Archive for category Economy
What’s Wrong with 20-Somethings? Nothing a Decent Economy Wouldn’t Cure
Posted by Glenden Brown in American History, American People, Economy, This Blog on August 23, 2010
I haven’t been inspired lately, sorry for the silence.
I saw this long article at the NY Times bemoaning the terrible 20-somethings in our society who are all lazy and living with mom and delaying adulthood. In the last few months, I’ve heard an increasing chorus of adults in their 30s and 40s bemoaning the awfulness of the next generation; I just can’t share that dyspeptic view. Every birth cohort has to mature in its own way, shaped by the influences they experience as children, teens and young adults. And the trends these adults are bemoaning were being actively bemoaned when we were in our twenties.
Even by the grotesque standards of the 80s and 90s, higher education has become ridiculously expensive and student loan programs far more stringent. I finished grad school with fifty grand in debt; I know people who finished college with that then went on to grad school and ended up with a hundred plus thousand in debt, married to people with similar debt loads. A year at the U these days is about ten grand without housing (non resident tuition is significantly more). Very few young people have ten thousand dollars a year just laying around. That means student loans; even if they’re working, chances are good they won’t be earning enough to pay everything, that means increasing credit card debt. Upon graduating, the jobs just aren’t there – that means living on credit or with mom and dad.
The Times’ article wails: Read the rest of this entry »
69% of Americans: Let Bush Tax Cuts for the Rich Expire on Schedule
Posted by Richard Warnick in American People, Bush Administration, Deficit, Economic Exploitation, Economy, Federal Budget, National Politics, This Blog, congress on August 21, 2010
Via Raw Story: A new CNN/Opinion Research poll released on Friday indicates that a whopping 69 percent of Americans want the Bush tax cuts for the rich to expire at the end of this year. Eighty-one percent favor extending them for the middle class.
CNN/Opinion Research poll (PDF):
As you may know, the tax cuts passed into law when George W. Bush was president are set to expire this year. Unless a new bill is passed, federal income tax rates will rise to the level they were at when those cuts were enacted. Which of the following statements comes closest to your view:
31% -Those tax cuts should continue for all Americans regardless of how much money they make
51% – Those tax cuts should continue for families that make less than 250 thousand dollars a year, but taxes should rise to the previous level for families who make more than that amount
18% – Taxes should rise to the previous level for all Americans regardless of how much money they make
To avoid ballooning deficits, all the Bush tax cuts will have to be allowed to expire when we recover from Bush’s Great Recession. The Congressional Budget Office calculates that extending the tax cuts for all but the rich would likely boost economic growth in the short-run but could hamper it over the next decade as the deficit would rise to 8 percent of GDP by 2020.
Related One Utah post:
How Long Are We Going to Keep Blaming President Bush for the Results of His Bad Policies? (June 28)
UPDATE: Mitch McConnell’s Con: Cut Social Security to Enable Tax Cuts to the Rich
The Decline: The Geography of a Recession
Posted by Richard Warnick in American People, Bush Failures, Capitalism, Disaster, Economy, National Politics, Unemployment on August 17, 2010
Geographers love maps. Maps are one of the best forms of communication ever devised. But sometimes maps can be very, very frightening…
Multi-temporal map animation by LaToya Egwuekwe
According to the U.S. Department of Labor’s Bureau of Labor Statistics, there are nearly 31 million people currently unemployed — that’s including those involuntarily working part time and those who want a job, but have given up on trying to find one. In the face of the worst economic upheaval since the Great Depression, millions of Americans are hurting. “The Decline: The Geography of a Recession,” as created by labor writer LaToya Egwuekwe, serves as a vivid representation of just how much. Watch the deteriorating transformation of the U.S. economy from January 2007 — approximately one year before the start of the recession — to the most recent unemployment data available today.
Note: This map displays the so-called U3 unemployment statistic, which doesn’t account for the underemployed and those who’ve simply given up looking for work. The real measure of unemployment is approximately double the U3 numbers.
h/t HuffPo
UPDATE: Glenn Beck’s advice to his unemployed fellow Americans: “Go out and get a job.” (Beck’s job pays $25 million a year — nice work if you can get it. No college degree required, either.)
UPDATE: Death and Joblessness: Suicide Dogs the Long-Term Unemployed. What Can Be Done to Help Them?
UPDATE: Initial Jobless Claims the Latest Indicator in Support of a Double Dip
Initial Jobless Claims for the week ending August 14th came in at a seasonally adjusted 500,000, the highest level since November 2009.
…That begs the question of whether the NBER’s reluctance to call an official end to the great recession means that the NBER thinks it never really ended.
