Tuesday, April 5, 2011

General Economics

News                                                                                                                             
My Money | Bernanke Predicts High Level of Foreclosure Starts in 2011
US Federal Reserve Chairman Ben Bernanke said late Monday that he expects to see a very high rate of foreclosure starts in 2011.
MSNBC | Uncertainty might be biggest shutdown cost
Increased use of federal contractors creates some new what-if's
WSJ | Moody's Adds to Pressure on Portugal
Moody's Investors Service Inc. on Tuesday cut Portugal's long-term government-bond rating even closer to junk grade and placed it on review for possible downgrade, citing heightened risks that the authorities will be unable to meet their ambitious deficit reduction targets.
CNN Money | Bankruptcy filings fall 6%
The number of Americans filing for bankruptcy dropped 6% in the first quarter of 2011 compared to the previous year, two industry groups said Monday.

Econ Comments                                                                                                             
NY Times | Wholesale Robbery in Liquor Sales
Last month,  Representative Jason Chaffetz, Republican of Utah, introduced a bill in the House that would allow states to cement such protectionist laws. It should appall wine snobs, beer swillers and even teetotalers. In this case, the law would protect not small stores and liquor producers, but the wholesale liquor lobby.
WSJ | After the Welfare State
The moral price of dependence on government is even higher than the financial cost.
Investors | Despite The Scary Warnings, U.S. Not Running Low On Oil
With Japan's nuclear crisis and a wave of instability crossing the Middle East, pols and pundits are turning again to the question of our energy future. Will civil war and strife disrupt access to oil and our way of life? Can the United States change its century-old pattern of relying heavily upon petroleum?
AEI | Principles for Reforming the Housing Finance Market
We recommend that the U.S. housing finance market of the future should be governed by four basic principles:
Smart Money | U.S. Should Value Greed, Not Need
Margaret Thatcher famously quipped , "The problem with socialism is that you eventually run out of other people's money." But the former prime minister of the United Kingdom was only half right: What's really wrong with socialism is its philosophy.
Fox Business | States Increasingly Turn to 401Ks to Replace Pensions
Big labor used the 43d anniversary yesterday of the assassination of Rev. Dr. Martin Luther King to hold hundreds of rallies nationwide, attacking “right-wing corporate politicians” for “trying to take away the rights Dr. King gave his life for: the freedom to bargain,” one flyer reads.

Blogs                                                                                                                          
Carpe Diem | Another Name for "Trade Deficit" is "Capital Account Surplus," Balance of Payments Always = 0
Here's another look at the balance of payments data back to 1980 (BEA data here), demonstrating graphically Don Boudreaux's statement that "another name for “U.S. trade deficit” is the “U.S. capital-account surplus” – that is, inflows of investment funds into America that supply (directly or indirectly) financing for more capital creation in America."
AEI: The American | End It, Don’t Mend It
Evidence against the Dodd-Frank Act continues to pile up. Now 18 Republican Senators have introduced legislation to repeal the act.
NRO: The Corner | How Do We Make People Understand that They Aren’t Entitled to Entitlement Programs?
Social Security doesn’t belong to taxpayers, even those who have paid into the program their entire lives. It is not an entitlement: Congress can change the law at any time, cut benefits or abolish the program at will.
WSJ: Real Time Economics | Recovery in the U.S. Beats Other Advanced Economies
Michael Mussa of the Peterson Institute for International Economics released his semiannual forecast for the global economy today, projecting GDP growth of 4.3% this year despite risks from turmoil around the world.
NRO: The Corner | Become Too Big to Fail, and You Will Live a Long and Happy Business Life
The TARP program is often presented as a great success because it is said to have prevented the market from collapsing at a cost to taxpayers of only $19 billion
Heritage Foundation: The Foundry | Young Arabs Agree: Economic Freedom Necessary for Prosperity
A study released Thursday shows that young people in the Arab world overwhelmingly want greater economic freedom and opportunity, and that conditions prior to the current uprisings left them “crying out for change.”

