Wednesday, October 31, 2012

Antidepressants (SSRIs) Negatively Affect Pregnancies: Increase Preterm Births, Miscarriages, Low Newborn Birth Weight: Doubles Risk Of Autism Spectrum Disorders: Increases Mother's Preeclampsia Risk

From "Paxil And Pregnancy A Dangerous Combo" in ScienceBlog:
"First, there is clear and concerning evidence of risk with the use of the SSRI antidepressants by pregnant women, evidence that these drugs lead to worsened pregnancy outcomes. Second, there is no evidence of benefit, no evidence that these drugs lead to better outcomes for moms and babies...." [Senior author Adam Urato, MD, Chairman of Obstetrics and Gynecology at MetroWest Medical Center and a Maternal-Fetal Medicine specialist at Tufts Medical Center.]
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Additionally, studies consistently show that women using antidepressants experience increased rates of miscarriage. There is also a strong signal of congenital abnormalities, the most noted of which is the association between the use of the antidepressant, Paxil, and cardiac defects.
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"Preterm birth is, perhaps, the most pressing obstetrical complication," write the authors.
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Available data also suggests that antidepressant usage, especially if it extends beyond the first trimester, leads to an increased risk of pregnancy-induced hypertension and preeclampsia.
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Similarly, long-term exposure to SSRIs appears to correspond to an increased incidence of birth weight falling below the 10th percentile, coupled with increased rates of respiratory distress.
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A 2006 study showed that infants exposed to antidepressants in utero had a 30 percent risk of Newborn Behavioral Syndrome, most commonly associated with persistent crying, jitteriness and difficulty feeding. In more rare instances the syndrome can produce seizures and breathing difficulties leading to the need for intubation. Studies have also shown delayed motor development in babies and toddlers. And a Kaiser Permanente study showed a "two-fold increased risk of autism spectrum disorders associated with maternal treatment with SSRI antidepressants during the pregnancy, with the strongest effect associated with treatment during the first trimester."

Employees Pushed From Full Time Into Part Time Work By Obama's New Healthcare Law

From The Wall Street Journal, "David Gamage: ObamaCare's Costs to the Working Class: Perverse incentives will make part-time work more attractive than a better-paying full-time job." by David Gamage:
Consider a low-income American supporting a family of four deciding whether to take a part-time job that pays $36,000 a year or a full-time job that pays $42,000 a year. According to my research, accepting the higher-paying job could result in the family losing over $10,000 a year in health-care subsidies.

Moreover, by switching low-income employees to part-time positions, rather than offering them health insurance, an employer will be able to save over $3,000 a year by avoiding ObamaCare's employer-mandate penalties. Without further reforms, many employers and employees will jointly benefit if employers make low-income employees part-timers rather than offering them health insurance. The losers will be taxpayers, who will need to fund the subsidies that these employees will be eligible for.

Tuesday, October 30, 2012

EPA Rather Burn Corn Than Feed It To Starving In Africa, Middle East And S America

From The Wall Street Journal "The Ethanol Election Delay: Why the U.S. burns 40% of its corn, despite a global food shortage:"
This summer's once-in-a-half-century Midwestern drought caused global prices for staple food products to soar by 10%—and corn in particular to jump by 25%, according to the World Bank. The food shortages across Africa, the Middle East and South America are the worst since the 1980s and have produced hunger and political instability, according to the United Nations.

So perhaps this emergency is the time to relax the U.S. ethanol mandate, which diverts four of every 10 domestic bushels of corn into gas tanks. That's equal to 15% of international corn production, burned in internal combustion engines that could run on another fuel. But this obvious solution is evidently not obvious to the Environmental Protection Agency, which, despite studying the question for more than a year, says it needs more time.

