One part of the “fiscal cliff” deal that received little attention was the expiration of the middle class payroll tax cut. The tax increase occurred immediately and hit workers right in the paycheck. While the lower classes may not drive the economy their spending does have influence: A payroll tax increase of 2 percentage points has [...]
|By: David Dayen Thursday December 20, 2012 10:00 am|
The economy grew at a faster rate than expected in the third quarter, according to the final revision on GDP released today. GDP increased at a relatively healthy 3.1% clip in Q3, a step up from the 1.3% increase in the final revision in Q2. Both figures are annualized. The Bureau of Economic Analysis explains [...]
|By: David Dayen Monday December 17, 2012 6:59 am|
Paul Krugman takes aim at something that should have been a major talking point for progressives, even if lawmakers couldn’t touch it, for the last four years. There has been a void in talking about the budget deficit in real terms, in what it’s composed of and what it really means. First of all, to [...]
|By: David Dayen 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 [...]
|By: David Dayen 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 [...]
|By: David Dayen 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 [...]
|By: David Dayen 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 [...]
|By: David Dayen 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.
|By: David Dayen 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.
|By: David Dayen 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 [...]
|By: David Dayen 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.