Friday, February 18, 2011

General Economic News

Where's the stimulus?
A bill to jump start the economy. That was the main idea behind the American Recovery and Reinvestment Act, better known as the "stimulus bill," which became law two years ago today.
Officials Question Debit Card Fee Limits
Top U.S. regulators said Thursday that small banks could be hurt by new limits on debit-card fees, comments that could fuel efforts to delay or change a provision in the Dodd-Frank financial-overhaul law.
China is richer, but most Chinese are still poor
Now that China has surpassed Japan to become the world's second-largest economy, economists predict it's on track to replace the US as the world's biggest by 2025. But what does the higher rank really mean for the average Chinese citizen?
Dupes of False Innovation
Is there real innovation in banking and finance, or just endless, cyclical repetition of credit enthusiasms and mistakes?
Athens in Mad Town
A seminal showdown between public unions and taxpayers.
The Blinders of Behavioral Economics
To put things in the words of the ancient philosophical question: If you know the better, will you do the worse?  

Read More »

Health Care News

Senators Introduce Bill to Expand Medicare Mental Health Coverage
Under current Medicare regulations, beneficiaries are offered up to 190 days of inpatient psychiatric treatment in a hospital through the lifetime of the policy. Under Kerry and Snowe's bill the limitation will be eliminated and Medicare mental health coverage would be equal to that offered in private insurance.
S&P: Health Care Costs Increase
Health care costs rose 6.06 percent with commercial insurance costs rising by 7.75 percent and Medicare costs rising by 3.27 percent, according to the report. But both costs are down from the May index, with the Medicare index showing annual growth cut in half from May’s rates.
Justice Dept. Asks Judge to Clarify Health Care Ruling After Alaska Governor Refuses to Enact Law
Alaska Gov. Sean Parnell said Thursday he will not implement President Obama's health care overhaul because a federal judge in Florida ruled it unconstitutional, prompting the Justice Department to take the case back to the judge.
Can Health-Care Waivers Be Justified?
The power to waive or dispense with the law is dangerous, it cannot be delegated, and it is not cured by transparency.
To Speed Drug Development, Government Must Get Out of the Way
The Obama administration proposes in its latest budget to create a new billion-dollar federal agency to help develop new medicines. The reason? The government is concerned that private companies aren't doing enough to get new drugs to market.
Bad Medicine: One-Year Review Of Obamacare
It has been a year since President Obama’s health care reform bill was signed into law. The Patient Protection and Affordable Care Act represents the most significant transformation of the American health care system since Medicare and Medicaid. It will fundamentally change nearly every aspect of health care, from insurance to the final delivery of care.

Read More »

Tax News

Time to Write Off the Mortgage Interest Deduction
Congress should take the bold step President Obama didn't on housing subsidies.
Time to Get Rid of the Corporate Income Tax?
Yes, America's corporate tax rate is very high, but that is just one of the layers of taxation imposed by the internal revenue code. Both the capital gains tax and the tax on dividends result in corporate income being taxed at least two times.
Where will Obama find new tax revenues?
Most corporations and individuals won't get hit with a tax increase, but money to reduce the deficit has to come from somewhere.
E-Commerce Surge May Hit Tax Revenue
The Commerce Department reported Thursday that e-commerce retail sales totaled $44 billion in the fourth quarter last year, up from $38 billion a year earlier.
Paying use tax for items you buy out of state? Pennsylvania is cracking down on businesses
This is part of the agency’s efforts to find every scrap of tax revenue as the state scrambles to address a budget deficit of more than $4 billion.
Connecticut governor proposes sweeping tax hikes
In his fiscal 2012 budget released Wednesday, Gov. Dannel P. Malloy proposed increasing state income and sales tax by $1.5 billion.

Read More »

Monetary News

Bernanke worries about cash bubble
Federal Reserve Chairman Ben Bernanke said Friday that unbalanced flows of money between nations is again posing a risk to the global economy and financial stability.
Bernanke: Don’t blame easy money for capital swings
Fed chief defending monetary policies in advanced economies against criticism.
China Raises Bank Reserves to Fight Inflation
The fifth such increase since October will force the country's biggest lenders to lock up a record amount of their deposits at the central bank, removing cash from the economy that otherwise would be pressuring prices higher.
Inflation rate: why prices are rising on everything from cornflakes to socks
The Consumer Price Index, a measure of the inflation rate, rose 0.4 percent in December and January. This is the first time the CPI has increased this much for two straight months since 2008.
ECB Said to Expand Purchases of Portuguese Government Bonds; Yields Slip
The European Central Bank expanded purchases of Portuguese government bonds, according to two people with knowledge of the transactions.
Split in Economy Keeps Lid on Prices
The pace of consumer price increases in the U.S. is quickening after being dormant for months. But a tug of war between the prices of goods and the prices of services, playing out beneath the surface, could keep inflation from becoming the worry it is in China, Europe and many emerging markets.

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Employment News

How states fared on unemployment applications
More people applied for unemployment benefits last week after applications had dropped to the lowest level in nearly three years in the previous week. That improvement had reflected the fact government offices had been closed the previous week in many states because of severe winter weather, preventing people from applying for benefits.
Jobless claims tick back above 400,000
The number of Americans filing first-time claims for unemployment benefits edged up last week, the government said Thursday.
Democrats turn 'Where are the jobs?' chant on GOP
Republicans won sweeping victories last November by taunting Democrats with "Where are the jobs?" Democrats are now throwing those taunts back, saying it's Republicans who will knock thousands of Americans out of work with their demands for deep cuts in federal spending.
Female veterans struggle in jobs market
The unemployment rate for female veterans of the long-running wars in Iraq and Afghanistan rose to 13.5% in January, above the 8.4% that was the seasonally unadjusted average for non-veteran adult women. And while the overall unemployment rate declined last year, unemployment among female veterans of the latest wars was more than 3 percentage points higher in December 2010 than in December 2009.
How best to boost the 'working poor'?
Nearly 1 in 3 working families now qualify as 'working poor.' More affordable college – and a more progressive tax system – would help.
US economy's hidden asset: older workers
Far from being a drag on the economy, so-called gray labor will be key to America's competitiveness in coming years. Mature workers can bring major productivity gains to US businesses – if we can make changes to better tap their talent.

Read More »

Budget News

Raise the debt limit -- or cut $738 billion
The country would need to cut spending or raise taxes by as much as $738 billion over just 6 months, according to a report from the Congressional Research Service. That's how much it would otherwise need to borrow to pay all its bills for the rest of the year.
A leadership deficit amid a budget crisis
Waiting on a crisis could lead to a downgrade of the nation's credit rating, a sudden spike in interest rates, a loss of confidence in the dollar or any combination of events that could send our economy into a tailspin.
Federal Government Could Reduce Debt by $1.5 Trillion with a Sale of Unneeded Assets
A large-scale sale of this magnitude would be a significant first step toward paying down the federal government’s unsustainable debt. It would be relatively painless, not requiring any tax increases or spending decreases.
Budget Process: a study of swollen spending
Our nation is at a critical crossroads: the federal government’s spending, deficits, and debt are at dangerous levels – and absent real reform – the already dire fiscal situation is projected to get far worse.
Some Dietary Suggestions For Our Regulators
It’s estimated that regulatory compliance costs $1.75 trillion annually thanks to a Federal Registry that has ballooned to 82,000 pages. Economically significant regulations, those costing an estimated $100 million or more in compliance, have grown faster still. Clinton’s term averaged 47 economically significant regulations annually. Bush: 48. Obama, reveres regulation: 66.
Wasteful Spending Does Not Stop at Earmarks and Overpayments
Federal entities estimate improper payments totaled $125.4 billion in fiscal year 2010, about 5.5 percent of the $2.3 trillion in reported outlays for the related programs. This $125 billion in overt waste, however, pales in comparison to the pervasive waste that exists in current spending patterns.