Reports                                                                                                                         
Mercatus Center | Bill 19-77 Pension Protection and Sustainability Act
Testimony Before the District of Columbia Committee on Government Operations and the Environment

Health Care

News                                                                                                                             
Fiscal Times | Senate to Vote to Repeal Small Part of Health Law
Congress is poised to send the White House its first rollback of last year's health care law, a bipartisan repeal of a burdensome tax reporting requirement that's widely unpopular with businesses. Even President Barack Obama is eager to see it gone.
NationalJournal | Left Takes Aim at Ryan's Health Voucher Proposal
Health care advocacy groups spent Monday spoiling for a fight over expected proposals to privatize Medicare and convert Medicaid into a state-owned and operated program for the poor.

Econ Comments                                                                                                             
Cato Institute | Ryan Budget: A Huge Opportunity to Improve Health Care
The budget should restrain Medicare spending by giving enrollees fixed vouchers they can use to purchase any private health plan of their choice. Poor and sick enrollees should get larger vouchers, but the average voucher amount should grow only at the overall rate of inflation.

Blogs                                                                                                                             
Atlantic: Megan Mcardle | The GOP Health Care Plan: A Diference in Kind, not Degree
So the Republicans have finally released what I think we can all agree is a plan for Medicare and Medicaid (though of course, I there remains the possibility that some of the people who have been complaining that the GOP "doesn't have a plan" may now retreat to saying that this is "not a real plan").  The plan is very real--though obviously, not to the liking of many.  It essentially voucherizes Medicare (with larger vouchers for the poor and sick), while transforming Medicaid into block grants.
Marginal Revolution | Choice-based Medicare cost controls
Let’s say it’s 2027 and I’ve just turned 65.  I fill out a Medicare application on-line and opt for a plan with superior heart coverage (my father died of a heart attack), not too much knee coverage and physical therapy (my job doesn’t require heavy lifting), no cancer heroics (my mother turned them down and I wish to follow her example), and lots of long-term disability.
Pajamas media | Smothering Medical Innovation
If we want to maintain our innovative mojo, the one thing we cannot do is continue down the road we are on of socializing the whole system.
Atlantic: Megan Mcardle | Health Care Law Still Really Unpopular
I took a casual gander at the health care poll numbers this morning, and what I saw surprised even me.  Obamacare not only hasn't gotten more popular, but is now showing a record gap between favorables and unfavorables:
Cato Institute | Medicare and Medicaid Reform
An essay on Medicare explains the program’s numerous shortcomings and an essay on Medicaid examines that program’s flaws. Suggested reforms in the essays are similar to reforms in Rep. Ryan's proposal, including converting Medicaid to a block-grant program.
NRO: The Corner | The Ryan Plan Doesn’t Privatize Medicare
In fact, while this reform is a great start, the plan continues the Washington tradition of extending open-ended promises on Medicare without paying for them (even though the cost is much lower). Also, this may be nitpicking on my part, but under this plan consumers will still be bound to a list of guaranteed coverage options chosen by the government
Heritage Foundation | New Report Shows Sec. Sebelius is Overstepping Her Authority
Secretary Sebelius has repeatedly asserted that CLASS is unsustainable. She has advocated repeal if CLASS can’t be reformed. It appears likely that the Obama Administration knew the program was fiscally unsustainable before Obamacare became law, and included it in the health care law only as a mechanism to reduce the price tag of the bill. Now, Secretary of Health and Human Services Kathleen Sebelius is asserting power that Congress did not grant her in a futile attempt to remake the program into something sustainable.

Reports                                                                                                                         
Heritage Foundation | Health Care Exchanges: Obamacare Isn't the Answer
States shouldn’t try to “shoehorn” a conservative, market-based exchange into the Obamacare architecture; it isn’t a viable strategy either practically or politically. States should instead advance separate conservative, patient-centered, market-based health care reforms that offer Americans concrete examples of a positive, alternative vision to Obamacare and reinforce congressional efforts to repeal it.

Taxes

News                                                                                                                             
WSJ | Private-School Tax Break Is Upheld
A divided Supreme Court Monday upheld an Arizona tax-credit program that offers a dollar-for-dollar reduction of state income tax payments to organizations that support religious schools, opening the door to the expansion of such programs nationwide.
CNN Money | Tax audits: 78% are done by mail, not in person
Of the more than 1.6 million Americans who were slapped with audits last year, 78% dealt with correspondence audits, while only 22% were asked to come in for an in-person examination.
Fiscal Times | Taxes: What Could Trigger an IRS Audit
...keep in mind that the odds of getting audited can rise sharply depending on details of your return.

