Thursday, April 14, 2011

General Economics

Fox | High Prices, Debt Crisis May Doom Obama's Green Energy Plans
As Congress and President Obama spar over spending cuts for the next year and beyond, new questions are being raised over whether the U.S. can afford the clean energy subsidies that the president has championed in several appearances this year and in his budget for fiscal year 2012.
WSJ | Senate Report Lays Bare Mortgage Mess
Panel Recommends a Range of Remedies for Financial Sector; 'I Found White Elephant, Flying Pig'
Fox | Higher energy prices push wholesale prices higher
More expensive gas pushed wholesale prices higher last month, although pricier cars and furniture also contributed to increase.

Econ Comments                                                                                                             
NRO | Libertarian Paternalism, Twisted
When you ban something, you are not helping people make choices, but taking choices away.
Minyanville | Navigating the Markets and Economy
The price of oil, action in the stock markets, and the Fed's policies ahould all be of great concern for investors.

Café Hayek | The housing boom and bust, part 2
In this post, I suggested that the spike in housing prices starting in 1997.
Heritage Foundation: The Foundry | When Trade is Free, the U.S. Gains Investment and Jobs
The argument against U.S. companies investing abroad typically goes as follows: “Companies are just trying to substitute cheap foreign labor for expensive U.S. labor. The United States loses jobs, capital, and technology when companies go offshore to employ cheaper foreign labor.”

RCM: Wells Fargo | Retail Sales Gain Despite Slip in Auto Sales
Retail sales increased for the ninth straight month. A 1.7 percent decline in auto sales was offset by a jump at gas stations where higher fuel prices boosted sales.

Health Care

CNN: Money | Obama lays out plan for cutting Medicare, Medicaid
The proposal, which would save $340 billion over the next 10 years, relies on controlling prescription drug costs and overhauling how the federal government funnels Medicaid money to states. It also gives more cost-cutting power to an advisory board created by last year's health care reform law.
NationalJournal | Gov. Patrick: Mass. Health Budget Woes Due to Premium Costs
This week marked five years since Massachusetts passed the landmark health care law, which was the framework for President Obama’s health care reform. While the state celebrates having 98 percent of the population insured, rising premium costs are crippling the government.

Econ Comments                                                                                                             
RCM | Tackling the Runaway Medicare Train
With the 2011 budget battle seemingly resolved, the Republicans and President Obama are turning to the federal budget for fiscal year 2012, which starts October 1.
Washington Times | ARCHAMBAULT: Massachusetts model mismatch
More states should have experimented before Washington imposed a health care plan.

Greg Mankiw's Blog | Two Visions for Medicare
What I found most interesting is the contrast between the President's vision for Medicare and Congressman Ryan's.  There are two major issues:
Fiscal Times | Obama Blasts Obamacare
President Obama addressed the nation yesterday, unintentionally providing a devastating critique of his healthcare bill. In speaking about the need to reduce our out-of-control deficit, Mr. Obama made it abundantly clear that soaring healthcare expenditures are one of the main sources of our fiscal woes.


CNN Money | Bye, bye tax breaks. Hello lower rates
President Obama on Wednesday officially threw his weight behind an idea to revamp the way Americans currently pay their individual tax bills, getting rid of popular breaks to lower all income brackets.
Fiscal Times | What's Rich? Down and Out on $250,000 a Year
Once again, the president has declared that a couple making $250,000 a year is wealthy and should pay a higher tax rate. In his deficit speech Wednesday, he said, "At a time when the tax burden on the wealthy is at its lowest level in half a century, the most fortunate among us can afford to pay a little more. I don't need another tax cut. Warren Buffett doesn't need another tax cut."
Politico | Polls: Most believe taxes are fair
As Tax Day approaches, most Americans say they think the taxes they pay are fair, though they’d like the government to cut spending and not raise taxes to combat the ballooning budget deficit, two new polls suggest.