Read More »

Budget News Feb. 14 - 18



News
FRIDAY
Raise the debt limit -- or cut $738 billion
The country would need to cut spending or raise taxes by as much as $738 billion over just 6 months, according to a report from the Congressional Research Service. That's how much it would otherwise need to borrow to pay all its bills for the rest of the year.

THURSDAY
Big Budget Cuts Seen for Illinois Despite Increases in Tax Rates
Even after Illinois raised income and corporate tax rates last month, Gov. Pat Quinn is proposing a budget that would cut aid to the poor, skimp on many services and count on borrowing billions to pay overdue bills.
Battles continue on House GOP spending bill
Despite working past midnight once again, lawmakers still intended to offer a raft of amendments to the $1.2 trillion legislation, which funds the Pentagon and the operating budgets of every Cabinet agency and provides $158 billion for the wars in Iraq and Afghanistan.
Sacred Cows: Why Lawmakers Are Stuck on Medicare, Medicaid, Social Security Fixes
The three programs have ballooned to 57 percent of the government budget this year and are widely cited as the most significant contributors to the federal deficit, something nearly all Americans want to see aggressively brought under control.
Debt deal: 'History will condemn us' if U.S. punts
The problem, Conrad said, is that the president's budget would do nothing to bring gross debt down below 100% of GDP, above which it will be for the next decade.
Deficit Plan Details Emerge
Bipartisan Senate Group Mulls Spending Caps That Could Trigger Tax Increases.

WEDNESDAY
Pentagon Budget Sees Weapons Growth Above Inflation Through 2016
The projections represent real growth of 2.6 percent annually, said Todd Harrison, a defense budget analyst with the nonpartisan Center for Strategic and Budgetary Assessments in Washington.
GOP Presses Biggest-Ever Budget Cuts
Proposed Pentagon Reductions Survive Early House Votes on Amendments to Bill Trimming $61 Billion in Spending.
Interior Added to GAO High-Risk List
After last year's Gulf Coast oil spill, the department might be unable to manage oil and gas leases while overhauling the agencies and offices responsible for them, according to the Government Accountability Office's biennial "High-Risk Report."

TUESDAY
Deficit is biggest as share of economy since 1945
That would be just under 11 percent of the $14 trillion economy - the largest proportion since 1945, when wartime spending swelled the deficit to 21.5 percent of U.S. gross domestic product.
Obama's wackiest budget cuts
...it offers a bewildering tour of government projects that don't work, are hopelessly outdated or downright wacky.
Chances up for federal shutdown
The chances of a government shutdown are on the rise.
Florida's Scott takes businessman's ax to budget
Many newly elected Republican governors have pledged to run their states like a business as they grapple with low revenues and multibillion-dollar budget gaps with little relief from a fragile U.S. economic recovery.

MONDAY
White House Expects Deficit to Spike to $1.65 Trillion
The White House projected Monday that the federal deficit would spike to $1.65 trillion in the current fiscal year, the largest dollar amount ever, adding pressure on Democrats and Republicans to tackle growing levels of debt.
Geithner Quietly Tells Obama Debt-to-GDP Cost Poised to Increase to Record
Net interest expense will triple to an all-time high of $554 billion in 2015 from $185 billion in 2010, according to the Obama administration’s adjusted 2011 budget.
House GOP Releases CR With $100 Billion in Cuts
The measure also includes no earmark funding and eliminates all previous earmark funding from fiscal 2010, saving about $8.5 billion.
Boehner warns: 'We're broke' as Obama plans to increase speed of spending cuts to $1.1trillion
John Boehner has condemned President Obama’s new plans to slash the budget deficit by $1.1trillion over the next ten years, calling the country ‘broke’ and saying the cuts don’t go far enough.
Steny Hoyer: Some Democrats to back Republican cuts
House Minority Whip Steny Hoyer expects some Democrats to support spending cuts proposed by the new Republican majority in the House but says the GOP effort to reduce the deficit is so far “more cosmetic than real.”
Obama’s 2012 Budget Proposal: How $3.7 Trillion Is Spent
Explore every nook and cranny of President Obama's budget proposal.
Obama spending plan criticized for avoiding deficit commission's major proposals
Some who worked on Obama's fiscal panel were also disappointed by his decision not to endorse any of the major elements of their deficit-reduction plan, which calls for raising the Social Security retirement age, charging wealthy seniors more for Medicare and limiting popular tax breaks such as the mortgage interest deduction.
Robert Gates to move on two budget fronts
The secretary already laid out the broad outlines of his budget plan for the next 2012 fiscal year last month, $553 billion, up a tad from its $549 billion request for this fiscal year, excluding funding for the wars in Iraq and Afghanistan.

Economist Comments
FRIDAY
Obama team uses slippery words to tout budget
...a budget in “primary balance,” according to the Obama administration, occurs when revenues and spending are equal -- excluding all the interest the government pays on its enormous debt.
Empty Words from Both Sides on the Debt
In fact, if the unfunded liabilities of entitlement programs were to be included in our national debt figures, our total future indebtedness could top $127.5 trillion.
Florida Railroad Check
Mr. Scott rejected $2.4 billion of federal money for an 84-mile line from Tampa to Orlando, saying that it would likely end up costing state taxpayers an additional $3 billion when the state's budget deficit this year is $3.6 billion.
Your $5,555 Defense Bill Chokes on Waste: Veronique de Rugy
On top of mandatory spending and other defense related programs, that comes to roughly $702 billion, or some $5,555 per American household.
Congress Finally Earns Its Pay
Unlike years past, the budget debates in the House were vigorous and democratic, not stage-managed by the leadership of the majority party.
Barack Obama’s Louis XV Budget
Unlike the French monarch, Obama is in denial of the coming deluge.
A leadership deficit amid a budget crisis
Waiting on a crisis could lead to a downgrade of the nation's credit rating, a sudden spike in interest rates, a loss of confidence in the dollar or any combination of events that could send our economy into a tailspin.
President Obama’s Pathetic Scalpel
The Bush administration had a quaint idea — evaluate the effectiveness of federal programs.

