors. They need to accept the fact Americans don't won’t this massive law anymore --and maybe after that happens--we might actually get health-care reform.

The Coming Doctor Shortage
We can't insure 32 million more people and cut funding to train doctors by $60 billion.
Doctor Is Already Feeling the Fateful Effects of Obamacare
Dr. Martha Boone is no ordinary urologist. For more than a year she has led a grassroots campaign against Obamacare — and for good reason. Boone’s livelihood depends on it.

Sebelius Says Repeal Fiscally Irresponsible
The nation’s top health official said today that a GOP-led effort to repeal the new health care law runs counter to a pledge of fiscal responsibility and has reinvigorated proponents of health care reform
Defund 'Obamacare': The next step
This legislation would validate the strategy for repeal that I have been advancing since the day the law was signed. It will also set the stage for the next component of my repeal strategy: the inclusion of language in every appropriations bill to prevent federal funds from being used to implement or enforce any of Obamacare's provisions.

Government Health Care in 1798
1798: Congress passes the Act for the Relief of Sick and Disabled Seamen. It provides health services to members of the merchant marine and funds a loose network of hospitals through the Marine Hospital Fund. The MHF is plagued by cost overruns, administrative mismanagement, and rationing of care. Some leaders oppose the new federal subsidies as an abuse of state sovereignty.
Where Are the Sick People Who Can’t Get Insurance?
A report recently released by the Department of Health and Human Services states that if the GOP succeeds at repealing Obamacare, “1 in 2 non-elderly Americans could be denied coverage or charged more due to a pre-existing condition.” Yet, as John Goodman of the National Center for Policy Analysis noted, “The Medicare program chief actuary predicted last spring that 375,000 would sign up for the new risk pool insurance in 2010. But by the end of November, only 8,000 had done so.”
Talk of Replacing ObamaCare Is a Bit Premature
Now that a bipartisan coalition in the House has voted to repeal ObamaCare, an even larger bipartisan coalition has approved a Republican resolution directing four House committees to “replace” that ill-fated law.  House Resolution 9 instructs the committees to “propos[e] changes to existing law” with the following goals:

House Vote to Repeal ObamaCare Is More than Mere Symbolism
he House vote to repeal ObamaCare is just the latest sign that ObamaCare goes too far, that it creates a more intrusive government than the American people are willing to accept.
New Jersey Practice Struggles With Health Care Changes
For the past 10 years, Joseph and Victoria Schwartz have owned a small endocrinology clinic in Englewood, N.J. Lately they’ve faced their share of challenges — some a result of Obamacare, the health care law that faces a crucial repeal vote in the House this week.
Economy Will Suffer If Obamacare Stands
Geithner is right that Congress should act to improve the economy, but leaving Obamacare in place would do the opposite. Repeal of Obamacare is the only way to restore economic prosperity in the United States, according to the 200 economists who signed a letter addressed to House and Senate leadership in support of overturning the new health law.
HHS Report on Obamacare’s Preexisting Conditions Impact: Say What???
"The report implies that without Obamacare’s prohibition on insurers applying preexisting-condition exclusions, nearly half of the entire U.S. population would be at risk of being denied health insurance because they already have a preexisting medical condition. The report’s “findings” are misleading and wildly inaccurate.

