Despite a recent spate of good economic data, including last week’s jobs report, the U.S. economy remains deeply depressed. Don’t take my word for it. That’s how Paul Krugman, leftist econo-pundit extraordinaire, describes the economy. In a recent column in The New York Times, he wrote, “our economy remains deeply depressed.” As Krugman pointed out, given an honest appraisal, one finds that “every silver lining comes with a cloud.” And thus it is with the recent good data, which while decidedly good and will hopefully persist, nevertheless cannot disguise the …
Much has been made of Mitt Romney’s asserted 15 percent or so tax rate. There is both a material error and an irony to this story. The release of Romney’s tax returns for 2009 and 2010 and a preliminary assessment for 2011 shows a remarkably consistent picture. First, he makes a pretty penny, but we knew that. His income is about $20 million a year, and he consistently pays about 15 percent in federal income tax. Most of his income is either dividends or capital gains, which are each taxed …
President Obama’s Council on Jobs and Competitiveness released its third report January 17 entitled “Road Map to Renewal,” a worthy description of serious issues affecting the American economy coupled with set of proposals that, with few exceptions, can best be described as pretty thin gruel. The council—chaired by Jeffrey R. Immelt, the chairman and CEO of GE—was obviously constrained in many cases by political considerations imposed on it either by the Obama Administration or by itself as it recognized the political season. However, this report will likely be best known …
The remarks of Alan Krueger, chairman of Obama’s Council of Economic Advisers, asserting that taxing the rich can spur economic growth demonstrate that he and the Administration are nothing if not consistent in their mistakes. Krueger says that there is growing income inequality in the United States, that this growing inequality contributes to slowing economic growth, and that raising taxes on the wealthy to offset some of this growing income inequality would actually stimulate the economy in the near term. While income inequality in the United States is growing, the …
The political battle over extending the payroll tax holiday is understandably confusing for many Americans, so it is worthwhile to step back and see how we got into this mess. Americans have come to expect Washington’s lamentable dysfunction, but this instance is of a different sort than most. First, the issue: A 2 percentage point cut in the federal payroll tax, enacted for 2011, is set to expire at the end of the year. The policy was dubbed a “holiday,” not because it was enacted during Christmas, but because it …
The Fed has shocked us once again, and it’s probably right. There’s a firestorm on the horizon. It starts in Europe, but it threatens the U.S. economy just as surely, and the Fed is getting ready. The most fundamental role of any central bank is to deal with a financial market crisis, to ensure markets operate as normally as circumstances permit. A central bank does this primarily by ensuring an adequate flow of liquidity to market participants, whether banks, other financial institutions, or other central banks. It is in this …
Contrary to tradition, the Congressional Budget Office (CBO) today released its mid-year assessment of the budget and economic situation. Traditionally, CBO releases its mid-year assessment after the White House’s Office of Management and Budget (OMB) releases its statutorily required Mid-Session Review (MSR). The law requires the MSR to be produced by July 15 of each year. For example, last year the Administration almost hit the target, releasing the MSR on July 23. However, the Administration has not yet complied with the law for this year, and with August waning the …
Ever since the debate over the debt limit began in earnest at the start of the year, the Obama Administration, led by Treasury Secretary Tim Geithner, has implied that the U.S. might default on its publicly held debt. In his press conference today, the President said that “it is not acceptable for us not to raise the debt limit and to allow the U.S. government to default. We cannot threaten the United States’ full faith and credit for the first time in our nation’s history.” The fear of default and …
The White House yesterday launched yet another signature initiative to cut wasteful spending, once again setting the Administration’s key utility infielder, Vice President Joe Biden, to the task. This latest campaign follows a previous effort launched in 2009 directing the cabinet secretaries to track down a whole $100 million—yes, million—in wasteful spending. In the summer of that year the White House then trumpeted that they had over-performed by a whole $2 million. Meanwhile, the budget deficit topped $1.4 trillion. Two full years into the Administration, with agency budget officers and …
May 21, 2011, was supposed to be Judgment Day according to Harold Camping. It was, in a sense. As the day came and went, the world judged that Camping’s 15 minutes of fame were up. Treasury Secretary Tim Geithner may yet learn something from Camping. Geithner has been a whirlwind of worry about the nation defaulting in the event Congress fails to raise the debt ceiling. It is interesting, therefore, that the market for U.S. debt—where the default would occur—remains sanguine about the debt ceiling debate and dismissive of Geithner’s …
