Friday, January 28, 2011

Budget News Jan. 24 - 28



News
FRIDAY
State pension + debt = big numbers
States' debt loads are high enough, but when you combine them with their pension obligations, the numbers are really eye-popping.
U.S. needs to make progress on deficit, IMF warns
U.S. officials must act quickly to control government deficits or face slower growth and even more difficult choices in the future, the International Monetary Fund said Thursday in a report criticizing the tepid U.S. response to its rising public debt.
Budget Committee Chides Obama on Debt
Conrad warns that members, not White House, may lead the way to balanced budget.
House passes bill eliminating public financing
The House of Representatives voted Wednesday to eliminate the federal public financing system that helps pay for presidential campaigns and political conventions.
Stairway to Spending
Obama seeks to buy time on the debt ceiling; conservatives push for a standoff.

THURSDAY
Obama's Spending Freeze Just 'Spare Change': Roubini
The White House plan to partially freeze government spending is just "spare change" compared to a budget deficit of more than $1 trillion and eventually the US will have to raise taxes, economist Nouriel Roubini of Roubini Global Economics told CNBC Wednesday.
Social Security fund will be drained by 2037
New congressional projections add sense of urgency to policymakers' efforts to reform system.
CBO: Social Security to Run $45 Billion Deficit in 2011
The Congressional Budget Office (CBO) reports that Social Security will effectively run a $45-billion deficit in 2011 and continue to run deficits totaling $547 billion over the coming decade.
Obama’s Deregulation Plan: It May Not Save Money
President Obama is courting business with his pledge to review government regulations, but he may find that the savings aren’t as great as he expects.
Moody’s to Factor Pension Gaps in States’ Ratings
Moody’s Investors Service has begun to recalculate the states’ debt burdens in a way that includes unfunded pensions, something states and others have ardently resisted until now

WEDNESDAY
Budget Deficit Is Expected to Hit $1.48 Trillion
The federal government's budget deficit is expected to grow about 14% to $1.48 trillion by the end of the current fiscal year, an increase largely resulting from the extension of lower tax rates, the Congressional Budget Office said Wednesday.
Obama on debt: What he said - and didn't
In his State of the Union address on Tuesday, he offered a few ideas, but didn't spell out a comprehensive plan.
Obama Counters G.O.P. With Plan to Extend Spending Freeze
By proposing a two-year extension to the three-year domestic spending freeze he called for a year ago, President Obama sought to quickly counter Republican demands for deeper cuts to shrink government and reduce annual budget deficits.
What a Tea Party budget looks like
With Washington buzzing with proposals to cut the budget, Sen. Rand Paul and Rep. Michele Bachmann -- two high-profile Tea Party members -- have each released laundry lists of spending cuts.
House Pushes Deep Spending Cuts
Contrasting Obama's Proposed Five-Year Freeze, Republicans Back More Drastic Curbs in Fiscal 2011 .
Illinois Plan for Pensions Questioned
Federal regulators are examining disclosures by Illinois about its unorthodox pension funding method, trying to determine whether the state misled bond investors about the risks.
GOP Plans to Move Spending Bill the Same Week Obama Releases Budget
House GOP leaders are looking to keep pace with the White House in the coming budget battle by bringing a major spending- cut bill to the floor the same week the Obama administration releases its budget.

TUESDAY
What if Your State Goes Bankrupt?
Changes Will Hit Pensioners, Bond Holders Hardest, If a State Goes Broke.
No State Bailouts, Lawmaker Says
House Majority Leader Eric Cantor said he didn't support allowing states to seek bankruptcy protection and ruled out any federal bailouts of state governments.
Republicans Propose Amendment to Block Bailouts
Such a change would bar government equity investments, but it has little chance of adoption.
Conservative House Members Keep Pushing for $100 Billion in Fiscal 2011 Cuts
GOP leaders have talked about cutting at least $55 billion to $60 billion in non-defense, non-security discretionary spending in fiscal 2011, which began Oct. 1.
Paul: Tea Party Caucus Puts All Cuts on Table
Nothing is off the table for the Senate’s Tea Party Caucus when it comes to proposing budget cuts, not Social Security or federal jobs, according to Sen. Rand Paul…

MONDAY
A 'state of the union' fight ahead over US government spending
How furiously to cut government spending is likely to be a major point of departure between Obama, who gives the State of the Union address on Tuesday, and congressional Republicans.
Tea Partiers: Defense budget in the mix for cuts
Defense Secretary Robert Gates, in a recent pre-emptive move, proposed $78 billion in spending cuts and an additional $100 billion in cost-saving moves. While that amounts to $13 billion less than the Pentagon wanted to spend in the coming year, it still stands as 3 percent growth after inflation is taken into account.
Spain's Progress on Deficit Creates Cushion for Savings Banks: Euro Credit
The deficit fell 46 percent in the first 11 months of 2010, though December is the biggest month for spending. By contrast, Portugal’s central government shortfall widened.
STATES IN CRISIS: After Cutting Budgets Last Year, Where to Find Money Now?
For the second year in a row, most states face gut-wrenching budget shortfalls. The three states with the biggest gaps to fill -- Illinois, New Jersey and Nevada -- held the same distinction last year.
A Promise Made
INFOGRAPHIC: A promise made… is a debt unpaid.

Economist Comments
FRIDAY
If Munis Are Perilous, What About Treasuries?
But consider the federal situation — excluding, as with the state numbers, health care obligations. To the $9 trillion of debt at the end of the 2010 fiscal year, by the Congressional Budget Office’s numbers, add the $5.4 trillion of unfunded Social Security obligations through 2084 as calculated by the trustees of the related funds.

THURSDAY
Federal budget battle: Can Congress avoid a government shutdown?
GOP proposals to cut the federal budget range from $100 billion to $500 billion to a symbolic $1.5 trillion. With Democrats wary of stifling the economic recovery, the divide just may be too wide.
Obama vs. Ryan: The Choice Is Clear
On Tuesday, Republicans offered an alternative to the president's big-government vision.
The spin, and the facts, on Obama’s spending freeze
Here’s the spin and the facts from the White House – and from Republicans – on the spending freeze in President Obama’s State of the Union address.
Obama's 'Investment' Charade
Milton Friedman warned that government spending cancels out higher-return private investment.
A Missed Opportunity On the Budget
The State of the Union gave Obama the opportunity to confront the contradictions and educate Americans in the unpleasant realities of uncontrolled government. He declined.
What Sent States' Fiscal Picture Into a Tailspin?
State and local governments are a big and growing part of the U.S. economy. They account for 15% of all economic output, up from less than 12% two decades ago. They employ one in every seven workers, more than manufacturing.
Showing the Way On Spending Cuts
President Obama's State of the Union address demonstrated anew that although he pays lip service to smaller government, less regulation, and deficit reduction, his heart is elsewhere.

