Wednesday, February 12, 2014

General Economics

National Journal | Here's What's Happening After the Debt Ceiling: Nothing
The debt-ceiling bill passed by the House Tuesday, unburdened by additional Republican policy demands, appears headed for approval in the Senate, which would mark an end to major fiscal fights for the rest of the year.
CNN Money | House votes to restore military pensions
The House on Tuesday passed a bill to restore pension increases for some 750,000 military retirees, but the fate of the legislation remained uncertain as disagreements in the Senate threatened to kill the bill.
WSJ | USDA Projects U.S. Net Farm Income to Decline 27% in 2014
American farm incomes are expected to plunge by 27% to the lowest level since 2010, federal forecasters said Tuesday, as a sharp drop in crop prices erases some of the gains from years of strong growth in rural economies.

Econ Comments & Analysis                                                                                            
Market Watch | Next crisis won’t come from the emerging markets
Right on cue, the plunge in emerging markets that started this year has given us, courtesy of the analysts at Morgan Stanley, the Fragile Five. Comprised of Indonesia, South Africa, Brazil, Turkey and India, they have been singled out because their big current-account deficits mean they are acutely vulnerable to a sudden exit of foreign capital.
NBER | Firm Age, Investment Opportunities, and Job Creation
This paper asks whether startups react more to changing investment opportunities than more mature firms do.
Market Watch | Fed's Fisher blames Congress for slow recovery
Federal Reserve Bank of Dallas President Richard Fisher on Tuesday reportedly blamed the U.S. Congress and federal government for weighing on the economy and dragging on the recovery.
Real Clear Markets | An Old Story About the War On Poverty
Recent weeks have seen a blizzard of media stories and reports, including one from the Council of Economic Advisors, about whether the War on Poverty was a success. What a surprise - Democrats tend to say it worked wonders while Republicans judge it to be a flop. However, there is one impact of President Johnson's War on Poverty that everyone should agree has been a terrific success, although a future problem looms. I'm referring to the positive impacts of the War on Poverty on the health, life expectancy, and poverty rates of the elderly.
CATO | Drop America’s Energy Export Ban
For years people have been told to expect a dismal energy future. But because of rapid market innovation, Americans now can look forward to a future of energy abundance. The U.S. could even become a leading exporter.

WSJ | Skipping College Is Getting More Expensive
A new report from the Pew Research Center finds that Millennials with a college degree earn more, have higher employment rates and report greater job satisfaction than those who stopped their formal educations during or after high school.
WSJ | Is U.S. Housing Unaffordable? It Depends on How You Chart It
Rising home prices and interest rates made housing less affordable last year than at any time in the last five years, according to data released Tuesday by the National Association of Realtors.

Health Care

Politico | Obama: Employer-based health insurance system not going anywhere
President Barack Obama on Tuesday described the latest delay in the implementation of the Affordable Care Act as a way of “smoothing out” the transition to the law and said he doesn’t see the employer-based health insurance system disappearing any time soon.
National Journal | Fed Chair: Obamacare’s Economic Impact 'Complex'
As Washington continues to spar over the Congressional Budget Office's Obamacare analysis, Federal Reserve Board Chair Janet Yellen weighed in Tuesday.

Econ Comments & Analysis                                                                                            
Washington Times | Seniors in the Obamacare bull’s-eye
Certainly, the administration thought it was in hot water over millions of canceled individual-market policies in 2013. It better brace itself, though, for the wrath of seniors who will suffer the fallout of the budgetary attack on Medicare Advantage plans.

Heritage Foundation | Why the Obamacare Mandate Delay Is a Big Deal
In the movie “The Naked Gun,” crack detective Frank Drebin comes across a firework factory that’s on fire and is collapsing in on itself. “Nothing to see here,” he calmly tells on-lookers as employees flee the explosions. “Please disburse.”


Bloomberg | Price Slowdown for Cars, Baby Clothes Raises Fed Concerns
Five years into the U.S. economic expansion, inflation shows little sign of picking up as prices rise more slowly for goods and services from automobiles to medical care, complicating the Federal Reserve’s drive to guide the economy away from the precipice of deflation.