Monday, October 29, 2012

Weaknesses In The IPO Market Reflect Weakness In US Economic Growth

From The Federal Reserve Bank Of New York, "Weakness in the U.S. IPO Market" by Stavros Peristiani:
IPO activity in the United States has fluctuated over the past three decades, influenced by the strength of the economy, technological and financial innovations, and other company- and industry-specific factors. The number and nominal volume of IPO proceeds surged in the 1990s, especially during the Internet boom period between 1995 and 2000, but plummeted after the collapse of the high-tech bubble in 2000 (see chart below).
Source: Federal Reserve Bank Of New York
Another way to measure the drop-off in IPO activity is relative to the total stock market capitalization in the United States (see chart below). Historically, the IPO market has rebounded from adversity, recovering after recessions in the early 1980s and 1990s. However, the number of priced offerings and volume of proceeds have remained very low throughout the 2000s.
Source: Federal Reserve Bank Of New York
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A Threatened Growth Outlook?
Although IPO flows represent a relatively small share of total stock market capitalization, they’re a vital source of organic growth for equity markets. As such, newly listed companies have to be financially strong and possess the capacity to develop and flourish. As this post suggests, the relatively few IPOs that occurred between 2001 and 2011, many of which had lackluster fundamentals, could be the harbinger of a more challenging growth outlook for U.S. equity markets.

Saturday, October 27, 2012

We Have Never Paid So Many People For So Long Not To Work: Scott Grannis

From Calafia Beach Pundit, "Big changes in the labor market" by Scott Grannis:

Source: Scott Grannis
The chart above shows how different this recession has been from other recent recessions: at the peak, the percentage of the labor force receiving unemployment compensation was 67% more than at the peak of the 1981-82 recession. This goes a long way to explaining why this recovery has been so tepid. It's been the weakest recovery ever, in part because we've never paid so many people for so long not to work. And the main cause of that huge increase was Congress' decision in July 2008 to create a program called "Emergency Claims," which went on to double the number of people receiving benefits by early 2010. Congress' "compassion" for the unemployed had the unintended consequence of slowing and drawing out the recovery for everyone. [Emphasis added]

Obama's Intrade Predicted Electoral College Votes Declining But Still Above Needed 270

Over the past month, the Intrade prediction for the exact number of electoral college votes for Obama have declined from a high of 319 on September 27 through Oct 2, 2012, to the current stable prediction of 276 electoral college votes. 270 electoral votes are needed to become president and Obama's predicted amount of 276 votes is enough to get reelected. There are 538 total electoral college votes.

Source: Intrade

Friday, October 26, 2012

At Start Of Financial Crisis/Recession, Renters Had More Debt Than Homeowners, College Educated Had More Debt Than Those Without A Degree, And Renters Had Bigger Increase In Debts From 1992 To 2007 Than Homeowners: The Financial Crisis Was Not About Housing And Excessive Mortgage Debt Alone

From TIME, "Highly Educated Have Biggest Debt Problems" by Dan Kadlec:
The study draws a line at the point where monthly payment on household debt equals 40% of income. That’s where default or bankruptcy becomes most likely should the household experience a decline in income, say researchers led by Sherman Hanna, professor of consumer sciences at Ohio State University.

Overall, the percentage of Americans exceeding this 40% threshold jumped to 27% in 2008, from 17% in 1992. College graduates were more likely to be in this group than those without a degree, according to the study. Those describing themselves as optimistic about the future also were among the most likely to have unmanageable debts, the study found. Says Hanna:

"People who piled on debt may have been too optimistic about their economic future, but you can’t blame that on a lack of education. People with college educations may have thought they were immune to any economic problems."

Meanwhile, folly in the mortgage markets was only part of the problem. One in three renters had unmanageable debts, versus just one in five homeowners, the study found. The percentage of homeowners who had heavy debt burdens increased to 22% in 2007 from 15% in 1992. But the increase was even more dramatic for renters, going to 35% from 20%. Says Hanna:

"The percentage of renters who piled on debt really surprised me. It shows that the financial crisis wasn’t all about housing speculation. There was too much debt in all parts of the economy."

NY Times Discloses Iran Has Virtually Completed In Recent Weeks Its Nuclear Enrichment Facility: Cites Intelligence Officials As Source But Not The Date NY Times Was Informed: Did NY Times Wait Until After Debates To Publish?

Curiously, after the debates, The NY Times publishes article about Iran finishing its nuclear enrichment plant and mentions the source as "Intelligence officials from several countries say" without saying when these intelligence officials disclosed the information to the NY Times.