WEDNESDAY
For the Nation's Sake, Cut Education Spending
Education is, indeed, very important. But while Washington spends huge sums on things that are education-related, the riches produce almost nothing of educational value. If anything, the feds keep stuffing donuts into an already obese system.
State Budget Reform Toolkit
Most of the legislative "fixes" over the past few years for state budget gaps have merely postponed or obscured the problems rather than addressing them directly.

TUESDAY
Dear Mr. President: Don't punt on debt
Big speech, tonight, sir. I have a plea: Focus on large and specific proposals to truly fix the budget. Please.
Obama Spending Drive Will Suffocate Job Growth: Amity Shlaes
Private-sector jobs will be created. That’s the argument President Barack Obama will present tonight in his State of the Union address to justify his plan for any federal spending increases.

MONDAY
An Ugly Side Effect of New 1099 Law: More Tax Evasion
They say more small businesses will likely opt to do all-cash transactions under the table to avoid the 1099 reporting requirement, and all of its onerous provisions, which are worse than small businesses may realize.
State Bankruptcy Is a Bad Idea
Politicians already have the power to tame public unions without roiling municipal bond markets. They merely have to use it.
WILLIAMS: Coming collapse of state pensions
...if we assume an 8 percent return on investment rate for the pension funds (which we can't) states will begin running out of money by 2018, with Illinois being the first, and 20 states by 2025.
Indebted America risks an age of austerity
The president must break his silence and educate Americans on the cuts and tax increases that cannot be avoided…
The Unsustainability of the US Fiscal Situation
We are on an insupportable path. Long before we get to 2019, the bond markets will have taken away our ability to finance our debt at low rates.
More spending is a threat to America
Reaching the debt ceiling should be a warning bell to Congress that our debt has reached scorching levels. But all Washington politicians want to do is shut off the alarm instead of put out the fire.

Blogs
FRIDAY
Treasury takes a step to avoid debt ceiling
The Treasury says the balance in its Supplementary Financing Account will decrease to $5 billion.
New CBO Numbers Re-Confirm that Balancing the Budget Is Simple with Modest Fiscal Restraint
If federal spending is capped so it grows 1 percent each year, the budget is balanced in 2019. And if the crowd in Washington can limit spending growth to about 2 percent each year, red ink almost disappears in just 10 years.
The Contribution of Student Loans to the U.S. National Debt
What we find is that since 2008, the net outflow of money the federal government borrowed to provide direct student loans has exploded, rising by $89.7 billion dollars, or 17.8% of the $504 billion discrepancy.

THURSDAY
The Rand Paul Budget
Sen. Rand Paul (R-KY) has proposed a budget that will cut $500 billion in federal spending in one year.
Why the CBO may not believe all its own deficit projections
The CBO had to make assumptions about US policies its officials seem to have little faith will be implemented.
Treasury to Cut Fed Program as Debt Ceiling Nears
The Treasury Department Thursday said it will allow holdings in a special account at the Federal Reserve to fall to $5 billion from $200 billion as it looks for more flexibility as the U.S. approaches its debt limit.
Nondefense Discretionary Spending Freezes
That category accounts for about 18 percent of total spending, so let’s see how such a freeze would affect the overall budget.
Get Out The Scissors -- It's Time to Start Cutting
Government is trying to do too much, for too many people, and is burying us all in the process. It's time to start slashing--not “growing” through central planning.
Debt Limit Reality
Debt limit reform should exclude economically irrelevant intragovernmental borrowing, and instead should apply a limit only to the debt held by the public—the debt that matters. First set the rules correctly, then set the limit appropriately.
A Visual Guide for 2011's Federal Spending Debate
If you want to quickly see how President Barack Obama and the Congressional Democrats' federal government spending proposal for 2011 stacks up against what Congressional Republicans have in mind, shown against a background illustrating the trend in U.S. federal government spending since 1967, here you go!

WEDNESDAY
I Wish the Government Would Stop Investing and Get Out of the Way
Every year, presidents talk about how government can help the economy by investing money, and each time this “investment” fails to bring the promised results.

TUESDAY
Making the Big Cuts
One thing the president is not expected to cut is the bloated Department of Education. In fact, it looks like he plans to increase it.
GOP Conservatives Propose Spending Cuts
The vast majority of the savings, $2.3 trillion, would come from freezing non-defense discretionary spending at fiscal 2006 levels over the next ten years.
Muni bonds taking a double hit
State and local government have been in the news for all the wrong reasons: bankruptcies (Vallejo, CA) and threats of bankruptcies, mushrooming budget deficits, burgeoning debt, sluggish tax revenue growth, falling property tax revenues and various contractual problems with unionized municipal and state workers.
Obama Won’t Endorse Social Security Reform
For one thing, by refusing to reform Social Security, President Obama is guaranteeing automatic benefit cuts of about 22 percent for everyone on the program in 2037 (when the trust funds run dry) without having had retirees plan for a replacement income.
Government Spending vs Economic Growth
The Obama administration clearly believes that more government spending is necessary for better economic growth. But what does the data say?

MONDAY
When the Long Run Shows Up Today
...the short and the long-run are pretty tightly-connected and a failure to focus on fiscal problems in the short run can manifest itself in pretty serious problems over the long haul.
UPDATE: Cantor seems to confirm $60b in cuts now, more later
House Majority Leader Eric Cantor (R-Va.) on Sunday appeared to confirm that House Republicans would stretch out their pledge to cut $100 billion in spending over the 2011 and 2012 budgets.

Reports
FRIDAY
Congress Has Time and Options on Debt Limit
Assuming that current tax-and-spending policies continue, publicly held debt will top $23 trillion by the end of the decade.

WEDNESDAY
Budget and Economic Outlook: Fiscal Years 2011 Through 2021
For 2011, the Congressional Budget Office (CBO) projects that if current laws remain unchanged, the federal budget will show a deficit of close to $1.5 trillion, or 9.8 percent of GDP.

MONDAY
Obamacare and the Budget: Playing Games with Numbers
A close examination of what CBO said, as well as other evidence, makes it clear that the deficit reduction associated with PPACA is based on budget gimmicks, sleights of hand, accounting tricks, and completely implausible assumptions.
They Can’t Spend What You Don’t Approve: Rethinking the Appropriations Clause
The Appropriations Clause is the cornerstone of Congress’s “power of the purse.” It assigns to Congress the role of final arbiter of the use of public funds.

Employment News Jan. 24 - 28



News
FRIDAY
Spain's jobless rate surges to 20.33%
Spain announced Friday its jobless rate surged to a 13-year record above 20 percent at the end of 2010, the highest level in the industrialized world, as the economy struggled for air.
Long-term unemployment rate still sky-high
The number of Americans suffering through long-term unemployment remains stubbornly high, according to a study released Thursday.
Workers saw 2 percent rise in wages and benefits
Workers saw their wages and benefits rise slightly faster in 2010 than 2009 but the gain was still the second lowest increase in nearly three decades.
Orders for U.S. Factory Goods Fell; Jobless Claims Rose
New claims for jobless benefits surged last week as snowstorms in some parts of the United States kept workers at home, but the underlying trend pointed to a gradual labor market improvement.
Geithner Says Growth Still Too Weak to Cut Unemployment
Treasury Secretary Timothy F. Geithner said the U.S. economic expansion is still too weak to slash unemployment or a budget deficit headed for $1.5 trillion.

