News
CNN: Money | Recession worsens racial wealth gap
The study, from 2009 data compiled by the Pew Research Center, found the median wealth of white households was 20 times that of black households and 18 times that of Hispanic households.
Bloomberg | Oil Rises as U.S. Debt Concern Weakens Dollar, Countering Demand Concern
Oil advanced as the U.S. President’s warning that the country’s debt stalemate may damage the economy weakened the dollar, boosting the appeal of commodities and countering concern that the crisis will hurt demand.
Fox News | Treasury secretary says economy may have slowed
Treasury Secretary Timothy Geithner (GYT'-nur) says the economy may have slowed during the second quarter of the year, but he's looking for it to pick up.The economy grew at a rate of 1.9 percent from January to March. The April-to-June figures for the gross domestic product aren't yet in, but some economists have forecast them to be lower.Geithner says growth for the first half of 2011 will probably come in at 2 percent, perhaps even slightly lower.
Bloomberg | Roubini Sees Reduced Threat of Euro Breakup, Deflation in Advanced Nations
The risk of a breakup in the euro area is lower than a year ago, Nouriel Roubini, the economist who predicted the global financial crisis, said. The risk of deflation in advanced economies has also fallen, Roubini, the co-founder and chairman of New York-based Roubini Global Economics LLC, said at a conference in Shanghai today.
Market Watch | U.S. home prices rise for second month in May
U.S. home prices rose for a second straight month in May, according to data released Tuesday, though the gains could be more reflective of the new buying season than of revived demand in the struggling housing market.
Econ Comments
CNN: Money | Household debt reduction: We've only just begun
Consumers have made great strides in reducing their debts, but spending hasn't picked up. Is the borrow and spend mentality gone forever?
Washington Times | FEULNER: What really is poverty?
Most ‘poor’ are surprisingly well off.
WSJ | Twin Paralyzing Factors Keep Washington Divided
The inability, after eight months' warning, to agree on any plan to deal with deficits and raise the nation's debt ceiling isn't some freak accident. Instead, it is the logical culmination of two giant trends in American politics: an unresolved debate over the size of government and the growing hyper-partisanship of Congress, particularly the House of Representatives.
Blogs
Econlog | Resolving Financial Crises
Another challenge with today's debt crises is that there may no longer be a government with the credibility and desire to back a bank big enough to buy up all the shaky debt, which, may include the debt of a number of banks with exposure to sovereign debt.
Political Calculations | Charity in America: The Donors
Type the sentence(s) summarizing the link here.Who donated money to U.S. charities in 2010? And how much money did they give?
Heritage Foundation | Exporting Natural Gas Benefits America
Natural gas prices in the United States have been low in the past few years, and increased estimates in natural gas reserves from shale formations in Pennsylvania, New York, Texas, Oklahoma, Arkansas, and Louisiana are opening opportunities to increase exports to other nations. In some countries, natural gas prices are three times as high as they are in the United States.
Financial Times | Regulators must risk more, and intervene less
Since the devastating Japanese earthquake and, earlier, the global financial tsunami, governments have been pressed to guarantee their populations against virtually all the risks exposed by those extremely low probability events. But should they? Guarantees require the building up of a buffer of idle resources that are not otherwise engaged in the production of goods and services. They are employed only if, and when, the crisis emerges.
Reports
Heritage Foundation | Red Tape Rising: A 2011 Mid-Year Report
Following a record year of rulemaking, the Obama Administration is continuing to unleash more costly red tape. In the first six months of the 2011 fiscal year, 15 major regulations were issued, with annual costs exceeding $5.8 billion and one-time implementation costs approaching $6.5 billion.
Heritage Foundation | Will Obama Ever Learn Economics from Reagan?
Type the sentence(s) summarizing the link here.Leading the nation through hard times wasn't easy. We'd like to suggest that President Obama take a closer look at how President Reagan dealt with that "economic hardship," and how he steered the nation toward what would turn into its longest peacetime economic expansion. It's a cautionary tale — one that involves the greatest domestic error of his administration.In 1981, President Reagan's plan for revitalizing the economy was a four-fold one:
Tuesday, July 26, 2011
Taxes
Econ Comments
AEI | Should Groceries Be Exempt from Sales Tax?