Econ Comments                                                                                                          
RCM | The U.S. Faces a Growing Tax and Debt Bomb
We thought tax reform meant lowering rates and broadening the base by eliminating or cutting back on various deductions, credits, and loopholes. That's what the Bowles-Simpson commission proposed. That's what Paul Ryan and David Camp are working on. And that's the pro-growth model.
AEI | What's Rich? Down and Out on $250,000 a Year
President Obama's plan recycles two of his longstanding tax proposals, the expiration of the Bush tax cuts for high-income households and a limitation on itemized deductions claimed by those households. But the plan adds a new element by calling for additional curtailment of tax preferences to further broaden the income tax base.
AEI | The Tax Code’s Burdens on Families and Individuals
Testimony before the House Ways and Means Committee.
Cato Institute | Obama's Soak-the-Rich Tax Hikes Won't Work
President Obama's response to congressional efforts to curb runaway federal spending is to emphasize, once again, his resolve to greatly increase tax rates on married couples whose joint incomes are above $250,000. This insistent desire to raise taxes — which he repeated in a speech yesterday while complaining about "trillions of dollars in ... tax cuts that went to every millionaire and billionaire in the country" — is a distraction. It won't solve our nation's fiscal problem.
USA Today | Opposing view: We don't need tax increases
Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff, warned that the greatest threat facing our nation is our debt. To get out of this crisis we will need a serious, responsible budget that cuts back on bloated federal spending, which now controls nearly 25% of our entire economy.
WSJ | Obama's Soak-the-Rich Tax Hikes Won't Work
Income tax revenues have been remarkably stable at 8% of GDP, regardless of tax rates. The way to increase revenue is to grow the economy.

Mercatus Center: Neighborhood Effects | Is There a Bad Way to Cut Taxes?
Good tax policy should strive for horizontal equity, meaning that similarly-situated taxpayers should face the same tax rate. Taxes that fail this test are unfair.
NRO: The Corner | Not a Victory for Taxpayers
Reading what Dean Baker and Katrina vanden Heuvel have to say about the budget deal in the Wall Street Journal, one would think that $1 trillion was trimmed from the budget last Friday night.
Cato@Liberty | Obama’s Tax Increase Trigger: Punishing Taxpayers with Automatic Tax Hikes When Politicians Overspend
Responding to widespread criticism of his AWOL status on the budget fight, President Obama today unveiled a fiscal plan. It already is being criticized for its class warfare approach to tax policy, but the most disturbing feature may be a provision that punishes the American people with higher taxes if politicians overspend


CNBC | Banks Face $3.6 Trillion 'Wall' of Debt: IMF
The world's banks face a $3.6 trillion 'wall of maturing debt' in the next two years and must compete with debt-laden governments to secure financing, the IMF warned on Wednesday.
Bloomberg | Geithner Says Financial Markets Showing Confidence in U.S. Fiscal Position
There is “a lot of confidence in markets that the American political system will be able to get our fiscal path in a sustainable position,”
Forbes | Why Are The Republicans So Silent On The Falling Dollar?
The failure of our fiat currency is up for political grabs.
Yahoo: Finance | BRICS demand global monetary shake-up, greater influence
The BRICS group of emerging-market powers kept up the pressure on Thursday for a revamped global monetary system that relies less on the dollar and for a louder voice in international financial institutions.
WSJ | In Euro's Hour of Need, Aide Gets 'Madame Non' to Say Yes
As Europe's debt crisis threatened to spiral out of control, German Chancellor Angela Merkel boarded a Luftwaffe jet on Nov. 10 with her finance minister, Wolfgang Schäuble, for an overnight flight to a global summit in South Korea.
WSJ | Strong Currency Threatens Ireland, Portugal
As currency hits 15-month high against the dollar, Ireland, Portugal are seen most vulnerable to a hit to exports.

Econ Comments                                                                                                             
MarketWatch | Federal Reserve’s path of destruction
The destructive result of the Federal Reserve’s earlier housing and consumer credit bubble became the excuse for embracing a destructive zero interest rate policy which is self-evidently fueling even more destruction.
WSJ | Dollar Has Come Down With a Heavy Cold
The dollar looks as it might have caught more than just a common cold. Over the past day or so, the U.S. currency has had a classic opportunity to rally. Global risk appetite has subsided, commodity currencies have fallen and investors were only too keen to take profits. But the dollar's response to all this has been feeble.
Minyanville | Expect Fed Rate Hike on Signs of Sustainable Growth Ahead
The Fed is likely to raise short-term interest rates in the second half of 2011 due to three reasons, including improved signs of core inflation and available money.
Minyanville | Worldwide Inflation Impacting Recovery
Recent reports revealed declining imports and exports and rising import and export prices. Much of this is due to inflation -- not only in the US, but worldwide.