The Curved World: Redressing Economic Disparity and Maintaining Transparency
Posted by Glenden Brown in Bailout, Deficit, Economy, Poverty, Society, Tax Policy, This Blog, Unemployment on August 17, 2010
David Smick’s The World Is Curved is one of the better books about the financial crisis of 2008. Despite Smick’s tendency to name drop (and it’s difficult to not get the impression Smick is the financial world’s Forrest Gump) the book is a brilliant and incisive analysis of the current state of both politics and economics. Smick tackles a wide array of issues in what is a relatively easy read (330 pages, and it goes quickly). After first laying out the paradoxical history of the massive entrepreneurial experiment of the last 30 years (it has simultaneously lifted millions of people out of poverty but has also led to increasingly disparity), Smick tackles the debacle of the 2008 financial collapse. Reading Smick’s account, it’s impossible to escape the reminder of how close the world came to a complete economic shutdown. From the book’s site, Smick has this to say about the future: Read the rest of this entry »
Social Security Isn’t At Risk Except From the People Trying to Destroy It!
Posted by Richard Warnick in American People, Capitalism, Democrats, Economic Exploitation, Federal Budget, National Politics, Poverty, This Blog, congress on August 2, 2010
StrengthenSocialSecurity.org – Sign the petition.
Social Security is the only defined-benefit retirement plan available to most Americans. My generation paid double payroll taxes so that we could fund the retirement of the generation ahead of us, and build up the trust fund for our own retirement.
On December 1, President Obama’s secretive Catfood Commission is going to recommend cuts to Social Security in the name of deficit reduction.
Dr. Irwin Kellner, MarketWatch:
Here is the bottom line right up front: the Social Security system will remain solvent far longer than is generally expected, so there is no need to tinker with it.
…Since 1983, revenues from payroll taxes have exceeded benefits paid to retirees. In 2003, income totaled $632 billion while benefits paid were $471 billion. Assets held in special issue U.S. Treasury securities totaled $2.5 trillion (the trust fund), with this amount expected to grow significantly over the next dozen or so years.
Ten years ago, the system’s actuaries thought the trust fund would be depleted by 2029. Five years ago they thought it would be 2032. Now the date when the surplus is expected to be gone is 2042 — and the Congressional Budget Office thinks it could be 2052.
The reason for these changing projections? More money coming in than previously expected.
This alone should signal policymakers that major surgery may not be needed. But when you look at the assumptions underlying these projections, you have to be even more cautious.
The system’s actuaries actually produce three long-range projections. The one that’s been picked by the politicians, pundits and the press and turned into the conventional wisdom is their intermediate projection — the one that expects the trust fund to be depleted by 2042.
But the assumptions underlying these projections are very pessimistic — especially when it comes to economic growth.
The actuaries assume that the U.S. economy will grow by an annual rate of 1.9 percent per year over the next 75 years. This is far below the 3.6 percent average of the past 75 years — a period that includes the Great Depression.
The system’s actuaries have a somewhat more optimistic projection. It assumes, among other things, a slightly faster rate of growth of 2.7 percent per year over the same period.
While this, too, is below the economy’s 75-year average, it shows that the system never runs out of money. That’s right, never.
So before they start fixing the Social Security system, policymakers should first understand that it’s not broken to begin with.
UPDATE: The Social Security Trust Fund is $2.5 trillion, not $1.5 trillion as originally stated above.
UPDATE: James K. Galbraith has a good idea– let’s expand Social Security and Medicare to save the economy:
There are many older workers who’ve already worked hard jobs for many years. They would love to retire. But they don’t, because early retirement on Social Security is very costly: you lose benefits every month over your entire future life, unless you hang on to the regular retirement age. We should give these people a break, and lower, not raise, the full-benefit Social Security retirement age—say, to 62 for the next three years. This would give millions a chance to get out, if they want to.
…Encouraging early retirements would mean that young people—just out of school, with fresh skills, good health, and high energy—would get the jobs they need now. They would not be stuck waiting, or spinning their wheels in school, for years and years.
UPDATE: Via HuffPo:
Social Security, according to its annual report (PDF), is expected to pay out slightly more in benefits than it receives in payroll tax this year, for the first time since changes were made in 1983. But payroll taxes are only one source of income for the program, and with the others — including interest income on its $2.5 trillion trust fund, held in special issue U.S. Treasury securities — the program is expected to continue to run a surplus until 2024.
Milton Friedman’s $8 Trillion Dollar Mistake
Posted by Glenden Brown in Capitalism, Conservative, Deficit, Economic Exploitation, Economy on August 2, 2010
In a lengthy and interesting op-ed, former Reaganite David Stockman covered a lot of ground, but one passage in particular jumped out at me:
The first of these [great deformations of the national economy] started when the Nixon administration defaulted on American obligations under the 1944 Bretton Woods agreement to balance our accounts with the world. Now, since we have lived beyond our means as a nation for nearly 40 years, our cumulative current-account deficit — the combined shortfall on our trade in goods, services and income — has reached nearly $8 trillion. That’s borrowed prosperity on an epic scale.