THURSDAY
Initial Jobless Claims Rose in US to 454,000
More Americans than forecast filed first-time claims for unemployment insurance payments last week, indicating it will take time for the labor market to mend.
Jobless Claims pushed higher by wintry weather
Snow and cold in four Souther states caused some companies to shut down.

WEDNESDAY
Jobless Rise in 20 States as Workers Still Laid Off
The unemployment rate rose in 20 states last month as employers in most states shed jobs.
Jobs: What Does It Cost to Add a Worker?
Politicians Shout About Creating Jobs, But Here's Surprising Truth About What It Takes
Obama Calls for Bipartisan Effort to Fight for U.S. Jobs
President Obama challenged Americans on Tuesday night to unleash their creative spirit, set aside their partisan differences and come together around a common goal of outcompeting other nations in a rapidly shifting global economy.
Lowe's cuts managers, plans lots more part-timers
Lowe's Cos., the No. 2 home improvement retail chain, is cutting 1,700 managerial jobs while adding up to 10,000 part-time workers in order to better staff its stores for weekend shoppers.
Unemployment rates by state, at a glance
The unemployment rate rose in 20 states last month, fresh evidence the job market is still struggling even as the economy improves. The Labor Department said Tuesday that the unemployment rate fell in 15 states and was unchanged in another 15. Meanwhile, hiring is still slow: The number of jobs on employer payrolls dropped in 35 states in December, while rising in only 15.

TUESDAY
Government Unions Build Ranks, Court TSA for Membership
Thousands of airport security screeners could choose a union to represent them as early as March, marking the latest expansion of union influence in the public sector, which now has more labor union members than the private sector.
GM adding 750 jobs
General Motors is adding a third-shift at its Flint, Mich., assembly plant. The shift addition will allow the company to hire back 750 workers to build its heavy-duty pickups, the company announced Monday.
They're hiring!
These 25 Best Companies to Work For have at least 700 openings each, totaling nearly 137,000 available jobs. What are they looking for? See what their recruiters say.
Business Economists Expect Substantial Hiring
More than four in 10 firms polled plans net addition of jobs in the next six months.

MONDAY
U.S. businesses' hiring plans top layoffs by most in 12 years
Survey of business economists finds them more hopeful about growth.
Economists see more hiring on the way
In another sign of a strengthening economy, U.S. companies say they are planning to hire more workers, and expect economic growth to pick up in the first months of 2011, according to a survey released Monday.
Americans Still Pessimistic About Job Market
But they're a bit more confident about finding a quality job than this time a year ago.

Economist Comments
WEDNESDAY
Uncertainty Continues To Depress Jobs
President Obama, in his State of the Union address, promised to focus on job-creation this year. But robust new hiring is unlikely when so much uncertainty — created by the same White House now promising jobs — hangs over the economy.
Comparative Advantage and American Jobs
U.S. workers win when industries are free to invest where they are the most productive.

MONDAY
What Will Stimulate America's Job Market?
Here, a look at four recommendations for how the US Congress can stimulate job growth, and why things may not always be as they seem

Blogs
FRIDAY
99ers More Likely to Be Older, Married, Minority
People who have been out of a job for well over a year are more likely to be older, married and a member of a minority group than other unemployed workers.

WEDNESDAY
Michigan Unemployment Rate Drop Doesn’t Mean Jobs Growth
While Michigan’s jobless rate fell at the fastest pace in the nation in December, the state isn’t celebrating yet.
Some States Saw Significant Jobs Progress
Follow the change in unemployment from the end of the recent recession. Below, the state-by-state unemployment rate from the Bureau of Labor Statistics, seasonally adjusted.

TUESDAY
Are underwater homeowners anchored to joblessness?
As America's jobless rate remains high, economists and pundits continue to raise the possibility of structural unemployment. And one of the mechanisms they cite is the anchoring effect of underwater mortgages. The argument is that many households now owe more on their homes than those homes are worth, which means that they can't afford to sell. Those households may then opt to stay in a location with high unemployment, even if a member of the household lacks a job and could find one elsewhere.

MONDAY
How NOT To Create Jobs: Spend More Money
Word is that President Obama will focus on jobs in his State of the Union speech on Tuesday. No surprise there: jobs are the American people's top public policy concern. Obama reportedly will propose new and expanded federal spending programs as the means of job creation. No surprise there either: what else do liberals have to offer?
No, That is Not Evidence That Obamacare Has Created Jobs
The simple fact that job creation has occurred since it was passed is not evidence that it had anything to do with health care. And there's a strong indication that the recovery in employment was due to a strengthening macroeconomy, not a health care deus ex machina.

Reports
FRIDAY
Jobs, Jobs, Jobs: Where Do Jobs Come From
So where do jobs come from? Real jobs that can be sustained by normal economic activity? Is there a role for government in the process? How do government policies enhance or reduce the long-run pace of job creation?

Monetary News Jan. 24 - 28



News
FRIDAY
IMF's Lipsky Says `Never Say Never' on Another Euro-Area Bailout
International Monetary Fund First Deputy Managing Director John Lipsky said the organization may have to provide further financial aid to so-called peripheral European countries if the region’s debt crisis doesn’t ease.

THURSDAY
Commodities' Warnings for Stocks
Overheating in those fast-growing economies and the resulting inflation could result in a "serious blow" to the global economy, the International Monetary Fund warned Tuesday.
Fed Closes Ranks as Improving Economy Fails to Derail Asset-Purchase Plan
Federal Reserve officials closed ranks to signal that an improving economy won’t derail their plan to cut unemployment by pumping $600 billion into the financial system.

WEDNESDAY
Inflation? No problem ... if you avoid food
Great news! There is no inflation to speak of -- unless you fancy a burger, cup of Joe or candy bar every now and then.
Emerging economies caught in inflation dilemma
Emerging economies, seen as the big hope for global growth this year, are caught in a tricky dilemma: let inflation rip and hurt stability or raise rates and risk stalling their economies.
Fed likely to keep $600B bond-purchase plan intact
The Federal Reserve is all but certain Wednesday to maintain the pace of its Treasury bond-buying program because unemployment remains high and sinking home prices are eroding Americans' wealth.
Greece Default With Ireland Breaks Euro by 2016 in Global Poll
Most global investors predict at least one nation will leave the euro area within five years and that Greece and Ireland will default, sentiment that is intensifying pressure on policy makers to strengthen their response to the debt crisis.