As I explained in my other articles, the taxation of business purchases and the disparate treatment of consumer goods and services are irrational policies that lack coherent justification. In contrast, the exemption of groceries serves the essential purpose of easing the fiscal burden on those with limited economic means.
Blogs
Heritage Foundation | Conservatives Beware: The Boehner Plan Leads to Tax Increases
The Boehner plan has two steps. The first step cuts spending by $1.2 trillion — but over ten years, and, as usual with these plans, the deep cuts come in the later years, which makes it less likely that they will ever occur.
American: Enterprise Blog | Means Tests as Marginal Tax Increases
My gut is that an explicit means test, like that proposed by the Heritage Foundation, which would reduce Social Security and Medicare benefits by around 45 cents for each dollar of a retiree’s income above $55,000, would have its largest effect on earnings of retired individuals.
AEI | Should Groceries Be Exempt from Sales Tax?
As I explained in my other articles, the taxation of business purchases and the disparate treatment of consumer goods and services are irrational policies that lack coherent justification. In contrast, the exemption of groceries serves the essential purpose of easing the fiscal burden on those with limited economic means.
Blogs
Heritage Foundation | Conservatives Beware: The Boehner Plan Leads to Tax Increases
The Boehner plan has two steps. The first step cuts spending by $1.2 trillion — but over ten years, and, as usual with these plans, the deep cuts come in the later years, which makes it less likely that they will ever occur.
American: Enterprise Blog | Means Tests as Marginal Tax Increases
My gut is that an explicit means test, like that proposed by the Heritage Foundation, which would reduce Social Security and Medicare benefits by around 45 cents for each dollar of a retiree’s income above $55,000, would have its largest effect on earnings of retired individuals.
Health Care
News
National Journal | Small-Business Survey Suggests Suspicion of Health Care Law
It found that 20 percent of employers with 50 or fewer workers expect to change what they offer those workers, with nearly all expecting to either raise costs for their employees or reduce benefits.
Econ Comments
WSJ | A Dangerous Medicare Proposal
Price controls on Part D drugs would cripple medical innovation and undermine a successful federal entitlement program.
Blogs
Heritage Foundation | Rasmussen: 57 Percent of Americans Favor Repeal of Obamacare
A new poll reveals that 57 percent of Americans favor the repeal of Obamacare, including 46 percent who strongly favor its repeal. Meanwhile, 53 percent think the law will be bad for the country, and only 31 percent think it will be good–the lowest finding since the law’s passage.
National Journal | Small-Business Survey Suggests Suspicion of Health Care Law
It found that 20 percent of employers with 50 or fewer workers expect to change what they offer those workers, with nearly all expecting to either raise costs for their employees or reduce benefits.
Econ Comments
WSJ | A Dangerous Medicare Proposal
Price controls on Part D drugs would cripple medical innovation and undermine a successful federal entitlement program.
Blogs
Heritage Foundation | Rasmussen: 57 Percent of Americans Favor Repeal of Obamacare
A new poll reveals that 57 percent of Americans favor the repeal of Obamacare, including 46 percent who strongly favor its repeal. Meanwhile, 53 percent think the law will be bad for the country, and only 31 percent think it will be good–the lowest finding since the law’s passage.
Monetary
News
Bloomberg | Declining U.S. Growth Forecasts Keep Rates Low
With third quarter growth looking weaker than before, the probability that the Fed will ease monetary policy has risen, Hatzius said in a July 15 report. Fed Chairman Ben S. Bernanke told Congress on July 13 the central bank is prepared to take additional action, including buying more government bonds, if the economy appears to be in danger of stalling.
Market Watch | How the dollar could rise if no debt deal
It’s certainly counterintuitive, but the U.S. dollar could actually appreciate if the U.S. government doesn’t raise the debt ceiling by the Aug. 2 deadline, some strategists say.
