CRS Resurrects Report Showing No Correlation Between Low Tax Rates on the Wealthy and Economic Growth

By: Friday December 14, 2012 6:14 am

A couple months ago, under pressure from Republicans, the Congressional Research Service, basically the think tank of Congress, took down a study on tax rates for the rich and the economy that rebutted a key GOP argument, that tax cuts at the top spurred economic growth. It didn’t matter that the Congressional Budget Office found [...]

Unemployment Problem, Not a Deficit Problem, Cont’d

By: Thursday December 13, 2012 12:30 pm

I touched on this yesterday, but with the release of the Federal Reserve’s economic projections, we can say just what a catastrophe the past several years of policymaking has been. Here’s Paul Krugman: What struck me is that the Fed expects the unemployment rate to be well above its long-run level even in the fourth [...]

We Have an Unemployment Problem, Not A Deficit Problem

By: Wednesday December 12, 2012 2:10 pm

The good news is that the Federal Reserve vowed to keep interest rates low until unemployment fell below 6.5%. The bad news is that they implied it would take until 2015 to get there. And it will take that long, if we continue to pull back on fiscal policy in the middle of a lukewarm [...]

Fed Announces Game-Changing Inflation and Unemployment Targets for Monetary Policy

By: Wednesday December 12, 2012 10:45 am

The Federal Reserve adopted an innovative tactic in its latest Federal Open Market Committee report. Instead of merely identifying a target federal funds rate, or giving guidance that rates will remain low for a certain period of time, the Fed now specifically targeted both an unemployment rate and an inflation rate, and said that their [...]

Treasury About to Embark on Measures to Hold Nation Back from Debt Limit Temporarily

By: Wednesday December 12, 2012 9:15 am

The Treasury has begun its “extraordinary measures”to fend off the reaching of the nation’s debt limit.

Corporate Tax Reform Dropped Into Fiscal Slope Negotiations

By: Wednesday December 12, 2012 6:17 am

I think the White House added the corporate tax piece into the negotiations so that they could get business groups to pressure Boehner on the other points, especially raising individual tax rates. John Engler of the Business Roundtable dutifully carried that out yesterday.

The Case for Adequacy and Economic Growth Rather than Deficit Reduction and “Smart Cuts”

By: Tuesday December 11, 2012 8:30 am

Fiscal slope talks have progressed, according to multiple news reports. Nobody’s talking details, which tea leaf-readers are taking as a sign of advancement (I wouldn’t be so sure of that, it seems more like standard back-room negotiating practice). But we do know that both sides are talking. What could they be talking about? Well, we [...]

Berlusconi’s Return Roils Italian Markets

By: Monday December 10, 2012 10:08 am

Markets in Italy are freaking out today, mainly because of the pronouncement of one man, Silvio Berlusconi. The former Prime Minister plans to run for office yet another time, and Mario Monti, the current caretaker leader, has resigned, setting up new elections probably in February.

The Housing Cliff

By: Monday December 10, 2012 7:45 am

Forgive me if I slip into some cliff metaphors for the next few posts, but the employment of the tool actually makes more sense in this context. The fact is that the expiration of the Mortgage Forgiveness Debt Relief Act, as explained by Adam Levin of Credit.com, represents a real threat to a nascent housing [...]

Consumer Confidence Starts to Drop

By: Friday December 7, 2012 11:45 am

This chart, which plots consumer confidence against incidences of news stories about the fiscal slope, finally shows the consumer affected by the uncertainty and fear from Congressional action (or lack thereof) tanking the economy. Since the summer, the consumer has been buoyed by a number of factors, including a recovery in housing prices and incremental [...]

The Continuing Crisis of Long-Term Unemployment

By: Friday December 7, 2012 9:15 am

As we gaze at today’s payroll report, it’s worth pointing out how government policies have improved the numbers in relative terms. Not by putting more people back to work, but by putting more people into the uncounted shadows: During a press conference demanding unemployment insurance be part of a fiscal cliff deal, Chuck Schumer noted [...]

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