Where are All the Sick People Who Can't Get Insurance?
HHS says that millions of people--about half the country, in fact--either has, or has a loved one with, a condition that could cause them to have difficulty securing insurance.
Why Don't Big Firms Fire the Sick?
The simplest answer is that employers rarely succumb to the temptation to fire the sick because they want to protect their reputations.  Firms offer health insurance packages to attract workers.  If workers expect to lose their jobs if they ever contract a serious illness, it's going to be hard to recruit workers in the first place.
Number of States Challenging the Constitutionality of Obamacare Rises to 28
Counting the separate lawsuits filed by Virginia and (in the near future) Oklahoma, there is now a total of 28 states suing the federal government over this issue.
ObamaCare, Round 2
The basic problem is too much government in the health care arena. It’s anything today but a market. Those approaches that have reintroduce market forces — like health savings accounts — have worked quite well.
Health Care’s Dueling Economists — Again
During the initial health-care debate, the White House and Congressional Republicans issued dueling letters from economists supporting and decrying the overhaul.
ObamaCare’s Medicaid Mandate Imposes Staggering Costs on States
ObamaCare requires each state to open its Medicaid program to all legal residents earning up to 138 percent of the federal poverty level.  Supporters estimate this mandate will cost state governments little: the Kaiser Family Foundation’s worst-case-scenario estimates suggest that state Medicaid spending would rise by just 1.2 percent in New York and 5.1 percent in Texas between 2014 and 2019.
Five Myths about New Health Care Law
"As Congress moves closer to a vote on whether to repeal the new health care law, we can expect another onslaught of claims and counterclaims. Therefore, as the debate gets under way, it is worth considering the facts behind some of the most common claims you will hear.

How to Repeal Obamacare in the Senate
If Senators don’t take two procedural steps this week, they will make it virtually impossible to ever get a vote on the House-passed full repeal bill this Congress.
List of 27 States Suing Over Obamacare
Last March, Virginia and Florida (joined by 12 other states) filed suit against Obamacare, challenging its constitutionality. Since that time, many other states have joined in, recognizing the threat posed by the legislation to both the Constitution and their own state budgets. As we reported on Friday, more than half of all states are now suing over Obamacare.

Obamacare and Medicare Advantage Cuts: Undermining Seniors’ Coverage Options
Medicare Advantage (MA) plans are private insurance options available to Medicare beneficiaries. The Patient Protection and Affordable Care Act (PPACA)[1] cuts deeply into the projected payments to MA plans. Millions of Medicare beneficiaries enrolled in MA plans, or who would have been enrolled if not for the cuts, will experience very substantial reductions in the value of health care services provided to them by the Medicare program.

Obamacare and Medicaid: Expanding a Broken Entitlement and Busting State Budgets
Roughly half of the anticipated gains in insurance coverage from the Patient Protection and Affordable Care Act (PPACA) are achieved through a massive expansion of Medicaid, the joint federal–state health insurance program for the poor.
Obamacare and the Employer Mandate: Cutting Jobs and Wages
One of the central goals of the Patient Protection and Affordable Care Act (PPACA) was to increase the number of individuals with health insurance coverage. To encourage employers to offer coverage, the new law creates a tax penalty on firms with more than 50 workers that fail to provide “adequate” coverage for their employees. The result is government intrusion into voluntary arrangements made between employer and employee.
Obamacare and the CLASS Act: Creating a Long-Term Care Entitlement Burden
CLASS reduces the deficit in the short run because the government collects premiums for five years (2012–2016) but pays no benefits. The Congressional Budget Office (CBO) estimates that premium payments into CLASS will exceed benefit payments out of CLASS only until 2030; the Centers for Medicare and Medicaid Services (CMS) estimates that this will happen in 2025.

Obamacare and Federal Health Exchanges: Undermining State Flexibility
With enactment of the Patient Protection and Affordable Care Act (PPACA), states “shall” establish a health insurance exchange in accordance with federal rules and guidelines. If a state chooses not to establish an exchange, the federal government will step in and set up such an exchange for that state.
Obamacare and the Individual Mandate: Violating Personal Liberty and Federalism
The congressional mandate on American citizens to purchase health insurance is unprecedented. It is one of the most controversial provisions of the new law, setting off a record number of state lawsuits and launching a large number of state legislative countermeasures.
Obamacare and the Independent Payment Advisory Board: Falling Short of Real Medicare Reform
Beginning on January 15, 2014, the board is authorized to make its first recommendations to reduce the per capita growth rate in Medicare spending in accordance with spending targets set in the statute.The board is also to give priority to recommendations that extend the solvency of the program.
Obamacare and the Hidden Public Option: Crowding Out Private Coverage
Under the Patient Protection and Affordable Care Act (PPACA), the federal government, through the Office of Personnel Management (OPM), is legally required to sponsor at least two national health insurance plans beginning in 2014. These OPM-sponsored plans would automatically be eligible to compete against private health insurance offered in the new health insurance exchanges to be established in every state.