Econ Comments
WSJ | Why the Fed Is Not Independent
The Fed's foray into fiscal policy makes for a volatile political mix that all but guarantees control from without..
Bloomberg | Declining U.S. Growth Forecasts Keep Rates Low
With third quarter growth looking weaker than before, the probability that the Fed will ease monetary policy has risen, Hatzius said in a July 15 report. Fed Chairman Ben S. Bernanke told Congress on July 13 the central bank is prepared to take additional action, including buying more government bonds, if the economy appears to be in danger of stalling.
Market Watch | How the dollar could rise if no debt deal
It’s certainly counterintuitive, but the U.S. dollar could actually appreciate if the U.S. government doesn’t raise the debt ceiling by the Aug. 2 deadline, some strategists say.
Econ Comments
WSJ | Why the Fed Is Not Independent
The Fed's foray into fiscal policy makes for a volatile political mix that all but guarantees control from without..
Budget
News
WSJ | IMF Sees Global Impact From U.S. Debt Woes
Downgrade Would Be 'Very Damaging'.
WSJ | Downgrade Threat Looms
U.S. Could Lose Top Rating; Obama Issues Stark Warning as Boehner Slams Spending.
Econ Comments
Washington Times | MILLER: Congress agrees: Keep spending
Democratic and Republican leaders preserve status quo on Capitol Hill.
Daily Caller | Don’t expect promised spending cuts to materialize
Voters should be wary of congressional promises to cut spending or taxes at some future date. Even when such promises are embedded in current legislation, politics, not law, will determine whether they are kept.
RCM | The Truth About the Debt-Ceiling Fight
The federal government can and will continue making all its payments on the debt whether it is authorized to spend past the current debt ceiling or not. The Obama administration is not telling the truth when it claims that the government will run out of money to make debt payments on August 2. It will cut spending elsewhere before it defaults.
Bloomberg | History Suggests Debt-Ceiling Fights May Be Good for Us: Echoes
...perhaps, debt-ceiling fights force presidents who would rather not focus on the glum details of economics to look more closely into the abyss of debt, rather than spending away and passing on the bill yet again.
Blogs
EconLog | Hennessey on the Debt Ceiling and the Budget Process
Keith Hennessey of Stanford University's Hoover Institution talks with EconTalk host Russ Roberts about the debt ceiling and the budget process.
Heritage Foundation | Lessons for Today from Reagan’s 1982 Deficit Reduction Compromise
You might want to consider a cautionary tale dating back to 1982 when President Ronald Reagan agreed to a deficit-reduction compromise—and a result he didn’t bargain for.
American: Enterprise Blog | Only in Washington
So what does Washington do with the money that citizens send in to reduce the debt? Turns out the federal government … spends it.
Atlantic: McArdle | The Subliminal Message of Tonight's Speeches: We're Doomed
Coupled with Boehner's rebuttal, the most plausible explanation to my mind is also the most troubling: both sides have given up making a deal, and are now just working on fixing the blame.
WSJ: Real Time Economics | Vital Signs: Increasing Wariness of U.S. Default
The spread on five-year credit default swaps on U.S. debt rose to 0.57 percentage points Monday — the highest since early 2010 — meaning the annual cost of insuring $10 million in U.S. debt against default is $57,000.
Reports
RCM: Wells Fargo Economics Group | Is the Greek Debt Problem “Solved”?
Our calculations show that the package should stabilize the government’s debt-to-GDP ratio at approximately 160 percent over the next few years. However, the calculations are sensitive to assumptions about nominal GDP growth and the government’s primary budget surplus.
WSJ | IMF Sees Global Impact From U.S. Debt Woes
Downgrade Would Be 'Very Damaging'.
WSJ | Downgrade Threat Looms
U.S. Could Lose Top Rating; Obama Issues Stark Warning as Boehner Slams Spending.
