News
National Journal | How Car Ownership Helps the Working Poor Get Ahead
Buses stop right outside LaToyia Newman-Gross's apartment in suburban Columbia, Md. That doesn't mean it's easy to get around by public transit. "They run every hour," says Newman-Gross, 32. If you miss a bus, you're stuck. Waiting out in the sun or snow with her four children beside her usually isn't a great option.
FOX Business | How to Tap Your IRA Early Without a Penalty
Retirement account withdrawals before age 59 1/2 typically incur penalties, but there are a few exceptions. One of those exceptions, outlined in Section 72(t) of the IRS code, allows penalty-free withdrawals for a "series of substantially equal periodic payments." These payments are based on your account balance and your age. You won't be able to take big lump-sum withdrawals, since the amounts are based on life expectancy -- in other words, they're designed to stretch out the payments over your remaining lifetime. The payments must continue for at least five years or until you turn 59 1/2, whichever takes longer.
Bloomberg | Orders for U.S. Capital Goods Rose After Revised May Drop
Orders for U.S. business equipment rose in June after falling the prior month, forming an inconsistent pattern that indicates corporate investment lacks the momentum needed to propel economic growth to a higher level.
WSJ | Ryan Proposes Consolidated Antipoverty Effort
Bringing detail to Republican promises to address poverty, House Budget Committee Chairman Paul Ryan laid out a plan Thursday for using a conservative approach to reshape food stamps, housing assistance and other federal social programs,
Econ Comments & Analysis
Fortune | Why the era of global free-trade is dwindling
For roughly 30 years, there had been growing momentum for nations to tear down trade barriers through free-trade agreements. The creation of free-trade blocs snowballed as countries signed on to these pacts to promote export-led economic growth.
Forbes | Economic Growth Is Slow Because Politicians Keep Trying To Help
While economic growth in the second quarter of the year is likely to rebound significantly from the sharp contraction of the first quarter, politicians are continually expounding on their ideas to bring more economic growth. They also spend a good bit of time attacking political opponents over how their policies are responsible for the slow economic growth of the past five years. In this case, the politicians are half right (which is probably above their career average).
Blogs
WSJ | Something New for U.S. Manufacturing: Stability
One economist thinks so. Daniel Meckstroth, chief economist at the Manufacturers Alliance for Productivity and Innovation, a research group in Arlington, Va., regularly does his own calculation of the number of plants based on data from the Bureau of Labor Statistics that tracks factory openings and closings. Even in the darkest days of manufacturing’s long slide, there were factories being built—but their number was far outweighed by the rush to shutter operations. Millions of jobs were lost in the process.
Friday, July 25, 2014
Health Care
News
Politico | IRS prepping for Obamacare employer mandate in 2015
The Obama administration signaled Thursday it’s not backing down from the controversial health law employer mandate that has been delayed twice and is the centerpiece of the House’s lawsuit against the president.
CNN Money | Thanks Obamacare! Check is in the mail for 6.8 million people
More than 6.8 million Americans will get a refund from their health insurer this summer. Total value of the rebates will be $332 million, with an average of $80 going to each family. They'll be issued by August 1.
Econ Comments & Analysis
WSJ | A 2014 Health-Care Strategy: Freedom
Contradictory rulings this week by the D.C. and Fourth Circuit Courts of Appeals mean that ObamaCare will probably return to the Supreme Court. The crucial issue is whether the government can subsidize premiums for health insurance bought on federal exchanges, though the Affordable Care Act's plain language authorizes subsidies only for policies purchased on "an Exchange established by the State."
CRS | Private Health Insurance Market Reforms in the Affordable Care Act (ACA)
The Affordable Care Act (ACA, P.L. 111-148, as amended) establishes federal requirements that apply to private health insurance. The market reforms affect insurance offered to groups and individuals and impose requirements on sponsors of coverage (e.g., employers). In general, all of ACA's market reforms are currently effective; some became effective shortly after ACA was passed in 2010, while others are effective for plan years that begin on or after January 1, 2014.