It is also an outcome that Milton Friedman said could never happen when, in 1971, he persuaded President Nixon to unleash on the world paper dollars no longer redeemable in gold or other fixed monetary reserves. Just let the free market set currency exchange rates, he said, and trade deficits will self-correct.
It may be true that governments, because they intervene in foreign exchange markets, have never completely allowed their currencies to float freely. But that does not absolve Friedman’s $8 trillion error. Once relieved of the discipline of defending a fixed value for their currencies, politicians the world over were free to cheapen their money and disregard their neighbors.
There’s something epic and mindboggling about those paragraphs. Friedman has been a leading preacher for the doctrine of “free markets fix everything” for decades. Stockman accuses him of misjudgment on a scale so massive it beggars the imagination.
Bush’s ‘Ownership Society’ – Wiping Out the Middle Class
Posted by Richard Warnick in American People, Bailout, Bush Administration, Capitalism, Disaster, Economic Exploitation, Economy, National Politics, Poverty, This Blog, Unemployment on July 27, 2010
Yesterday I got my annual property tax assessment in the mail. When President Bush’s so-called “ownership society” collapsed, the value of the house I live in plunged 40 percent in one year. Now it has come back up a few thousand dollars to the market price from eight years ago.
The “ownership society” was a right-wing article of faith, but the hard reality is most Americans got owned. By the politicians, by the banks, by the corporations. I’m actually one of the lucky ones, because I don’t owe more on my house than it’s worth– and I still have a job.
From Michael Snyder, Business Insider:
22 Statistics That Prove The Middle Class Is Being Systematically Wiped Out Of Existence In America
- 83% of all U.S. stocks are in the hands of 1% of the people.
- 61% of Americans “always or usually” live paycheck to paycheck, which was up from 49% in 2008 and 43% in 2007.
- 66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.
- 36% of Americans say that they don’t contribute anything to retirement savings.
- A staggering 43% of Americans have less than $10,000 saved up for retirement.
- 24% of American workers say that they have postponed their planned retirement age in the past year.
- Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32% increase over 2008.
- Only the top 5% of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
- For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
- In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to 1.
- As of 2007, the bottom 80% of American households held about 7% of the liquid financial assets.
- The bottom 50% of income earners in the United States now collectively own less than 1% of the nation’s wealth.
- Average Wall Street bonuses for 2009 were up 17% when compared with 2008.
- In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.
- The top 1% of U.S. households own nearly twice as much of America’s corporate wealth as they did just 15 years ago.
- In America today, the average time needed to find a job has risen to a record 35.2 weeks.
- More than 40% of Americans who actually are employed are now working in service jobs, which are often very low paying.
- For the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
- This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
- Despite the financial crisis, the number of millionaires in the United States rose a whopping 16% to 7.8 million in 2009.
- Approximately 21% of all children in the United States are living below the poverty line in 2010 – the highest rate in 20 years.
- The top 10% of Americans now earn around 50% of our national income.
What are the Republicans proposing now that the “ownership society” has been exposed as a fraud? They want to raise taxes on what’s left of the middle class to pay for more tax cuts for the rich, and more corporate tax cuts.
UPDATE: On Walking Away: Is Strategic Default All That’s Left to Stressed Homeowners?
How Can We Stop the Catfood Commission?
Posted by Richard Warnick in Deficit, Democrats, Disaster, Economic Exploitation, Economy, National Politics, This Blog, Unemployment, congress on July 23, 2010
It is absolutely beyond the Republicans’ power to cut Social Security, even if they re-take the House and Senate in November, since Obama will continue to wield veto power. The real impetus for Social Security cuts is from the “Deficit Commission” which Obama created in January by Executive Order, then stacked with people (including its bipartisan co-Chairs) who have long favored slashing the program, and whose recommendations now enjoy the right of an up-or-down vote in Congress after the November election, thanks to the recent maneuvering by Nancy Pelosi. The desire to cut Social Security is fully bipartisan (otherwise it couldn’t happen) and pushed by the billionaire class that controls the Government.
If the Catfood Commission proposes a bill slashing Social Security and Medicare benefits and it comes to the House floor, Republicans and Blue Dog Dems will vote for it. Even if all the progressive-leaning Democrats oppose it on a straight vote, it will probably pass. Millions of retirees will fall out of the middle class into poverty.