Econ Comments                                                                                                             
Fiscal Times | The 12 Craziest Tax Laws in America
Colorado recently revised its definition of what constitutes an “essential” food item to make those plastic lids taxable.
CNN Money | New taxes: Never say never
...since our largest taxes are on income, higher rates create disincentives for work and saving.
WSJ | Coburn vs. Norquist
The Senator is right on ethanol and, in this case, on tax subsidies.

Blogs                                                                                                                             
Reason: Out of Control Policy Blog | Complaints About "Tax Havens" Are Misguided
The problem is that worldwide systems, which often result in higher taxes for companies that operate abroad, have proven increasingly uncompetitive.

Monetary

News                                                                                                                             
MSNBC | Rep. Paul planning hearing on Fed foreign lending
Subcommittee would not expect Bernanke to respond to a call to testify, but he could be asked to send a deputy.
WSJ | OECD Frets Over Inflation
Economic growth in the world's richest countries outside disaster-stricken Japan is gaining strength, the Organization for Economic Cooperation and Development said Tuesday in an upbeat interim assessment, but warned that a rise in commodity prices may push up inflation expectations.
MSNBC | Bernanke says Fed will improve oversight role
Law requires that central bank work with other regulators to watch 'clearninghouses'.
CNN: Money | China raises interest rates again
For the fourth time in six months, China's central bank is hiking interest rates to combat rising inflation in the country. The People's Bank of China said Tuesday that it will raise its one-year lending rate to 6.31% from 6.06%, effective Wednesday.
NationalJournal | Fed Lent to Over 100 Banks That Later Failed
The loans posed little risk to the Fed, as the central bank demanded significant collateral. Such financial support can be a stopgap that enables struggling banks to survive, or, alternatively, a crutch that delays inevitable demise while allowing banks to sink even deeper into debt.

Econ Comments                                                                                                             
Ludwig von Mises Institute | The Cure (Low Interest Rates) Is the Disease
According to the Austrian School of economics, however, the latest crisis has been brought about by a monetary policy of artificially suppressing the interest rate; and pushing interest rates down even further will only make matters worse.
Washington Times | RAHN: The responsible, the timid and the ugly on inflation
A three-way donnybrook will determine our economic future.
CNN: Money | Fed should focus on inflation, not jobs
Ben Bernanke and the Federal Reserve have the authority to curb unemployment. Here's why they shouldn't.
Ludwig von Mises Institute | Life with the Fed: Sunshine and Lollipops?
We have heard the objection a thousand times: Why, before we had a Federal Reserve System the American economy endured a regular series of financial panics. Abolishing the Fed is an unthinkable, absurd suggestion, for without the wise custodianship of our central bankers we would be thrown back into a horrific financial maelstrom, deliverance from which should have made us grateful, not uppity.
Cato Institute The Responsible, the Timid, and the Ugly on Inflation
For the past year, the Federal Reserve has been the largest single purchaser of U.S. government securities, buying well more than half of all new debt. The Fed calls this program quantitative easing (QE2), or what normal people would call printing money. The Fed has stated that this program will stop in June. Who is going to purchase all of the new government debt when the Fed stops?
Ludwig von Mises Institute | Is Inflation Harmless or Even Good?
As Ron Paul's "End the Fed" movement grows, more and more Fed economists are speaking up on behalf of the central bank. In a recent post, David Andolfatto of the St. Louis Fed argues that the systematic debasement of the currency has had a negligible effect on the average American. The Fed and commercial banks have been ripping off everyone who uses dollars.
Minyanville | The Long Wave Cycle of Fed Policy
Fed policy's nature is that of a long wave because it's not something that is dictated by an intraday chart.

Blogs                                                                                                                             
Café Hayek | Podcast: BitCoin
The latest EconTalk is Gavin Andresen talking about BitCoin. BitCoin is an electronic currency with a very clever way to increase the amount of BitCoins in circulation but not by too much and in a transparent way.