From The New York Times "Iran Said to Nearly Finish Nuclear Enrichment Plant" by David E Sanger and William J Broad, October 25, 2012:
WASHINGTON — Intelligence officials from several countries say Iran in recent weeks has virtually completed an underground nuclear enrichment plant, racing ahead despite international pressure and heavy economic sanctions in what experts say may be an effort to give it leverage in any negotiations with the United States and its allies.

The installation of the last of nearly 3,000 centrifuges at a site called Fordo, deep under a mountain inside a military base near the holy city of Qum, puts Iran closer to being able to build a nuclear weapon, or come up to the edge, if its leaders ultimately decide to proceed.

Thursday, October 25, 2012

L’Aquila Verdict Is A Typical Example Of How The Press And The Mass Media Misrepresent Events To Fit Simplistic Storylines And News Media Biases

From Scientific American Blog, "The L’Aquila Verdict: A Judgment Not against Science, but against a Failure of Science Communication" by David Ropeik:
A court in Italy has convicted six scientists and one civil defense official of manslaughter in connection with their predictions about an earthquake in l’Aquila in 2009 that killed 309 people. But, contrary to the majority of the news coverage this decision is getting and the gnashing of teeth in the scientific community, the trial was not about science, not about seismology, not about the ability or inability of scientists to predict earthquakes. These convictions were about poor risk communication, and more broadly, about the responsibility scientists have as citizens to share their expertise in order to help people make informed and healthy choices.

It is ludicrous and naïve for the American Association for the Advancement of Science to condemn the verdict, as they did the charges when they were filed, as a misunderstanding about the science behind earthquake probabilities. That this was never about the ability of seismologists to predict earthquakes is clear from the very indictment itself; the defendants were accused of giving "inexact, incomplete and contradictory information" about whether small tremors prior to the April 6 quake should have constituted grounds for a warning.

It was never about whether the scientists could or could not predict earthquakes. Even the leader of the 309 Martiri (309 Martyrs) who pressed for the case to be brought said so; Dr. Vincenzo Vittorini, who lost his wife and daughter in the quake, said back when the trial began "Nobody here wants to put science in the dock. We all know that the earthquake could not be predicted, and that evacuation was not an option. All we wanted was clearer information on risks in order to make our choices". [Emphasis added]
In the US, the fight by the Catholic churches to not have to pay for contraception becomes a mass media story about attacks against women's rights and not about the US government's infringement of the Constitution and religious rights. Arguments against taxing the rich in the news media become arguments against helping the needy by cutting funding and not about economic growth or the unfairness of taxing those who take risk and work harder to earn their money.

It is also seems that news organizations, news publications and most of the mass media all tell the same stories from the same point of view. The good guys are the good guys in most of the stories as are the bad guys. If there were much less herding by news organizations into very similar points of view, the public would be much better served and the public would get a much more accurate portrayal and subtle story of the facts. Many times in life, the story is not good against evil. The story is more likely about two conflicting goods that cannot co-exist in the situation. The press likes to pick sides despite their claims of neutrality and portray one side as better than the other.

Sunday, October 21, 2012

Obama's Long Term Presidential Legacy Would Probably Be More Highly Rated If He Were In Office One Term Rather Than Two Terms

The textbook narrative, whether or not you believe the facts support it, of Obama's presidency for the first term would likely be that he was the first elected Black US president; he stopped the US economy from falling into a depression; he received the Nobel peace prize; he ended the conflict in Iraq and brought the US troops home; he signed into law universal healthcare and reformed the US medical system; he reformed and saved the US financial system and ended too big too fail; he saved the US automakers and their employees; he invested in green technologies and increased US green jobs.

With a second term win, Obama faces the likely possibility that the US economy will continue at its sluggish pace, possibly entering into a recession during his second term, with no further significant reduction in unemployment; tax increases will not produce increases in tax revenues or the funds to redistribute income from the rich to the poor; the budget deficit will not shrink and will grow; the number of people without health insurance will not significantly decrease despite the passage of the Affordable Care Act; numerous companies will drop employer paid health care as a work benefit; the churches will win their lawsuit against the mandate for their health insurance work benefit to cover contraception for their employees and Obama will be seen as encroaching on church-state separation; the weaknesses of health reform in fixing US health care will become much more evident as the law is further implemented; Medicare's and Social Security's funding problem will get worse; there will be very few green jobs or positive returns for the government's green technology investments; GM will run into severe financial difficulties; the US will use much more natural gas and not switch to green energy technologies; terrorist activity against the US will increase worldwide; middle east conflict due to Iran's nuclear materials refinement will escalate and cause increased conflict in the middle east; bank lending will continue to be sluggish and financial reform, Dodd-Frank, will be blamed; Obama will come to be blamed for ignoring threats of attacks on the Benghazi consulate and the subsequent deaths of the staff and diplomats; Obama will not tackle tax reform, Medicare funding, Social Security funding, or the budget deficit during his second term.