THURSDAY
Opinion: This Is No Way to Win the Future
Obama's original estimates were way off for the same reason his current scenario can't be trusted: He grounds most deficit reduction in the fantasy world of increased revenues.
For Congress, a History of Effort to Enforce Budgetary Restraint
Gramm-Rudman, as it came to be called, failed to meet its goals—but paved the way for a bipartisan agreement to cut the deficit years later.
BACON: AWOL: The ‘responsible’ Obama
It is time for Washington to act as responsibly as American families do, but it’s a bit of a stretch for Mr. Obama to suggest that the fiscal 2012 budget approaches the frugality displayed by the Breece household.
William Watson: Can the U.S. find fiscal sanity? Maybe
Budget data show the U.S. has a horrible fiscal record.
Fiscal Sanity Requires Courage
Measured by the Christie standard, President Obama's $3.7 billion budget request for fiscal year 2012, which will begin October 1, fails.
EDITORIAL: Oil ban means more debt
Washington loses revenue while plugging wells.

WEDNESDAY
Serious Debt Reduction Will Require Courage
Barely 12 cents on every federal dollar spent is in the nonsecurity discretionary budget... the overfocus on the 12 cents could leave the U.S. hollowed out, damaging education, infrastructure, science, health and basic research.
Small Budget Cuts Add Up
Why has Congress spent $720 million on a think tank over the past 25 years?
Obama Budget Offers Inertia, Not Hope and Change
...conventional wisdom also said that the stimulus package and Obamacare would be popular. The Republicans, following where the voters led, are betting conventional wisdom is wrong again.
Top Ten Obama Budget Failures
The president’s budget numbers are based on the assumption that the economy will grow, in real terms, 3.6 percent in 2012 and 4.4 percent in 2013. That’s much faster than CBO or private economists forecast, and nearly a quarter point faster than the economy has grown coming out of the last five recessions.
EDITORIAL: Obama’s budget blarney
The Fiscal Year 2010 budget projected a deficit of $581 billion in FY 2012. The FY 2011 budget projected $829 billion of red ink in 2012. And now the FY 2012 budget itself projects $1.1 trillion, a deficit 89 percent higher than the one Mr. Obama’s numbers crunchers projected for the coming fiscal year two budget cycles ago.
After Obama's Budget, Republicans Need a New Strategy
The big spenders are setting the GOP up for another phony debt ceiling debate. The party should unify around a proposal to put a ceiling on debt as a share of the economy.

TUESDAY
Why Pentagon budget cuts might not be as impressive as they sound
At $553 billion, the Pentagon budget is $13 billion less than expected. But it is still up from last year, and many of the biggest planned cuts are in the uncertain future.
Examiner Editorial: Obama adds $8.8 trillion in new debt in next decade
That number would be even larger, except that Obama's budget also raises taxes by $1.5 trillion on corporations and high-income earners, imposing higher marginal rates and new limits on charitable and mortgage deductions.
Obama's sea of red
Another free-spending budget.
Budget Battle Lines Drawn
Obama Plan Offers Tax Increases and Spending Cuts, but Avoids Big Fiscal Issues.
Sessions, Ryan: President failed on budget
Under his plan, the federal government would spend $46 trillion over the next 10 years, doubling the national debt by the end of his term and tripling it by the end of the decade.
$120 Billion for Obama’s ‘Sputnik Moment’
Despite a five year freeze in his budget, President Obama emphasized the need for “investment” spending on programs to improve America’s competitiveness and spur job growth — what he calls a down payment on his “Sputnik moment” agenda to “win the future.”
The Cee Lo Green Budget
The cynical and unrealistic White House budget.

MONDAY
A Limited Government--and a Strong Defense
Now begins the great business for which the voters recalled the Republican party to power in Washington: reestablishing the habits of limited government.
High Speed Rail a Fast Track to Waste
Translation: The administration would pay states $53 billion to build rail networks that would then lose money - lots - thereby aggravating the budget squeezes of the states or federal government, depending on which covered the deficits.
Runaway Trains
Obama's high-speed rail plan is a fiscal pipedream.
The Federal Government’s Unspent Billions
Meanwhile, more than $700 billion gathers dust in accounts all around Washington.
What cuts? Obama's budget only boosts spending
President Obama has two choices to avoid a major fiscal debt crisis for the U.S.: Fix it or ignore it. Unfortunately, he has so far chosen the latter.

Blogs
FRIDAY
Federal Government Could Reduce Debt by $1.5 Trillion with a Sale of Unneeded Assets
A large-scale sale of this magnitude would be a significant first step toward paying down the federal government’s unsustainable debt. It would be relatively painless, not requiring any tax increases or spending decreases.
Till Debt Do Us Part
The European marriage between its peripheral and core countries shows all the signs of the parties having irreconcilable differences.
I’ll Take “Whatever Evidence I Like” for Hundreds of Billions, Alex
Clearly, "evidence" doesn't drive budgeting decisions -- it's just a term that's invoked when it's politically expedient to do so.
Budget Process: a study of swollen spending
Our nation is at a critical crossroads: the federal government’s spending, deficits, and debt are at dangerous levels – and absent real reform – the already dire fiscal situation is projected to get far worse.
Worried About U.S. Debt? Shiller Pushes GDP-Linked Bonds
...if veteran economist Robert Shiller has his druthers, bonds linked to gross domestic product should shed that stigma, and the U.S., although not in immediate danger of defaulting, should give serious consideration to using them in order to help manage its burgeoning debt.
Some Dietary Suggestions For Our Regulators
It’s estimated that regulatory compliance costs $1.75 trillion annually thanks to a Federal Registry that has ballooned to 82,000 pages. Economically significant regulations, those costing an estimated $100 million or more in compliance, have grown faster still. Clinton’s term averaged 47 economically significant regulations annually. Bush: 48. Obama, reveres regulation: 66.

THURSDAY
Obama’s Plainly Unserious Budget
Starting with the bottom line, according to the administration’s own numbers, the 2012 budget would push debt (held by the public, not government trust funds) up to nearly $12 trillion at the end of 2012. That’s up from $5.8 trillion at the end of 2008.
Budget Blues: What Would State Bankruptcies Accomplish?
Even municipalities can declare bankruptcy, and sometimes do. But federal law denies states this remedy.
The State of State Subsidies
Chris Edwards recently penned a piece that makes the case for cutting federal subsidies to state and local governments. In a related budget bulletin, he shows that there are now over 1,100 federal aid programs for state and local governments.
A Budget Paradox
...Federal outlays went up 108 percent from 2000 to 2010, while the Consumer Price Index only went up 26 percent.
A Budget No One Believes In
The reality is that President Obama’s budget calls for a 49% rise in total spending over the next ten years. Driven by this spending explosion the President’s budget will cause the publicly held debt to rise from $9.5 trillion this year to $16.7 trillion in 2021.
Could your family spend money like the government?
The average American household earned $49,777 in 2009 (that latest year for which statistics are available). If that family followed the lead of the federal government, its credit card debt would equal about $47,785.

