Wednesday, January 9, 2013

General Economics

News                                                                                                                             
Politico | Holding Congress accountable
If competitive elections are the backbone of our democratic republic, U.S. House elections are the snails: no vertebrae, only a hard, protective shell of their own making. More than 80 percent of members are safe within the shell of one-party districts where they’re never tested by a challenge from the opposing party, and they rarely face a serious primary challenge.
CNN Money | No more paper Social Security checks come March
Millions of Americans still receiving paper checks for Social Security and other federal benefits have less than two months to switch to electronic payments.
Bloomberg | Box Demand as Economic Gauge Shows U.S. Output Gains: EcoPulse
Makers of corrugated boxes will probably see a pick-up in demand for their products as recent gains in manufacturing indicate the U.S. expansion will be sustained in 2013.
WSJ | Americans Get Moving Amid Torpid Recovery
Americans began striking out for greener pastures at a pace not seen since before the recession crippled job prospects, hobbled home sales and kept many stuck in place.
Washington Times | Big worries linger for 
many small businesses
Tom Romola makes his living as a debt collector, a business in which one can prosper in bad times and good. But like many small-business owners these days, he says, the economy presents a particularly difficult challenge for the little guy.

Econ Comments & Analysis                                                                                            
Washington Times | Beyond waste and fraud
Democrats are united in their fiscal message. Throughout the “cliff” negotiations and again with the pending debt-ceiling debate, their argument has rested on a single, flimsy premise: Cutting government spending would push the economy into recession.
WSJ | The States of Foreclosure
One reason for optimism in the New Year is the housing market, which continues to heal despite the weak economic recovery. Case-Shiller, Lender Processing Services and other data trackers are reporting recoveries in many regions. Even more noteworthy is that the rebound is strongest in states that let lenders enforce contracts.
Market Watch | A year of stagnation continued in 2013: Andy Xie
Between 2009 and 2011, the emerging economies, especially the BRICs, kept growing following a brief crash in 2008. Many pundits interpreted it as a sign of decoupling. Emerging economies, due to their low base, tend to grow faster than the developed ones. The issue is by how much.
CNN Money | The road to real recovery is open
This is the year that the U.S. economy could pick up steam on the way back to broad-based prosperity. Assuming governments here and around the world limit their follies (yes, I'm being hopeful), we could be at the beginning of a run rivaling the manufacturing boom of the '50s and '60s that built the middle class, or the tech boom of the '90s that built the investor class.
Market Watch | Housing affordability on track to set record: NAR
Housing affordability is expected to set a record in 2012 due to low prices and interest rates, according to data released Wednesday by the National Association of Realtors.
Heritage Foundation | A Housing Market Free from Fannie Mae and Freddie Mac: The Economic Effects of Eliminating the Housing Government Sponsored Enterprises
Elimination of Fannie Mae and Freddie Mac and the mortgage interest rate subsidy that these mortgage institutions generate would have minimal impact on the U.S. economy. Congress needs to recognize that this institutional model has failed and should be eliminated to protect U.S. taxpayers and the U.S. Treasury.

Blogs                                                                                                                             
Café Hayek | On Income Inequality
Bottom Line: Household demographics, including the average number of earners per household and the marital status, age, and education of householders are all very highly correlated with household income.
WSJ | Secondary Sources: Platinum Coin, Fed Dissenters, New Mercantilism
A roundup of economic news from around the Web.

Health Care

News                                                                                                                             
CNBC | UnitedHealth Argues For $500 Billion In Medicare Savings
The U.S. could save more than $500 billion in Medicare and Medicaid spending over the next ten years, by more aggressively coordinating medical care for seniors and the poor, according to new research from health insurer UnitedHealth Group.

Monetary

News                                                                                                                             
Market Watch | 3 reasons the ECB won’t cut…and 1 reason it might
Expectations that the dawn of a new year would bring another cut in interest rates by the European Central Bank melted faster than a freak Christmas snow in Rome.
Market Watch | Bank of Japan to mull 2% inflation target: report
Under political pressure from the new Japanese government to ease policy further, the Bank of Japan plans to discuss doubling its inflation target and adding more funds to its asset-buying program, Reuters cited unnamed sources as saying in a report Wednesday.

Econ Comments & Analysis                                                                                            
CNN Money | $1 trillion coin is nuts but not $25 billion - Opinion
Policy wonks are debating whether a $1 trillion platinum coin would be a clever or insane way for President Obama to play hardball with Republicans in the upcoming debt limit battle.

Blogs                                                                                                                             
Calculated Risk | Question #6 for 2013: What will happen with Monetary Policy and QE3?
Earlier I posted some questions for this year: Ten Economic Questions for 2013. I'll try to add some thoughts, and maybe some predictions for each question.