Politico | IRS prepping for Obamacare employer mandate in 2015
The Obama administration signaled Thursday it’s not backing down from the controversial health law employer mandate that has been delayed twice and is the centerpiece of the House’s lawsuit against the president.
CNN Money | Thanks Obamacare! Check is in the mail for 6.8 million people
More than 6.8 million Americans will get a refund from their health insurer this summer. Total value of the rebates will be $332 million, with an average of $80 going to each family. They'll be issued by August 1.
Econ Comments & Analysis
WSJ | A 2014 Health-Care Strategy: Freedom
Contradictory rulings this week by the D.C. and Fourth Circuit Courts of Appeals mean that ObamaCare will probably return to the Supreme Court. The crucial issue is whether the government can subsidize premiums for health insurance bought on federal exchanges, though the Affordable Care Act's plain language authorizes subsidies only for policies purchased on "an Exchange established by the State."
CRS | Private Health Insurance Market Reforms in the Affordable Care Act (ACA)
The Affordable Care Act (ACA, P.L. 111-148, as amended) establishes federal requirements that apply to private health insurance. The market reforms affect insurance offered to groups and individuals and impose requirements on sponsors of coverage (e.g., employers). In general, all of ACA's market reforms are currently effective; some became effective shortly after ACA was passed in 2010, while others are effective for plan years that begin on or after January 1, 2014.
Monetary
News
Bloomberg | Dollar Rises to Highest in Month as U.S. Outperforms
A gauge of the dollar rose to the highest level in a more than month amid signs the U.S. economy, beset by years of sluggish growth, is outperforming its major peers.
Market Watch | Fed clears Zions' resubmitted stress test
The Federal Reserve said Friday that it won't object to a resubmitted capital plan by Zions Bancorp. The Fed had previously rejected a plan because the bank did not meet the minimum, post-stress tier 1 common ratio of 5%, but under the new submission, the firm's minimum, post-stress tier 1 common ratio was 5.1%.
Market Watch | Japan prices inflate further, thanks to sales tax
Japan's consumer prices chalked up steady increases in June, at least on an annual basis, according to data out Friday from the Statistics Bureau, though the results again reflected the April 1 sales-tax hike.
Econ Comments & Analysis
Market Watch | Obama: Fed focused on right thing
President Barack Obama on Thursday said Fed Chairwoman Janet Yellen and her colleagues at the U.S. central bank have been right to focus on restoring the health of the U.S. labor market. In an interview on CNBC, Obama said the cost of high unemployment of young people and workers who can't get back into the labor market "has devastating effects on the economy for generations."
Telegraph | IMF fears ultra-low rates are fuelling asset bubbles
Ultra-low interest rates around the world are fuelling financial bubbles and pushing investors into overvalued assets, the International Monetary Fund has warned in a marked shift of policy.
WSJ | The Federal Reserve's Risky Reverse Repurchase Scheme
Four years after the passage of Dodd-Frank, we are still discussing whether the law has made the financial system more stable. These discussions are important, yet too little attention is being paid to a Federal Reserve program called the Overnight Reverse Repurchase Facility, also referred to as ON RRP. This program, while well-intentioned, could be a new source of financial instability. It needs a closer look.
CATO | Fed Proposal to End Bailouts Falls Short
At the heart of public anger with Wall Street is the sense that accountability is lacking. The largest banks seem to live in a ‘heads I win, tails you lose’ world in which they keep their gains but receive a bailout to prevent their failure.
Blogs
WSJ | Which Wage Measure Best Captures Inflation Pressures?
Federal Reserve Chairwoman Janet Yellen has made clear that her perceptions of a healthy labor market hinge on more than just the unemployment rate or the strength of recent job gains. Also high up on her labor-market dashboard is wage growth. As labor markets tighten, workers should be able to bargain for bigger raises.
Bloomberg | Dollar Rises to Highest in Month as U.S. Outperforms
A gauge of the dollar rose to the highest level in a more than month amid signs the U.S. economy, beset by years of sluggish growth, is outperforming its major peers.
