LyrArc Article Gist
The U.S. Senate voted 51 to 49 on a Democratic party measure for further reductions in 2012 Social Security payroll taxes for workers and employers, including a surtax on incomes over $1 million. A measure supported by the Republican party to pay for the payroll tax cut by reducing the Federal payrolls was defeated, with half the Republicans voting against it. Democrats hope to use this issue to show Republicans favor the rich over the middle class, as the payroll tax cut benefits most Americans. Polls show Americans by a large majority see Republican policies favoring the rich. A New York Times/CBS poll in October showed 7 of 10 Americans feel this way. Pollster Geoff Garin says the income inequality issue is beginning to override other issues including antigovernment feeling. This is one way in which the Occupy Wall Street Movement's slogan of "the 99 percent" has resonated with U.S. public opinion. The Democratic party sees this as an opportunity to define the campaign issues for 2012, with Republicans running for reelection cautious about being seen this way....

LyrArc Article Gist
Erskine Bowles, a former chief of staff under President Clinton, and Alan Simpson, former senator from Wyoming, say the U.S. Supercommittee members should remember that their personal priorities and the common good are not at odds. The authors of the Bowles-Simpson Presidents Commission for deficit reduction say there is growing discontent among voters with politicians who are obsessed with gaining partisan advantage. Using issues of national importance that require a common approach from all parties as a way to score political points will only backfire on these politicians. Personal priorities of members of Congress are now no longer at odds with the common good, they are converging. It is upto the Congress, members of both parties, to push back against the special interests and partisan politics, and show leadership on the deficit. The eurozone crisis has shown the dire consequences of any sluggishness or procrastination. The failure of the political class and leadership in Italy and Greece, and in other nations of the EU, has put the fate of these countries in the hands of markets, which have relentlessly pushed up the borrowing rates of Greece, Italy, Spain and other countries, and taken future direction out of the hands of politicians. Erskine and Bowles say don't wait for a fiscal crisis to take action because it will be disastrous economically and politically, with everyone as losers and no winners. Timidity is not an option, leadership is required to take action that is big and broad, tackling tax expenditures, entitlement expenditures, defense, across the board....

LyrArc Article Gist
David Stockman, Director of the Office of Management and Budget under President Reagan tells Tom Keene that the first step to deficit reduction is to means test the 2 milllion to 5 million or 10 million people who are very affluent, and have the benefits of some part of this population eliminated entirely. The next step he suggests is for spending much less on defense. A defense budget at $800 billion he says does not make sense today, because it is 35% larger in real terms than the budget when Reagan was President and the U.S. faced the Soviet Union. The U.S. does not need to be the world's policeman.

LyrArc Article Gist
Britain's National Institute for Health and Clinical Excellence (NICE) says Glaxo's drug Benlysta for lupus is not "good value for money." The drug is priced at 10,000 pounds a year in the U.K. ($15,600) and much higher at $35,000 a year in the U.S. Benlysta is covered by insurers in the U.S. and some European state run health systems according to Glaxo. NICE also rejected a new multiple sclerosis drug Gilenya, which costs 19,000 pounds a year in the U.K. ($29,700), and $48,000 a year in the U.S.

LyrArc Article Gist
Nowhere in the U.S. are the approaches to the budget crisis in U.S. states so different than in Republican Kansas and Democratic Maryland.

LyrArc Article Gist
The Guardian sends its reporters along with UN special envoy on poverty Australian Prof. Alston as he spends two weeks in the world's richest country looking at poverty in urban areas.  They look at some of the 55,000 homeless people in Los Angeles, homelessness exacerbated by the tech boom in California that has sent housing costs skyrocketing. LA saw homeless people increase by 25% in 2017. The safety net is not being reinforced as the Trump administration cuts many social safety net programs. Next they visit the Tenderloin district in San Francisco where homeless people can be found at St Boniface Church sleeping in the pews. As the Guardian points out the cuts to social programs disproportionately hurt people of color who make up 39% of the homeless in the U.S. This report looks at the incongruity between the tax cuts that are likely to hurt poor whites who supported the Trump administration, as well as hurt the social protections that are part of today's democracies across the western world. This is most evident when one looks at the European Union. They were put in there in Europe for a reason- fairness is good for all classes, and most of all it protects democracies. Authoritarian regimes arise out of social dislocation from wars, or from lack of social protections and ineptitude of elites. Which is why a Lincoln or a Theodore Roosevelt from the Republican party supported fairness and social protections as much as FDR and Truman from the Democratic Party. The view expressed in this report in the Guardian is that the U.S. may have moved in the wrong direction under the Reagan and Clinton administrations creating the "me first" culture that prevails in the U.S. today. ...

LyrArc Article Gist
The joint statement after the G-8 summit stated that "our imperative is to promote growth and jobs." It stated the budget deficits need to be addressed but said "spending cuts must "take into account countries' evolving economic conditions and underpin confidence and economy recovery." Germany's Merkel in her remarks said growth and deficit reduction supported each other, that "we have to work on both paths, and the participants have made clear, and I think this is great progress." Opposition Social Democrats in Germany say Ms. Merkel is adept at changing as the situation changes, and it appears Merkel is making the transition away from strict austerity policies she had championed earlier. Especially now with fresh elections in France, Netherlands and Greece, and the election of Francois Hollande on a pro-growth platform, the German position of strict austerity is being increasingly questioned on all sides. French president Hollande met U.S. president Obama at a pre-arranged meeting prior to the summit. Obama and Hollande see the need to reduce high unemployment in the U.S. and Europe by encouraging growth, creating a common interest....