WSJ: MarketBeat | Euro-Zone Debt Woes Rising Once Again
More than a year after Greece opened the euro-zone debt crisis, the situation remains far from resolved.


Yahoo | Pentagon warns on big defense cuts
The United States may have to scrap some military missions and trim troop levels if President Barack Obama sticks with his goal of saving $400 billion on security spending over a 10-year period, the Pentagon said on Wednesday.
CNN: Money | Deficit hawks: Not too bad, Mr. President
He may have taken his time to join the brewing debate about how to reduce long-term U.S. debt. But President Obama got some kudos from deficit hawks for the broad debt reduction framework he laid out on Wednesday.
Econ Comments                                                                                                             
NYT | In Budget’s Fine Print, Real and Illusory Cuts
Few financial problems have generated more public attention in the last few years than mortgage fraud, one of the triggers for the nation's housing collapse. But even government officials seeking to combat a front burner issue like that one are feeling the sting of the budget deal struck last Friday to aver a federal shutdown.
WSJ | The Presidential Divider
Obama's toxic speech and even worse plan for deficits and debt.
Washington Times | MURDOCK: How the GOP can keep its $100 billion promise
Seize tens of billions in forgotten funds and add them to $38.5 billion deal
Who Will Speak for National Security? | Obama Guts Defense
Who Will Speak for National Security?
NRO | Paul Ryan vs. the Mythmakers
The CBO's actual projections for the Ryan plan show a debt level in 2021 that is $4.7 trillion lower than its projections for Obama's budgets.
NRO | Strike One
We initially supported the deal House Speaker John Boehner cut with the White House to cut $38.5 billion from the rest of the fiscal year 2011 budget. I t was only a pittance in the context of all of Washington's red ink but it seemed an acceptable start, even if we assumed it would be imperfect in its details.
RCM | The U.S. Faces a Growing Tax and Debt Bomb
Sometime in mid to late May, the debt ceiling to allow the government to borrow more money is going to run out. The Treasury can move money inside government accounts to forestall a debt breakdown for another couple of months.
Fox Business | $38 Billion in Cuts? Not Even
Today's Wall Street Journal says that the $38 billion in cuts that were agreed upon last week to keep the government from shutting down were actually more like $ 20 billion…once you account for some accounting scams.
Washington Times | BACON: Policy of hope trumps budgetary change
Obama’s plan delivers imaginary solutions and tax increases.

The Economist: Free Exchange | Obama's counter-punch
President Obama's strategy on the long-term deficit has been, for the most part, to talk tough but waffle on the specifics in the hope that a better economic and political backdrop will present itself.
Café Hayek | Not even a deck chair on the Titanic
A Congressional Budget Office analysis of the fiscal 2011 spending deal that Congress will vote on Thursday concludes that it would cut spending this year by less than one-one hundredth of what both Republicans or Democrats have claimed.
Cato@Liberty | Budget Agreement: Overall Spending Increases
Based on estimates from the Congressional Budget Office, total federal outlays will still rise by approximately $177 billion.
The Economist: Free Exchange | Do nothing, sure, but how?
A government is basically a means through which powerful interests protect themselves from unpleasant change. If it turns out that protecting these powerful interests from unpleasant change is unsustainably costly, then one must either make the interests less powerful or the change less unpleasant.


CNN Money | New unemployment claims surge to 412,000
The number of Americans filing first-time claims for unemployment benefits rose last week, a sign that the job market's road to recovery remains bumpy.
USA Today | More Americans leaving workforce
Roll over each state to see the share of the population working in 2010.

Calculated Risk | BLS: Job Openings increase in February, Highest since 2008
From the BLS: Job Openings and Labor Turnover Summary.