News
Bloomberg | Consumer Comfort in U.S. Climbed to an Eight-Month High
Consumer sentiment last week reached an eight-month high, reflecting broad-based gains that indicated even wealthy Americans were less concerned about tax increases and fiscal policy challenges heading into 2013.
FOX Business | Despite a Rough Recovery, Consumers Still Paying Down Debt
Consumers continued to pay down debt in the third quarter of 2012, but slow job growth and the expiration of a tax cut could mean it will become more difficult to repay loans, the American Bankers Association said on Thursday.
CNN Money | Wall Street's biggest headwind: Washington
Investors are relieved that the fiscal cliff was avoided, thanks to last minute negotiations, but the debt problems facing the United States -- and in turn the stock market -- are far from over.
Bloomberg | Housing Lobby’s Win Costing U.S. $600 Billion: Mortgages
Congressional efforts to reduce the U.S. deficit revived tax breaks for mortgage insurance and extended interest deductions for homeowners that will cost the government $600 billion over five years.
Washington Post | Financial reform battle continues over Dodd-Frank law
The fate of financial reform may be decided in the coming year as congressional leaders on both sides of the aisle attempt to modify the Dodd-Frank Act.
Econ Comments & Analysis
Mercatus | Dodd-Frank Regulatory Actions to Watch in 2013
Dodd-Frank doesn’t take away the taxpayer safety net and force the market to sink or swim without government guarantees. It doesn’t address the dangerous dependence on taxpayer guarantees in housing finance that was central to the crisis. Dodd-Frank deepens the government’s entanglement with the biggest financial institutions and threatens to shrink the ranks of smaller institutions through regulatory inundation.
Real Clear Markets | More Sensible Regulations Require Predictable Disclosure
The Administration tardily released the Fall 2012 Unified Agenda of Federal Regulatory and Deregulatory Actions on December 21, 2012. The Spring 2012 edition was never released, thus breaking a nearly two-decade practice of agencies telling the public twice a year which regulations are under consideration. The semi-annual publication of agencies' regulatory agendas is not simply good government; it fulfills a legal mandate.
Blogs
Economist | Cuts on the sly
To those on fixed incomes, including many retirees, inflation is the enemy. Workers can generally expect their wages to rise with inflation (if not in one-for-one lockstep). But after retirement income is set, and erodes in real terms as prices increase. Some retirees are protected; their pension benefits increase with inflation each year. That protection may now be vulnerable.
Thursday, January 3, 2013
Health Care
News
Politico | Obamacare: 5 states to watch
States entered 2012 not knowing whether President Barack Obama’s health care law would survive. They enter 2013 facing the reality of impending deadlines and tough choices that can’t be put off much longer.
Econ Comments & Analysis
Real Clear Markets | NGDP's Advocates Overstate Monetarism's Effectiveness
Canadian central bank chief Mark Carney, who will become governor of the Bank of England in June, caused a stir on both sides of the Atlantic when he appeared to endorse a monetary policy based on nominal gross domestic product (NGDP) targeting - a new monetary policy framework. A fresh approach to the current policy, which has manifestly failed to guarantee macroeconomic stability, is certainly long overdue. But could NGDP targeting have really prevented the financial meltdown and the ensuing recession as its advocates claim?
Politico | Obamacare: 5 states to watch
States entered 2012 not knowing whether President Barack Obama’s health care law would survive. They enter 2013 facing the reality of impending deadlines and tough choices that can’t be put off much longer.
Econ Comments & Analysis
Real Clear Markets | NGDP's Advocates Overstate Monetarism's Effectiveness
Canadian central bank chief Mark Carney, who will become governor of the Bank of England in June, caused a stir on both sides of the Atlantic when he appeared to endorse a monetary policy based on nominal gross domestic product (NGDP) targeting - a new monetary policy framework. A fresh approach to the current policy, which has manifestly failed to guarantee macroeconomic stability, is certainly long overdue. But could NGDP targeting have really prevented the financial meltdown and the ensuing recession as its advocates claim?
Monetary
Econ Comments & Analysis
WSJ | The Fed's Dangerous Direction
The Federal Reserve is heading in the wrong direction. What the central bank describes as "unconventional monetary policy" is creating dangerous bubbles in asset markets that will lead to higher future inflation and is supporting the explosive growth of the national debt. Its new "communications strategy" will, moreover, only further confuse markets.
WSJ | The Fed's Dangerous Direction
The Federal Reserve is heading in the wrong direction. What the central bank describes as "unconventional monetary policy" is creating dangerous bubbles in asset markets that will lead to higher future inflation and is supporting the explosive growth of the national debt. Its new "communications strategy" will, moreover, only further confuse markets.