As a one term president, Obama would be highly respected for his accomplishments while in office. As a two term president, he will be less respected for failing to deal with immigration, Medicare, and Social Security as their problems worsen, and for promoting and signing health care legislation during his first term that left many in need of medical care uninsured, created a two-tier medical system of the rich and not rich, and left many with less access to doctors and medical care than before the legislation; increasing middle east conflict will also undermine his first term foreign policies; continued sluggishness in employment and the economy will undermine his tax and economic policies putting the blame on him instead of Bush.

If I were a first term president and saw what was on my plate for the second term, I would decline to run again because I would recognize that my ideology and worldview does not allow for an effective solution to the upcoming problems. He could have done it very magnanimously by saying he wanted to give Hillary Clinton or some other woman a chance at becoming president. Doing so, whether she won or not, would have catapulted him in the ranking of US presidents. Unfortunately, most presidents, including Obama, think that because a second term is available, they must run to be reelected. In so doing, Obama has probably relegated himself to the middle of the pack of presidents, good, neither horrible nor great.

Saturday, October 20, 2012

One-Fifth To One-Quarter Of Southeast US Home Sales Are To Investors

From Federal Reserve Bank of Atlanta Macroblog, "Investor Participation in the Home-Buying Market" by Jessica Dill, a senior analyst:
Southeast (excluding Florida) noted that one-fifth of home sales, on average, were to investors. Once we added Florida into our tally of Southeast contacts, just over one-fourth of sales, on average, were to investors.
Source: Federal Reserve Bank of Atlanta

Friday, October 19, 2012

If Obama And The Democrats Were Truly Pro Woman ...

The Democrats would work to remove the necessity of obtaining a doctor's prescription for birth control pills.

The birth control pill in various forms and dosages has been in use by American women for 50 years. It is as safe as any other over the counter medicine and its side effects are well known.

Removing the prescription requirement would lower the pill's price, and allow women to obtain contraception without the need to find time in their lives to schedule a doctor's appointment. It would also allow the pill to be sold in other convenient locations, such as grocery stores, etc., and make life a little easier for women.

A no prescription birth control pill would save women time, money and the worry that they will run out before they can see their doctor and have a prescription filled at the pharmacy.

A truly pro woman agenda would try to make women's lives easier, less stressful and less costly.

Celebrities At Their Best: Katy Perry Sings With An Autistic Child At A Benefit

Katy Perry sings with an autistic child at a fundraising benefit for autism, Night of Too Many Stars. Beautiful Katy never drowns out or vocally runs over the autistic child. She lets the child's voice shine. Celebrities are at their best when they lend their fame for good causes without letting their egos get in the way.

Little If Any Evidence That Income Inequality Hurts The Poor, The Middle Class Or Economic Growth

From Brookings, "Has Rising Inequality Actually Hurt Anyone?" by Scott Winship:
Too many accounts of inequality today simply assume that it must be bad — that gains at the top have come at the expense of the middle class and bottom, ... But there is scant evidence for each of these propositions.

Note, first, that the CBO data indicates that median household income — the income of the person in the middle of all households — rose by 46 percent from 1979 to 2007, and the income of the average household in the bottom fifth has risen by a similar amount. To be sure, that’s a smaller increase than Americans saw in the 1950s and 1960s and a much smaller increase than the top has seen. But it’s not the case that the middle class and poor have been doing worse over time.
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The poor and middle class are doing far better today than their counterparts in Pittsburgh during the Gilded Age, evoked by Freeland, and far better than their counterparts in most of the rest of the world.
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Cross-national comparisons are tricky, but the evidence we have (from the Luxembourg Income Study) suggests that if you could line people up from richest to poorest in the United States, in Europe and in other English-speaking nations, Americans at every point in the richest 80 percent of households are better off than their counterparts occupying the same place in line in nearly every peer nation. Among the poorest fifth of households, this pattern breaks down, but it is hardly obvious that our inequality levels are to blame.

