November 7, 2013

Coverage of Third Qtr. GDP and Fourth Qtr. Estimates Omits Potential Obamacare Impact

You would think that economic forecasters, who have been obsessing over the impact on economic growth of October’s 17 percent partial government shutdown might have noticed that a lot of people have all of a sudden learned that they’re about to experience a major cut in their take-home pay. You would be wrong.

Hundreds of thousands of Americans had received health insurance cancellation notices by September 30, and had also learned that they will be on the hook starting next year for hundreds of dollars in premium increases on the Obamacare exchanges. It should be obvious that most affected people would have started spending less on other items virtually immediately, and that they will continue to be in major cutback mode indefinitely. But I didn’t find anyone in the establishment press who mentioned it. Nor did I find anyone who noted that the millions of Americans facing higher health insurance premiums are also going to materially impact fourth quarter growth and Christmas shopping season results.

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Funny … and Sad

My understanding is that lefty blogs and forums have gone apoplectic over this hilarious riff (longer video here) at last night’s Country Music Awards:

There’s also this from John Boehner’s YouTube account:

At the end of Boehner’s vid, you hear a couple of examples of the press characterizing Obama’s description of his broken guarantee (“if it hasn’t changed since the law was passed”) — it wasn’t “just” a promise, it was a flippin’ guarantee — as a “tweak.”

Horse manure. As Ron Fournier at National Journal wrote on Tuesday, it was “lying about lies” in an “orchestrated deceit.”

Told Ya: Obamacare Leads Married Couple to Consider a Divorce (Update: And Another to Consider Working Less)

Filed under: Health Care,Taxes & Government — Tom @ 8:24 am

Originally posted just after midnight. Moved to the top because of the importance of the two topics (divorce and work disincentives).

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Sept. 25, at PJ Media (BizzyBlog mirror): “The Obamacare Wedding Tax”

Nov. 6, at CBS in New York: Nona Willis Aronowitz and Aaron Cassara have figured it out —

Obamacare Restrictions Lead Brooklyn Couple To Consider Divorce
‘We Would Save Thousands Of Dollars If We Got Divorced,’ Woman Says

… From website crashes to long holds on calls, the issues involved with the unveiling of the Affordable Care Act are well documented.

But now, could it be breaking couples up?

“After Obamacare has rolled out, we realized that we would save thousands of dollars if we got divorced,” Aronowitz said.

The issue for Aronowitz and Cassara is that together as family of only two, they make more than the $62,000 level to qualify for subsidies under the Affordable Care Act. But if they lived together unmarried, they would qualify for the subsidies and could literally save hundreds of dollars a month on their health care.

I’m not going to be impolite and guess Ms. Aronowitz’s age, but Mr. Cassara looks to be in his late-30s. The savings at that age from divorcing are far less than the savings couples in their late-50s and early-60s will see.

Robert Rector at the Heritage Foundation documented why this should have been anticipated two months before Obamacare’s passage.

No one should be blindsided by this, but plenty of people in government and the press will be.

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UPDATE: Told ya x 2 –

Sept. 23, at PJ Media (BizzyBlog mirror): “Obamacare Has Work Disincentives Like We’ve Never Seen Before”

Nov. 6, at Pro Publica (HT Hot Air):

Loyal Obama Supporters, Canceled by Obamacare

… The couple — Lee (Hammack), 60, and JoEllen (Brothers), 59 — have been paying $550 a month for their health coverage — a plan that offers solid coverage, not one of the skimpy plans Obama has criticized. But recently, Kaiser informed them the plan would be canceled at the end of the year because it did not meet the requirements of the Affordable Care Act. The couple would need to find another one. The cost would be around double what they pay now, but the benefits would be worse.

(The) new Kaiser plans … would cost nearly $1,300 a month for the two of them (more than $15,000 a year).

So what is Hammack going to do? If his income were to fall below four times the federal poverty level, or about $62,000 for a family of two, he would qualify for subsidies that could lower his premium cost to as low as zero. If he makes even one dollar more, he gets nothing.

That’s what he’s leaning toward — lowering his salary or shifting more money toward a retirement account and applying for a subsidy.

They’d be more likely and more certain to achieve thousands of dollars in savings if they divorced, because the definition of income is essentially the bottom of Page 1 on the long form federal Form 1040 — and that number can be hard to accurately peg.

3Q13 Gross Domestic Product, First Reading (110713): An Annualized +2.8%

Filed under: Economy,Taxes & Government — Tom @ 7:31 am

Today, a week later than originally scheduled, the government is issuing its first take on third-quarter economic growth.

Bloomberg is predicting an annualized 2.0 percent. So are the UK Telegraph and Reuters.

The report will be here at 8:30.

HERE IT IS (full HTML version): For the moment, a pleasant surprise —

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 2.8 percent in the third quarter of 2013 (that is, from the second quarter to the third quarter), according to the “advance” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.5 percent.

… The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, residential fixed investment, nonresidential fixed investment, and state and local government spending that were partly offset by a negative contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The acceleration in real GDP growth in the third quarter primarily reflected a deceleration in imports and accelerations in private inventory investment and in state and local government spending that were partly offset by decelerations in exports, in nonresidential fixed investment, and in PCE.

Key components:

  • Consumption expenditures, +1.04 points (historically very low, lowest since 2Q11).
  • Private investment, +1.45 points, with 0.83 points in inventory growth.
  • Exports, +0.60 points; Imports, -0.30 points.
  • Government, +0.04 points.

Considering the predictions, this isn’t too bad. Keynesians who obsess over consumption will put those concerns on the shelf and suddenly rediscover the wonders of private investment.

Considering what’s needed to generate meaningful job growth (i.e., several quarters of 4%-plus annualized growth), it’s nowhere near good enough.

