Tuesday, April 19, 2011

General Economics

CNN Money | Housing construction shows strength
In an encouraging sign for the housing market, new home construction increased more than expected in March, according to a government report Tuesday.
Washington Times | Shoppers squeezed by spat over debit card use
At issue are ‘swipe fees’ to be charged at the register.

Econ Comments                                                                                                             
WSJ | When Big Government Goes to College
The more the feds try to lower the cost, the worse the problem becomes.

Cato Institute | Fannie Mae, Freddie Mac, and the Future of Federal Housing Finance Policy: A Study of Regulatory Privilege
How the two companies should exit their conservatorship has implications that reach throughout the global financial markets and are of key importance to the future of American housing finance policy.
Heritage Foundation | Federal Highway Program Shortchanges More Than Half the States
Under the laws governing the federal highway program, the federal fuel taxes paid into the trust fund by motorists (18.3 cents per gallon) and truckers are returned to the states by a series of mathematical formulas that attempt to match the scope and usage of each state’s surface transportation system with payments received from the trust fund.[1] These formulas, however, embody a number of serious flaws that cause many states (called donors) to consistently receive shares that are less than they pay in, while others (called donees) consistently receive more.

Health Care

Politico | Boston Globe has Mitt Romney's back on health care
After a week of broadsides marked the fifth anniversary of his controversial Massachusetts health care law, Mitt Romney is getting some support from his home state paper. In an editorial Monday the Boston Globe writes that conservatives should giver Romney credit for "warding off various schemes feared by business."

Econ Comments                                                                                                             
WSJ | ObamaCare Opt Out
States turn down money for the law's new insurance exchanges.
NRO | The Road to IPAB
If you love Medicaid, you'll adore the new version of Medicare.
NRO | Government Makes a Poor Physician
Federal health guidelines do more harm than good.

Heritage Foundation | The President’s Medicare Plan: A Trojan Horse to Ration Health Care?
Medicare, the federal health care program for America’s seniors, represents $30.8 trillion in long-term unfunded obligations. If Medicare’s runaway costs are not reined in, the program could cease to exist for future generations.
NRO: The Corner | IPAB, Obama, and Socialism
They're back. Rationing, death panels, socialism, all those nasty old words that helped bring Republicans victory in 2010, and that came to seem so impolite after November of that year. They're back because of IPAB (Independent Payment Advisory Board).

Heritage Foundation | Why Accountable Care Organizations Won’t Deliver Better Health Care—and Market Innovation Will
The Patient Protection and Affordable Care Act (PPACA) creates federal “accountable care organizations” (ACOs). In theory, ACOs provide financial incentives to health care organizations to reduce costs and improve quality. In reality, given the complexity of the existing system, ACOs will not only fail; they will most likely exacerbate the very problems they set out to fix.


WSJ | State Tax Collections Tick Up
While Higher Levies Help Refill Capital Coffers, Cities Face Weakening Revenue.

Reason: Hit & Run | America's Tax System In Just 72,536 Easy Pages
It's no wonder that even the government's own experts and officials can't figure it out. Any system of rules that requires in excess 72,000 pages to explain and understand borders on useless.


Bloomberg | Bernanke May Sustain Stimulus to Avoid ‘Cold Turkey’ End to Aid
Federal Reserve Chairman Ben S. Bernanke may keep reinvesting maturing debt into Treasuries to maintain record stimulus even after making good on a pledge to complete $600 billion in bond purchases by the end of June.
MarketWatch | Dollar slips versus euro as debt fears ease
The U.S. dollar lost ground Tuesday, while the euro rebounded from earlier losses as positive economic data balanced out worries about debt problems in Europe’s so-called periphery.

Econ Comments                                                                                                             
MSN | Worrying about QE2
The end of the Fed's program of quantitative easing will bring plenty of bumps but won't crash the US economy. Emerging markets could be in for a rockier road.
Minyanville | Finland's Election Results to Fuel Surge in US Dollar?
Finland doesn't normally sway world markets, but does have the ability to veto any proposed bailout by the European Union.
AEI | Shooting the Messenger European Style
Judging by the recent actions of European parliamentarians, one could be excused for thinking that the primary cause of the European sovereign debt crisis was short selling by foreign speculators in general and the existence of the small European Credit Default Swap market in particular.
Ludwig von Mises Institute | The EU Crackup
The core issue is whether Finland ought to be paying for bailouts for other EU states. In reaction to establishment support for the bailout, voters ousted the pro bailout ruling party and gave an upset victory to the bailout-critical conservative party.

The Economist: Free exchange | Type the Title You Want People to See
The big risk now is that Europe will finally recognize the need for restructuring in Greece, but will again pursue half-measures that fail, once more, to get ahead of markets.


WSJ | Big U.S. Firms Shift Hiring Abroad
Work Forces Shrink at Home, Sharpening Debate on Economic Impact of Globalization
CNN Money | McDonald's hiring 50,000 workers today
Tuesday is the day McDonald's plans to hire 50,000 workers -- or roughly four people per restaurant -- in a hiring blitz that spans all 50 states.


CNS News | U.S. Debt Tops $14.3 Trillion for First Time
By the close of business Friday, the debt had climbed to $14.31 trillion ($14,305,336,580,992.11), an increase of $34.54 billion ($34,544,461,807.22).
Reuters | Geithner: no risk U.S. will lose AAA credit rating
…saying political prospects for long-term deficit reduction were improving.
CNN Money | Which debt plan do economists favor? Neither
…eight out of 18 economists polled said they believed neither President Obama's nor Republican Paul Ryan's plans for deficit reduction are in the best interest of the nation's economy.

Econ Comments                                                                                                             
WSJ | The Obama Speech Downgrade
S&P's 'negative' outlook on the President's budget strategy.
Politico | Why we must freeze the debt limit
A temporarily frozen debt limit could instead signal U.S. lawmakers’ resolve to get our fiscal house in order. It may even reassure investors about long-term U.S. economic prospects.
Minyanville | Interest on National Debt is Biggest Projected Problem, Not Healthcare
For a budget plan to work, it must act fast, cut interest on US debt, and make someone accountable.
Cato Institute | Ryan's Way Is the Better Way
...Medicare is facing huge unfunded liabilities. It would have to be given at least $45 trillion now to cover all shortfalls for as far out as can reasonably be projected.

WSJ: Real Time Economics | Who Are the Other Triple-As?
Standard & Poor’s Corp. cut its outlook on U.S. debt to negative, raising concerns that the country could eventually lose its triple-A rating, enjoyed by just 20 nations.
Political Calculations | What Forced Obama to the Deficit Cutting Table?
...the President's FY2012 budget proposal actually proposes to borrow money to pay for paying out Social Security benefits, which counts against the higher taxes and reductions in discretionary expenditures…
WSJ: Real Time Economics | Economists React: S&P Outlook Cut ‘No Big Deal’
Economists and others weigh in on S&P’s decision to put the U.S. sovereign rating on a negative outlook.
Atlantic: McArdle | There's No Such Thing As Deficit Reform Without Pain
One point to keep in mind, though: it's quite easy in theory for spending to exceed our taxing power. But tax revenue can't.
Cato@Liberty | Budget Cuts Look Familiar
They were all cut in 1995 under a rescissions package engineered by then-Speaker Newt Gingrich and cut last week in the budget agreement reached by Republican and Democratic leaders.