For one, inequality between, say, the poor and the middle to upper-middle class has not increased meaningfully since the 1980s. Second, to the extent inequality between the bottom and middle rose during the 1970s and 1980s, increasing single parenthood and rising out-of-wedlock births were a big part of the story. Third, it’s unclear that intergenerational mobility has declined over time — there is at least as much evidence that it has been unchanged as there is that it has fallen.
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Studies on whether inequality hurts economic growth typically focus on developing countries, and research by, for instance, Christopher Jencks suggests that inequality across rich countries does not go hand in hand with lower growth. The latest research on whether inequality leads to financial crises concludes that it does not — rising inequality tends to co-occur with expansions in credit, but it is the latter that appears to lead to crises.

Thursday, October 18, 2012

Cleveland Fed Computes Current Real GDP Trend Growth Rate At 1.7 To 2.2 Percent

From The Federal Reserve Bank Of Cleveland, Economic Trends, "Estimating Real GDP Growth Trends" by Margaret Jacobson and Filippo Occhino:
We begin with a simple measure of trend growth that is based on real GDP data only. To construct it, we eliminate all short-term and medium-term fluctuations, including business cycles, and we keep the long-term changes only. According to this measure, trend growth reached a peak rate above 4 percent at the beginning of the 1960s, declined to rates well below 3 percent in the late 1970s, and partially recovered in the 1980s, only to drop further in the late 1990s and 2000s toward the current 2 percent rate. Other measures based on real GDP data lead to slightly different estimates, but they all agree that trend growth is currently close to historically low rates.

Besides real GDP data, other information is useful for estimating trend growth. Real GDP trend growth can be decomposed into the sum of the trend growths of three components: output per employee (employee productivity henceforth), the labor force, and the ratio of employment to the labor force. The latter component, which is related to changes in the trend of the unemployment rate, contributes little to real GDP trend growth, so we focus on the other two components, first on employee productivity and then on the labor force.
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Summing up our estimates for the trend growth rates of employee productivity and the labor force, we obtain the implied growth rate of the real GDP trend. The current rate likely lies in the interval between 1.7 percent and 2.2 percent.... [Charts omitted.]

Wednesday, October 17, 2012

AP Fact Checking Gets It Wrong On Romney's GM, Chrysler Bankruptcies: Auto Industry Would Have Been Saved By Romney Without Upsetting Established Bankruptcy Creditor Priorities: Obama's Auto Industry Bankruptcies With Union Favoritism Likely Frightened Post Recession Private Investment

From Planet Gore, "Debate: AP’s Fact-Free Auto Fact-Check" by Henry Payne:
Romney is correct that “the president took Detroit bankrupt.” The administration took both GM and Chrysler into Chapter 363 bankruptcy — a politicized bankruptcy criticized as "end-running the legal process" by at least one prominent legal expert – in order to benefit Big Labor special interests at the expense of bondholders, teacher and firefighter pensions, Delphi salaried employees, and so on.
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AP’s claim that Romney’s "proposed [auto industry bankruptcy] path probably would have forced General Motors and Chrysler out of business" is not only contradicted by repeated statements by the candidate, but also by many industry experts. "Without government aid, both companies probably would have gone under and their assets sold in pieces," writes AP, getting its facts wrong about what Romney proposed.

"The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk," wrote Romney in the 2008 New York Times op-ed that Obama & AP caricature as a call for Detroit to die.
As a consequence, Obama's quickie bankruptcies of GM and Chrysler that favored unions over other higher priority creditors is likely responsible in part for the slowness of private investment after the recession and the slowness of the recovery.

