Friday, December 9, 2011

General Economics

USA Today | Economists hold sizable role in determining EU's future
As leaders of the European Union meet this week to try to resolve Europe's debt crisis, economists will play a major role in the success or failure of efforts to prevent the region from lapsing into a deep recession.
Politico | Poll: 3/4 say don't reelect Congress
Seventy-six percent of respondents said most members of Congress do not deserve to be reelected, while just 20 percent said they deserve to be sent back to office.
National Journal | Keystone XL Pipeline: Just the Facts
The Keystone XL pipeline is a 1,700-mile, $7 billion project that would bring 700,000 barrels of carbon-heavy tar-sands oil per day from Alberta, Canada, to refineries on the Gulf Coast. It would be an extension of a pipeline that became operational in June 2010 and already carries crude oil from Alberta to Illinois and Oklahoma.
Market Watch | Trade deficit narrows to $43.5 billion in Oct.
Smallest gap this year, but Q3 GDP may be downwardly revised.
Politico | European downgrade could squelch U.S. recovery
Right as the U.S. economy has finally shown signs of steadying itself, a Standard & Poor’s downgrade of Europe could kick the legs out of the recovery.
CNN: Money | Household wealth takes biggest hit since '08
The Federal Reserve said the net worth of households fell by $2.2 trillion, or 4.1%, to end at $57.4 trillion. The decline comes to about $7,800 for every U.S. resident.

Econ Comments                                                                                                             
WSJ | How the U.S. Can Help Europe: Just Say No
The greatest threat to our economy is not the debt crisis across the pond, but the one right here on American soil.
WSJ | Europe's Growth Deficit
The Continent tries to tax its way back to prosperity.
Cato Institution | Income Inequality Data Has Flaws
Far too many policymakers, analysts, and reporters assume that the data showing rising inequality is carved in stone, but it isn’t.

WSJ: Real Time Economics | Vital Signs: Student, Car Loans Lead Rise in Borrowing
U.S. consumers increased their borrowing in October. Overall consumer credit outstanding rose $7.6 billion from September to $2.457 trillion.
Political Calculations | Scheduling the Next U.S. Recession
Thanks to the Fed's excursion into Zero Interest Rate Policy (aka "ZIRP"), we can't use our dedicated tool that reckons the odds of a recession up to a year in the future.
WSJ: Real Time Economics | Economists React: No Silver Bullet From ECB
The ECB said in its monthly policy remarks Thursday that it will make two offers of unlimited 36-month credit to euro-zone banks; will cut its reserve requirement for commercial banks to 1% from 2%; and will widen the pool of assets it accepts as collateral for ECB loans to ensure easier access to funds for banks. It also cut its key rate to 1%.
AEI: The American | Obama’s economic plan? Back to the ’70s!
Obama clearly thinks the “last few decades” have been a disaster for the U.S. economy, that America’s 30-year economic experiment in enhanced economic freedom—lower tax rates, less regulation, freer trade—has been a failure.
WSJ: Real Time Economics | Unrealized Assumptions Could Alter 2012 Forecasts
The 54 economists see a 2.3% expansion for 2012, compared with an expected rate of 1.7% for 2011. Although an improvement, that isn’t fast enough to tame unemployment. On average, they see that rate still at 8.5% in December 2012, compared with the 8.6% reported in November this year.
NRO: The Corner | Private vs. Public Sector Pensions
Few who don’t work for the government sector have comparable assets. Over the last several decades, the private sector has moved increasingly to the 401(k)-style “defined contribution” model, which yields a retirement nest egg based on what both employers and employees have contributed to individual accounts.
WSJ: Real Time Economics | Equity Gap: Companies Looking to Issue Stocks May Find Too Few Buyers by 2020
We have the gender gap and the income gap. Prepare for the equity gap.

NBER | How Did the Recession of 2007-2009 Affect the Wealth and Retirement of the Near Retirement Age Population in the Health and Retirement Study?
This paper uses asset and labor market data from the Health and Retirement Study (HRS) to investigate how the recent "Great Recession" has affected the wealth and retirement of those in the population who were just approaching retirement age at the beginning of the recession, a potentially vulnerable segment of the working age population.

Health Care

National Journal | QUICK TAKE: House Doc Fix Cuts Health Reform Law
House Republicans' latest proposal to avert a 27 percent cut to Medicare doctors’ pay will take a sizeable chunk from the 2010 health reform law, according to multiple sources on Capitol Hill and K Street.

