Wednesday, February 1, 2012

General Economics

Washington Times | Home prices dropped in November in most U.S. cities
Prices dropped in November from October in 19 of the 20 cities tracked, according to the Standard & Poor’s/Case-Shiller home-price index released Tuesday.
WSJ | Contraction Threat Clouds Euro Zone
New economic data brought more signs that the euro-zone economy contracted at the end of last year, with December consumer spending in the currency area's two largest economies dropping sharply and unemployment staying elevated throughout the region.

Econ Comments & Analysis                                                                                            
CATO | No More Bipartisan Bailouts
One of the few lines in President Obama’s State of the Union address that actually received bipartisan applause was his vow of “no bailouts, no handouts, and no cop outs.
Bloomberg | Obama Plans Assistance for Rentals, Refis
President Barack Obama will announce a package of proposals to jolt the housing market out of its doldrums, including an effort to help more borrowers take advantage of historically low mortgage interest rates, the White House said today.
Washington Times | Clean-energy hostages
“Let the fossil fuels go, or the wind industry gets it in the wallet.” That’s the threat congressional Republicans need to convey to their colleagues across the aisle to stop the Obama war against fossil fuels.
WSJ | Price Controls for Harvard?
In his State of the Union address last week, President Obama said he wants the federal government to assert control over the rapidly rising cost of college tuition. His objective is to force all schools receiving federal aid—which is nearly all of them—to justify their tuition increases or lose the aid. Where to begin?
Washington Times | Low scores for Obama economy
The Republicans’ presidential primary slugfest has all of our attention right now, but the general election race is really the more interesting story.
WSJ | Class Warfare
The House votes today on repealing one of the Affordable Care Act's major new subsidy programs, and the referendum deserves more attention than it will probably get.
Washington Times | Obama risks trade war with China
President Obama indicated that he’s willing to risk a trade war with China, possibly leading to a swift closure of new markets for U.S. goods and services - the exact opposite of his stated goal.

Daily Capitalist | Income And Spending Slowed To A Crawl In 2011
After all the hype about the great holiday season for retailers, the data just came in saying that personal consumption expenditures were actually flat for December, actually real PCE went down 0.1%.
Political Calculations | The Millionaire Decay Function
Did you know that the most downwardly mobile members of society are millionaires? It's true, and what's more, we have the data and math to prove it!

Health Care

Politico | CLASS Act: Abandoned yet defended
No one knows what CLASS is, in the view of these strategists. The individual mandate is the only health reform issue anyone cares about. And every day spent repealing an abandoned program is another day of Congress doing nothing — Obama’s favorite theme.
National Journal | Breast Cancer Charity Pulls Funds From Planned Parenthood
A major breast-cancer charity has cut off support for Planned Parenthood because of controversy over abortion and the group’s standing as a provider of generalized women’s health services.

Econ Comments & Analysis                                                                                            
Politico | Implementing health reform
Consumers dread choosing health insurance, as various surveys show, largely because they don’t understand it. But the new health care law now calls for uniform health insurance summaries, available to all consumers starting in 2012. The Affordable Care Act requires that this summary be “understandable to the average plan enrollee.”

Heritage Foundation | Obamacare: CLASS Act Repeal Vote Approaching in the House
The House of Representatives is expected to vote as early as tomorrow on H.R. 1173, the Fiscal Responsibility and Retirement Security Act of 2011. This bill would repeal the CLASS Act, Obamacare’s new long-term care entitlement.


Bloomberg | Fed Bank Presidents Reveal Assets From Ranchland to Inflation-Linked Bonds
Federal Reserve regional bank presidents revealed unprecedented details about their personal wealth, disclosing Citigroup Inc. (C) shares bought by accident and ownership of a Missouri farm and Texas ranchland.

Econ Comments & Analysis                                                                                            
Market Watch | Fed's Plosser: Inflation needs careful watching
Inflation may moderate in the near term but that doesn't mean the Federal Reserve can relax, said Charles Plosser, the president of the Philadelphia Federal Reserve Bank on Wednesday.