From CFO.com, "Are GM, Chrysler "End Running" Chapter 11?: Some critics say the automakers are structuring their bankruptcies as sales in an improper way." by
Alix Stuart - CFO.com | US:
And that [Obama's union preferential GM, Chrysler bankruptcies] could scare off lenders in a wide variety of future situations, say some experts. "The reason America has always been the most welcoming place for loans is because everyone knows what their downside is, since we have the most well-established set of bankruptcy codes," said Peter Kaufman, president and head of restructuring and distressed M&A for the investment bank Gordian Group, in a recent teleconference sponsored by the American Bankruptcy Institute. "Now all that has been turned on its ear."
[Added Oct 24, 2012] Link to actual November 18, 2008, NY Times Op-Ed piece by Mitt Romney, "Let Detroit Go Bankrupt."

Half Of All Millionaires File As Millionaires For Just One Year

From The Tax Foundation, "Chart of the Day: Millionaire Status is Fleeting" by Richard Morrison:

Source: Tax Foundation

Embedded Video, Audio, And Full Text Of President's Speech About Attack On US Embassy (Consulate) In Libya

Embedded video, just audio, and full text of the President's speech in the Rose Garden about the September 11, 2012, attack in Benghazi, Libya and the death of the US Embassy staff.



Just the audio of the President's Rose Garden speech about the attack in Libya.

The official White House transcript of the speech:
The White House

Office of the Press Secretary

For Immediate Release September 12, 2012
Remarks by the President on the Deaths of U.S. Embassy Staff in Libya

Rose Garden

10:43 A.M. EDT

THE PRESIDENT: Good morning. Every day, all across the world, American diplomats and civilians work tirelessly to advance the interests and values of our nation. Often, they are away from their families. Sometimes, they brave great danger.

Yesterday, four of these extraordinary Americans were killed in an attack on our diplomatic post in Benghazi. Among those killed was our Ambassador, Chris Stevens, as well as Foreign Service Officer Sean Smith. We are still notifying the families of the others who were killed. And today, the American people stand united in holding the families of the four Americans in our thoughts and in our prayers.

The United States condemns in the strongest terms this outrageous and shocking attack. We're working with the government of Libya to secure our diplomats. I've also directed my administration to increase our security at diplomatic posts around the world. And make no mistake, we will work with the Libyan government to bring to justice the killers who attacked our people.

Since our founding, the United States has been a nation that respects all faiths. We reject all efforts to denigrate the religious beliefs of others. But there is absolutely no justification to this type of senseless violence. None. The world must stand together to unequivocally reject these brutal acts.

Already, many Libyans have joined us in doing so, and this attack will not break the bonds between the United States and Libya. Libyan security personnel fought back against the attackers alongside Americans. Libyans helped some of our diplomats find safety, and they carried Ambassador Stevens’s body to the hospital, where we tragically learned that he had died.

It's especially tragic that Chris Stevens died in Benghazi because it is a city that he helped to save. At the height of the Libyan revolution, Chris led our diplomatic post in Benghazi. With characteristic skill, courage, and resolve, he built partnerships with Libyan revolutionaries, and helped them as they planned to build a new Libya. When the Qaddafi regime came to an end, Chris was there to serve as our ambassador to the new Libya, and he worked tirelessly to support this young democracy, and I think both Secretary Clinton and I relied deeply on his knowledge of the situation on the ground there. He was a role model to all who worked with him and to the young diplomats who aspire to walk in his footsteps.

Along with his colleagues, Chris died in a country that is still striving to emerge from the recent experience of war. Today, the loss of these four Americans is fresh, but our memories of them linger on. I have no doubt that their legacy will live on through the work that they did far from our shores and in the hearts of those who love them back home.

Of course, yesterday was already a painful day for our nation as we marked the solemn memory of the 9/11 attacks. We mourned with the families who were lost on that day. I visited the graves of troops who made the ultimate sacrifice in Iraq and Afghanistan at the hallowed grounds of Arlington Cemetery, and had the opportunity to say thank you and visit some of our wounded warriors at Walter Reed. And then last night, we learned the news of this attack in Benghazi.

As Americans, let us never, ever forget that our freedom is only sustained because there are people who are willing to fight for it, to stand up for it, and in some cases, lay down their lives for it. Our country is only as strong as the character of our people and the service of those both civilian and military who represent us around the globe.

No acts of terror will ever shake the resolve of this great nation, alter that character, or eclipse the light of the values that we stand for. Today we mourn four more Americans who represent the very best of the United States of America. We will not waver in our commitment to see that justice is done for this terrible act. And make no mistake, justice will be done.