Taxes
News
CNN Money | Your taxes under the fiscal cliff deal
The fiscal cliff deal contains a wide array of tax provisions that will affect taxpayers. Here's the list of what is -- and isn't -- in the agreement
Politico | Dems done hiking tax rates?
The fiscal cliff deal handed Democrats a tax victory years in the making, but it also means the party will need a new playbook for the budget battles that lie ahead.
CNN Money | No word on tax refunds
Congress' late action on the fiscal cliff tax provisions has caused headaches for the Internal Revenue Service, which now has to program its systems and issue tax forms based on the revised laws. It has not announced when taxpayers can start filing their 2012 returns, which means refunds will most likely be delayed. Filing usually begins in mid-January.
Bloomberg | Budget Deal Lets More Savers Switch to Roth 401(k): Taxes
U.S. workers willing to take tax pain today in exchange for tax-free gains on earnings in their 401(k) retirement accounts later have a new avenue to do so.
CNN Money | Your taxes under the fiscal cliff deal
The fiscal cliff deal contains a wide array of tax provisions that will affect taxpayers. Here's the list of what is -- and isn't -- in the agreement
Politico | Dems done hiking tax rates?
The fiscal cliff deal handed Democrats a tax victory years in the making, but it also means the party will need a new playbook for the budget battles that lie ahead.
CNN Money | No word on tax refunds
Congress' late action on the fiscal cliff tax provisions has caused headaches for the Internal Revenue Service, which now has to program its systems and issue tax forms based on the revised laws. It has not announced when taxpayers can start filing their 2012 returns, which means refunds will most likely be delayed. Filing usually begins in mid-January.
Bloomberg | Budget Deal Lets More Savers Switch to Roth 401(k): Taxes
U.S. workers willing to take tax pain today in exchange for tax-free gains on earnings in their 401(k) retirement accounts later have a new avenue to do so.
Employment
News
CNN Money | Business hiring picks up in December
Employers added 215,000 jobs in the month, ADP said, beating economists' forecasts of 140,000. That's a substantial pick-up in hiring since November, when private employers added 148,000 jobs.
Bloomberg | Jobless Claims in U.S. Rose More Than Forecast in Holidays
More Americans than forecast filed claims for unemployment insurance payments last week, according to government figures that were estimated because some state agencies closed during the holidays.
CNN Money | Federal workers breathe sigh of relief
The deal passed by the House late Tuesday found a way to set aside $24 billion to stave off some automatic spending cuts that were scheduled to kick in Wednesday.
Econ Comments & Analysis
WSJ | A Message to Aspiring Lawyers: Caveat Emptor
There is a crisis in law-school education, but don't expect the institutions to tell potential applicants about it. In short, there are far too many graduates for the number of jobs available, and the majority of those who get jobs are not being paid nearly enough to service their debt.
CNN Money | Business hiring picks up in December
Employers added 215,000 jobs in the month, ADP said, beating economists' forecasts of 140,000. That's a substantial pick-up in hiring since November, when private employers added 148,000 jobs.
Bloomberg | Jobless Claims in U.S. Rose More Than Forecast in Holidays
More Americans than forecast filed claims for unemployment insurance payments last week, according to government figures that were estimated because some state agencies closed during the holidays.
CNN Money | Federal workers breathe sigh of relief
The deal passed by the House late Tuesday found a way to set aside $24 billion to stave off some automatic spending cuts that were scheduled to kick in Wednesday.
Econ Comments & Analysis
WSJ | A Message to Aspiring Lawyers: Caveat Emptor
There is a crisis in law-school education, but don't expect the institutions to tell potential applicants about it. In short, there are far too many graduates for the number of jobs available, and the majority of those who get jobs are not being paid nearly enough to service their debt.
Budget
News
Politico | Moody's: U.S. must tackle deficit
Following the fiscal cliff deal, lawmakers must focus on deficit reduction when they tackle the debt ceiling issue to turn around a negative outlook on the U.S. credit rating, according Moody’s Investors Service.
Politico | Obama signs bill to avert fiscal cliff, via autopen
President Barack Obama ordered Wednesday that his signature be affixed to legislation that averts the bulk of the so-called "fiscal cliff" and prevents federal income tax rates from rising on the vast majority of Americans, the White House said.
Econ Comments & Analysis
Washington Times | ‘Fiscal cliff’ deal ignores the real problem
Not until after the clock ran out on 2012 did the Senate cobble together a “fiscal cliff” deal that finally passed the House late on Jan. 1, in a 257-167 vote. This deal amounts to a kind of “bungee cord” that has snapped us back to the top edge of the cliff again. That we should get a deal instead of a solution should come as no surprise. The entire process has been focused on the wrong problem all along.