Taxes

News                                                                                                                             
National Journal | How the Fiscal-Cliff Deal Affects Tax Season
Tax-filing season will be eight days later than planned this year thanks to the fiscal-cliff deal lawmakers passed last week, the Internal Revenue Service said on Tuesday afternoon.

Econ Comments & Analysis                                                                                            
National Journal | The Corporate-Tax Change That Could Raise $114 Billion
Just one tweak to the way the United States taxes corporations could raise $114 billion over 10 years, according to a new report from the Congressional Budget Office, the agency that provides economic analysis to Congress.
Real Clear Markets | States Cut Taxes Even As Washington Raises Them
Although federal taxes are rising for three-quarters of Americans this year, many states have spent the last two fiscal years cutting levies and simplifying their tax codes. Even as high profile battles to raise taxes in places like California have garnered the press's attention, from Kansas to Michigan to Oregon and New Jersey, states have actually been net tax cutters recently after trying for several years to tax their way out of budget woes.
CBO | Options for Taxing U.S. Multinational Corporations
In 2008, 12 percent of all federal revenues came from corporate income taxes; about half was paid by multinational corporations reporting income from foreign countries. How the federal government taxes U.S. multinational corporations has consequences for the U.S. economy overall as well as for the federal budget.
Heritage Foundation | Effective Marginal Tax Rates for Low-Income Workers Are High
While much focus in the past two years has been on the top end of the income scale—the “Buffett Rule,” the “1 percent”—the effects of taxation and government benefits are severe among the bottom 1 percent as well.

Blogs                                                                                                                             
Neighborhood Effects | The Home Mortgage Interest Deduction: A Bad Deal for Taxpayers
The home mortgage interest deduction is one of the largest tax expenditures in the U.S. tax code, second only to the non-taxation of employer-provided health insurance and pension contributions.

Employment

News                                                                                                                             
FOX News | Steady hiring drives unemployment rates below 7 pct. in most large US cities in November
Unemployment rates fell below 7 percent in a majority of U.S. cities in November, suggesting steady job gains are benefiting most parts of the country.
Bloomberg | Morgan Stanley Said to Cut 1,600 Investment-Banking Jobs
Morgan Stanley, the sixth-largest U.S. bank by assets, plans to eliminate about 1,600 jobs from its investment bank and support staff in coming weeks, a person familiar with the matter said.

Econ Comments & Analysis                                                                                            
Fortune | What higher U.S. wages mean
Just as most U.S. workers see less in their paychecks, a slowly improving job market is boosting wages. Earnings have generally been flat for the past few years, and the uptick couldn't have come at a more sensible time.

Blogs                                                                                                                             
WSJ | Slow Startup Formation Raises Job Creation Questions
When it comes to U.S. labor markets, small businesses are viewed as the mice that roar. But that growl is growing more muted, and could limit future hiring.

Budget

News                                                                                                                             
Roll Call | Obama's Budget Is Running Late
The Obama administration’s fiscal 2014 budget is widely expected to arrive late on Capitol Hill, possibly not until sometime in March, primarily as a result of uncertainty created by fiscal cliff negotiations.

Econ Comments & Analysis                                                                                            
Daily Caller | Balance may be good politics, but it’s bad economics
Despite the unprecedented explosion of the federal debt during his first four years in office, President Obama acknowledges that something must be done to halt deficit spending.
Politico | Trillion dollar coin: Funny money or real solution?
Democrats aren’t writing off suggestions that President Barack Obama skip another round of negotiations with congressional Republicans and simply raise the debt ceiling himself.
CNN Money | The euro crisis no one is talking about: France is in free fall
The euro zone's second-largest economy is suffering more than any other member from a shocking deterioration in competitiveness. And it's doing nothing to stop it.
Forbes | The Lopsided Fiscal Cliff Deal: All Tax Hikes, No Spending Restraint
Throughout the 2012 presidential campaign, and up until New Year’s Eve, President Barack Obama kept insisting that any solution to the U.S. “fiscal cliff” required what he called a “balanced approach” — meaning that forthcoming federal budget deficits should be narrowed partly by tax hikes (on “millionaires and billionaires”) and partly by spending restraints. Of course, we all know that Mr. Obama and the Democrats wanted only tax hikes, while the Republicans mainly wanted only spending restraint.
CBO | Monthly Budget Review
The federal budget deficit was $293 billion for the first three months of fiscal year 2013 (that is, October through December 2012), $29 billion less than the shortfall recorded in the first quarter of last fiscal year, CBO estimates. Without shifts in the timing of certain payments in both years, however, the deficit for the three-month period would have been about $60 billion lower this year than in fiscal year 2012.

Blogs                                                                                                                             
WSJ | Fed’s Lacker Warns of Damage Over Debt Ceiling Debate
Federal Reserve Bank of Richmond President Jeffrey Lacker said Tuesday that it would be damaging to the economy if it starts to look like Congress won’t raise the debt limit before the Treasury runs out of room to borrow.