General Economic News Jan. 17 - 21

Record $4 Billion Exits Muni Funds
Investors pulled $4 billion out of municipal-bond funds in the week ended Wednesday, setting a new record, Thomson Reuters unit Lipper FMI said Thursday.
Obama's Conundrum: Matching Job Creation and Spending Cuts
President Obama's visit to General Electric's birthplace in Schenectady, New York today comes as part of his 2011 economic push. So far almost everything he has done this year has been focused on the economy, from his editorial in the Wall Street Journal promising to rollback burdensome regulations to hiring a new Chief of Staff, Bill Daley, who has strong ties to the business community.
California Declares Fiscal Emergency
Jerry Brown, California’s governor, declared a state of fiscal emergency on Thursday for the government of the most populous US state to press lawmakers to tackle its $25.4 billion budget gap.
Home sales hit 13-year low; slow recovery ahead
The number of people who bought previously owned homes last year fell to the lowest level in 13 years, and economists say it will be years before the housing market fully recovers.
In N.Y., Obama looks to highlight economic successes
President is announcing GE's Immelt will lead restructured presidential advisory board
Gas prices high - and might get higher
Strong worldwide oil demand and lack of supply are to blame for steadily rising gasoline prices in the United States, an oil industry group said Friday.
The World Economic Forum in Davos: A Changed Global Reality
Given that the scale of the downturn was so epochal, it should not be surprising that the nature of the recovery would likewise be the stuff of history. And it has been.
Rebuilding Haiti's economy
A long-term, sustainable recovery in Haiti can't take place without job creation. Investing in reviving Haiti's garment manufacturing sector holds the promise of providing tens of thousands of Haitians with work.
The Boondoggle That Wouldn't Die?
The New Cost-Cutting Congress May Spend Billions More On A Jet Engine The Pentagon Doesn't Want
Back with a vengeance
Rising commodity prices both reflect and threaten the world’s economic recovery
The consequences of costly nosh
What record food prices mean for business
Financial Crisis Panel to Deliver Three Conclusions
The federal commission that investigated the origins of the financial crisis is set to issue three competing conclusions next week.
Hu Says Strong China-U.S. Ties Are Needed as World has `Tortuous' Recovery
Chinese President Hu Jintao told business executives in Washington that closer ties between his country and the U.S. were critical amid a “tortuous” global economic recovery.
Pouring gas on an economic recovery
The U.S. economy is slowly but surely nursing itself back to health.

China GDP Expands 9.8% Despite Tightening Measures
China's economy unexpectedly accelerated in the fourth quarter of 2010 despite a series of tightening measures, spotlighting Beijing's difficulties managing growth and fueling market concerns about further government moves to combat inflation.
Administration Split over Fannie-Freddie Strategy
the Obama administration is sorely divided over how to reform Fannie Mae and Freddie Mac, the controversial mortgage giants.  Sources familiar with the discussions raise the possibility that the White House will miss its statutory deadline for submitting recommendations to Congress.
World needs $100 trillion more credit, says World Economic Forum
The world's expected economic growth will have to be supported by an extra $100 trillion (£63 trillion) in credit over the next decade, according to the World Economic Forum.
Brazil central bank raises interest rate to 11.25%
The move, though, adds to upward pressure on Brazil's currency, the real, whose soaring value against the dollar has already become problematic for the country's exporters.
Welfare Tab for Children of Illegal Immigrants Estimated at $600M in L.A. County
Los Angeles County Supervisor Michael Antonovich released new statistics this week showing social spending for those families in his county rose to $53 million in November, putting the county government on track to spend more than $600 million on related costs for the year -- up from $570 million in 2009.
U.S. companies dump billions into China
While U.S. businesses are still reluctant to invest in new plants and jobs in the United States, many are pouring money into China. But not for the reasons you'd think.
December Sales of U.S. Existing Homes Jump to 7-Month High
Purchases of existing houses, which are tabulated when a contract closes, increased 12 percent to a 5.28 million annual rate, the most since May.
Banks say fewer consumer loans are going bad
In an encouraging round of earnings reports, major banks say fewer mortgages are going bad, credit card defaults are down and more people are paying the bills on time.