Econ Comments & Analysis                                                                                            
Forbes | After A Century Of The Fed, It's Time To Return To Constitutional Money
The Federal Reserve System recently turned 100, but it has presided over a century of folly, argues Professor Richard Timberlake in his magisterial 2013 book Constitutional Money (Cambridge University Press).  Timberlake, professor emeritus at the University of Georgia, makes a compelling case that the U.S. made a terrible blunder in abandoning the gold standard in favor of a fiat monetary system under the control of a few supposed experts.
Fortune | 3 problems Congress should stop asking the Fed to solve
Fed Chair Janet Yellen visited Capitol Hill today, offering a perfect time to break out three problems that, for whatever reason, Congress has convinced itself the Fed has a responsibility to address.
NY Times | A World Unprepared, Again, for Rising Interest Rates
The stable American economic order lasted more than three decades from the end of World War II, when economic cycles were essentially driven by the Federal Reserve’s raising and lowering of interest rates to combat inflation. It started to crumble with the severing of the link between gold and the dollar and the twin oil crises of the 1970s.

WSJ | Fed’s Lacker: ‘Too-Big-To-Fail’ Problem Is Alive and Well
Federal Reserve Bank of Richmond President Jeffrey Lacker said Tuesday more work needs to be done to resolve the ongoing threat posed by too-big-to-fail financial institutions.


Econ Comments & Analysis                                                                                            
WSJ | New 3.8% Investment Tax Raises Flags
Congress enacted the 3.8% surtax on dividends, interest and other income back in 2010, but didn't make it effective until tax year 2013. Even though advisers have been studying the tax's rules, many still have some questions as they help clients report the tax for the first time.

WSJ | The Difference BetweenTax Planning and Tax Preparing
Tax payers often confuse “tax planning” with “tax preparation.”  The first looks forward for opportunities and strategies to reduce your future tax liabilities. “Tax preparation,” by contrast, requires looking in the rear-view mirror, gathering and organizing your information from a past year, primarily for compliance with tax laws.


CNN Money | Yellen: 'Too many Americans remain unemployed'
Yellen, who was sworn in as Federal Reserve chair last week, stressed that she expects "a great deal of continuity" in Fed policy, following in the footsteps of previous Chairman Ben Bernanke.
Bloomberg | Home Depot Plans to Hire Same Amount of Seasonal Workers
Home Depot Inc. (HD), the largest U.S. home-improvement retailer, plans to add the same number of part-time workers for its busiest sales season as it did in 2013, capitalizing on rising demand for home renovations.
Washington Post | What do the jobless do when the benefits end?
The end to federal jobless benefits for nearly 2 million people has sparked a bitter debate in Congress about whether Washington is abandoning desperate households or simply protecting strained government coffers.


Politico | House passes clean debt ceiling bill
After a frantic few days, the House voted 221-201 to lift the debt ceiling until March 2015, removing the threat of a default until well after the November midterm election. The bill was supported by 193 Democrats and just 28 Republicans.
Politico | The Word That Changed the Debt Ceiling Debate
The official line? “We believe that defaulting on our debt is the wrong thing,” says House Speaker John Boehner (R-Ohio). “We don’t want to do that.” On Tuesday, the House duly voted to raise the debt limit without conditions, sending the action over to the Senate.

Econ Comments & Analysis                                                                                            
CBO | S. 540, Temporary Debt Limit Extension Act
Upon enactment, S. 540 would suspend the current debt limit through March 15, 2015. On the following day, the debt ceiling would be raised by the amount of obligations incurred up to that point.
CBO | Testimony on the Budget and Economic Outlook: 2014 to 2024
Testimony before the Committee on the Budget, United States Senate

CATO | Federal Government: Much Smaller in Canada
Canada released a new federal budget yesterday. The ruling Conservatives are centrists and far too supportive of the welfare state. Nonetheless, the government is expected to balance the budget next year while steadily reducing spending and debt as a share of GDP.
Heritage Foundation | Double-Whammy: The No-Debt-Limit-Bill Increases Spending and the Debt
The no-debt-limit extension bill that was introduced after 9 p.m. on Monday night manages to increase not just the debt, but spending as well.