But we also know that the lives these Americans led stand in stark contrast to those of their attackers. These four Americans stood up for freedom and human dignity. They should give every American great pride in the country that they served, and the hope that our flag represents to people around the globe who also yearn to live in freedom and with dignity.

We grieve with their families, but let us carry on their memory, and let us continue their work of seeking a stronger America and a better world for all of our children.

Thank you. May God bless the memory of those we lost and may God bless the United States of America.

END
10:48 A.M. EDT

Tuesday, October 16, 2012

Instead Of More Highways and High Speed Rail, The US Needs High Speed Information Highways

From The Wall Street Journal, "Infostructure Is the New Infrastructure: We aren't going to need 20 lanes on the New Jersey Turnpike, or $100 billion high-speed rail lines, to save us from national gridlock." by Walter Russell Mead:
Two things seem clear about the 21st century: Internet connectivity and bandwidth are going to improve so that today's technologies behind services like Skype are going to change beyond recognition. Each generation of young people will be more accustomed to socializing and interacting online. We are going to have more, better and cheaper alternatives to traditional business and commuting travel patterns, and our society will find it more and more natural and desirable to shift from expensive, time-consuming travel in "meat space" to doing business online.

More sophisticated computer technology will also allow us to use existing infrastructure more intensively and efficiently. This means better air-traffic control allowing more efficient use of runways, and self-driving "Google cars" (already in trial) allowing faster movement on existing road networks. We aren't going to need 20 lanes in either direction on the New Jersey Turnpike by 2050, or $100 billion high-speed rail projects, to save us from national gridlock.

The challenge isn't to move more meat; it is to move more information more effectively, and to re-engineer business practices and social organization to take full advantage of the extraordinary efficiencies that the Internet affords. The rush-hour rituals of the 20th century aren't destined to continue to the end of time. Telecommuting, flextime and mini-commutes to satellite offices will change the way we work.

Lobbying for more highways and high-speed rail misses the point. What's needed instead is support for advancing the Information Age economy. Government policy could reward companies that promote telecommuting and teleconferencing, for example, or otherwise facilitate the transition. (Greens take note: These and other business-friendly policies would reduce greenhouse-gas emissions.)

Monday, October 15, 2012

Higher Marginal Tax Rates Decrease Supply Of Labor: Higher Marginal Tax Rates Will Not Increase Tax Revenue: Obama's Tax Plans Will Cause Four More Years Of Slow Economic Growth

From "Why Do Americans Work So Much More Than Europeans?" by Edward C. Prescott, awarded the 2004 Nobel Prize in Economics:
Americans, that is, residents of the United States, work much more than do Europeans. Using labor market statistics from the Organisation for Economic Co-operation and Development (OECD), I find that Americans on a per person aged 15–64 basis work in the market sector 50 percent more than do the French. This was not always the case. In the early 1970s, Americans allocated less time to the market than did the French. The comparisons between Americans and Germans or Italians are the same. Why are there such large differences in labor supply across these countries? Why did the relative labor supplies change so much over time? In this article, I determine the importance of tax rates in accounting for these differences in labor supply for the major advanced industrial countries and find that tax rates alone account for most of them.

This finding has important implications for policy, in particular, for financing public retirement programs, such as U.S. Social Security. On the pessimistic side, one implication is that increasing tax rates will not solve the problem of these underfunded plans, because increasing tax rates will not increase revenue. On the optimistic side, the system can be reformed in a way that makes the young better off while honoring promises to the old. This can be accomplished by modifying the tax system so that when an individual works more and produces more output, the individual gets to consume a larger fraction of the increased output. [Emphasis added.]
An economy's output, its GDP, is a function of the labor supply, the number of hours worked and the number of workers, and capital investment. Higher marginal tax rates will decrease the labor supply and GDP. Romney has it right about increasing the US economy's growth. Obama's tax plan for increasing the top marginal tax rates will cause four more years of slow growth of the US economy.

ObamaCare May Lower Overall US Health Outcomes

From The National Center For Policy Analysis, John Goodman's Health Policy Blog, "Health Reform is a Matter of Life and Death" by John Goodman:
Source: John Goodman 
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We are about to spend $1.8 trillion over the next ten years insuring about 32 million people. About half of the newly insured will go into Medicaid and half will get private insurance. If the above chart is to be believed, which half you’re in makes a real difference.