China 'logs double-digit growth in 2010'
China's economy grew 10.3 percent last year but inflation exceeded the government's full-year target, Hong Kong-based Phoenix Television said on its website Wednesday.
What is Plan B if China dumps its U.S. debt?
When borrowing money it's always good to have a Plan B in case a big creditor pulls the plug. That should be true whether the sum is a few thousand dollars or about a trillion, the size of the United States government's debt to China.
Housing Starts in U.S. Decreased in December to One-Year Low
Builders began work on fewer homes than projected in December, a sign the industry that triggered the recession continued to struggle more than a year into the U.S. economic recovery.
U.S. for sale - Uncle Sam's real estate play
As Washington deficit hawks scour the federal budget for ways to trim the size of government, they are arriving at one idea with increasing frequency: Put government property on the auction block.
Another nasty inflation surprise
The script for 2011 had appeared as simple as it was momentous: would the fiscal squeeze stifle the recovery? That question remains as potent as before but just days into the new year the narrative has now abruptly switched to a rival storyline: just how bad will inflation get?

States Warned of $2 Trillion Pensions Shortfall
US public pensions face a shortfall of $2,500 billion that will force state and local governments to sell assets and make deep cuts to services, according to the former chairman of New Jersey’s pension fund.
'Explosive' Food Prices the Biggest Risk: Analyst
Overheating emerging markets, in China in particular, pose the biggest threat to the market and political situation in 2011 according to Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.
Food Prices Causing Riots in Africa Stoke Record U.S. Farm Economy Growth
The same record food prices causing riots in Algeria and export bans in India are allowing President Barack Obama to combine the biggest-ever U.S. farm exports with the tamest inflation since the 1960s.
Obama Launches Rule Review, Pledging to Spur Jobs, Growth
President Barack Obama plans a government-wide review of federal regulations, aiming to eliminate rules that stymie economic growth.
Deadlines Missed on Financial-Overhaul Rules
Regulators have missed or postponed several deadlines to write rules needed to implement the financial overhaul triggered by the Dodd- Frank law.
U.K. Plans to Set Minimum Prices for Alcoholic Drinks
Supermarkets including J Sainsbury Plc and Tesco Plc, as well as smaller retailers, pubs and bars in England and Wales, will be banned from selling alcoholic drinks at less their rate of duty plus value-added tax, to help cut binge drinking.
Report: Housing Market Steady in January
The National Association of Home Builders says its housing market index held steady in January, with many builders remaining pessimistic that home sales will improve in the near future.
Canada tightens mortgage rules
Canada imposed new curbs on mortgage lending on Monday amid concern about spiralling consumer debt fuelled by high property prices and low interest rates.

Economist Comments
European debt crisis: Does Obama get how serious this is?
Europe's debt crisis appears to be getting worse, yet American leadership is absent. How many times will America turn away from Europe only to return to it at great cost?
Spike in world food prices: It's more than bad weather
A global index for food prices, as measured by the UN, reached a record high last month. This on the heels of a food crisis in 2007-08. The weather isn't the only culprit -- or solution.

Obama isn't fooling anyone
When Obama was in a place of political comfort, the free market was a place of unhinged self-interest, unfairness and misery. Nearly all of our troubles were portrayed as a case of regulatory neglect — and nearly every dilemma was met accordingly.
Obama Approaches Regulations Backwards
After two years of issuing regulations that have exacerbated recession-induced unemployment by discouraging job creation, President Obama has issued an executive order to evaluate whether rules and regulations have benefits that exceed costs. This backwards process-backwards because the benefit-cost calculus should have been applied first-does not inspire confidence.
Taking the Government Out of Housing Finance: Principles for Reforming the Housing Finance Market
Implicit in most of the proposals for reforming the housing finance system is the idea that institutional investors will not buy mortgage backed securities (MBS) backed by US mortgages unless they are issued by a government sponsored enterprise (GSE), a US government agency, or are otherwise guaranteed by the US government. We believe, however, that there is a robust alternative to government support of the housing finance system—a system which in the past has led to large scale taxpayer bailouts and losses.