WEDNESDAY
Budget Numbers You Can Understand
What makes more sense? Eviscerating those budgets, or means testing social security, raising the retirement age, and cutting back on our military commitments?
Spending Projections and Spending Reality
Two years ago, they were promising that the spending increase would be “timely, targeted, and temporary.” As such, they projected that in 2011, spending as a share of the economy would already have fallen to 23.4 percent.
Obama’s Budget Means the Burden of Government Spending Will be $2 Trillion Higher in Ten Years
The most important number in Obama's budget is that he is proposing $5.7 trillion of spending in 2021, about $2 trillion more than is being spent this year, according to table S-1 of the budget.
Guest Blogger: The CRs Simple and Complex Spending Cuts
So as Congress begins the task of conquering our $14 trillion debt, H.R. 1 marks Congress’s first trip to the budget chopping block in years.
Deconstructing the Revenue Side of Obama’s Budget
The President wants higher tax rates, including higher taxes on investors, entrepreneurs, and small business owners. He also wants to increase the tax burden of American companies that are competing for market share in global markets.
Gov. Rick Scott Kills High-Speed Rail for Florida
Florida governor Rick Scott has just rejected $2.4 billion in federal high-speed-rail funds for his state, at the same time blasting the administration’s economic policies for making the U.S, and Florida, uncompetitive.
The price tag of fiscal evasion in Maryland
...what seem like small one-time maneuvers to close budget gaps ultimately weaken fiscal discpline and come with a price. Maryland has been dipping into the TTF since 1984 as the fund also became more reliant on bonds. The result is Marylanders now looking at higher taxes and fees, as well as interest payments on transportation bonds.
Why We Should Reform Entitlement Programs Now
Their conclusion is that “the rising burden imposed by the public financing of health care expenditures” in the form of more taxes and less economic growth could ultimately be what slows down the growth of health-care spending.

TUESDAY
Time to Get Serious About the Deficit
Conservatives will be very unhappy that the budget permanently ratchets spending up to 23% of GDP. But liberals shouldn't be too happy either--the president still hasn't found a way to get tax revenues above 20% of GDP.
Obama Budget Relies on Gloomier Economic Outlook
The jobless rate is seen at 8.6% in 2012 and should fall to a more normal level of 5.9% only in 2015.
Morning Bell: Obama Budget Doubles Down on Deficit Spending Failure
Since President Barack Obama was sworn into office, total entitlement spending has grown 4 percent, total discretionary has soared 16 percent, and the national debt has exploded 43 percent. Over that same time the United States economy has lost 3.3 million jobs.
Dealing With Higher Pension Costs
Buried deep within President Barack Obama’s budget proposal is a plan to stick traditional pension plans with a bill for an additional $16 billion dollars over the next ten years.
Education Reform, the Cost-Free Way
In fact, there’s no correlation between increased funding and a better education. In testimony delivered earlier this month at a hearing conducted by the House Education and Workforce Committee, the Cato Institute’s Andrew Coulson pointed out it costs the taxpayer $151,000 for each student’s K-12 public education — nearly three times as much as was spent per student in the ’70s, if you adjust inflation.
New Era of Big Government
Spending as a percentage of GDP has increased dramatically since the surplus years of the late 1990s.
The Budget Does Nothing to Assuage Fears over the Debt
A shocking side note is that not only will interest payments explode over the next 10 years, but they will account for an increasing portion of the total federal deficit (which is scheduled to remain at about 3% of GDP indefinitely). For instance, by 2021, interest payments will account for 83 percent of the entire federal deficit.
Deconstructing the Spending Side of Obama’s Proposed FY2012 Budget
The budget needs to be dramatically downsized, yet the President has proposed that we tread water.
30 years of spending priorities
INFOGRAPHIC: A look at how President Obama's federal spending compares to his recent predecessors, and how presidential priorities have shifted over time.
Budget puzzle
So what would be so hard about going back to the level of nominal spending in 2007 of $2.7 trillion? Why isn’t that proposal on the table?
The New Obama Spending Future
Now that the White House has released President Barack Obama's budget proposal for the government's 2012 fiscal year, we thought we'd update our look at how the future for federal spending has changed since George W. Bush was President.
First Thoughts on the Budget
First, there’s the $1.6 trillion deficit. That figure is the same as the entire budget of the United States in FY1998 (FY1986 in real terms, which is interesting considering the tendency to compare Obama with Reagan).

MONDAY
Obama the Born-again Budget Cutter?!?
There may not be any major initiatives to expand the burden of government, like the failed stimulus or the budget busting government-run healthcare scheme, but it certainly does not seem like there are any plans to reverse direction and shrink the burden of government.
Hidden costs of light rail
Are there additional energy costs of running a light rail that don't get measured?
Actually, Texans Save $600 Million a Year
A Texas tax official estimates in this story that Texas loses an estimated $600 million in Internet sales taxes every year. Its part of a long-running debate about whether state governments should be able to collect taxes from out-of-state retailers who send goods into their jurisdictions.
The 19 Percent Solution
How to balance the budget without increasing taxes.
The High Cost of Gravy Trains
Notwithstanding his proposal to spend $53 billion on an upgraded national passenger rail system, Vice President Joseph Biden is the problem, not the solution.
To Fix the Budget, Bring Back Reagan…or Even Clinton
The good news is that there's no major initiative such as the so-called stimulus scheme or the government-run healthcare proposal. The bad news, though, is that government is far too big and Obama's budget does nothing to address this problem.

Reports
FRIDAY
Wasteful Spending Does Not Stop at Earmarks and Overpayments
Federal entities estimate improper payments totaled $125.4 billion in fiscal year 2010, about 5.5 percent of the $2.3 trillion in reported outlays for the related programs. This $125 billion in overt waste, however, pales in comparison to the pervasive waste that exists in current spending patterns.

TUESDAY
President Obama’s 2012 Budget Builds on Failures of the Past
Under the President’s budget, the deficit in 2011 will hit a new record of $1.645 trillion, and the national debt held by the public over the next 10 years would nearly double, rising by $7.2 trillion.
Repealing the Davis–Bacon Act Would Save Taxpayers $10.9 Billion
The Davis–Bacon Act (DBA) requires the government to pay construction wages that average 22 percent above market rates. This shields unions from competition on federal construction projects. It will also add $10.9 billion to the deficit in 2011.

MONDAY
Additional $47 Billion in Spending Cuts for the Continuing Resolution
Rather than stop at $84 billion, lawmakers could seek a full $100 billion reduction in non-security discretionary spending.
Fiscal Year 2012 of the U.S. Budget
Fiscal Year 2012 contains the Budget Message of the President, information on the President’s priorities, budget overviews organized by agency, and summary tables.

Employment News Feb. 14 - 18



News
THURSDAY
How states fared on unemployment applications
More people applied for unemployment benefits last week after applications had dropped to the lowest level in nearly three years in the previous week. That improvement had reflected the fact government offices had been closed the previous week in many states because of severe winter weather, preventing people from applying for benefits.
Jobless claims tick back above 400,000
The number of Americans filing first-time claims for unemployment benefits edged up last week, the government said Thursday.
Democrats turn 'Where are the jobs?' chant on GOP
Republicans won sweeping victories last November by taunting Democrats with "Where are the jobs?" Democrats are now throwing those taunts back, saying it's Republicans who will knock thousands of Americans out of work with their demands for deep cuts in federal spending.
Female veterans struggle in jobs market
The unemployment rate for female veterans of the long-running wars in Iraq and Afghanistan rose to 13.5% in January, above the 8.4% that was the seasonally unadjusted average for non-veteran adult women. And while the overall unemployment rate declined last year, unemployment among female veterans of the latest wars was more than 3 percentage points higher in December 2010 than in December 2009.