Initial Unemployment Claims (110713): 336K SA, Raw Claims Marginally Up From Previous Week

Filed under: Economy,Taxes & Government — Tom @ 7:31 am

Predictions: Perhaps reflecting the data integrity problems of the past month or so, Bloomberg doesn’t have one, though it believes that tomorrow’s jobs report will show 120,000 jobs added and an unemployment rate of 7.3 percent (up from 7.2 percent).

Business Insider has a prediction of 335,000 seasonally adjusted claims.

Seasonal Adjustment Factors:

  • Week ended Nov. 2, 2013 — 97.3
  • Week ended Nov. 3, 2012 — 99.6

Raw Claims:

  • Week ended Oct. 26, 2013 — 317,580 (before likely revision)
  • Week ended Nov. 3, 2012 — 361,800

To stay at last week’s seasonally adjusted level of 340,000 (before it likely gets revised), this week’s raw claims will need to be 331,000 or lower (331K divided by 97.3 is 340K, rounded). That would mean raw claims about 4% higher than last week. If today’s seasonally reading isn’t a dip of 10,000 or more from last week, it should be considered a disappointment.

The report will be here at 8:30 a.m. I’m going to concentrate on this morning’s GDP result before looking in any kind of detail at unemployment claims.

HERE IT IS (permanent link):

SEASONALLY ADJUSTED DATA

In the week ending November 2, the advance figure for seasonally adjusted initial claims was 336,000, a decrease of 9,000 from the previous week’s revised figure of 345,000. The 4-week moving average was 348,250, a decrease of 9,250 from the previous week’s revised average of 357,500.

UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 327,074 in the week ending November 2, an increase of 4,222 from the previous week. There were 361,800 initial claims in the comparable week in 2012.

The upward revision to last week of 5,000 was one of the largest in quite some time.

Assuming next week gets revised upward by a few thousand, we’re still basically in the 340K-350K range. Over four years after the recession’s official end, that’s unacceptable.

Thursday Off-Topic (Moderated) Open Thread (110713)

Filed under: Lucid Links — Tom @ 6:05 am

This open thread will stay at or near the top today. Rules are here. Possible comment fodder may follow. Other topics are also fair game.

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As a result of looking into what Zeke the Bleak Emanuel has been up to during the past four years, I came across this Wall Street Joural item from mid-July, which reminds everyone that Obamacare really does have a “death panel”

David Rivkin and Elizabeth Foley: An ObamaCare Board Answerable to No One
The ‘death panel’ is a new beast, with god-like powers. Congress should repeal it or test its constitutionality.

… the law’s most disturbing feature may be the Independent Payment Advisory Board. The IPAB, sometimes called a “death panel,” threatens both the Medicare program and the Constitution’s separation of powers. At a time when many Americans have been unsettled by abuses at the Internal Revenue Service and Justice Department, the introduction of a powerful and largely unaccountable board into health care merits special scrutiny.

… The board, which will control more than a half-trillion dollars of federal spending annually, is directed to “develop detailed and specific proposals related to the Medicare program,” including proposals cutting Medicare spending below a statutorily prescribed level. In addition, the board is encouraged to make rules “related to” Medicare.

The ObamaCare law also stipulates that there “shall be no administrative or judicial review” of the board’s decisions. Its members will be nearly untouchable, too. They will be presidentially nominated and Senate-confirmed, but after that they can only be fired for “neglect of duty or malfeasance in office.”

Once the board acts, its decisions can be overruled only by Congress, and only through unprecedented and constitutionally dubious legislative procedures—featuring restricted debate, short deadlines for actions by congressional committees and other steps of the process, and supermajoritarian voting requirements. The law allows Congress to kill the otherwise inextirpable board only by a three-fifths supermajority, and only by a vote that takes place in 2017 between Jan. 1 and Aug. 15. If the board fails to implement cuts, all of its powers are to be exercised by HHS Secretary Sebelius or her successor.

The IPAB’s godlike powers are not accidental. Its goal, conspicuously proclaimed by the Obama administration, is to control Medicare spending in ways that are insulated from the political process.

All of this deliberately created insulation will enable IPAB to rule out certain treatments entirely or for certain classes of patients. Those who are denied life-saving treatment when their orders are implemented will die, or die sooner.

IPAB is indeed a “death panel” which will keep its hands clean while the medical community enforces its strictures on individiaul patients. For the umpteenth time, Sarah Palin was right.

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Oh that Ocare: “BC/BS, North Carolina: Only one person has enrolled through the fed exchange, and he hasn’t actually paid yet” (HT to a commenter yesterday at another post).

Update, 11:35 a.m.: Oh boy, there’s more — Delaware has four.

Positivity: Man Who Found Boston Marathon Bomber Gets New Boat

Filed under: Positivity — Tom @ 6:00 am

From Boston (HT Daryn Kagan):

Oct. 3, 2013

David Henneberry On His New Boat: ‘The Bad Guy Didn’t Win’

David Henneberry’s bullet-riddled boat was the centerpiece of the climactic end to the hunt for the Boston bomber.

Now, more than five months later, Henneberry recently got a new boat, thanks to donations from generous strangers across the country.

“We just recently, two weeks ago, got a used boat,” Henneberry told ABCNews.com. “We did accept [the $50,000 raised] and we did also request that anything over that went to the One Fund. It just seemed right to do.”

The One Fund is the organization created to help victims of the Boston Marathon bombing.

He called the 24-foot boat a “fixer-upper” with the same “sparse” amenities as his previous boat.

“You just want to ramble on you feel so grateful,” Henneberry said. “After such a bad thing happened to us and the people of Boston, it was wonderful to see that. It was humbling. It restores your faith in people. They don’t know me.” …

Go here for the rest of the story.