Thursday, December 20, 2012

General Economics

News                                                                                                                             
Market Watch | Leading economic index drops 0.2% in November
The U.S. economy looks to be slowing, the Conference Board said Thursday as it reported its leading economic index dropped in November. The leading economic index dropped 0.2% in November, in line with the MarketWatch-compiled economist consensus and the fourth fall of the year.
Market Watch | Sales of existing homes rise 5.9% in November
Sales of existing homes rose 5.9% in November to a seasonally adjusted annual rate of 5.04 million, reaching the highest rate since November 2009, when a tax credit was expected to expire.
WSJ | Senate GOP to Propose $24 Billion Sandy Package
Senate Republicans will soon propose a $24 billion aid package for superstorm Sandy rebuilding efforts as an alternative to the $60 billion plan being pressed by Senate Democrats.
Bloomberg | Obama Proving $418 Billion Bailout No Failure as GM Buys
The U.S. Treasury’s plan to sell its remaining 32 percent stake in General Motors Co. (GM) is a leap forward for the Obama administration’s effort to end a $418 billion bailout program that in four years was transformed from a political albatross to a winning campaign issue.
Washington Times | U.S. economy grew by 3.1 percent in summer
The U.S. economy grew at an annual rate of 3.1 percent over the summer as consumers spent more and state and local governments added to growth for the first time in three years — but the economy is likely slowing in the current quarter.
WSJ | Report Says Libor-Tied Losses at Fannie, Freddie May Top $3 Billion
That figure is among the largest potential losses reported amid the unfolding Libor scandal and comes as federal officials remain mum on how the alleged manipulation cost the government.

Econ Comments & Analysis                                                                                            
AEI | How to restructure Social Security
To see how we might reform the structure of Social Security, we need to get into the nitty-gritty details of how the program works. Social Security benefits are financed by a payroll tax on earnings. While the payroll tax discourages work, it doesn't always do so to the same extent as the income tax.
WSJ | Arthur Brooks: America's Dangerous Powerball Economy
Unearned income—as from the lottery or entitlements—doesn't buy happiness.
Source | A Process for Cleaning Up Federal Regulations
This paper suggests a process to identify, evaluate, and eliminate inefficient regulations.
WSJ | How Washington Crowds Out Private Lending
Government loans to students and banks should help markets, not supplant them.
Market Watch | The real meaning of rising home prices
As home prices continue to climb, some analysts are questioning whether that alone indicates the housing market is truly in recovery mode.
Heritage Foundation | Three Social Security Fixes to Solve the Real Fiscal Crisis
As a solution is found to the fiscal cliff, policymakers should include the first steps toward fixing Social Security.

Blogs                                                                                                                             
Econ Lib | Does An Increase in Supply Lead to Higher Prices
Why is it profitable for Saudi Arabia that Canada extracts oil from its tar sands?
WSJ: Real Time Economics | Philly Fed Manufacturing Bounces Back
Business conditions for mid-Atlantic manufacturers this month improved dramatically, according to a report released Thursday by the Federal Reserve Bank of Philadelphia.

Health Care

News                                                                                                                             
CNBC | Medicare Premium Increase Plan Redefines 'Well-Off'
Failure by panel would trigger cuts in spending.

Monetary

News                                                                                                                             
Fox Business | Bank of Japan Boosts Stimulus Again
The Bank of Japan delivered its third shot of monetary stimulus in four months on Thursday, in a prelude to more aggressive action next year as it faces intensifying pressure from the country's next leader for bolder action to beat deflation.

Econ Comments & Analysis                                                                                            
New York Post | Fed chief has gone totally round the Ben(d)
Fed Chairman Ben Bernanke, who has already done more than enough to destroy this country's currency, must need a change of prescription.

Blogs                                                                                                                             
The Economist | How durable is the emerging NGDP consensus?
Those who want central bankers to focus to changes in nominal incomes rather than the pace of consumer price increases have made tremendous progress over the past few years, at least when it comes to persuading economists and pundits.

Taxes

News                                                                                                                             
CNN: Money | Lack of AMT fix could delay 100 million tax returns
As many as 100 million taxpayers may be unable to file their returns until late March and would face refund delays if Congress fails to reach a fiscal cliff deal by Dec. 31 that includes an Alternative Minimum Tax fix.