WEDNESDAY
Calif gov. freezes hiring, drops minimum wage suit
Gov. Jerry Brown on Tuesday ordered a state government hiring freeze amid California's $26.6 billion fiscal crisis, hours after he dropped a lawsuit filed by former Gov. Arnold Schwarzenegger over whether the governor has the authority to pay state workers minimum wage.
Rising Employment No Rebound for Inflation as Wages Affirm Bernanke Stance
The improvement in the unemployment rate to 9 percent in January from a two-decade peak of 10.1 percent in October 2009 masks a new reality: Many of the jobs people are taking as the economy rebounds offer lower pay, fewer hours and worse benefits than some of the 8.75 million positions that disappeared because of the recession, according to Paul Ashworth, chief U.S. economist at Capital Economics Ltd. in Toronto.
Congress plays chicken over paying for 1099 fix
There's one legislative issue lawmakers on both sides of the aisle overwhelmingly agree on: The onerous 1099 tax-reporting mandate that snuck into the health-care reform bill has to be repealed.

TUESDAY
Home Depot to hire 60,000 seasonal workers
Home Depot said Tuesday that it will hire more than 60,000 seasonal workers in anticipation of a springtime rush for home improvement supplies.
How best to boost the 'working poor'?
Nearly 1 in 3 working families now qualify as 'working poor.' More affordable college – and a more progressive tax system – would help.
US economy's hidden asset: older workers
Far from being a drag on the economy, so-called gray labor will be key to America's competitiveness in coming years. Mature workers can bring major productivity gains to US businesses – if we can make changes to better tap their talent.

MONDAY
Women's share of jobs slipping
Once poised to become a majority of the workforce, women haven't found as many jobs as men during the recovery. But some signs point to an eventual rebound.

Economist Comments
MONDAY
The U.S.' Biggest Brain Magnets
College graduates are heading in droves to Raleigh, Austin and, surprisingly, New Orleans.
Obamacare’s casualties: 800,000 jobs
Unemployment will rise if health care takeover isn’t stopped

Blogs
MONDAY
Jobs, Jobs, Jobs
In this article, Allen Sanderson, who teaches introductory economics at the University of Chicago (using my favorite textbook, of course), takes on the political rhetoric about job creation.
Study: Strict Derivatives Regulation Could Cost 130,000 Jobs
Upwards of 130,000 jobs could be lost if U.S. regulators impose new restrictions on derivatives transactions too broadly, according to a study to be released Monday.
Correlating the Price of Gas and the Unemployment Rate
We were intrigued by a chart Robert Zubrin posted illustrating that spikes in the inflation-adjusted price of oil have often preceded changes in the U.S. unemployment rate. So much so that we wondered if a similar pattern might emerge if we substituted the average price of gasoline at the pump instead.
SF Fed: What Is the New Normal Unemployment Rate?
An economic letter from Justin Weidner and John Williams at the SF Fed: What Is the New Normal Unemployment Rate?

Reports
TUESDAY
The Myth of Green Energy Jobs:The European Experience
With $2.3 billion in Recovery Act tax credits allocated for green manufacturers, President Barack Obama and other Democratic politicians have high hopes for green technology. But their expectations clash with both economic theory and practical experience in Europe. Green programs in Spain destroyed 2.2 jobs for every green job created, while the capital needed for one green job in Italy could create almost five jobs in the general economy. Wind and solar power have raised household energy prices by 7.5 percent in Germany, and Denmark has the highest electricity prices in the European Union. Central planners in the United States trying to promote green industry will fare no better at creating jobs or stimulating the economy.

Tax News Feb. 14 - 18



News
THURSDAY
Paying use tax for items you buy out of state? Pennsylvania is cracking down on businesses
This is part of the agency’s efforts to find every scrap of tax revenue as the state scrambles to address a budget deficit of more than $4 billion.
Connecticut governor proposes sweeping tax hikes
In his fiscal 2012 budget released Wednesday, Gov. Dannel P. Malloy proposed increasing state income and sales tax by $1.5 billion.
Amazon's Exit Spurs Tax Fight in Texas
That position had caused discomfort for Gov. Rick Perry, who promotes his policies as job-creating. In a rare public disagreement with a fellow Republican, he said Ms. Combs made the wrong call.

WEDNESDAY
Geithner: Cut Corporate Tax Rate Substantially
Treasury Secretary Timothy Geithner said on Tuesday that the United States needs to cut the corporate tax rate substantially with a goal in the high 20% range, down from the current 35%.

TUESDAY
Big Role for Tax Increases Fuels Criticism From Business Groups
Rather than offer a tax-overhaul plan, the budget includes numerous measures that, on net, would raise taxes on businesses and high-income individuals by about $327 billion during the next decade.
Raising taxes to cut the deficits
The White House would raise some $350 billion by getting rid of tax breaks in the coal, oil and gas sectors, resurrecting an environmental corporate tax, and targeting "loopholes" in the international tax system.

Economist Comments
FRIDAY
Time to Write Off the Mortgage Interest Deduction
Congress should take the bold step President Obama didn't on housing subsidies.

THURSDAY
EDITORIAL: The cell-phone tax burden
Obama’s plan is to expand wireless so he can tax it.

WEDNESDAY
Top 5 silliest state tax hikes
The Daily Caller has compiled a list of the five silliest revenue raisers implemented and floated in the rush to raise money for state coffers. While some voters might be angry about the overspending that has brought about these tax hikes, the creativity is undeniable and, in a weak moment, almost impressive.
Obama's 2011 Tax Budget Lowest Since World War II
...the trough will be 2011, 14.4%, thanks to persistently high unemployment, the extension of the Bush tax cuts, federal stimulus, and the temporary cut in Social Security taxes.
Race to the Top of the Laffer Curve
David Leonhardt of the New York Times has it exactly backward: America’s corporate tax rates are driving economic activity abroad.
It's Time to Abolish State Corporate Income Taxes
Currently, states and localities collect about 14.7 percent of all corporate income tax in the United States in a typical year.

TUESDAY
Slash mortgage deductions for the rich? Fat chance
The president once again proposed in his budget to curtail high-income earners' tax deduction for mortgage interest payments and charitable contributions.
Want to Boost the Economy? Lower Corporate Tax Rates
The increased flow of capital to the U.S. would result in greater productivity and higher real wages.

MONDAY
How to fix a budget crisis? Cut taxes!
That's the path some governors want to take to get their states back on the right economic track.
Laffer Curve Pays Billions If Obama Just Asks
The U.S. is about to have the highest corporate tax rate in the developed world because our competitors have noticed that revenue goes up as rates go down. Multinational corporations today nimbly move their profits to the friendliest environment, rewarding tax havens like never before.

Blogs
FRIDAY
Time to Get Rid of the Corporate Income Tax?
Yes, America's corporate tax rate is very high, but that is just one of the layers of taxation imposed by the internal revenue code. Both the capital gains tax and the tax on dividends result in corporate income being taxed at least two times.
Where will Obama find new tax revenues?
Most corporations and individuals won't get hit with a tax increase, but money to reduce the deficit has to come from somewhere.
E-Commerce Surge May Hit Tax Revenue
The Commerce Department reported Thursday that e-commerce retail sales totaled $44 billion in the fourth quarter last year, up from $38 billion a year earlier.