Market Watch | U.S. Treasury takes new step to avoid debt limit
Treasury Secretary Tim Geithner said late Monday that he was suspending investment in the Civil Service Retirement and Disability Fund in a effort to delay the day the government will exceed its $16.4 trillion legal borrowing authority.
CNN Money | Deficit hawks: Fiscal cliff deal a real downer
That, in a nutshell, summarizes how independent deficit hawks view the fiscal cliff compromise that Congress passed on Tuesday and which President Obama signed into law Wednesday.
AEI | Republicans got a pretty good deal
The more you think about it, the more it becomes clear that Republicans did far better in the tax negotiations than one might have expected. One might even say that they won.
CATO | The Spending Cliff
Twenty-three point nine trillion dollars. That will be our national debt in 2022 under the fiscal-cliff bill that just passed Congress. That’s nearly $4 trillion more than the current-law baseline, and while most of that comes from making the Bush tax cuts permanent for most Americans without offsetting the loss of revenue through spending cuts, at least $330 billion of the new debt results from the increased spending that was part of the deal. Our government debt will amount to more than 118 percent of GDP.
Blogs
Reason | Fiscal Irresponsibility Day
It's the deficit-reduction package that doesn't reduce the deficit. It's the debt-ceiling deal that doesn't touch the debt ceiling (and doesn't cut debt). It's the long-term entitlement negotiation that—after nearly three years of wheedling—does not delay, let alone stave off, a Baby Boomer retirement bomb currently on pace to swallow half of federal outlays by 2030.
Library of Economics | How I Was Wrong About Government Debt
When an individual owes three times his annual income, we think it questionable: Okay for recent home-buyers, but probably a bad idea. But when a government owes 300% of GDP in peacetime, we think it blatantly irresponsible. I've often been puzzled by the disparity.
Politico | Moody's: U.S. must tackle deficit
Following the fiscal cliff deal, lawmakers must focus on deficit reduction when they tackle the debt ceiling issue to turn around a negative outlook on the U.S. credit rating, according Moody’s Investors Service.
Politico | Obama signs bill to avert fiscal cliff, via autopen
President Barack Obama ordered Wednesday that his signature be affixed to legislation that averts the bulk of the so-called "fiscal cliff" and prevents federal income tax rates from rising on the vast majority of Americans, the White House said.
Econ Comments & Analysis
Washington Times | ‘Fiscal cliff’ deal ignores the real problem
Not until after the clock ran out on 2012 did the Senate cobble together a “fiscal cliff” deal that finally passed the House late on Jan. 1, in a 257-167 vote. This deal amounts to a kind of “bungee cord” that has snapped us back to the top edge of the cliff again. That we should get a deal instead of a solution should come as no surprise. The entire process has been focused on the wrong problem all along.
Market Watch | U.S. Treasury takes new step to avoid debt limit
Treasury Secretary Tim Geithner said late Monday that he was suspending investment in the Civil Service Retirement and Disability Fund in a effort to delay the day the government will exceed its $16.4 trillion legal borrowing authority.
CNN Money | Deficit hawks: Fiscal cliff deal a real downer
That, in a nutshell, summarizes how independent deficit hawks view the fiscal cliff compromise that Congress passed on Tuesday and which President Obama signed into law Wednesday.
AEI | Republicans got a pretty good deal
The more you think about it, the more it becomes clear that Republicans did far better in the tax negotiations than one might have expected. One might even say that they won.
CATO | The Spending Cliff
Twenty-three point nine trillion dollars. That will be our national debt in 2022 under the fiscal-cliff bill that just passed Congress. That’s nearly $4 trillion more than the current-law baseline, and while most of that comes from making the Bush tax cuts permanent for most Americans without offsetting the loss of revenue through spending cuts, at least $330 billion of the new debt results from the increased spending that was part of the deal. Our government debt will amount to more than 118 percent of GDP.
Blogs
Reason | Fiscal Irresponsibility Day
It's the deficit-reduction package that doesn't reduce the deficit. It's the debt-ceiling deal that doesn't touch the debt ceiling (and doesn't cut debt). It's the long-term entitlement negotiation that—after nearly three years of wheedling—does not delay, let alone stave off, a Baby Boomer retirement bomb currently on pace to swallow half of federal outlays by 2030.
Library of Economics | How I Was Wrong About Government Debt
When an individual owes three times his annual income, we think it questionable: Okay for recent home-buyers, but probably a bad idea. But when a government owes 300% of GDP in peacetime, we think it blatantly irresponsible. I've often been puzzled by the disparity.
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