TUESDAY
IMF: Instability Threatens Recovery
The uneven global recovery continues apace but sovereign debt and financial sector risks, particularly in Europe, could threaten global stability, the International Monetary Fund said Tuesday.
Fed Likely to Press On With QE Even as Business Lending Rises
The Federal Reserve will probably push forward with $600 billion in securities purchases even as the biggest jump in business loans in more than two years adds to signs the U.S. economy is gaining strength.
Treasury's Toxic Asset Funds Up 27%
Since the funds were established in 2009, they have used about $5.2 billion of Treasury's equity investment to buy toxic assets. As of the end of 2010, the funds have gained $1.1 billion to about $6.3 billion.
The 4 new voting members on Fed policy making panel
Four regional Federal Reserve Bank presidents are rotating onto the Fed's main policy making group this week for the first meeting of 2011. Two of the four have been critics of the Fed's $600 billion Treasury bond-buying program.

MONDAY
Global Price Fears Mount
As Food, Raw Materials Soar, Europe's Central Bank Head Warns on Inflation.
Euro Bears Retreating From Merkel Pledge as Strategists Draw Line at $1.30
Traders are starting to believe German Chancellor Angela Merkel when she says Europe’s biggest economy will do whatever it takes to save the region’s currency.
Super-Cycle Leaves No Economy Behind as Davos Shifts to Growth From Crisis
For only the third time since the Industrial Revolution, the world may be entering a long-term growth cycle that will lift all economies simultaneously, driving bond yields and commodity prices higher.
Dollar Drops Before Fed as Gain in Stocks Spurs Demand for Riskier Assets
The dollar declined against most of its major counterparts as a gain in stocks before this week’s meeting of Federal Reserve policy makers encouraged demand for higher-yielding assets.

Economist Comments
FRIDAY
The Week in Monetary Policy Analysis
Financial professionals with every perspective weighed in. Here, Minyanville offers a recap of this week's hottest debate.
Economic Policy Hasn't Changed; Prepare for Stagnation, Inflation
There is no believable evidence that bailouts or fiscal stimulus have done anything positive for the economy whatsoever.
Fed Continues Failed Monetary Policy
We are in the midst of this program that is failing to bring down US Treasury yields as intended.

THURSDAY
Much Left Unsaid by the FOMC
QE2 to complete its course, but impacts of $600 billion in bond buying remain to be seen.

WEDNESDAY
The Wrong Way to Double Exports
Ronald Reagan believed we could 'outproduce, outcompete and outsell anybody' without compromising the value of the dollar.
Inflation Is So Much Worse Than BLS Says
There are glaring errors in the Bureau of Labor Satistics' methods that render the official inflation measure hopelessly -- and dangerously -- inaccurate.
US Interest Rates Negatively Affecting Canada
Today would be a good time to stop exporting both inflation and an overvalued CAD to Canada.

MONDAY
Favorable Interest Rates and Inflationary Concerns to Support Gold
Signals for the precious metal are very much bullish in the long term.

Blogs
FRIDAY
Kein optimalen Währungsraum
Brian Blackstone reports on the hawkish sentiments emerging from European Central Bank officials as headline inflation creeps above 2%.
Rand and Ron Paul Introduce Twin Fed-Audit Bills
Sen. Rand Paul (R., Ky.) introduced U.S. Senate legislation Wednesday to audit the Federal Reserve while his father, long-time Fed critic Rep. Ron Paul (R., Texas), re-introduced similar legislation in the U.S. House.

THURSDAY
Secondary Sources: China and the Dollar, SOTU and Taxes, Law School
Martin Wolf looks at China’s relationship to the dollar.
Hayekian Credit Booms
As more money chases a stagnating amount of goods, the boom turns bust, when overconsumption leads to serious consumer price inflation and over-employment of resources (necessary because other resources are held in overinvested capital good industries) does not allow keeping up the production level.
John Taylor Advocates Narrowing Fed Mandate
Former U.S. Treasury Department undersecretary John Taylor on Wednesday called for overhauling the Federal Reserve’s dual mandate of ensuring stable prices and maximum employment, saying that the central bank should focus on prices.
Will the debt crisis increase European inflation?
As long as the European Central Bank (ECB) sells other assets, its purchase of government bonds won't cause inflation.
Parsing the Fed: How the Statement Changed
The Fed’s statement following the January meeting was little changed from the previous month as a united group decided to leave previously announced policy unchanged.
Euro Zone inflation: The Good, The Bad and The Ugly
With euro zone inflation above the ECB’s sub-2% target for the first time in over two years, and ECB officials sending hawkish signals of late, price pressures are being scrutinized more closely than usual in the euro bloc.
Feeling the Heat: Comparing Global Inflation
Consumer prices are moving unevenly across the world. Economic growth, supply and demand, currency values and a variety of other factors drive consumer prices up — inflation — or down — deflation.

TUESDAY
Survey Indicates Inflation Expectation Still Muted
U.S. households expect inflation to rise over the short term but remain contained over the longer run, shrugging off higher food and energy prices, in a positive sign for consumer spending patterns.
$1 Trillion to Flow Into Emerging Nations in 2011
Investment and cash flows to emerging nations will surge to nearly $1 trillion dollars this year, adding pressure to developing economies already overheating.

MONDAY
Secondary Sources: Mortgage Rates, Current Accounts, China’s Foreign Reserves
A roundup of economic news from around the Web.
Gold is to China as paper currency is to US
Gold buying is up in China. Paper currency is on the rise in the United States because of the Federal Reserve's quantitative easing.

Reports
None.

Tax News Jan. 24 - 28



News
FRIDAY
15 Democrats Support Johanns’ Repeal of Tax Reporting Provision
Sen. Mike Johanns believes he has enough support to overcome Democratic efforts to block his proposal to repeal the unpopular 1099 tax reporting provision of the health care overhaul law, the Nebraska Republican said Thursday.
Corporate Tax Code Proves Hard to Change
But recent efforts to rationalize the code all have failed, and some members of both parties express skepticism that this time will be different. The problem, in a nutshell, is that the popular step of lowering taxes for industries like trucking requires the unpopular step of raising taxes for industries like biotech.

THURSDAY
Sacramento's $500,000 `Crash Tax' Taps Drivers to Fill Gap
California’s capital city of Sacramento, facing a $35 million deficit, will bill out-of-town drivers whose traffic accidents require rescue crews, the latest U.S. municipality turning to a “crash tax” for revenue.
Executives Skeptical Obama Can Deliver
Many chief executives reacted skeptically to President Barack Obama's offer to lower the corporate-tax rate and foster U.S. job growth, but some said they appreciated the president's changed tone toward business during his State of the Union address.
Low-tax states attract budget-conscious Americans
Retirees who can stash money into a tax-deferred retirement account during their working years, and then withdraw the money to spend on their new life in a low-tax state, can especially profit.

WEDNESDAY
A Call to Overhaul Corporate Taxes
President Barack Obama opened the door Tuesday to lowering U.S. corporate tax rates, launching a politically fraught and complex effort that holds promise for some U.S. firms and pain for others.
Real Bipartisanship: Undoing Tax Law, Not Paying for It
Tuesday’s serious crossing-the-aisle effort came as Democratic and Republican senators jostled to show their support for repealing a much-maligned revenue raiser in the health care reform law.