Gas-fueled vertigo
Rising pump prices are leaving motorists wobbly
Oversight Plan Seen to Lack Specifics
Top federal regulators inched forward in their implementation of the new financial regulatory law, but didn't provide the clarity banks and others are seeking on two critical provisions.
Obama's Rules Revelation

Why China matters
If China and the United States had Facebook profiles, their relationship statuses would say "it's complicated."
Why the Economy Is Headed for Another Depression
Here, a look at the events that will lead to the next leg down in the secular bear market and the reaction by the Fed that will end up pushing the economy over the edge.

Will Rising Food Prices Kill the Recovery?
If food costs more, will you buy any less? Surprisingly enough, that simple question may be the key to whether 2011 sees a strong rebound in economic growth, or is, instead, a bust.
Is China's bubble close to popping?
A few hedge funds are betting that it is.
China's playing catch-up
China's economy is expanding rapidly, but the West can't emulate that kind of growth.
Can entrepreneurship save Pakistan?
We know that decades of aid haven't worked, writes guest blogger Dane Stangler. So what do we try now?
Costs of living
What is behind rising inflation?
Housing Finance Reform
In order for the buy-and-hold model to come back, a lot more capital would have to come into the banking system, whereas now a lot of that capital is in the shadow banking system. I think that can happen as a natural, evolutionary process. But things could evolve differently from what I expect.
Now it is all about the economy
It seems reasonable to hope that the most interesting arguments in British politics will be about things that matter: how much the state should tax, borrow and spend, how to organise the British economy and welfare system to promote jobs and growth, and how to deliver public services. The dividing lines between the coalition and Labour could not be clearer, and those lines will be defended on both sides by articulate and aggressive champions. Bring it on.
Foot Voting, Political Ignorance, and Constitutional Design
The strengths and weaknesses of federalism have been debated for centuries. But one major possible advantage of building decentralization and limited government into a constitution has been largely ignored in the debate so far: its potential for reducing the costs of widespread political ignorance.
Who's rich?
To get into the top 5%, you need to earn less than $150,000. To me, it's something of a wake-up-call to realise that a couple who make $75,000 each are in the top 5% of American households. I'm curious whether this is surprising to others, too? Would you, like me, have guessed the thresholds were higher? Does this change what you think about who is "rich" in America today?
The Great Reconfiguration
If the chief reason that government takes over health care and education is because it can, that is not an outcome I would wish for.
America's broke recovery
ONE of the ideas for why America's recovery has been relatively slow and jobless refers to the fact that the country experienced a balance-sheet recession. In the years prior to the crisis, households accumulated a lot of debt, which was offset by rising asset prices. Those asset prices then collapsed and many households are now desperately attempting to pay down their debts. Because they're heavily indebted, efforts to spark a recovery by encouraging household spending or residential investments are likely to go nowhere; people are simply too broke.
What If the Largest Countries Had the Biggest Populations?
What if the world were rearranged so that the inhabitants of the country with the largest population would move to the country with the largest area? And the second-largest population would migrate to the second-largest country, and so on?