AEI: The American | Chronic health spending: Healthcare fact of the week
Admittedly, 9 of every 10 dollars in adult health spending can be attributed to those who have at least one chronic condition.
Heritage Foundation | Medicare Needs a Budget and Structural Reform
Medicare faces a dismal future that could threaten its very existence. In two recent papers, Stuart Butler, Ph.D., and Robert Moffit, Ph.D. of the new Heritage Center for Policy Innovation analyze the problem and offer detailed solutions on how to reverse course.


WSJ | Inflation Rate Seen Outpacing Home Prices for Years
The ailing housing market is unlikely to return to health before 2016 and is weighing on the two-year-old U.S. recovery, which finally is showing signs of picking up steam.
CNN: Money | China's inflation rate: Lowest since September 2010
Inflation in China is losing some of its momentum, triggering a shift to worries focused more so on the country's slowing economic growth.

AEI: The American | What happens if the euro collapses?
That is the question Citigroup tries to answer in a new note. The bank’s forecast is global depression and possibly war. But lawyers would do OK.
Minyanville | Could Currency Collapse Lead to Economic Collapse in the US
Currency collapses are very painful, but they don't necessarily spell doom for society. Yet the harsh truth is, the US is trending in a dangerous direction.


Market Watch | Republicans link payroll tax cut to oil pipeline
House Republican leaders on Thursday linked speeded-up approval of a controversial oil pipeline to extending a payroll tax cut and unemployment benefits, picking a fight with President Barack Obama with just three weeks remaining for Congress to renew the expiring aid.

Econ Comments                                                                                                             
WSJ | Europe's Growth Deficit
The Continent tries to tax its way back to prosperity.
Washington Times | PINKERTON: Rising tide for the American people
Prosperity goes up as corporate tax rate goes down.
WSJ | The Millionaire Subsidy Elimination Act
Cutting benefits to those who don't need them is a better way to trim deficits than hurting the economy with higher tax rates.

Marginal Revolution | Stephen Williamson on inequality and taxation
...I think it is likely that tax revenue is much more elastic with respect to the tax rate, particularly in the long run, than Diamond and Saez are letting on. To evaluate this properly, you need a serious model, and they have not provided one.

CRS | Reasons for the Decline in Corporate Tax Revenues
Corporate tax revenues have declined over the last six decades. In the post-World War II era, corporate tax revenue as a percentage of gross domestic product (GDP) peaked in 1952 at 6.1%. Today, the corporate tax generates revenue equal to approximately 1.3% of GDP.


Fox News | Unprecedented Boom Has Jobs Looking for People in North Dakota
While most of the country is still mired in a troubled economy, North Dakota is riding an unprecedented boom that has jobs looking for people, rather than the other way around.

Heritage Foundation | Regulation: You Can’t Have Jobs and Eat Them, Too
As Heritage experts James Gattuso and James Sherk point out, “unemployment… has remained high, because job creation has been extremely low.” While certain lawmakers on Capitol Hill claim that regulations have no negative impact on jobs, the facts—and employers—say otherwise...
Coordination Problem | Regime Uncertainty and the Labor Market
Think of it this way:  regime uncertainty creates discouraged capital which, given that it is ultimately complementary in turn means we have more discouraged labor.
Calculated Risk | Labor Force Participation Rate: The Kids are Alright
In the long run, more education is a positive for the economy (although I am concerned about the surge in student loans). This increase in education enrollment suggests we should look at the prime working age (25 to 54) for changes in the participation rate and employment-population ratio due to the recent recession.


NY Times | Treaty to Save Euro Takes Shape, but Britain Sits Out
Importantly, all 17 members of the European Union that use the euro agreed to the new treaty, along with six other countries who wish to join the currency union one day.
NY Times | Europe’s Debt Crisis Brings Two Former Foes Closer Than Ever
In the battle over how to save the euro, Germany has plenty of leverage but not many friends. Among its staunchest supporters is also one of the most surprising, its historic enemy, Poland.

Econ Comments                                                                                                             
Washington Times | ROKITA: New austerity in our future
Greece’s devastating economic squeeze could happen here.
Minyanville | Tackling the Ongoing Problem of Too Much Debt
A certain amount of debt can help an economy grow. But there's a point at which too much of it becomes harmful.

Heritage Foundation | Chairman Ryan’s Proposals for Fixing the Budget Process
To say “the budget process is broken,” as many Members of Congress like to complain, is a little misleading.