TUESDAY
More money for your kids
For the next two years the tax will return with a much higher exemption level ($5 million for individuals, $10 million for couples) than before and a lower rate (35%) than just about anyone expected.
A 2nd I.R.S. Amnesty for Offshore Accounts
The Internal Revenue Service said on Monday that it would soon announce a new amnesty program aimed at encouraging wealthy Americans with hidden offshore bank accounts to come forward, declare their money and pay taxes owed.

MONDAY
Mortgage Giants Leave Legal Bills to the Taxpayers
Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud.
Lawmakers Look to Obama to Lead on Tax Overhaul
This year, members of both parties agree that strong backing from the White House is crucial to successfully revising the nation’s tax laws, and they are looking for that push to begin Tuesday.

Economist Comments
THURSDAY
Tax-Code Overhaul May Raise Burden on Some Businesses
Six million other employers operate under tax laws that govern individuals and would lose deductions without gaining a lower rate.

WEDNESDAY
Taxpayers Lose Most When Munis Fluctuate
Although there is little doubt that states and cities face their most serious budget crunch in decades, some of the talk about massive defaults comes from mixing up two sets of issues, namely government's short-term fiscal problems and the long-term obligations of states and municipalities, including their bond debt and pension liabilities.

TUESDAY
How Public Unions Took Taxpayers Hostage
The first to seize on the political potential of government workers was New York's Mayor Robert F. Wagner. The Kennedy White House took notice of his success.

MONDAY
The IRS Targets Income Tricks
There's a saying: Pigs get fed and hogs get slaughtered. The Internal Revenue Service surely hopes that includes tax hogs.
Slow-Growth US Now Ripe for Consumption Tax
It's been 360 years since Hobbes first called for the elimination of income taxation and wholesale adoption of a consumption tax. Its time may finally have come.
Obama Team Wants Business Buy-In on Corporate Tax Reform
The White House wants tax reform, not tax reduction.
Estate tax' label misleads on levy's true purpose
For as long as there have been politicians, politicians have hidden their true purposes by giving laws names that disguise what they actually do. One such law is the estate tax.

Blogs
WEDNESDAY
Obama Calls for Corporate Tax Cut
The stuff about loopholes and simplification–that’s window dressing. The real story is that the reality has sunk in even to liberal Democrats that we are shooting ourselves in the foot with the highest corporate tax rate in the world.
How to Think & Talk About Vouchers & Ed Tax Credits
...evidence suggests that the best message overall is one that focuses on the financial benefits of school choice (and this is even before the financial crisis).

MONDAY
More on “Failure to Tax” as Subsidies
The closest we can actually come to a tax that is both economically neutral and satisfies widely accepted conditions of fairness is a head tax – a lump-sum levied regularly on each person regardless of that person’s income, status, or anything else.

Reports
None.

Health Care News Jan. 24 - 28



News
FRIDAY
House GOP debates Medicare privatization plan
Americans wary of idea to reign in spending on health program for seniors.
HHS: Health care reform is already working
The Obama administration is firing back at one of the major attacks Republicans have leveled at the health reform law: that it will make insurance premiums rise.

THURSDAY
Congress Will Probe Special Exemptions to Health-Care Law That Obama Administration Gave Select Unions and Businesses, Says Republican Senator
The waivers allow the health insurance plans, carried by the unions and companies involved, to impose annual limits on what they will spend on a policy holder’s medical coverage for a given year.

WEDNESDAY
Health gets little time, big reaction
The president spent less than 300 words on health care - but he elicited the evening’s first groan when he brought it up, followed quickly by a laugh when he said he’d heard “rumors” that some in the room had concerns about the law.

TUESDAY
Is long-term care insurance worth the price?
If you have long-term-care insurance, get ready for sticker shock.
Federal Government Recoups Record Amount in Medicare Fraud
Federal health officials recouped a record high $4 billion last year in Medicare and Medicaid fraud and introduced tighter measures to clamp down on criminal activity in the future. More than half of the money has been returned to the Medicare Trust Fund.
A State of the Union challenge: Health reform
President Obama will have two challenges when he talks about his signature health care law Tuesday night: Get the public back on his side, and don’t spend too much time on it.
Medicaid expand birth control access
As reproductive health advocates brace for a wave of state-level abortion restrictions, they also see a glimmer of hope in a little noticed health reform provisions: increased Medicaid access to family planning and contraceptives.

MONDAY
Senate Republicans eye health care repeal
Democratic and Republican senators agreed Sunday that the Senate will vote to change elements of the health care legislation passed in the last Congress, most likely through amendments to other bills.

Economist Comments
FRIDAY
A winning health care strategy
Obama can’t run away because we’ll be everywhere.
Health reform's political fallout
Despite talk earlier this week that the health care law was gaining favorability in the wake of the House repeal effort, polls now show it continues to be unpopular among a majority of the American public.

TUESDAY
Just Call Me Liar of the Year
Tonight President Barack Obama delivers his State of the Union address to a chamber that just voted overwhelmingly to repeal his health care law. Before you believe anything I might have to say about that, however, there's something you should know: I am a liar.

Blogs
WEDNESDAY
Obama Supports Repealing 1099 Rule
In addition to a corporate tax cut, Obama takes another one out of Cato’s playbook in his State of the Union address. He supported repealing an idiotic IRS requirement in the 2010 health care law that mandated hundreds of millions of additional 1099 tax forms.
Opposition to ObamaCare Hits New High in Kaiser Family Foundation Poll
ObamaCare‘s unfavorables reached 50 percent in the latest Kaiser Family Foundation poll.

TUESDAY
Some “No”s and “Yes”es of Health-Care
Objecting to efforts by ‘the party of No’ to repeal Obamacare, you ask “What Comes After No?”

MONDAY
Healthcare’s Uncertainty Uncertain
Widespread uncertainty about the effects of the healthcare legislation persisted throughout polling leading up to its passage in March of 2010. Uncertainty about the law’s effect is also likely contributing to the different results pollsters are getting. With such ambiguity, whom the public trusts to handle the issue becomes more important in swaying public opinion. When in doubt, the public supports whom they trust more. But with trust evenly divided between Obama and the Republicans, uncertainty remains.
How the States Can Carry the Torch to Repeal Obamacare
So far, 27 states have filed suit against the new law’s individual mandate and requirements forbidding states from reducing eligibility for their Medicaid programs. But the legal battle isn’t the only way states can throw a wrench in the health care overhaul. This week, the American Legislative Exchange Council (ALEC) debuts “The State Legislators Guide to Repealing Obamacare” highlighting ways in which states can continue the battle.
Micromanagement of Health Benefits Under Obamacare Begins Now
The House of Representatives passed a measure to fully repeal Obamacare, but the negative effects of the law will continue to unravel until the legislation makes it to the President’s desk. These include the requirement under the new law that the Department of Health and Human Services (HHS) define “essential health benefits,” which must be included in all plans sold in the new health exchanges beginning in 2014.