LyrArc Article Gist
Bank of England governor Mervyn King's speech at the Economc Club of New York in Dec. 2012. About incoming governor Mark Carney, King says "I think he'll do a great job and they won't miss me at all." He says one way or another the U.S. will find a way to avoid the fiscal cliff. He sees a tension between short and long term policy goals such as recapitalizing banks and having governments reduce their debt.

LyrArc Article Gist
This editorial in the WSJ describes the sharp increase in premiums under the Affordable Care Act of president Obama. The average premium increase is about 24.2% according to a Barclay's analysis, and as high as 43.9% in states such as Illinois. Bill Clinton calls it the craziest thing with small business affected, and some premiums doubling. Of the 17 million people in the individual market eight million buy without subsidies. One in five enrollees cannot qualify for subsidies. Democrats say subsidies are too small. Hillary Clinton has proposed to have a Medicare "buy-in" for people ages 55-65, and a "public option" government run plan. Republicans want to rewrite the law. But this depends on which party wins the Senate, with the election in Missouri giving Democrats an opportunity to maintain a Senate majority.

LyrArc Article Gist
This article in the NYT provides a look at the features of the Republican House Health Care Plan- Both the Affordable Health Care Act and the House Plan provide incentives for buying insurance- the ACA bases these incentives on income levels whereas the House Plan does not provide additional help for low incomes or elderly. Incomes at $20,000 would see a loss greater than  $2000 under the House Plan and as many of the elderly poor living in high cost areas may not have the resources to make up for this loss of subisidies they may forgo buying insurance or have insurance coverage that protects only in a limited way. President Trump has given assurances that all will be covered. For people with incomes of $50,000 or $75000 the loss of $2000 subisidies would also have some impact. At larger incomes or the well to do the subsidies are not handed out under either plan. Under the ACA the emphasis was on income levels and high cost insurance areas the subsidies were greater, under the House Plan the subisidies would be higher for the elderly compared to the young but very low income levels are not given additional help.     ...

LyrArc Article Gist
Municipal yields are back up. The Center on Budget and Policy Priorities says states in the USA will have to close budget gaps of $140 billion in fiscal year 2012, ending in June, down from $160 billion this year. But real shortfalls will increase because federal stimulus funds that helped state and local governments will fall from $59 billion this year to $6 billion next year. Local governments depend on states for one third of their revenue, according to a Congressional Budget Office report, which makes them vulnerable. Property taxes account for a quarter of local government revenue and this too will be declining with declining assessed values. The Federal Reserve Act limits open-market purchases of munis to ones with maturities of less than 6 months, which reduces the scope for help from the Fed.

LyrArc Article Gist
Charlie Rose talks to Paul Ryan, the Republican Congressman from Wisconsin on his "Roadmap for the Future" and a major overhaul of taxes, spending, Medicare and Social Security. He tells Rose, who hosts a news show on Bloomberg TV, that in 2010 he is all by himself looking at the big picture for shaping ideas on economic reform, and still hopes others will join him in this effort.

LyrArc Article Gist
Illinois has the worst credit rating of the 50 U.S. states. It has a public debt per capita of $9,624 including state and local borrowing, second only to New York. But much of the money is not available to rebuild roads, bridges and schools because of poor fiscal practices, says the report of the State Budget Crisis Task Force. It says "Illinois has been doing back flips on a high wire without a net."

LyrArc Article Gist
What Krugman makes of the $1.089 trillion dollar U.S. deficit for fiscal year ending in Sept. 2012. He points out that the U.S. can have a stable to declining debt to GDP ratio with $400 billion debt. He cites the Clinton years (1992-2000) when the debt to GDP ratio declined from 49% to 33% with steady growth. What about the remaining $600 billion. He attributes this mostly to temporary factors which are reversible as growth picks up. Of this remaining excess deficit he says $400 billion is from lower tax payments to Treasury because of the 2008 economic crisis and the recession that followed. This includes the payroll tax cut which is also temporary to keep up consumer spending in the recession. The $150 billion is from unemployment insurance, food stamps, and other aid which is also reversed once growth picks up. He places emphasis on restoring economic growth as early as possible and reducing unemployment and using the recession for business to continue to invest in R&D, productivity, and government to preserve the social fabric, invest in education, and provide incentives for growth. S&P Nov. 8 report says the net government debt to GDP ratio is estimated to be over 80% in 2013. It will have to stabilize at current levels for S&P to preserve the U.S. credit rating, says S&P executive Chambers. The higher debt to GDP ratio in 2013 and lower growth rates expected makes the situation different from the lower debt to GDP ratios during the Clinton period. Britain, France and other major industrialized nations with political parties at either end of the political specrum have also chosen to stabilize or reduce debt to GDP ratios rather than take on the risks of them going much higher. The U.S. has the added problem of health care costs out of control with an aging population and about 17.9% of GDP going to healthcare costs in 2010 expected to increase significantly, as Medicare actuaries estimate enrollee numbers jump to 80 million in 2030 from 50 million in 2012. Democrats and Republicans have largely sidestepped this underlying problem in fiscal cliff negotiations....

LyrArc Article Gist
US Undersecretary of Defense, James Clapper Jr., secured approval for the release of the figure of $80.1 billion, for the amount spent by intelligence agencies in the USA. The National Intelligence Program, operated by the CIA and other agencies reporting to the Director of National Intelligence spent $53.1 billion. The Military Intelligence Program spent $27 billion. By comparison the Department of Homeland Security spent $42.6 billion and the State Department spent $48.9 billion.