Econ Comments & Analysis                                                                                            
Washington Times | TAYLOR AND TANTON: Blow off wind-production tax credit
Wind-energy advocates claim that with just one more extension of the 20-year-old “temporary” wind-production tax credit, wind generation finally could become competitive with conventional sources of electricity. The truth is, it’s never been competitive — and has only appeared to be close because some of its costs have been subsidized and others have been ignored.
RCM | To Reduce Tax Avoidance, Eliminate Deductions and Cut Taxes
Tax avoidance is legal. Most tax avoidance entails the use of deductions expressly created by governments, and it includes everything from the homeowner's mortgage-interest deduction to corporate deductions for research and development.
LA Times | Kinsley: Tuning the tax code
Given that all taxes are disincentives, what kinds of taxes do we want?

Blogs                                                                                                                             
WSJ: Real Time Economics | Tax Increases Coming Whether Fiscal Cliff Is Averted or Not
Neither the Obama administration nor congressional Republicans want to increase taxes on everyone, but most workers are likely to see lower take-home pay in 2013, eating away at economic growth.

Employment

News                                                                                                                             
Washington Times | Americans seeking unemployment aid rises by 17,000
The number of Americans applying for unemployment benefits rose last week by 17,000, reversing four weeks of declines. But the number of people seeking aid is consistent with a job market that continues to grow modestly.

Budget

News                                                                                                                             
National Journal | Obama Urges GOP to Take the Fiscal-Cliff Deal
“There’s got to be, I think, a recognition on the part of my Republican friends that, you know—take the deal,” Obama said. “They will be able to claim that they have worked with me over the last two years to reduce the deficit, more than any other deficit-reduction package.”
Roll Call | Boehner Faces GOP Caucus Backlash On 'Plan B' for Taxes and Fiscal Cliff
With both Democrats and hard-line conservative Republicans vowing to tank his “plan B” bill that would allow tax increases on millionaires, Boehner’s test Thursday will be to show the White House and Democrats that he has some control over his unruly conference as time to produce a deal averting tax hikes and automatic spending cuts runs out.
National Journal | Experts: GOP Plan B Would Lighten Tax Burden for Some Wealthy Households
Only those who earn between $200,000 and $1 million would see their federal tax burden shrink under the GOP's 'Plan B' proposal, according to analysis from the nonpartisan Tax Policy Center.
CNBC | Goodbye, Government, Under Either Fiscal Plan
The frenzied partisan horse-trading has glossed over what is arguably the central issue of any debate over long-term fiscal policy: the kind of role we expect the government to play in the nation's future.

Econ Comments & Analysis                                                                                            
Washington Times | MILLER: Obama’s ‘fiscal cliff’ win
House Speaker John A. Boehner is trying to salvage what he can in the showdown with President Obama over the “fiscal cliff.” To do so, he gave in to Mr. Obama’s demand to raise income tax rates.
Mercatus Center | Impartiality, Political Participation, and Federal Budget Process Reform
The Founders insisted that trust in government is essential to the stability of government and the security of rights, and that public participation in, and the transparency of, political processes are essential to the cultivation of trust in government.

Blogs                                                                                                                             
Heritage Foundation | Obama Fiscal Cliff Plan Silent on Payroll Tax Cut
This time last year President Obama said of the pending expiration of the payroll tax cut, “It may be that there’s [sic] some folks in the House who refuse to vote for this compromise because they don’t think that 40 bucks is a lot of money. But anyone who knows what it’s like to stretch a budget knows that…$40 can make all the difference in the world.”
Cato Institute | Portugal May Become the First of Europe’s Bankrupt Welfare States to Stumble upon a Genuine Recovery Formula: Less Spending AND Lower Tax Rates
Before getting too excited, it’s important to note that the Portuguese proposal is a bit gimmicky. It’s not a corporate tax rate of 10 percent, it’s a special rate of 10 percent for new investment, however that’s defined.
Reason.com | It's the Spending, Stupid!
The media obsess about tax rates, but spending is more important. As Milton Friedman taught us, spending is a far more accurate gauge of the government burden.