Monday, February 2, 2015

General Economics

Market Watch | Consumer spending falls by most in 5 years
Americans boosted their savings in December and cut spending by the largest amount in five years, buying fewer cars and trucks and paying less at the gas pump.

Econ Comments & Analysis                                                                                            
Wall Street Journal | U.S. Economy Hits Speed Bumps
The U.S. economy entered 2015 on the most robust streak of consumer spending in years, yet when the first growth figures for 2014 came out Friday they underscored the lack of vigor in the current expansion.
Market Watch | New numbers but same story: Economy growing but wages flat
We just got two important signals about the economy, and they tell a story that we are all too familiar with: The economy continues to grow, but workers aren’t seeing enough of the gains. The initial gross domestic product, or GDP, growth estimate for the last quarter of 2014 came in at 2.6%, a solid number. At the same time, the Bureau of Labor Statistics, or BLS, released the employment cost index, arguably the most comprehensive measure of income growth in the U.S. economy, showing compensation growing only 2.2% over the past year. | Reaganomics Beats Obama's 'Middle Class Economics' By A Country Mile
President Obama has taken to touting his "middle class economics" as a big success. That's difficult to believe, given the latest GDP numbers, and impossible when you look at his complete record.

Health Care

Econ Comments & Analysis                                                                                            
Fox Business | New GAO Report Finds Health Costs Vary Widely in U.S.
In a deep dive into what’s driving health-care spending, a new report by the top Congressional watchdog unit again found wide differences in hospital costs for the same surgeries between geographic regions. Bottom line: You could be paying more for the same hospital procedure, nearly double, depending on where you live.


Wall Street Journal | Yellen Tells Senate Democrats U.S. Economy is Strong
Ms. Yellen conveyed that “things are going well” for the economy, unemployment is low, but some people are still hurting, Sen. Joe Manchin (D-W.V.) told reporters after emerging from the luncheon Thursday afternoon. “She feels the economy is strong, a lot is good,” he said.

Wall Street Journal | Fed-Watchers Look to Janet Yellen’s February Testimony Before Congress
If Federal Reserve Chairwoman Janet Yellen would like to start shifting the central bank away from rhetoric that has pointed to a first interest-rate increase around midyear, next month’s semiannual testimony before Congress may be just the forum.


Wall Street Journal | Obama Proposes One-Time 14% Tax on Overseas Earnings
President Barack Obama is making an opening bid on overhauling corporate taxes and linking it to boosting infrastructure spending, a move that could clear a rare path toward common ground in a deeply divided capital.

Econ Comments & Analysis                                                                                            
Washington Times | Why wages aren’t rising
President Obama has wisely abandoned his lead-filled trial balloon of taxing college savings plans. Congressional offices were deluged over the last week with indignant calls from voters on this middle-class bait-and-switch scheme and finally Democrats caved. Good riddance.


Wall Street Journal | Obama to Detail Nearly $4 Trillion Budget for Fiscal 2016
President Barack Obama on Monday will lay out the details of a nearly $4 trillion fiscal 2016 budget aimed at improving the nation’s infrastructure and boosting middle-class Americans, but at a cost of tax increases and spending above caps set in a bipartisan deficit-reduction agreement.

Econ Comments & Analysis                                                                                            
Market Watch | Obama bets that worries about budget deficits are fading
President Barack Obama is betting that Americans prefer “middle-class economics” to reducing the federal deficit.
Real Clear Markets | Voters Expect the GOP To Actually Reduce Spending
President Obama is supposed to send his budget proposal to Congress today and the word is that he wants an increase of $74 billion in discretionary spending above the sequester level that is the current legal baseline for spending. This would be a seven percent increase above current levels. While seven percent sounds like a very large increase, the $74 billion might not sound all that large. However, it is only the tip of the iceberg.