Reports
FRIDAY
How to Limit the Damage from Obamacare—Pulling It Out Weed by Weed
Although attempts to repeal the massive and misnamed Patient Protection and Affordable Care Act (PPACA) are being blocked by the Senate and the White House, there are multiple tools that lawmakers can employ to reduce the damage that “Obamacare” is inflicting on the U.S. economy and American freedoms. In its rampant and uncontrollable growth, Obamacare resembles weeds that take over a lawn, going even further to become a government version of kudzu.

THURSDAY
Helping Americans Keep the Coverage They Have and Promoting Transparency
As of today, a total of 733 waivers have been granted for 2011.

General Economic News Jan. 24 - 28



News
FRIDAY
Bumps remain on economy's road to recovery
Headwinds include fading stimulus, budget cuts, ongoing housing recession
Causes of the financial crisis? Commission ends in hung jury.
In its final report, the Financial Crisis Inquiry Commission offers three views of the crisis -– essentially one from Democrats and two dissenting views by Republicans on the panel.
Don't panic—yet
The government should stick to its course despite worrying economic figures
Senate Approves Changes Intended to Ease Gridlock
In an effort to ease persistent Senate gridlock, the leadership on Thursday promised to temper the procedural warfare that has consumed the chamber in recent years and increased partisan tension.
The union's troubled state
A strikingly unaudacious speech from Barack Obama failed to address America’s problems
Data Reflect Economy's Strain
New claims for jobless benefits rose last week and orders for durable goods fell in December, according to reports Thursday indicating the struggle of an economy trying to gather steam.
Consumer Mood Improves in Late January
U.S. consumer sentiment improved in late January, as hopes of a stronger economy and more jobs overcame worries about rising costs for food and gasoline, a survey released on Friday showed.

THURSDAY
Las Vegas lef nations in foreclosures
Las Vegas is once again the foreclosure king.
Mortgage rate rise for second week in a row
30-year benchmarks edges up to 4.80% from 4.74%.
What Businesses liked in the State of the Union- and what they didn't
The tone with businesses has changed, but they are waiting to see what happens with the State of the Union promises.

WEDNESDAY
Cool maps: Measuring growth from outer space
For many of the world’s poorest countries, figures measuring economic growth are unreliable, and in some cases they don’t exist at all.  In an NBER working paper, Brown University professors J. Vernon Henderson, Adam Storeygard, and David N. Weil came up with an interesting proxy for GDP growth: the amount of light that can be seen from outer space.
Obama and his imbalanced ledger
The ledger did not appear to be adding up Tuesday night when President Barack Obama urged more spending on one hand and a spending freeze on the other.
Consumer rebound: No 'sugar rush' - it's 'protein'
American consumers are finally opening their wallets again, according to an exclusive CNNMoney survey, raising hopes that the long-suffering economy could get a boost.
UK Economy May Be Heading for a Double-Dip
Britain's "awful" gross domestic product figure for the fourth quarter is pushing the country closer to a double-dip and limits the central bank's ability to fight rising inflation, analysts and business leaders said Tuesday.
TARP watchdog blasts Obama's foreclosure program
The Obama Administration's main foreclosure-prevention program continues to fall short, and last year's Wall Street reform act does not adequately address the threat that big financial firms pose to the broader economy, the top federal bailout watchdog said Tuesday.
State of the Union 2011: Sidestepped Issues
Social Security, Foreclosures, Price Tags Among the Taboo Topics
Business Sees the Devil in the Policy Details
Business responses to President Obama’s State of the Union address reflected praise for his rhetorical commitment to “winning the future” and his support for innovation, education and infrastructure, while raising concerns about the details of his policy proposals.
Financial Crisis Was Avoidable, Inquiry Finds
The 2008 financial crisis was an “avoidable” disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a federal inquiry.

TUESDAY
Home price slump deepens
November home prices continued their latest slump, falling 1% compared with October, according to the latest S&P/Case-Shiller Home Price Index of 20 metro markets.
UK economy shrinks 0.5%
Economic activity in Britain contracted unexpectedly in the fourth quarter of 2010, with bad weather likely to have been a significant factor, preliminary figures show.
Consumer Confidence Hits Highest Level Since May
U.S. consumer confidence rose more than expected in January to its highest level in eight months, helped by growing optimism about the economy and the jobs market, according to a private sector report released Tuesday.
IMF: Instability Threatens Recovery
The uneven global recovery continues apace but sovereign debt and financial sector risks, particularly in Europe, could threaten global stability, the International Monetary Fund said Tuesday.
Cashing in on a China bet
President Hu Jintao's visit may be over, but the hype around China is not going away. As the country's economic boom continues, investors want to know how they can cash-in on this rapid growth.

MONDAY
GM's China sales pass US for first time in history
General Motors Co. sold more cars and trucks in China last year than it did in the U.S., for the first time in the company's 102-year history.
Reforming Fannie and Freddie: A $6 Trillion Problem
As the Obama administration struggles to draft a report to Congress on how best to overhaul Fannie Mae and Freddie Mac, industry and  public interest groups are promoting plans of their own for the two mortgage giants.
Postal Service Eyes Closing Thousands of Post Offices
The U.S. Postal Service plays two roles in America: an agency that keeps rural areas linked to the rest of the nation, and one that loses a lot of money.
Economic Reports for the Week
Scheduled for this week include the S.& P./Case-Shiller home price index for November and consumer confidence for January (Tuesday); new home sales for December (Wednesday); durable goods orders for December and pending home sales for December (Thursday); and gross domestic product for the fourth quarter and the Thomson Reuters/University of Michigan consumer sentiment index for January (Friday).
Gas tax holds the line as roads crumble
Area roads and bridges are crumbling, commuters are wasting hours sitting in traffic on congested highways, and legislators are at the end of their ropes in finding ways to generate new revenue. Despite gas prices topping $3 a gallon, some are still pondering whether now is finally the time for a gas tax increase.
Greek Finance Minister Reiterates No Need to Restructure Country's Debts
Greek Finance Minister George Papaconstantinou reiterated that his nation doesn’t need to restructure about 300 billion euros ($409 billion) of debt.
The end of credit cards is coming
Credit cards may soon be as outdated as vinyl records. (Remember those?) And this is the year that the slow, steady march to oblivion begins.
Treasury's Toxic Asset Funds Up 27%
The eight toxic asset funds have seen gains since they were created to help revive the mortgage-backed securities market.

Economist Comments
Obama’s regulatory deja vu
Dude, it’s been done, and it flopped.
A Two-Track Plan to Restore Growth
Our economic wounds are self-inflicted. Changing fiscal and monetary policies could make a difference fast.
Facing Up to $4 Gasoline
As pump prices climb, President Obama is likely to loosen drilling restrictions.
YOUNG: Gridlock: Better for budgets
Divided government helps keep spending in check

THURSDAY
Land of Milk and Regulation
Preventing the next dairy farm oil slick.
What caused the financial crisis?
Congresses's inquiry commission is offering a simplistic narrative that could lead to the wrong policy reforms.

