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Economic News, Data and Analysis

“Live” on Marketplace: Huge deficit seen. Does it matter now?

Marketplace: Huge deficit seen. Does it matter now?

The Congressional Budget Office has announced the deficit for fiscal 2008 is going to hit almost $220 billion — not counting war spending or an economic stimulus package. But analysts say there are bigger things to worry about. Danielle Karson reports.
Listen to this Story

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“Live” on ScienceProgress.org

Science and the 2009 Budget

Federal Budgets Matter Tremendously for Science
President Bush’s last budget is unlikely to expand dedicated and critical federal spending on science. It’s a problem that must be overcome.
By John Irons | Wednesday, January 23rd, 2008 | Share This | Print Print
In early February, the president will release his last budget proposal of his tenure in office. For policy analysts, the annual budget ritual is an interesting chance to take a look behind the political rhetoric and to gauge the priorities of the president and, shortly thereafter, Congress. It is easy to give a speech promoting science and technology, but concrete action will only arise if science programs are adequately funded through the budget.

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EPI Recession Watch

Been busy with the day job – lot’s to do thinking about economic stimulus. The link below contains a stimulus proposal, congressional testimony, blog posts from colleagues, etc. I will try to post some media appearances as time allows…

EPI Recession Watch | EPI

Strategy for an economic rebound
Because the United States is either already in a recession or is headed for one, policy makers need to act now to craft an effective economic stimulus package to spur growth and job creation. Without a stimulus of sufficient magnitude, the U.S. economy is likely to see a decline in growth or even a formal recession, leading to higher unemployment, declining or stagnant wages, and a host of other economic problems. A package that provides $140 billion of stimulus–1% of GDP–would begin to reverse our economic course by creating an additional 1.4 to 1.7 million jobs. EPI unveils a broad-based, three-part prescription for stimulating the economy in its new Briefing Paper, Strategy for Economic Rebound–Smart Stimulus to Counter the Economic Slowdown.

Update – a few of note:

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FT.com: US public finances feel the pinch

More evidence of a general slowdown from the CBO…

FT.com / World / US & Canada – US public finances feel the pinch

US public finances feel the pinch
The economic downturn in the US is starting to hit government revenues, the head of the Congressional Budget Office has told the Financial Times.
In an interview, Peter Orszag, the CBO director, said the slowdown “is showing up in revenue”. Tax receipts were softer “across revenue as a whole” but “the slowing is most marked in corporate tax receipts”.

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Employment growth and Unemploymet

Here’s the monthly employment growth as well as the unemployment rate since 2000. Seems to be a clear labor market slowdown…
stimulus_28637_image001.gif

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Le pétrole cher frappe une économie américaine déjà fragilisée

It’s always interesting to see myself translated, and what the result looks like when Babel Fished back. I sound very militant below…

Le pétrole cher frappe une économie américaine déjà fragilisée – Yahoo! Actualités

La pilule sera-t-elle aussi facile à avaler cette fois? Certains en doutent.
“Beaucoup de gens ont été surpris par la résistance de l’économie ces dernières années”, estime John Irons, directeur des recherche à l’Economic Policy Institute. La différence cette fois est que “nous avançons en territoire inconnu”, du fait de la décélération de l’économie.

Via babel fish:

Will the pill be also easy to swallow this time? Some doubt it.
“Much of people were surprised by the resistance of the economy these last years”, estimates John Irons, director of research in Economic Policy Institute. The difference this time is that “we advance in unknown territory”, because of the deceleration of the economy.

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DeLong at Salon.com on Huckabee, the FairTax and the Media

I recently wrote about Huckabee’s fair tax gambit and wondered why he was getting away with proposing a tax increase on the middle class.
Brad DeLong runs with the idea, and with one thrust of his mighty sword, skewers Huckabee, the FairTax, and the Media’s reporting on economic issues.

Mike Huckabee wants to abolish the IRS | Salon.com

Mike Huckabee wants to abolish the IRS
His loopy tax plan would be an economic disaster — but it’s more honest than the schemes being peddled by the establishment Republican candidates.
[…]
This is part of a pattern with Huckabee. Anxious to distinguish himself on policies from his competitors but without the staff and the network to perform due diligence on policy proposals, he ends up with ideas that aren’t fully worked out and don’t make much substantive policy sense.
Does the FairTax make political sense? It is hard to see how — at least not if people know what he is really proposing. After all, a lot more people make between $30,000 and $200,000 a year than make more than $200,000. Politicians prefer, other things being equal, to take positions that are advantageous to more people rather than those that are advantageous to fewer.
So why is Huckabee doing this?
I believe the reason is that he is counting on people not knowing what he is really promising. I believe he is counting on the nigh total fecklessness of America’s press corps — a fecklessness that I at least now see as deployed with a sharp partisan edge.

He also references my favorite blog…

As economist John Irons laments on his blog, ArgMax.com: “I’m not sure how he is getting away with adopting the FairTax as part of his platform. Wouldn’t Democrats be skewered in the media if they proposed a tax increase on people making between $30,000 and $200,000?” Yes.

And so the circle of life continues….

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$100 oil

Yuck.

Oil pushes to $100
NEW YORK (CNNMoney.com) — Oil prices kicked off the first trading day of 2008 by hitting a new high of $100 a barrel Wednesday on violence in oil-rich Nigeria, the prospect of more interest rate cuts, a halt in Mexican imports and the expectation of yet another drop in U.S. crude supplies.
U.S. crude for February delivery jumped $4.02 to $100 a barrel on the New York Mercantile Exchange. The previous trading record was $99.29 set Nov. 20. Oil prices ended 2007 by gaining nearly 60 percent for the year, the largest jump this decade.

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Summers on the Economy and Stimulus

Larry Summers argues for a targeted and temporary fiscal stimulus. But is $50 to $75 billion, or 0.36% to 0.54% of GDP big enough?

The State of the U.S. Economy (application/pdf Object)

Any actual fiscal stimulus program would have to be worked out in the context of events as they unfold and should be walled off from longer term policy considerations where actions to assure long term fiscal sustainability are essential. It is reasonable to suggest that stimulus approaching $50-$75 billion — roughly in the range of 1/2 of 1% of GDP — is likely to be appropriate. The largest part of this stimulus should come in the form of tax cuts distributed equally among all taxpayers and recipients of tax refunds. Other elements of a stimulus package should include extension of unemployment insurance benefits given that long term unemployment is already at
recession levels, temporary step-ups in food stamp benefits which can be executed and have effect very quickly, and tax measures to eliminate from taxation the so-called income that homeowners receive when they are foreclosed, a step that has just been passed by Congress.

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