Market Watch | Fed clears Zions' resubmitted stress test
The Federal Reserve said Friday that it won't object to a resubmitted capital plan by Zions Bancorp. The Fed had previously rejected a plan because the bank did not meet the minimum, post-stress tier 1 common ratio of 5%, but under the new submission, the firm's minimum, post-stress tier 1 common ratio was 5.1%.
Market Watch | Japan prices inflate further, thanks to sales tax
Japan's consumer prices chalked up steady increases in June, at least on an annual basis, according to data out Friday from the Statistics Bureau, though the results again reflected the April 1 sales-tax hike.
Econ Comments & Analysis
Market Watch | Obama: Fed focused on right thing
President Barack Obama on Thursday said Fed Chairwoman Janet Yellen and her colleagues at the U.S. central bank have been right to focus on restoring the health of the U.S. labor market. In an interview on CNBC, Obama said the cost of high unemployment of young people and workers who can't get back into the labor market "has devastating effects on the economy for generations."
Telegraph | IMF fears ultra-low rates are fuelling asset bubbles
Ultra-low interest rates around the world are fuelling financial bubbles and pushing investors into overvalued assets, the International Monetary Fund has warned in a marked shift of policy.
WSJ | The Federal Reserve's Risky Reverse Repurchase Scheme
Four years after the passage of Dodd-Frank, we are still discussing whether the law has made the financial system more stable. These discussions are important, yet too little attention is being paid to a Federal Reserve program called the Overnight Reverse Repurchase Facility, also referred to as ON RRP. This program, while well-intentioned, could be a new source of financial instability. It needs a closer look.
CATO | Fed Proposal to End Bailouts Falls Short
At the heart of public anger with Wall Street is the sense that accountability is lacking. The largest banks seem to live in a ‘heads I win, tails you lose’ world in which they keep their gains but receive a bailout to prevent their failure.
Blogs
WSJ | Which Wage Measure Best Captures Inflation Pressures?
Federal Reserve Chairwoman Janet Yellen has made clear that her perceptions of a healthy labor market hinge on more than just the unemployment rate or the strength of recent job gains. Also high up on her labor-market dashboard is wage growth. As labor markets tighten, workers should be able to bargain for bigger raises.
Taxes
News
Bloomberg | Rich French Fleeing Hollande Taxes Find Portugal Haven
Lisbon real estate agent Paulo Silva says Portugal’s property market has a Frenchman to thank. Francois Hollande, that is.
Econ Comments & Analysis
FOX Business | The Tax Differences Between a C Corporation and an S Corporation
Deciding the difference between a C Corp and an S Corp should include a tax professional and an attorney. The attorney can address the liability and legal issues of incorporating and the tax professional can explain the tax consequences and even worksheet anticipated liabilities based on the actual situation.
Heritage Foundation | IMF Wants U.S. Taxpayers to Shoulder More Risk
The International Monetary Fund’s (IMF) report on its 2014 Article IV consultation with the United States highlights the importance of securing a safer financial system. The IMF’s policy recommendations would, however, achieve the opposite while putting U.S. taxpayers at risk.
Blogs
FOX Business | Mortgage Interest Rate Deduction: Do We Really Need It?
I argued that childless renters making a good income tend to be on the losing end when it comes to the tax breaks. Most readers pointed out that renters do not have the overhead that comes with owning a house, which means the write-off of mortgage interest and property taxes levels the playing field.
Bloomberg | Rich French Fleeing Hollande Taxes Find Portugal Haven
Lisbon real estate agent Paulo Silva says Portugal’s property market has a Frenchman to thank. Francois Hollande, that is.
Econ Comments & Analysis
FOX Business | The Tax Differences Between a C Corporation and an S Corporation
Deciding the difference between a C Corp and an S Corp should include a tax professional and an attorney. The attorney can address the liability and legal issues of incorporating and the tax professional can explain the tax consequences and even worksheet anticipated liabilities based on the actual situation.