Do People Vote With Their Feet for Economic Freedom?
If libertarians value liberty so much, wonders New Zealand-based libertarian economist Eric Crampton, why don’t more of them move to New Zealand?
Complexity, Spontaneous Order, blah, blah, blah…and Wow
So I still feel confident saying that price controls will lead to long lines and are a bad idea, that expropriating private property will decrease investment, and that letting you choose for yourself is usually better than having the Central Authorities tell you what to do.
The crazy housing market
But the point I want to emphasize here is that when we talk about why the housing went crazy between 1997 and 2007, let’s not stick with interest rates, capital flows, and animal spirits. Let’s remember the role of bad economic policy in the housing market and the financial sector.
Krugman Issues a Counter-Challenge to Austrians
Krugman argues that he has already demonstrated the logical and empirical errors in the Austrian Theory of the Business Cycle.  With that assertion firmly made, he then asks: "The point is that the real world looks a lot like the one Keynes and Friedman envisioned, in which the demand side drives the business cycle. Why should anyone be determined to throw away 75 years of economic thought, to believe that these appearances are deceiving?
The Demise of America’s Manufacturing Sector Has Been Greatly Exaggerated
While it is true that the United States has lost more than 7 million manufacturing jobs since the late 1970s, that’s happened at the same time that U.S. manufacturing output has continued to expand and grow to new record levels almost every year. And in comparison to other countries, the United States remains by far the world’s largest manufacturer.
Housing Remains Embattled Sector
Housing may no longer be in the basement, but it is barely crawling up the cellar steps.
Haiti, New York, and learned helplessness
Why are we surprised to hear of Haitians waiting for the state to clean up their island, while snowbound New Yorkers wait for the city to clear theirs?

Obama's Regulation
It’s a relief President Obama, in an Op-Ed in today's Wall Street Journal, acknowledges that the free market is “the greatest force for prosperity the world has ever known.”
Corrupt cronies
What we are living through now is the continuing of the looting process. Get the government out of the banking business. The process is corrupt. The cronies are winning. You and I are losing.
From Katrina to snowmageddon: lessons government should learn
From Katrina to the Christmas blizzard to river floods, the government has botched natural disaster relief management. Here's how to do it right.
Prepayment Penalties Help Risky Borrowers
Recognizing this logic also explains why we don’t often see prepayments in prime mortgages:  prime borrowers are already close to the best credit, so there’s less chance of their credit improving and less room overall for improvement.  Of course, there’s nothing stopping the borrower from waiting for their credit to improve before getting a mortgage.
Number of the Week: Big Banks Gobble Up Market Share
Size has advantages. But in the case of the biggest U.S. banks, it could also be one of the greatest weaknesses in the global financial system.
Barack Obama, Mr. Deregulation?
In today’s much talked-of Wall Street Journal op-ed, President Obama reaches for common ground with critics of excessive government regulation — not a constituency he’s had much time for in the past. He announced an executive order requiring agencies to review existing regulation for outdated or unwise rules deserving of being struck from the books. That drew measured praise from organized business groups, something the President has not had much of lately.
A continuing disgrace
THE British inflation rate was 3.7%, as measured by the consumer prices index in December, and 4.8% on the broader retail prices index. It has been above the government's target range for over a year now; far more than a temporary blip. And inflation is sure to rise again in January, once the value added tax increase is absorbed. Higher food and fuel prices are the current driving force.
India's economy: Headed for trouble?
I've written in the past that India's economy emerged from the Great Recession in better shape than China's, despite its slightly lower growth rate. But now India looks like it's running into choppy times as well, with frighteningly high inflation, big budget and trade deficits and weakening competitiveness versus China and other rivals.