Budget

News                                                                                                                             
CNS News | March Madness: U.S. Gov't Spent More Than Eight Times Its Monthly Revenue
During the month, according to the Treasury, the federal government grossed $194 billion in tax revenue and paid out $65.898 billion in tax refunds (including $62.011 to individuals and $3.887 to businesses) thus netting $128.179 billion in tax revenue for March.
Reuters | Geithner warns U.S. to hit debt ceiling by May 16
The United States will hit the legal limit on its ability to borrow no later than May 16, Treasury Secretary Timothy Geithner said on Monday, ramping up pressure on Congress to act to avoid a debt default.
WSJ | Congress Jousts as Budget Clock Ticks
Obama Calls White House Summit to Reach Spending Deal And Avert Government Shutdown; GOP Polishes 2012 Plan.
Business Insider | The 15 Countries That Are Buried Under The Most Debt
We've ranked the 15 states with the worst debt to GDP ratios, and added CDS prices (where available) to point out what the market thinks of their outlook.
Washington Times | House GOP offers last-minute shutdown reprieve
...House Republican leaders announced another one-week stop-gap spending bill late Monday night that would cut $12 billion more from 2010 spending levels.

Econ Comments                                                                                                             
NY Times | To Cut the Deficit, Look to Social Security
Solving Social Security’s problems would not only reduce the long-term deficit, but also improve the future security of retirees.
RCM | U.S. Budget: Demagoguery and Sophistry Reign
After Pelosi became speaker in 2007 and Obama became president in 2009, annual federal spending jumped $1.1 trillion - 40 percent - thanks to additional spending on Medicaid, Medicare and other forms of income redistribution…
Financial Times | History will rue US and Europe debt woes
Will 23rd-century historians look back on today's fiscal follies with the same mixture of bemusement and disdain with which we now view…
Fiscal Times | Six Fiscal Issues that Could Shut Down Government
...for those keeping score, here are six of the hottest, most pressing fiscal issues to keep an eye on in the coming days and months…
Washington Times | BOND & DEAN: Using debt ceiling to force a balanced budget
Adopting a 10-year debt-reduction plan would be a starting point.
Cato Institute | Paul Ryan's Fiscal Framework
Ryan's budget proposes spending cuts, tax reforms, and the restructuring of entitlement programs.

Blogs                                                                                                                             
Washington Post: Federal Eye | Obama administration moving forward with government shutdown plans
...top administration officials have instructed agency officials to begin sharing details of shutdown contingency plans with top managers.
Bankrupting America | Did you get your money’s worth from Congress last week?
The House passed five bills or resolutions that would cost taxpayers more than $72 billion.
Cato@Liberty | Federal Spending: Ryan vs. Obama
...Ryan’s budget plan would make crucial reforms to federal health care programs, and it would limit the size of the federal government over the long term.

Reports                                                                                                                         
Mercatus Center | The Growth of Government: Public Goods and Public Choice
Adding state and local to federal, we see that total government spending in the United States has risen markedly as a share of GDP: then [beginning postwar] about 18 percent, now about 31 percent of GDP.
House Committee on the Budget | The Path to Prosperity
Where the President has failed, House Republicans will lead. This budget helps spur job creation today, stops spending money the government doesn’t have, and lifts the crushing burden of debt. This plan puts the budget on the path to balance and the economy on the path to prosperity.

Employment

News                                                                                                                             
CNN Money | Federal workers in shutdown limbo
With just five days left before a government shutdown, federal workers are pressing lawmakers to cut a deal that will keep the government open for business.

Blogs                                                                                                                          
Forbes: Community of Liberty | Job Creation, Economic Growth And Social Justice
Last year’s tax debate pitted the Democrats, who sought to raise tax rates on “the rich,” against Republicans, who fought successfully to extend the Bush tax cuts for all Americans.
Political Calculations | March 2011 Jobs and March 2013 Unemployment
The employment situation in the U.S. showed real improvement for the second straight month in March 2011, as the number of employed Americans rose above the range of stagnation they had been in from April 2010 through January 2011.