THURSDAY
Taxpayer Calculator: High-Speed Rail
Among the line items in the $3.7 trillion budget blueprint President Obama outlined this week is a six-year $53 billion investment in a national high-speed intercity passenger rail network.

WEDNESDAY
A super-high tax for the super rich? Wouldn't be the first time.
A proposal to raise the marginal tax on incomes over $15 million to 70 percent seems unrealistic to some, but under President Eisenhower, the highest marginal tax rate was 91 percent.
Obama Tarries on Tax Reform, Loads Up New Tax Breaks
As Gleckman points out, the 2012 budget, while cutting some tax preferences for energy companies and the wealthy, actually loads up the tax code with even more. We can't be inserting new tax breaks that further narrow the base while misallocating resources to boondoggle government projects.
Obama plans to cut taxes. And raise them, too.
...it appears that the deficit-reducing revenue increases, as the Administration measures them, total about $425 billion over the next ten years.

MONDAY
Tax Makes Fiji Water Turn off the Tap
Sure, taxes on cigarettes, alcohol, and now even bottled water seem like a quick and easy way to offload the burden of government on an unpopular minority.

Reports
None.

General Economic News Feb. 14 - 18



News
FRIDAY
Where's the stimulus?
A bill to jump start the economy. That was the main idea behind the American Recovery and Reinvestment Act, better known as the "stimulus bill," which became law two years ago today.
Officials Question Debit Card Fee Limits
Top U.S. regulators said Thursday that small banks could be hurt by new limits on debit-card fees, comments that could fuel efforts to delay or change a provision in the Dodd-Frank financial-overhaul law.
China is richer, but most Chinese are still poor
Now that China has surpassed Japan to become the world's second-largest economy, economists predict it's on track to replace the US as the world's biggest by 2025. But what does the higher rank really mean for the average Chinese citizen?
Union Fight Heats Up
Absent Teachers March; Wisconsin Democrats Flee to Halt Vote

THURSDAY
Fed raises growth forecast for 2011
Minutes from the most recent meeting of the Federal Reserve released Wednesday show that policymakers anticipate a bigger bump in economic growth for 2011 than they thought just a few months ago.
Consumer Prices in U.S. Climb More Than Forecast
The cost of living in the U.S. climbed more than forecast in January, led by higher prices for food and fuel that may be starting to filter through to other goods and services.
Who got high speed rail money
The federal government already has more than $10 billion in stimulus and other money set aside for high speed rail projects. To date, it has made commitments to spend $4.5 billion of that.
NRF: Retail Sales to Rise 4% in 2011
The National Retail Federation said it expects U.S. retail sales to rise 4% in 2011, continuing a trend of improving consumer spending last year that intensified over the holidays.
Index of Leading Economic Indicators Climbed 0.1%
The index of U.S. leading indicators rose in January for the seventh straight month, signaling the expansion will extend into this year.

WEDNESDAY
Americans Climbing out of Debt and Saving More
The recession that just rocked the U.S. economy happened in part because Americans were borrowing and spending more than they could afford. Now, three years after the downturn began, families are moving faster than many analysts had expected to put their finances in order by paying down debt and boosting their savings.
Home construction rises in January
New home construction rose in January, but permits for future building declined during the month, the government reported Wednesday.
Industrial Production Falls 0.1%
U.S. industrial output unexpectedly fell in January as a return to normal winter temperatures caused a sharp fall in utility output, while production from mines also fell, a Federal Reserve report showed on Wednesday.
Food spike puts 44 million in poverty
The rise in food prices since last June has shoved 44 million people into dire poverty, the World Bank says in its latest report on the global food crisis.
How the middle class became the underclass
Incomes for 90% of Americans have been stuck in neutral, and it's not just because of the Great Recession. Middle-class incomes have been stagnant for at least a generation, while the wealthiest tier has surged ahead at lighting speed.
Producer prices index hints at inflation pressures
Core reading of wholesale inflation up by most since October 2008
Factory output grows for 5th straight month in Jan
Factories produced more goods for the fifth straight month in January as strong auto sales spurred demand for new cars and trucks. But overall industrial production fell for the first time in 19 months.
Housing starts surge, beating expectations
Builders begin work on more apartments, condos
Borders Files for Ch. 11 Bankruptcy Protection
Borders to close 30 percent of stores, files for Ch. 11 bankruptcy protection
Banks Push Home Buyers to Put Down More Cash
The down payments demanded by banks to buy homes have ballooned since the housing bust, forcing many people to rethink what they can afford and potentially shrinking the pool of eligible buyers.

TUESDAY
Store sales slow in January
Retailers logged slight increases in store sales last month as consumers primarily focused on paying for grocery and gasoline purchases, the government reported Tuesday.
Don't sweat rising mortgage rates
Will rising interest rates slam the door on a fragile housing recovery?
Homebuilder Sentiment Unchanged in February
U.S. home-builder sentiment was unchanged in February, stuck at a low level for the fourth month in a row as the housing market struggles to recover from its collapse, a survey released Tuesday showed.
Stock market in London and Toronto to merge
Stock market merger between London Stock Exchange and TMX Group will create one of the largest stock exchanges in the world.

MONDAY
Japan Economy Shrinks Less-Than-Estimated 1.1%, Surpassed by China in 2010
Japan’s gross domestic product fell less than estimated in the fourth quarter in a pullback that may prove temporary as overseas demand revives production after the nation fell behind China as the world’s second-largest economy.
Housing Crash Is Hitting Cities Once Thought to Be Stable
Few believed the housing market here would ever collapse. Now they wonder if it will ever stop slumping.
Banks slashed small business lending by $43 billion
The numbers back up what small business owners have been saying for two years: Main Street suffered a brutal credit crunch.
Clothing Prices to Rise 10% Starting in Spring
The era of falling clothing prices is ending. Clothing prices have dropped for a decade as tame inflation and cheap overseas labor helped hold down costs.
Egypt Plans Stimulus to Revive `Sudden Stop' Economy
Now with Mubarak gone, the plight of Abdel-Wanis and the 40 percent of his countrymen near the poverty line is prompting Finance Minister Samir Radwan to develop a stimulus plan aimed at creating the jobs needed to avoid further social unrest.
Economic Reports for the Week
Scheduled for this week are retail sales and import prices for January, and business inventories for December (Monday); producer price index, housing starts and industrial production for January (Wednesday); weekly jobless claims, consumer price index and leading economic indicators for January, and the Philadelphia Fed manufacturing index for February (Thursday).

Economist Comments
FRIDAY
Dupes of False Innovation
Is there real innovation in banking and finance, or just endless, cyclical repetition of credit enthusiasms and mistakes?
Athens in Mad Town
A seminal showdown between public unions and taxpayers.
Immortal Fannie, Immortal Freddie
Are Fannie and Freddie ever going away?
Facing Down the Unions
Tackling the public-employee unions may no longer be a political kamikaze mission.

