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bparksj28

Federal Reserve official wants low interest rates until unemployment falls to 6.5% - No... - 0 views

money.cnn.com/...index.html

shared by bparksj28 on 28 Nov 12 - No Cached
  • Charles Evans, president of the Chicago Fed, wants the central bank to keep the federal funds rate near zero until unemployment falls to 6.5% -- a jobless rate not seen since 2008.
  • in January he will rotate into a voting role on the Fed's policymaking committee. For about a year, he has been urging his colleagues to publish clear economic targets that would guide the central bank's policies.
  • . He wants to see the unemployment rate fall to at least 6.5% and inflation not exceed 2.5% a year
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  • hope behind the policy is that numerical targets will lift some of the mystery surrounding the Fed's decisions.
  • As economic data is released, the public can base their expectations for Fed policy on a clearer picture of the central bank's goals.
  • "I support this approach because it would enable the public to immediately adjust its expectations concerning the timing of liftoff in response to new information affecting the economic outloo
  • The Fed has kept interest rates near zero since late 2008 in an effort to stimulate the economy. While the unemployment rate has since fallen slightly to 7.9%, the Fed is still unsatisfied with that level and has been pursuing additional alternative policies to boost the economy further.
  • The Fed's policymaking committee is next scheduled to meet Dec. 11-12.
bparksj28

The fiscal cliff may be overblown - The Term Sheet: Fortune's deals blog Term Sheet - 0 views

finance.fortune.cnn.com/...fiscal-cliff-2

cliff term

shared by bparksj28 on 09 Nov 12 - No Cached
  • By not going off the cliff, the CBO estimates that deficits over the next decade would rise by a total of $7.7 trillion (that's "trillion" with a "T"). That would bring the total national debt somewhere to around $24 trillion by 2023 which is equal to 90% of GDP (that's pretty high). If we go off the cliff, don't expect a clean slate, though, as the nation would still have a significant budget deficit equal to 58% of GDP in 2023 due to all the mandatory spending associated with the impeding explosion in costs emanating from Social Security and Medicare.
  • The cuts in spending and the increased taxes will cause thousands of people to lose their jobs pretty much overnight (millions of Americans owe their jobs directly or indirectly to federal government spending). This would push unemployment up across the country from 7.9% to 9.1%. As a result, the CBO projects that real GDP would drop by 0.5% in 2013 after growing by 2.1% in 2012. Real GDP would fall at an annual rate of 2.9% in the first half of next year, tipping the nation into a recession that the CBO figures would be similar in magnitude to the one the nation experienced following the first Persian Gulf War in the early 1990s (for those who didn't live through that, it was bad)
  • Indeed, the fiscal cliff is about as real of a problem as the nation's burgeoning national debt – it's theoretically bad, but it isn't bad enough for Washington to risk making the short term any more economically unpleasant than it has to be. After all, there will be elections for the House in just two short years, so neither side wants to go into that election cycle trying to defend why the government instituted growth killing spending cuts while allowing taxes to shoot up to address some arbitrary debt load that investors continue to fund for next to nothing
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  • The increase in federal taxes and the reductions in federal spending would cut the budget deficit (the difference between how much revenue the government takes in how much it spends) from $1.1 trillion last year to $641 billion in fiscal 2013, roughly a $500 billion cut. That represents a reduction in the budget deficit (as a percentage share of GDP) not seen since 1969 when the conservative Richard Nixon booted the free-spending Lyndon Johnson out of the White House
  • The increase in federal taxes and the reductions in federal spending would cut the budget deficit (the difference between how much revenue the government takes in how much it spends) from $1.1 trillion last year to $641 billion in fiscal 2013, roughly a $500 billion cut. That represents a reduction in the budget deficit (as a percentage share of GDP) not seen since 1969 when the conservative Richard Nixon booted the free-spending Lyndon Johnson out of the White Hous
  • It is therefore hard for politicians to so brazenly throw the nation into a deep recession to reduce spending when the benefits of acting are so intangible. The fact is that the Budget Control Act of 2011 was political theater in which the Republicans tried to appease "Tea Party" voters – a constituency that has basically been wiped out as the economy has improved. Discussions around raising the marginal tax rate on the top 2% are simply just political fodder. Indeed, multiple studies, including ones by the CBO say that it would raise an insignificant amount of money (a negative for the Democratic view) but would also cause no real harm to the economy (a negative for the Republican view). In the end, if it takes changing the top 2% rate from 35% to 39.6% to end this whole fiscal cliff charade, you can bet it has already been agreed to
  • s it may sound, it is simply irrational for either side to address the deficit in any meaningful way given how cheaply it is for Washington to borrow money. As we have seen in Europe, nations won't swallow the bitter pill of austerity unless the markets force them to
  • As cynical
bparksj28

Bulgarian government resigns amid growing protests - Yahoo! News - 0 views

news.yahoo.com/tional-protests-073220738.html

government growing protests bulgaria quits

shared by bparksj28 on 20 Feb 13 - No Cached
  • Bulgaria's government resigned on Wednesday after violent nationwide protests against high power prices, joining a long list of European administrations felled by austerity during Europe's debt cri
  • raise living standards in the European Union's poorest member,
  • Wage and pension freezes and tax hikes have bitten deep in a country where living standards are less than half the EU average
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  • The spark for the protests was high electricity bills, after the government raised prices by 13 percent last July. But it quickly spilled over into wider frustration with Borisov's domineering manner and unpredictable decision making.
  • The prime minister made sacrifices in an attempt to cling on, sacking his finance minister, cutting power prices and risking a diplomatic row with the Czech Republic by punishing foreign-owned companies, a move that conflicted with EU norms on protection of investors and due process.
  • Unemployment in the country of 7.3 million is far from the highs hit in the decade after the end of communism but remains at 11.9 percent and average salaries are stuck at around 800 levs ($550) a month.
  • Millions have emigrated in search of a better life, leaving swathes of the country depopulated and little hope for those who remain.
  • The precedent is unlikely to encourage other foreign investors, who already have to navigate complicated bureaucracy and widespread corruption and organized crime if they want to take advantage of Bulgaria's 16-percent flat tax rate.
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