Econ Comments
Washington Times | MILLER: Congress agrees: Keep spending
Democratic and Republican leaders preserve status quo on Capitol Hill.
Daily Caller | Don’t expect promised spending cuts to materialize
Voters should be wary of congressional promises to cut spending or taxes at some future date. Even when such promises are embedded in current legislation, politics, not law, will determine whether they are kept.
RCM | The Truth About the Debt-Ceiling Fight
The federal government can and will continue making all its payments on the debt whether it is authorized to spend past the current debt ceiling or not. The Obama administration is not telling the truth when it claims that the government will run out of money to make debt payments on August 2. It will cut spending elsewhere before it defaults.
Bloomberg | History Suggests Debt-Ceiling Fights May Be Good for Us: Echoes
...perhaps, debt-ceiling fights force presidents who would rather not focus on the glum details of economics to look more closely into the abyss of debt, rather than spending away and passing on the bill yet again.
Blogs
EconLog | Hennessey on the Debt Ceiling and the Budget Process
Keith Hennessey of Stanford University's Hoover Institution talks with EconTalk host Russ Roberts about the debt ceiling and the budget process.
Heritage Foundation | Lessons for Today from Reagan’s 1982 Deficit Reduction Compromise
You might want to consider a cautionary tale dating back to 1982 when President Ronald Reagan agreed to a deficit-reduction compromise—and a result he didn’t bargain for.
American: Enterprise Blog | Only in Washington
So what does Washington do with the money that citizens send in to reduce the debt? Turns out the federal government … spends it.
Atlantic: McArdle | The Subliminal Message of Tonight's Speeches: We're Doomed
Coupled with Boehner's rebuttal, the most plausible explanation to my mind is also the most troubling: both sides have given up making a deal, and are now just working on fixing the blame.
WSJ: Real Time Economics | Vital Signs: Increasing Wariness of U.S. Default
The spread on five-year credit default swaps on U.S. debt rose to 0.57 percentage points Monday — the highest since early 2010 — meaning the annual cost of insuring $10 million in U.S. debt against default is $57,000.
Reports
RCM: Wells Fargo Economics Group | Is the Greek Debt Problem “Solved”?
Our calculations show that the package should stabilize the government’s debt-to-GDP ratio at approximately 160 percent over the next few years. However, the calculations are sensitive to assumptions about nominal GDP growth and the government’s primary budget surplus.
Employment
News
USA TODAY | Texas bucks national unemployment trend
From June 2009 to June 2011 the state added 262,000 jobs, or half the USA's 524,000 payroll gains, according to the Federal Reserve Bank of Dallas and the Bureau of Labor Statistics.
Econ Comments
Politico | Importance of skilled immigrants
...today the United States faces a skills gap in our economy. Investments in education are critical to addressing this. But so, too, is thoughtful reform of U.S. immigration laws.
WSJ | The Latest Job Killer From the EPA
The agency's ozone rule will be the most expensive in history—and isn't required by law.
Blogs
WSJ | Jobs Woes Make U.S. Labor Market Look More European
As of 2009, the researchers said the gap between labor participation rates in the U.S. and Europe has moved to a relatively modest 1.7%. The difference had already fallen to just under 5% on the eve of the financial crisis.
USA TODAY | Texas bucks national unemployment trend
From June 2009 to June 2011 the state added 262,000 jobs, or half the USA's 524,000 payroll gains, according to the Federal Reserve Bank of Dallas and the Bureau of Labor Statistics.
Econ Comments
Politico | Importance of skilled immigrants
...today the United States faces a skills gap in our economy. Investments in education are critical to addressing this. But so, too, is thoughtful reform of U.S. immigration laws.
WSJ | The Latest Job Killer From the EPA
The agency's ozone rule will be the most expensive in history—and isn't required by law.
Blogs
WSJ | Jobs Woes Make U.S. Labor Market Look More European
As of 2009, the researchers said the gap between labor participation rates in the U.S. and Europe has moved to a relatively modest 1.7%. The difference had already fallen to just under 5% on the eve of the financial crisis.
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