Another nasty inflation surprise
THE script for 2011 had appeared as simple as it was momentous: would the fiscal squeeze stifle the recovery? That question remains as potent as before but just days into the new year the narrative has now abruptly switched to a rival storyline: just how bad will inflation get?
Through Trade, Millions Tap Into the Talents and Knowledge and Efforts of Each Other
Imagine how much time Mr Thwaites would have spent building his own toaster from scratch were his goal to build a toaster comparable to the one he bought at retail.  (Actually, don’t imagine….  it’s impossible.)
Schedule for Week of January 16th
Three key housing reports will be released this week: January homebuilder confidence on Tuesday, December housing starts on Wednesday, and December existing home sales on Thursday.
What Would Public Choice Theory Say About Rating Agencies and Sovereign Debt?
Particularly since the European sovereign debt crisis put the question of sovereign debt ratings squarely on the table, and even more in the last few days since the rating agencies have downgraded Greek debt to junk status, I have to wonder what insulates Moody’s, Standard & Poors, and Fitch against pressures direct and indirect, subtle and not so subtle, by interested sovereigns.
The Keynesian Diversion
It’s easy to be a Keynesian – most business people are, and swarms of pseudo-economists long before Keynes were saying largely the same thing that Keynes himself said in 1936.  It is, alas, far more difficult to be a real economist.
The Keynesian Diversion II
In short, as Leland Yeager suggests in the passage highlighted here, Keynes’s assumed away most of the adjustments to economic discoordination that actually take place in economies – most of the stuff that are the objects of ‘microeconomic’ analyses.  Keynes was then left – not surprisingly – with deficient aggregate demand as the overwhelming culprit that must be solved.
Sumner and Krugman on zero MP workers
A few points about Scott's and Krugman's posts.
AS vs. PSST, again
The debate is hotting up, as our friends across the pond would say. Some random comments.
Krugman’s Evil Twin
I know the evil twin analogy is hackneyed, but I am at a loss to explain the back-to-back pieces Paul Krugman wrote over this past weekend. 
Productivity, Inventory Recessions, and Recalculations
The most recent two recessions--the Dotcom crash and the securitization crash--were not inventory recessions (we had a housing inventory recession in 2006-2007, but the really big overall economic hit came later). Think of them as financial shocks or recalculations. As a CEO, you worry about your firm surviving, so you focus on the balance sheet. You lay off your overhead workers in order to conserve cash. You try to restructure your organization. Output per worker goes up.
Which Provides More Bang for the Buck: Roads or Light Rail?
Between roads and light rail, which option would you suppose is the most cost effective for moving people into and through the downtown area of a major American city?
A Regulatory Overhaul?
President Obama makes the case for a regulatory overhaul in the Wall Street Journal and announces a new executive order. A couple of thoughts:
Oil shocks and economic recessions
I've just completed a new research paper that surveys the history of the oil industry with a particular focus on the events associated with significant changes in the price of oil. Here I report the paper's summary of oil market disruptions and economic downturns since the Second World War. Every recession (with one exception) was preceded by an increase in oil prices, and every oil market disruption (with one exception) was followed by an economic recession.
What kinds of societies create wealth? What kinds destroy it?
New and free societies create wealth. As they age, they shuffle wealth – and then destroy it.
China fact and sentence of the day
China has lent more money to other developing countries over the past two years than the World Bank, a stark indication of the scale of Beijing’s economic reach and its drive to secure natural resources.
Inflation Is Here
“Faced with rising international food prices,” Steven Mufson writes in the Washington Post, “governments around the world are cooking up measures to protect domestic supplies and keep a lid on prices at home.” Instead of export bans, subsidies, and price controls, governments might better consider the role of their central banks in creating money out of thin air and causing price inflation.
A continuing disgrace
THE British inflation rate was 3.7%, as measured by the consumer prices index in December, and 4.8% on the broader retail prices index. It has been above the government's target range for over a year now; far more than a temporary blip. And inflation is sure to rise again in January, once the value added tax increase is absorbed. Higher food and fuel prices are the current driving force.
Are Record Retail Sales Good For US consumers?
Congratulations. We are now consuming more each month than we did before the start of the recession.

A Gain for LEI, but Watch out for the Head-Fake From Permits
The sixth straight monthly gain in the Leading Economic Index (LEI) is consistent with our outlook for continued growth in 2011. However, gains in the LEI may be overstating the strength of the recovery.

Housing Starts End The Year On A Weak Note
Housing starts fell 4.3 percent in December to a 529,000-unit pace, with single family starts tumbling 9.0 percent. Building permits jumped 16.7 percent, however, reflecting a big jump in apartment construction.

Key Asian Indicators: A Book of Charts
The global financial crisis has had a major impact on perceptions of American power and its relationships in Asia. Many of the perceptions are not founded on facts. Among the facts often overlooked:
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Weekly Economic & Financial Commentary