THURSDAY
Profit: The Right Standard for Business
Business ethicists and advocates for corporate social responsibility are playing a dangerous game.
Independently Incompetent
Regulators may drive derivatives markets out of the U.S.
Abolishing Fannie and Freddie Isn't Enough
The news that the Obama administration seeks to "wind down" both Fannie Mae and Freddie Mac has generated positive - albeit cautious - praise from right-of-center thinkers not known for their support of much of the Obama economic agenda. If the Administration is actually serious - which is a fair question - then this is a nice development.
Happy stimulus day
How’s that working out for you?
Nightmare for Elderly May Not Be Unavoidable: Chris Farrell
Republicans and Democrats are starting to battle in earnest over how to cut federal discretionary spending. Eventually the ominous arithmetic of entitlements and tax revenue will require the focus to turn to the Social Security benefit formula (as well as Medicare).
Pruning Farm Subsidies
In times of massive deficits, why are we borrowing millions to subsidize profitable agribusiness? Lots of presidents have asked that question. George H. W. Bush tried to cut farm subsidies. Bill Clinton did, too. George W. Bush wanted them ended as well. All failed.

WEDNESDAY
Productivity and Growth: The Enduring Connection
It is simply untrue that there is a trade-off between efficiency and jobs in a dynamic economy.
Education Waste: We Have Only Ourselves to Blame
There's a curious line in the summary of President Barack Obama's proposed fiscal 2012 Department of Education budget. "Now more than ever," it reads, "we cannot waste taxpayer dollars on programs that do not work." It's curious because no federal education programs appear to work, yet the Obama administration is proposing to increase Education Department spending from $64 billion to $77 billion. It's a bankrupting contradiction, but don't get angry at Obama: We only have ourselves to blame.
State Plans Anger Unions
Proposed Curbs on Bargaining Rights Threaten Membership, Labor Leaders Say
BURR & COBURN: Caution kills
FDA’s go-slow approval approach shortens lives
Stop Public Financing of Campaigns
Every few years, as new contenders ready their campaigns, we have to watch the depressing spectacle. Why should we be forced to pay for it?
Another Dodd-Frank Triumph
Did we mention its new source of systemic risk?
GROVER: Dismantling overbearing financial reforms
Repeal is unlikely, but they can be taken down brick by brick

TUESDAY
Do we want house prices to rise?
If President Barack Obama could ask for one gift from the economy — one statistic that turns unexpectedly rosy, what would it be? If Americans in general could choose one change in their financial situation, what would they choose?
The Future of Consumption and Economic Growth, Part 1
Minyanville contributors Professor Pinch and Conor Sen dissect and discuss a paper by the World Economic Forum.
Geithner Unveils 7-Year Plan for Fannie and Freddie
Pillars of reform include reducing the government's footprint in the housing market, adjusting the role of the banks, and putting more emphasis on renters.

MONDAY
The End of Fannie Mae
Treasury wants the company phased out but punts on how to do it.
Emerging Markets as Partners, Not Rivals
In his State of the Union address last month, President Obama set the stage for a coming policy debate and his re-election bid with a catch phrase. Six times, he called on Americans to “win the future.” And he used the variant “winning the future” three other times. But is this really a good way to frame the economic challenges we face?
Honduras's Experiment With Free-Market Cities
A poor country considers a new way to stimulate private investment.
Gold Won't Repeat 2010's Climb
The precious metal rose slightly on the turmoil in Egypt, but it is unlikely to continue rising at the growth rates it reached—near 30%—last year.
High-Speed Pork
Faster trains will produce almost no new mobility.
Homebuyer, Be Warned
Mortgage rates figure to rise under the administration’s housing proposals, with good reason.
Mr. Lincoln’s Economics Primer
Abraham Lincoln’s greatest love was politics, but his intellectual passion was for what the 19th century called “political economy” — the way economics and politics intersected in society and government.

Blogs
FRIDAY
Testimony on video
If you keep listening, you’ll get to see Elijah Cummings run roughshod over the three witnesses. We do our best but he can’t be stopped. And you’ll get to see Dennis Kucinich wonder who invited me because he and I agree on Wall Street and the government.
MBA: Loans in Foreclosure Tie All-Time Record, fewer Short-term Delinquencies
The MBA reports that 12.85 percent of mortgage loans were either one payment delinquent or in the foreclosure process in Q4 2010 (seasonally adjusted). This is down from 13.52 percent in Q3 2010.
Cap-and-Trade Is Not Dead
For our economy to flourish, we need abundant and affordable energy. A clean energy standard would guarantee us less abundant, more expensive energy—it’s a profoundly bad idea dressed up in pretty, deceptive language.
Do pensions affect state borrowing costs?
The Center for Retirement Research at Boston College has published a new brief that looks at the relationship between pension funding and the cost of government borrowing. Recently Moody’s announced it would look at states’ unfunded pension liabilities along with outstanding debt in its evaluations. (When they did so, Moody’s found Connecticut, Hawaii, Illinois, Kentucky, Massachusetts, Mississippi, New Jersey, and Rhode Island topped the list of state indebtedness).
The Blinders of Behavioral Economics
To put things in the words of the ancient philosophical question: If you know the better, will you do the worse?
The Pendulum Swings Again on Government Regulation
Yesterday, CBS News released a new poll that shows Americans are worried about excessive regulation. In the poll, 45 percent of respondents said there was too much federal regulation of business. Twenty-seven percent said there was too little.
So much stimulus, so little to show for it
Sure, the recession is technically over. But after such a massive stimulus, shouldn't there be bigger results?
Fitch warns of state downgrades
Fitch Ratings has warned that a new method it uses to assess state and municipal obligations may prompt ratings downgrades because of governments' growing pension obligations.

THURSDAY
Food, Famine, and Globalization
How does climate change change the fact that regions suffering crop failures are especially in need of food imports – and will get them if prices are free to rise and if trade is free?
House Financial Services Committee Hearing on Durbin Amendment
The House Financial Services Committee is holding a hearing tomorrow on the Durbin Amendment price controls on debit card interchange fees.
Randy Barnett on the Mandate
In his congressional testimony, he illustrates the difference between regulating activity and inactivity
Congressional Testimony on the Stimulus
Text of my opening remarks before the Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending of the House Committee on Oversight and Government Reform, February 16, 2011.
Shaking The Nations
The good news is that 117 countries have increased their economic freedom in the past year. The bad news is that none of those countries is called United States of America.
Government is raising the value of a life
What the Chinese have done is to neglect health care investments (until very recently) and basically maximize gdp growth. They wanted to have fewer people anyway, so why spend money to keep ailing people around? We find this horrible when presented in such explicit terms, and yet we admire their achievement of the end of growth maximization.
No Substitute For Saving
Of course, this was easier to do, because other people were also consuming less stuff; living on less than you make when everyone else is leveraged to the hilt makes you feel poor. But it's the only way to make sure you survive retirement.
Durbin and Digital Payments
Among the reasons why I’ve argued that price controls on payment card interchange fees are not necessary is because of the potential for competition among different payment systems. So its not just that Visa and MasterCard compete in debit cards (of course, AmEx, Discover, and store-brand cards compete on credit cards and there are a bunch of debit card networks), but they also compete against credit cards, PayPal, cash, checks, ACH, Revolution Money, prepaid cards, and probably others that I’m not even aware of.
China and Japan, moving apart
NOTHING stays the same forever. This week, fresh economic data confirmed what everyone has known since last summer: China surpassed Japan to be the world's second-largest economy sometime in 2010.
The State of State Subsidies
Like countless other individuals and interest groups, state and local government officials have become addicted to federal taxpayer money. This addiction has encouraged irresponsibility and profligacy at all levels of government. It has also prevented citizens from appreciating the true cost of the services they demand from state and local governments.
Homeownership Before the New Deal
The latest canard offered for keeping taxpayers on the hook for mortgage risk is that, without such, homeownership would limited to the wealthy. Sarah Rosen Wartell of the Center for American Progress stated before the House Subcommittee on Capital Markets, "The high cost, limited availability, and high volatility of pre-New Deal mortgage finance meant that homeownership was effectively limited to the wealthy." Congressman Al Green repeated the point. As I've generally found Sarah to be one of the more reasonable CAP employees, and that this is fundamentally an empirical question, I would have expected her to offer some evidence to support such a claim. Alas, she did not. So I will.
Happy Anniversary, Stimulus. Look What You’ve Done in Two Years.
Today is the two-year anniversary of the stimulus bill becoming law, and the National Republican Senatorial Committee has a one-minute web ad spotlighting the claims of the senators who voted for it and how their states are doing. It’s quite well done