WSJ | Senators: Get Rid of Dollar Bills
Sens. Tom Harkin (D., Iowa), John McCain (R., Ariz.) and two colleagues Tuesday are introducing legislation that would kill off the dollar bill in favor of dollar coins, touting the move as a way to cut costs over the long run


CNBC | Obama Wants Tax Breaks for Small Business
White House officials say President Barack Obama will call on Congress Tuesday to pass legislation that, among other measures, would eliminate tax rates on capital gains for investments in small businesses and extend for a year the ability of all businesses to immediately deduct all of the costs of equipment and software purchases.
National Journal | CBO Predictions Show Just How Significant Bush Tax Cuts Will Be
 If those tax provisions are extended, the CBO snapshot of federal receipts and the deficit would drastically change (and become more depressing).

Econ Comments & Analysis                                                                                            
CATO | A Flat Tax Is the Answer
Meanwhile, previewing a theme for the general election, President Obama said in his State of the Union address that "millionaires and billionaires" should cough up at least 30 percent of their earnings to the IRS. This is bad policy based on inaccurate data.

Tax Foundation | Fix the Current AMT Before Creating a New One
In response to President Obama's State of the Union address, in which he called for a "Buffett Rule" setting a minimum tax of 30% for households making over $1 million, a group of Democratic senators have introduced legislation doing just that.


Bloomberg | Jobs Increase as Health Care Eclipses Factories
While the economy lost 7.5 million positions during the recession, health care expanded staff. Together with social assistance, it will add 4 million employees to become the second-biggest job gainer by 2018
Washington Times | Eurozone unemployment ends 2011 at record high
Eurostat, the EU’s statistics office, said the 10.4 percent unemployment rate in December was unchanged at its highest level since the euro was launched in 1999, as November’s was revised upward from a previous estimate of 10.3 percent.
Market Watch | January private-sector jobs rise 170K: ADP
Private-sector payrolls increased 170,000 in January, led by the service-providing sector and small businesses, according to the ADP employment report released Wednesday.

WSJ | Determining Why People Stop Working Is Key
When Friday’s jobs report comes out, the January unemployment rate is expected to stay at 8.5%. That doesn’t mean, however, that 91.5% of the U.S. population is working.
Marginal Revolution | Youth unemployment across Europe
The unemployment ratio – that is, the number of unemployed people over the population rather than the labor force is arguably a more consistent indicator across countries.


USA Today | Obama won't come close on pledge to halve deficit, CBO says
The president said in February 2009 that the $1.3 trillion deficit he inherited would be cut in half under his budget blueprint, but according to the CBO, the deficit in 2012 will continue to hover around $1 trillion, and fall to just under $1 trillion next year if current tax laws are extended, as expected.
Politico | Congressional Budget Office reports another $1 trillion deficit
For the fourth year in a row, Washington faces a $1 trillion-plus deficit and just servicing the nation’s debt will soon cost as much as paying for Medicaid, the federal-state health care program for the poor and disabled.
Market Watch | CBO sees falling deficits in 2012, 2013
The U.S. budget deficit will shrink in fiscal 2012 and 2013, the Congressional Budget Office estimated on Tuesday, improving from last year but still high enough to keep up intense election-year pressure on the White House and lawmakers to address government red ink.
CNN Money | Europe's debt crisis: Where things stand
After wreaking havoc in global financial markets last year, the debt crisis in Europe has entered a complicated new phase in 2012.

Econ Comments & Analysis                                                                                            
WSJ | $5 Trillion and Change
The political strategy behind Obamanomics was always simple: Call for "stimulus" to rescue the economy, run up the debt with the biggest spending blitz in 60 years, and then when the deficit explodes call for higher taxes.
CBO | Testimony on the Budget and Economic Outlook: Fiscal Years 2012 to 2022
The federal budget deficit—although starting to shrink—remains very large by historical standards. How much and how quickly the deficit declines will depend in part on how well the economy does over the next few years.

CATO | New Congressional Budget Office Numbers Once Again Show that Modest Spending Restraint Would Eliminate Red Ink
Back in 2010, I crunched the numbers from the Congressional Budget Office and reported that the budget could be balanced in just 10 years if politicians exercised a modicum of fiscal discipline and limited annual spending increases to about two percent yearly.
WSJ | CBO: TARP Spending Will Be $61 Billion More in Fiscal 2012
The federal government will spend roughly $61 billion more in fiscal 2012 than it did in fiscal 2011 on its continuing emergency rescue fund instituted at the height of the 2008 financial crisis, the nonpartisan Congressional Budget Office said.
WSJ | Economic Projections and Key Numbers From CBO Budget Report
The nonpartisan Congressional Budget Office released its latest budget and economic forecasts this morning. Both Democrats and Republicans will find campaign trail fodder in the report, as well as reason for concern.