Jon Walker on FDL thinks that House progressives can threaten to remove Rep. Nancy Pelosi as Speaker of the House if she allows such a vote. That does not seem likely. IMHO if they had that kind of cojones then Bush would have been impeached and health care would include a public option.
Here’s the question. How can we stop the Catfood Commission?
Related One Utah post:
Budget Priorities Left to Catfood Commission (July 6)
Hey, Senator Hatch: Unemployment Insurance Is Paid For Already
Posted by Richard Warnick in Economy, Federal Budget, National Politics, Orrin Hatch, Republicans, Tax Policy, Tea Bag Party, This Blog, Unemployment, Utah Politics on July 20, 2010
Source: Calculated Risk
WASHINGTON (AP) Millions of people stuck on the jobless rolls would receive an extension of unemployment benefits averaging $309 a week under a Senate bill that appears set to break free of a Republican filibuster.
But Senator Orrin Hatch hates to let go of that money. He’s a born-again deficit hawk. (Or maybe he’s just running scared from the Tea Partyers).
“What the president isn’t telling the American people is that many of us in the Senate are fighting to make sure our children and grandchildren aren’t buried under a mountain of debt,” said Sen. Orrin Hatch, R-Utah. “If we are going to extend unemployment benefits, then let’s do it without adding to our record debt.”
Last December, Senator Hatch explained why he voted for the Bush administration’s deficit spending, deficits that doubled the National Debt in eight years. Under Bush, “it was standard practice not to pay for things,” he said.
What Senator Hatch isn’t telling the American people is there’s a reason why Congress has always routinely extended unemployment benefits (before the Party of NO appeared on Capitol Hill last year). They don’t add to the National Debt because they’re already financed by state and federal payroll taxes.
The unemployment insurance system is jointly operated by the state and federal governments. Under the Federal Unemployment Tax Act (FUTA), the federal tax rate is 6.2% of taxable wages applied to the first $7,000 of income. Most of the federal payroll tax can be offset by state unemployment taxes, which vary from state to state, as do the benefits.
Over the long run, unemployment is funded by a dedicated revenue stream. It’s paid for.
UPDATE: Unemployment: Report Says Jobs Hole Could Persist For A Decade
UPDATE: David Dayen on FDL:
This extends benefits through November, only four months away. The White House has said they would fight for an additional extension if, as expected, unemployment does not recover significantly. So we’ll have this fight all over again soon. But Democrats basically lost this round…
UPDATE: Senator Sherrod Brown (D-OH) had this to say about his Republican colleagues:
“They voted for Bush tax cuts for the wealthy, charged it to our grandchildren, didn’t pay for it,” he said. They “voted for the giveaway or bailouts to drug and insurance companies in the name of Medicare privatization, charged it to our grandchildren, didn’t pay for it.
“And now they’re saying, because these are laid off workers who have done the right thing for most of their lives and now need some help, that we can’t provide it for them. It’s terrible public policy.”
Hope is Fading Away
Posted by Richard Warnick in Barack Obama, Civil liberties Infringement, Democrats, Disaster, Economy, Health Care, National Politics, Party Politics, This Blog, Unemployment on July 16, 2010
John Harris and Jim VandeHei yesterday wrote a Politico article in which unnamed White House functionaries complain that the administration isn’t getting enough credit for bringing the change promised in the 2008 campaign.
Digby offers a few thoughts that are obvious to those of us outside the Beltway:
First of all, the central premise seems to be that liberals should be happy that Obama has “gotten something done” without regard to what that “something” is. But the fact is that professional politicians always rattle off a legislative laundry list while activists care about process, politics and policy — and average voters only care about the results.
…Therefore, his political advisers should know that when the country is still reeling from unemployment and foreclosures after nearly two years, the passage of an inadequate stimulus bill, which unrealistic benchmarks and a giddy victory party ensured would be the only chance they got, the only people who will consider that a “success” would be beltway insiders. They should have realized that a health care bill that nobody in their right minds would have designed from scratch, the worst aspects of which liberals will be asked to defend for years to come, would be met with dampened enthusiasm by those who watched the process devolve from a sense of progressive purpose to an exhausting farce. They are expected to be able to predict that financial reform without accountability for what’s gone before, combined with the administration’s unwillingness to confront the civil liberties abuses of the last administration — indeed expanding on them in some cases — would show a lack of fundamental concern for justice among those who care about such things.
Since the Village is essentially a Republican town perhaps they assumed that liberals were all going to be the same dead-enders the Bush cultists were, defending their man until the day he was out of office (and then insisting they never liked him in the first place). That’s what “little people” (and paid political hacks) are supposed to do. But liberals are not known for cultlike devotion to their leaders — ask Lyndon Johnson and Jimmy Carter.
Like I said, some things are obvious outside the Beltway.
killed
wounded
Recent Comments