WEDNESDAY
3.6, 4.4, 4.3, 3.8
Remember those numbers because they are the 2012-2015 growth rates Obama needs the US economy to hit for the following graph to look this pretty:
Rising food prices feed US economy
The US is a net exporter of agricultural products, so it's cashing in on rising food costs.
Administration Playing Both Sides on Fannie Mae
On Friday the Obama Administration released its report on "reforming America's Housing Finance Market." The report claimed that the Administration would work toward "winding down Fannie Mae and Freddie Mac on a responsible timeline."
The Failure of Keynesian Politics
What are the alternatives to Keynesian politics?
Eternal Vigilance Needed on Trade Carve-Outs
A bill that would have set a troubling precedent indeed was killed in the Senate last week. I've written previously about the Trade Adjustment Assistance program, and its fate has been tied up with the Generalized System of Preferences, a scheme by which certain developing countries gain duty-free access to the U.S. market for many of their goods. Congress was trying -- and failed -- to pass an extension of the programs together, along with the Andean Trade Preference Act.
New York Stock Exchange and German Rival Merge
So the rumor about the merger between the New York Stock Exchange and Germany's largest stock exchange turned out to be true.

TUESDAY
A Leg Up: World's Largest Cities No Longer Homes of Upward Mobility
Throughout much of history, cities have served as incubators for upward mobility. A great city, wrote RenĂ© Descartes in the 17th century, was “an inventory of the possible,” a place where people could lift their families out of poverty and create new futures. In his time, Amsterdam was that city, not just for ambitious Dutch peasants and artisans but for people from all over Europe. Today, many of the world’s largest cities, in both the developed and the developing world, are failing to serve this aspirational function.
EWOT Paraphrase of the Weekend
The quote of the weekend, as far as I'm concerned, came from the excellent George Selgin in reference to the following graph:
A better future for housing finance?
The Treasury has come up with some good ideas about reforming housing finance.
5,100 More IRS Agents
The White House plan to close the mythical "tax gap."

MONDAY
What is Economic Activity?
What is economic activity? In standard macroeconomics, economic activity consists of spending. Certainly that is how we measure economic activity, using national income accounts. However, I propose looking at economic activity as patterns of sustainable specialization and trade (PSST).
Where and What Is U.S. Trading Internationally?
The Commerce Department reported today that U.S. trade rebounded strongly in 2010. The following charts detail who we’re trading with, and what we’re trading.
Austrian Economics in the News
The financial crisis of 2008 led to a lot of unfortunate Keynesian and corporatist policymaking, but also to a renewed interest in Austrian economics and particularly to the Austrian theory of the business cycle and the role of the Federal Reserve in creating bubbles and busts.
Unofficial Problem Bank list at 944 Institutions
Here is the unofficial problem bank list for Feb 11, 2011.
The Author of the Administration's Housing Finance Report
As reporters ask me about the report, I in turn ask them where the real report is. I mean, I cannot believe that such a sketchy, half-baked proposal was given an official seal (two of them, one each from HUD and Treasury). My first reaction was that this was like a bad term paper from a public policy grad student.
Debunking the Myth of Oil Dependence
An article in today's Boston Globe might help to debunk one of the more pervasive myths that distorts U.S. foreign policy: the belief that access to oil from the Middle East is a vital national security issue for the United States.
The "Right" Amount of Manufacturing
Free-trade critic Ian Fletcher argues that the United States has too little manufacturing. Even if manufacturing output is at an all-time high, he argues, it's still too low. So clearly he has in mind some amount of manufacturing that is right or, at least, some criterion by which we can judge whether the amount of manufacturing is the right amount.
Schedule for Week of February 13th
The key releases this week will be retail sales on Tuesday, industrial production on Wednesday, and the consumer price index on Thursday. For housing, the NHAB housing market index will be released on Tuesday, and housing starts on Wednesday.
The Obama Administration on Housing Finance
Nobody seems to want to step back and ask fundamental questions about housing policy.
Treasury Mortgage 'Reform' Report Fails To Fix The Biggest Problem (The FHA)
Treasury and HUD on Friday released their report to Congress titled "Reforming America's Housing Finance Market."
US-China Trade Numbers Reveal Political Risk
Our trade deficit with China rose 20 percent to a record $273 billion last year, according to figures just released by the Commerce Department. For political reasons, this is a depressing, dangerous result.
Good pension policy requires transparency
In 2010, alarm bells started going off around the country about the huge costs and liabilities associated with public employee pensions. Lawmakers in 18 states enacted pension reforms intended to cut costs, with more considering the issue in 2011.

Reports
FRIDAY
The Stimulus Two Years Later
Testimony Before the House Committee on Government Oversight and Reform, Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending
Erase Artificial Barriers: Focus On Entrepreneurship
Testimony Before the California Senate Governance and Finance Committee

THURSDAY
Regulatory Analysis: Understanding Regulation's Effects
Testimony Before the Committee on Oversight and Government Reform United States House of Representatives Hearing on “Regulatory Impediments to Job Creation”
The Stimulus: Two Years Later
Statement before the House Committee on Oversight and Government Reform Subcommittee on Regulatory Affairs, Stimulus Oversight and Government spending.

TUESDAY
Trade Agreement Would Promote U.S. Exports and Colombian Civil Society
The purpose of this bulletin will be to examine the Colombia agreement in light of the president's call to boost U.S. exports, and to examine whether violence in Colombia against union members poses a legitimate obstacle to trade liberalization.
Can America Double Its Exports in Five Years?
One year ago, President Obama set a goal for the United States to double its exports over the course of five years. With the recent release of annual trade data for 2010, we have the opportunity to assess how the country is doing in meeting the president’s goal.

MONDAY
Economics Group
Weekly Economic & Financial Commentary