Heritage Foundation | IMF Wants U.S. Taxpayers to Shoulder More Risk
The International Monetary Fund’s (IMF) report on its 2014 Article IV consultation with the United States highlights the importance of securing a safer financial system. The IMF’s policy recommendations would, however, achieve the opposite while putting U.S. taxpayers at risk.
Blogs
FOX Business | Mortgage Interest Rate Deduction: Do We Really Need It?
I argued that childless renters making a good income tend to be on the losing end when it comes to the tax breaks. Most readers pointed out that renters do not have the overhead that comes with owning a house, which means the write-off of mortgage interest and property taxes levels the playing field.
Employment
News
FOX News | Fewer and fewer US layoffs mean job security is as strong as it's been in more than 8 years
As the U.S. economy has improved and employers have regained confidence, companies have been steadily shedding fewer workers. Which is why applications for unemployment benefits have dwindled to their lowest level since February 2006 — nearly two years before the Great Recession began — the government said Thursday.
Econ Comments & Analysis
Mercatus | Social Security Disability Insurance's Effect on Labor Force Participation
The labor force participation rate for the prime working-age population — those between 25 and 54 years old — has been declining in the U.S. since 1997. One of the big reasons is a rise in the disability rate, which hit a record 5.2 percent in 2013. Since the start of the Great Recession, the withdrawal rate due to disability has accelerated. In fact, 90 percent of the labor force decline for those who were in their prime working ages for the entire six-year span was from disability. Most of this — three quarters — was from those receiving Social Security Disability Insurance (SSDI) benefits.
FOX News | Fewer and fewer US layoffs mean job security is as strong as it's been in more than 8 years
As the U.S. economy has improved and employers have regained confidence, companies have been steadily shedding fewer workers. Which is why applications for unemployment benefits have dwindled to their lowest level since February 2006 — nearly two years before the Great Recession began — the government said Thursday.
Econ Comments & Analysis
Mercatus | Social Security Disability Insurance's Effect on Labor Force Participation
The labor force participation rate for the prime working-age population — those between 25 and 54 years old — has been declining in the U.S. since 1997. One of the big reasons is a rise in the disability rate, which hit a record 5.2 percent in 2013. Since the start of the Great Recession, the withdrawal rate due to disability has accelerated. In fact, 90 percent of the labor force decline for those who were in their prime working ages for the entire six-year span was from disability. Most of this — three quarters — was from those receiving Social Security Disability Insurance (SSDI) benefits.
Budget
News
CNN Money | Argentina is now very close to default
The clock is ticking. Argentina will default in just a few days unless the country can find a way to satisfy creditors that are owed roughly $1.5 billion.
Blogs
Library of Economics | Nick Rowe on fiscal policy (and reply to Caplan)
The average reader of the New York Times probably thinks he knows about fiscal policy. "We know that Y=C+I+G+NX, so we can see that higher G increases Y. And monetary policy works because lower interest rates increase I, if we can cut interest rates. And Nick Rowe is just obfuscating, no doubt for political reasons, by ignoring that simple obvious mechanism."
WSJ | ECB Paper Identifies Most Growth-Friendly Cuts
A European Central Bank paper has weighed in on a big debate among economists in recent years: how much of an effect fiscal belt-tightening has on the economy.
CNN Money | Argentina is now very close to default
The clock is ticking. Argentina will default in just a few days unless the country can find a way to satisfy creditors that are owed roughly $1.5 billion.
Blogs
Library of Economics | Nick Rowe on fiscal policy (and reply to Caplan)
The average reader of the New York Times probably thinks he knows about fiscal policy. "We know that Y=C+I+G+NX, so we can see that higher G increases Y. And monetary policy works because lower interest rates increase I, if we can cut interest rates. And Nick Rowe is just obfuscating, no doubt for political reasons, by ignoring that simple obvious mechanism."
WSJ | ECB Paper Identifies Most Growth-Friendly Cuts
A European Central Bank paper has weighed in on a big debate among economists in recent years: how much of an effect fiscal belt-tightening has on the economy.
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