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  1. The downdraft begins in earnest, Obama blameshifting will go into overdrive:

    New Jobless Claims: Totally Expected and What to Expect Next

    http://politicalcalculations.blogspot.com/2013/02/new-jobless-claims-totally-expected-and.html#.UQ5_Uq5jB0s

    Now, here’s where it gets interesting. For a typical American household, President Obama’s desired 2% Social Security tax increase would reduce their take home pay by nearly $1000. If we add that figure to the $2,655 that the typical American household spent on gasoline and motor oil in 2011 (and 2012), assuming they consumed the same 754 gallons of fuel, the effect on the economy would be the same as if the cost of gasoline at the pump suddenly spiked upward to $4.84 per gallon.

    That’s quite a lot higher than the $4.00 per gallon level that gasoline prices spiked higher to hit and surpass in April 2008, which is the event that firmly pushed the United States economy into recession, which then led to the failure of two-thirds of the nation’s automotive industry at the end of 2008 and beginning of 2009.

    At this point, we’ve only seen about half the initial impact of that change, as the new jobless claims numbers for the week ending 26 January 2013 are just reflecting the period into the second week of January. Given the delay in when most companies would be adjusting their paycheck tax withholding related to the fiscal cliff debate at the beginning of the year, the effect of President Obama’s desired 2% tax hike on all wage and salary-earning Americans will continue to play out over the next several weeks.

    So you can expect the number of new jobless claims to increase in the weeks ahead. At least you can’t say that the numbers are unexpected!

    Comment by dscott — February 3, 2013 @ 10:22 am

  2. Greta points, though I’m not sure that reverse Keynesianism will be as bad as thought, because forward Keynesianism (i.e., the SocSec cut) wasn’t meaningfully beneficial to the economy.

    Comment by Tom — February 3, 2013 @ 12:05 pm

  3. Speaking of budget cuts and the oxymoron of efficient government:

    HHS Made $64.2 Billion in ‘Improper Payments’ in Fiscal 2012

    http://cnsnews.com/news/article/hhs-made-642-billion-improper-payments-fiscal-2012

    So here is $642 billion over ten years that could be saved, i.e. not spent IF the government actually were competently run by the so called experts who know better than us. But no, Obama insisted on tax hikes as a “balanced approach” because he is so incompetent and unable to control the bureaucracy he so loves. The balanced approach is to shovel more money in the hole in a vain attempt to over come the gross mismanagement of the government delivering services it insists on giving.

    I would call this the $400 hammer moment for entitlements. I can’t for the life of me understand the failure of the GOP to seize upon these endless examples to demand a commensurate subtraction from Obama’s demands for more money to take from the citizenry. When Obama demands a trillion more dollars in revenue, the GOP should be slapping him repeatedly with each example until he agrees to end the incompetent spending. He doesn’t need a trillion if he stopped wasting a trillion on bureaucratic bungling.

    Comment by dscott — February 3, 2013 @ 12:40 pm

  4. #2, the forward Keynesian 2% cut merely went into offsetting the higher cost of gasoline and food. The excluded inflation components of the CPI quickly ate up any beneficial effect. The 2% softened the blow of higher gasoline prices to a certain extent.

    btw – Since the 2% was on wages, not interest or capital gains, only the bottom 2/3rds of the population whose income is primarily spent on getting by would feel this effect. In other words the screws just got tightened a little more on top of being limited to less than 30 hours of pay per week. In that sense it is not going to hit businesses directly but indirectly in lower sales, but as you know, lower sales is no justification for maintaining existing staffing levels much less expanding the workforce.

    Comment by dscott — February 3, 2013 @ 12:50 pm

  5. Retailers that will close the most stores

    http://www.usatoday.com/story/money/business/2013/02/01/retailers-close-stores-24-7/1873745/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+UsatodaycomMoney-Waggoner+%28Money+-+Waggoner%29

    Comment by dscott — February 3, 2013 @ 4:28 pm

  6. Related to #1:

    Gasoline costs take biggest share of household income in three decades

    http://thehill.com/blogs/e2-wire/e2-wire/280873-fed-agency-2012-household-gasoline-costs-take-biggest-bite-in-decades#ixzz2JxhUAN3I

    Comment by dscott — February 4, 2013 @ 2:53 pm

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