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Economic News, Data and Analysis

BudgetBlog

`cause just one blog won’t do…
Center for American Progress Budget Blog

Filed under: Economics

15 new ideas

CAP has released a doc with new policy ideas…

15 New Ideas – Center for American Progress
America today faces profound challenges. As progressives, we believe America’s path forward requires that our leaders offer bold, new approaches built on careful analysis and common ideals.
The pages that follow lay out 15 new ideas from Center for American Progress experts for tackling America’s challenges head-on. Each page outlines an idea and provides links to more detailed treatments. While the ideas are new, they are grounded in values as old as our country: offering opportunity to all, building strong communities, creating open and fair government, and promoting a more just and secure world.
Read more of the 15 ideas

Filed under: Economics

GDP 1.1 percent annual rate in Q:4

This is not very good.
I suspect the slowdown is due to rising energy prices and higher interest rates.
Consumer spending fell back to a 1.1 percent growth rate matching the overall GDP number — the drop appears to be driven by a 17.5 percent annual rate decline in durable goods.

Brakes on the economy? GDP slows to 1.1% growth rate in 4Q – Jan. 27, 2006
GDP posts smallest gain in 3 years
Far less growth than forecasts in the fourth quarter, as economy manages only 1.1% annual rate gain.
By Chris Isidore, CNNMoney.com senior writer
January 27, 2006: 11:39 AM EST
NEW YORK (CNNMoney.com) – The nation’s economy grew at its slowest pace in three years in the fourth quarter, according to the government’s gross domestic product report Friday, which came in far weaker than economists’ forecasts.
The broad measure of the nation’s economic activity showed an annual growth rate of 1.1 percent in the fourth quarter, down from the 4.1 percent growth rate in the final reading of third-quarter growth. Economists surveyed by Briefing.com had forecast a 2.8 percent growth rate in the fourth quarter.
[…]

Filed under: Economics, Economy

New Year’s Resolution

One of my new year resolutions is to make this blog a bit more visually interesting… hence, I hope to post more pictures. Some will be economics related… and some not.

Filed under: Uncategorized

Online Tax Filing – for free

Seems like a good idea to me. IRS is offering free electronic filing to those with <$50k AGI.

Free File Home – Your Link to Free Online Filing
Free File Home – Your Link to Free Online Filing
Man and woman looking at computer
Whoever said there is no such thing as a free lunch may have been right. But for millions of eligible taxpayers, with an Adjusted Gross Income of $50,000 or less, there is Free File. Free File is online tax preparation and electronic filing through a partnership agreement between the IRS and the Free File Alliance, LLC. In other words, you can e-file… free.

Filed under: Economics

Cost of tax cuts

Looks like the president’s FY’07 budget will include an estimate of the cost of extending the tax cuts past 2010. Since Bush took over, the White House has only been doing 5-year budgets (rather than the standard 10-year). And this is the first time that the tax sunsets will have made it into that 5-year window.
Note that the $118.3 billion number mentioned below is a fiscal year number, while the tax cuts expire at the end of the calendar year. So the fiscal year cost only includes 3 quarters of an extension. A closer back-of-the-envelop estimate of the annual cost is simply $118.3 x 4/3 = $157.7 billion.

Bloomberg.com: U.S.
Bush’s 2007 Budget to Reveal Cost of Making Tax Cuts Permanent
Jan. 13 (Bloomberg) — U.S. President George W. Bush faces a day of reckoning next month when he presents a budget that for the first time will account for the cost of making permanent his first-term tax cuts, which may widen the deficit by at least $118.3 billion in 2011.
Bush’s budget request for the 2007 fiscal year, due to be submitted Feb. 6 to Congress, will be the first to include the revenue impact of extending the tax cuts after 2010. The biggest cuts are currently slated to expire in 2009, and Bush wants to make them permanent. Presidential budgets project the fiscal impact of tax and spending policies on a five-year basis.
[…]

Filed under: Economics

US/Europe productivity growth

Varian on use of IT in the US and Europe and the implications for productivity growth…

American Companies Show an Edge in Putting Information to Work – New York Times
[…]
Furthermore, the authors suggest that information technology capital may be a big part of the productivity difference: American companies in Britain use a whopping 40 percent more information technology capital per worker than the average company. Not only did American companies use more information technology, they used it more effectively. According to the economists, “U.S. firms appeared to simply get more productivity out of the same amount of I.T. (this was not true of non-I.T. capital).”
There is an additional piece of evidence: the big returns to information technology use by American companies operating in Britain were in wholesale and retail trade – the same industries that have been so productive in the United States.
[…]

Filed under: Economics

$400 billion deficit in ’06

So much for cutting the deficit in half…

White House sees 2006 budget gap of more than $400 billion – Jan. 12, 2006
White House sees $400B deficit in ’06
Administration says costs of Katrina recovery contributed to budget strain.
January 12, 2006: 5:09 PM EST
WASHINGTON (Reuters) – The White House projected a 2006 budget deficit of more than $400 billion Thursday, a sharp increase over a July forecast, and blamed the surge largely on costs of recovering from Hurricane Katrina.
The new deficit projection was likely to further intensify an election-year debate about whether to renew President Bush’s tax cuts, which he says are essential for maintaining economic growth but which Democrats say are a drain on federal coffers.
The deputy director of the White House Office of Management and Budget, Joel Kaplan, said White House officials believed that by sticking to Bush’s economic policies and spending restraint “we will return to our downward trajectory and remain on path to cut the deficit in half by 2009.”
A July forecast had projected the 2006 budget deficit at $341 billion. Kaplan said preliminary calculations indicate the deficit will exceed $400 billion, or 3.1 percent of gross domestic product.
Kaplan said the costs of recovering from Katrina and a second hurricane, Rita, represented a “temporary event.”

Filed under: Economics

IRS holding the money

Not cool…

I.R.S. Limited Tax Refunds of Poor, Congress Is Told – New York Times
I.R.S. Limited Tax Refunds of Poor, Congress Is Told
By DAVID CAY JOHNSTON
Published: January 10, 2006
Tax refunds sought by hundreds of thousands of poor Americans have been frozen and their returns labeled fraudulent, blocking refunds for years to come, the Internal Revenue Service’s taxpayer advocate told Congress today.
The taxpayers, whose average income was $13,000, were not told that they were suspected of fraud, the advocate said in her annual report to Congress. The advocate, Nina Olson, said her staff sampled suspected returns and found that, at most, one in five was questionable.
A computer program selected the returns as part of the questionable refund program run by the criminal investigation division of the Internal Revenue Service. In some cases, the criminal division ordered that taxpayers be given no hint that they were suspected of fraud, the report said.
Most of the poor people whose returns the computer flagged as fraudulent were seeking the earned income tax credit, a benefit for the working poor. The credit can return all of the income taxes and Social Security taxes withheld from the paychecks of poor people. Without the credit, many poor people coming off welfare and going to work would receive less money because of taxes taken out of their paychecks and the loss of health benefits, I.R.S. data and other government documents show.
The average refund sought was $3,500, which under the rules for obtaining the credit means that the vast majority of those suspected of fraud were single parents or married couples with children. The maximum benefit for singles is less than $400.

Filed under: Economics

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