WEDNESDAY
The poor are not getting poorer
In the latest version of its annual report "The State of Working America," the Economic Policy Institute once again argues that the gap between America's rich and poor is widening. Using a variety of data, the institute argues that a few are profiting at the expense of many.
The Great Misallocators
What Barack Obama and General Electric have in common.
The Economic Stimulus That Wasn't
Did the hundreds of billions spent to stimulate the economy do the job? And where did all that money go, anyway? A new report crunches the data and finds answers that are devastating for stimulus backers.
SOTU Sells Big Government with American Exceptionalism
But what made his speech truly exceptional was his attempt to harness the language of American exceptionalism in defense of big government.
Restoring Economic Freedom
Suppose a quiz show host were to ask: “What country enjoys the most economic freedom?” Most Americans probably wouldn’t even hesitate before answering, “The United States.” They’d be wrong. In fact, according to the 2011 “Index of Economic Freedom,” the U.S. isn’t even in the top five. We come in at number nine -- right below Denmark, Ireland and Canada.

TUESDAY
Obama puts political correctness ahead of economics
President Obama reportedly will call on Congress tonight in his State of the Union address to make "investments" in America's future by appropriating large new sums of money for education, alternative energy and infrastructure to create what he often calls the jobs of the 21st century.
The SOTUation on Trade and the Deficit
The State of the Union address offers any president the temptation to revel in the pageantry and splendor of the office. He can sound resonant themes and expound on U.S. values. He can embellish these motifs with the recognition of carefully-placed guests in the balcony.
Obama’s regulatory reform test
President Obama jumped on the regulatory-reform bandwagon last week after two years of greatly expanding costly regulations and reducing personal liberty, particularly on health care and financial services. I confidently predict his new initiative will be a failure. History has shown that the vested interest of the regulators in job preservation and expansion almost always swamps efforts at regulatory reform.
Why Do Regulators Hate the Markets?
So don't blame capitalism or greedy businesses for the sluggish state of the U.S. capital markets. The blame rests squarely at the feet of the SEC.
Regulations and rhetoric
President promises to lighten the burden while bureaucrats load up

MONDAY
Obama's Rule-Making Loophole
The President's new executive order says agencies must consider "equity, human dignity, fairness, and distributive impacts" as benefits of regulation.
Regulatory state needs more than a trim
First, a red-tape timeout before adding new restraints
The UAW's Next Act
Saved by Washington, the union wants to write its own labor laws.
The eurozone’s best solution is the least likely
Last week we got a glimpse of what a “permanent” crisis resolution strategy for the eurozone might look like: a bond repurchase programme for Greek debt. The reaction to reports that European Union officials were considering this option reminded me of the heydays of using structured finance to spread risk. The markets were euphoric.
Obama must woo business to win
Asked last week what was needed to revive the US economy, Jeff Immelt, chief executive of General Electric, told the Financial Times: “It’s a little bit on policy, a lot on tone.” Barack Obama, wondering what he must do to revive his presidency, may have come to the same conclusion.
Corporate excess bad, union robbery of kids just dandy
Under the administration of President Obama and the former Democratic majority in both houses of Congress, it was fashionable to engage in class warfare and attack anything viewed as corporate excess.

Blogs
FRIDAY
The Real Scandal of Farm Subsidies
When the Washington Post published a story in 2007 about how dead farmers had received farm subsidies to the tune of over $1bn, most people were horrified (even “farm subsidy moderate” Rand Paul thought they should go!). Although the article made clear that “most estates are allowed to collect farm payments for up to two years after an owner’s death,” and that the payments weren’t necessarily fraudulent, outrage ensued.
Does the Federal Government Want to Fix Fannie and Freddie?
It would work, but here's the problem: does the government actually want to do it?
Nothing Has Changed
It is apparent to me that the factors that underlie the causes of our boom-bust cycle still exist. Nothing has changed.
Environmental National Income Accounting
While I think it is certainly a useful thought exercise, the creation of Green GDP accounting metrics is fraught with inconsistencies and measurement difficulties, and is typically used as yet another “scientific tool” to prove that market-based economic systems are “unsustainable.” But despite this, a proper Green GDP accounting would probably have to recognize that the measured and reported “normal” GDP dramatically understates the present condition of the world.
Overcooked, undercooked
What do burger prices tell us about the reliability of official inflation figures?
Speeding up
The big continued question marks concern the problems in government budgets—how much a drag on growth they will ultimately represent—and the labour market. If growth begins translating into an acceleration in hiring, that could change the psychology around the economy, fueling spending and investment. And then recovery might finally resemble the V-shape one would expect after such a long, deep, and painful downturn.
Mr. President, Being Innovative Requires Greater Economic Freedom
The tool of choice for advancing innovation and American economy into the future—economic freedom—requires only an understanding that the people, expressing their wishes freely in the marketplaces of America, know better than any central planner or government bureaucrat what they need to get moving again.

THURSDAY
The American Nomenklatura
The Republicans are almost as bad. And thats not good enough.
Gauging the President and the State of the Union Speech
I may be underestimating the man, but the speech says otherwise.
Update on Government and Science
The flawed market failure arguments pertaining to "basic research" have morphed to apply to the commercial end of R&D to further "competiveness in the global knowledge economy." In reality, however, this unwarrented extension of government insinuation into the private sector is just a more modern version of 1970s "industrial policy" and should be rejected for the same reasons
The Moral Heart of Economics
Economists are often wary of moral exhortation, as many see the harm so wrought by arguments that are long on passion and short on sense. But don't think that our discipline doesn't have a moral spine beneath all the algebra. That spine is a fundamental belief in freedom.

WEDNESDAY
Free Market Vs. Government Rail
President Obama proposed a five year budget freeze. Yippee.  Except that it won’t affect Medicare. Or Social Security. Or the military. And current levels of spending are the highest ever.
RSC Silent on Farm Subsidies
The federal government, in my opinion, has a role to play in limited and defined areas of public life.  I strongly disagree with the NAWG’s implication that farm subsidies are just as important/necessary as, say, public funding for national defense or for the control of infectious disease.
USPS Takes Another Shot at Closing Outlets
The USPS needs to adjust to the times, but congressional meddling makes the task nearly impossible. The solution is to separate the government from the postal business altogether and allow the private sector to provide mail services, just as it provides package delivery and countless other services.
NAEP: If the Scores Don’t Rise, You Must Revise!
Maybe there’s an excellent reason why the federal government no longer wants to measure trends in science  achievement, but if there is, I suspect it’s political rather than educational.
Public Education Needs Transparency & Competition, Not More Money
Unfortunately, at the state, local, and school-district level, it takes a forensic accountant to discover how much we’re really spending.
Heritage Responds To The State Of The Union
And here are just some of our experts’ immediate reactions to parts of the speech:

TUESDAY
Debating the Great Depression: Steve Horwitz’s Latest Contribution
Misunderstanding the Great Depression has caused much mischief in modern macroeconomics and, more important, in government fiscal and monetary policies based on or influenced by this faulty understanding. If we are ever to arrive at a sound understanding of the Depression, we will have to persuade the economics profession to take Austrian economics seriously, as most economists did before the publication of Keynes’s magnum opus in 1936. Keynesianism in particular has proven itself to be a fundamentally flawed mode of analysis, yet one that has survived, evolved, and—like the zombies in the film “Night of the Living Dead”—keeps coming back, no matter how many times anti-Keynesians credit themselves with having dealt it a fatal blow. Monetarist, New Classical, and other recent critiques have themselves been inadequate or indefensible in various ways, as well.
An economic snowdown
BRITISH output seems to move in only one direction these days, and that direction is whatever the forecasters aren't predicting. After surprising to the upside in the second and third quarters of 2010, British GDP notched a shock decline in the fourth quarter. Output dropped 0.5% for the quarter (2% annualised), leaving observers wondering where the economy will go once austerity begins in earnest.
Our Crony Capitalist in Chief
Regardless of what the president says in the State of the Union address, his actions suggest that his administration is focused on crony capitalism, and not the real thing.
Case-Shiller: U.S. Home Prices Keep Weakening as Eight Cities Reach New Lows in November
S&P/Case-Shiller released the monthly Home Price Indices for November (actually a 3 month average of September, October and November).
What to Expect from Obama’s State of the Union
With confidence, I can tell you what President Obama will not say in his State of the Union address tonight: “The era of big government is over.”

MONDAY
Ryan to Give State of Union Response
Wisconsin Rep. Paul Ryan, who will spearhead GOP efforts to slash federal spending, will deliver the Republicans’ response to President Barack Obama’s State of the Union next week.
Regulations from the Executive In Need of Scrutiny
Tomorrow afternoon (back willing) I will be in Washington, D.C. to testify before the House Judiciary Committee’s Subcommittee on Courts, Commercial and Administrative Law on the Regulations from the Executive In Need of Scrutiny (REINS) Act.  This bill would require congressional approval before  new “major” regulations – those regulations expected to cost in excess of $100 million per year — could take effect.  It also creates an expedited process for consideration of new regulations, much like that which has been used in conjunction with “fast track” trade negotiation authority, to ensure that both Houses of Congress take up-or-down votes within a short time frame.
Schedule for Week of January 23rd
The key economic report for the coming week is the Q4 advance GDP report to be released on Friday. There are also two important housing reports to be released early in the week: Case-Shiller house prices on Tuesday, and New Home sales on Wednesday. There is also a two day FOMC meeting ending on Wednesday.
Keynes Versus Hayek: An Empirical Matter
Is our aim, as economic theorists, to defend our initial position come what may, or to advance our understanding of economic reality? If the latter, shouldn’t we be open to empirical evidence as to what model (or combination of models) most closely captures the current historical reality? Because I can’t help but believe that the key points of divergence between Keynes and Hayek are empirical matters, and can’t be answered on the plane of pure theory.
House Price Behavior
With secularly rising incomes, a little bit of house price appreciation is enough to get a good trade-up market going. But an equivalent decline in house prices would not create as much trade-down activity.
U.S. Lawmaker Renews Push for Credit Card Rate Cap
Concerned that credit cards are trapping consumers “in a spiral of debt,” a Democratic U.S. lawmaker from New York Thursday introduced a bill that would cap credit card interest rates and all other loans at 15%.
Unofficial Problem Bank list increases to 937 Institutions
Here is the unofficial problem bank list for Jan 21, 2011.
Another recession? Here's what indicators really say.
Two leading indicators point to continued growth, not recession.
English Anti-Tax Haven Ideologues Are Just as Foolish and Ignorant as their American Cousins
There’s a supposed expose’ in the U.K.-based Daily Mail about how major British companies have subsidiaries in low-tax jurisdictions. It even includes this table with the ostensibly shocking numbers.
State Corporate Welfare Programs Under Fire
One positive outcome of the recession, as the states struggle to find revenue to spend, is that state subsidies to businesses are facing increased scrutiny.
Sugar Policy: Sweet Deal for Producers, Sour for Consumers
In a recent Wall Street Journal letter titled “The Sugar Program Makes Sense,” the American Sugar Alliance’s chief economist claimed that “sugar policy operates at no cost to the government and is projected to do so for the next decade.” While it’s true that U.S. sugar producers haven’t tapped American taxpayers directly since the beet sugar farmers raked in more than $240 million in farm subsidy payments from 2000 to 2005, U.S. sugar policy does force American consumers to pay out billions of dollars every year in higher sugar prices to support the “Big Sugar” cartel.

Reports
FRIDAY
Competitive Exclusion with Heterogenous Sellers
The Case of State Wine Shipping Laws.
Durable Goods Orders Fail To Bounce Back in December
Durable goods orders were weaker than expected for December, slipping 2.5 percent. Nondefense aircraft orders were virtually nonexistent in the month, on a seasonally adjusted basis.
The Case for Gridlock
By fostering gridlock, the U.S. Constitution increases the likelihood that policies will reflect broad, unorganized interests instead of the interests of narrow, organized groups.

THURSDAY
New Home Sales Jumped in December, but Recovery Still Slow
New home sales rose 17.5% in December to a 329,000-unit annual pace, the largest month-over-month gain since 1992. The inventory of unsold homes, however, continued to slide and remains at a 42 year low.

WEDNESDAY
Dissent from the Majority Report of the Financial Crisis Inquiry Commission
To avoid the next financial crisis, we must understand what caused the one from which we are now slowly emerging, and take action to avoid the same mistakes in the future.

TUESDAY
Economic Realities of the Electric Car
Congress should not provide any additional taxpayer-funded incentives for electric vehicles and should repeal the ones already in place. Private industry should be allowed to improve these products to meet the demands of the market.
How Western Environmental Policies Are Stunting Economic Growth in Developing Countries
Governments and large agribusinesses are increasingly using the environmentalist movement and its policy arm of green nongovernmental organizations to justify imposing protectionist non-tariff barriers on developing countries. Wrong-headed environmental policies and “green” protectionism are contributing to a resurgence of malaria in some countries and endangering millions of jobs in developing countries. Even the World Bank’s mandate to foster economic development is being subverted to serve environmentalist and protectionist objectives. The EU and the U.S. need to eliminate protectionist policies and regulations that are masquerading as environmental safeguards and refocus the World Bank on promoting economic development to alleviate poverty.

MONDAY
Economics Group
Weekly Economic & Financial Commentary
Obama’s State of the Union Address: Top Five Commitments for a Free, Secure, and Prosperous America
The President’s approach has proven to be far short of what is needed to keep the nation safe, free, and prosperous. It is time for a new doctrine—and new priorities. Here are the top five that should be in the President’s speech.