Cartoon: Nero Fiddling

Tax Freedom Day: April 9th

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Can Tax Rate Increases Eliminate the Deficit?

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Trade Deficit Feb 2010

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Did the Recession end in July 2009?

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Is the Recession Over?

The Business Cycle Dating Committee of the National Bureau of Economic Research met at the organization’s headquarters in Cambridge, Massachusetts, on April 8, 2010. The committee reviewed the most recent data for all indicators relevant to the determination of a possible date of the trough in economic activity marking the end of the recession that began in December 2007. The trough date would identify the end of contraction and the beginning of expansion. Although most indicators have turned up, the committee decided that the determination of the trough date on the basis of current data would be premature. Many indicators are quite preliminary at this time and will be revised in coming months. The committee acts only on the basis of actual indicators and does not rely on forecasts in making its determination of the dates of peaks and troughs in economic activity. The committee did review data relating to the date of the peak, previously determined to have occurred in December 2007, marking the onset of the recent recession. The committee reaffirmed that peak date.

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My thoughts: Many sources and conventional wisdom are pointing to the recession ending in June 2009. There seems to be some doubt coming from the NBER. NBER also takes it time, often over 1 year before declaring a trough. Likely we will have a double dip or a very long recession. Jobs seem to be the key.

Baby Back Ribs

3" Filet

Boston Butts

3" New York Strip

Cartoon: Supply Side Economics

Cartoon: Grim Reaper

Social Security: An Investment Loser

To find the dividing line between net gainers and losers, we created a projection assuming an individual with a salary equaling the top taxable Social Security limit for 45 years (to get an idea of this amount, consider the limit was $3,000 dollars in 1940 and $106,800 in 2010 – both nice salaries). Our test dummy paid the maximum Social Security taxes every year.

On the other hand, upon retirement, he would receive maximum benefits. According to the Social Security Administration, maximum taxation is a prerequisite to maximum payouts. Next, we added Social Security benefits received over 13 years (derived from the average U.S. life expectancy of about 78). Finally, we calculated the difference between taxes paid over 45 years and the payouts received for 13. The results were shocking.

Before 2007, our projected retirees were net gainers from Social Security. 2007 retirees were the first net losers at –$411. By 2011, retirees will be –$40,403 in the red.

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Cartoon: Unemployment

Healthcare Reform Summarizied

“Let me get this straight. We’re going to be gifted with a health care plan written by a committee whose chairman says he doesn’t understand it, passed by a Congress that hasn’t read it but exempts themselves from it, to be signed by a president who also hasn’t read it and who smokes, with funding administered by a treasury chief who didn’t pay his taxes, to be overseen by a surgeon general who is obese, and financed by a country that’s broke. What could possibly go wrong?”

read the essay

Consumer Finances

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March Unemployment 9.7%

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Bruce Caldwell on Hayek and the Economic Meltdown

Bruce Caldwell:

the Austrian /public choice one-two punch: we usually do not have the necessary knowledge to intervene effectively, and the political process is such that, even if we did, we still likely would get bad policy, and this together with an ever growing government sector.

read the paper

Feburary Job Market

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Major Social Legislation

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