That tiny little sliver of difference between the green line and the red line is the differential survival between those who are uninsured and those who are in Medicaid. Even after five years, the differential survival is a little more than 1%.

So why are we spending all that money if the impact on health is so small? It gets worse. The actual additions to the Medicaid population will be much greater than the newly insured. Given the opportunity, many people who currently have private coverage will drop their insurance to take advantage of free insurance from Medicaid. In fact, estimates are that 50% or more of people who become newly eligible for Medicaid will drop their private insurance to take advantage of free government coverage.
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The upshot is that the Affordable Care Act may actually lower overall health outcomes for the country as a whole!

You have to wonder why ObamaCare is so rigid. Why can’t people who qualify for Medicaid have the opportunity to opt into private coverage instead. For example, the average amount that Medicaid spends on an adult is about $3,000. The average amount spent on a child is $2,000. So why can’t we give the adults a $3,000 voucher and the children a $2,000 voucher and let them apply these amounts to private insurance premiums instead?

Larry Summers On The Economy: "What Started As A Financial Problem Is Becoming A Structural One"

From The Financial Times, "The world is stuck in a vicious cycle" by Lawrence Summers:
In much of the industrial world, what started as a financial problem is becoming a structural one. If growth in the US and Europe had been maintained at its average rate from 1990 to 2007, gross domestic product would have been between 10 and 15 per cent higher today and more than 15 per cent higher by 2015 on credible projections. Of course, this calculation may be misleading because global GDP in 2007 was inflated by the same factors that created financial bubbles. However, even if GDP was artificially inflated by 5 percentage points in 2007, output is still about $1tn short of what could have been expected in the US and EU. This works out to more than $12,000 for the average family.
Summers, the Charles W. Eliot University Professor at Harvard University's Kennedy School of Government, served as the Director of the White House United States National Economic Council for President Barack Obama until November 2010, and the United States Secretary of the Treasury from 1999 to 2001 under President Bill Clinton.

[HT: Greg Mankiw]

Al Roth On His Blog Upon Winning The Economics Nobel Prize: Understatement Of The Year: "Blog may be delayed today"

Al Roth on his blog, Market Design:
Blog may be delayed today...
Count me as surprised...

Nobel Committee 2012 Economics Prize Research Statement In Full

The Nobel Committee awarded the 2012 Prize in Economics to Lloyd Shapley and Alvin Roth for their abstract theoretical and empirical work to find practical solutions to real-world allocation problems when prices are unavailable. Examples include the assignment of new doctors to hospitals, students to schools, and human organs for transplant to recipients.

The full Nobel Committee statement on the economics research of the two recipients follows:

Stable Matching Theory, Evidence, And Practical Design

Saturday, October 13, 2012

Top 1 Percent Income Gain Does Not Come From Middle Class Or Any Other Americans

The rise in income at the top did not result in a decline in income of the middle class.

From the Tax Foundation, "Putting a Face on America's Tax Returns: Chart 12:"

Source:  Tax Foundation

Top 1 Percent Share Of Total Income Did Increase Due To Capital Gains And More Education
However, the share of total income of the top households did increase, while the total income share of the bottom households did decline, due to two factors. A greater return on education and skills with a higher pay for a high-skilled workforce over a low-skilled workforce, and (2) more capital gains income to the top income group.

From The Federal Reserve Bank of Cleveland Economic Commentary, "Labor's Declining Share of Income and Rising Inequality" by Margaret Jacobson and Filippo Occhino:
The Decline in Labor’s Share of Income
Household income comes in two types: labor income, which includes wages, salaries, and other work-related compensation (such as pension and insurance benefits and incentive-based compensation), and capital income, which includes interest, dividends, and other realized investment returns (such as capital gains). During the last three decades, labor’s share of total income has declined in favor of capital income.

There are a number of ways to measure the share of income that accrues to labor. We look at three different data sources, and each provides broad evidence of the decline. According to data from the Bureau of Economic Analysis, labor’s share of gross national income fluctuated around 67 percent during the 1980s, 1990s, and early 2000s, but it has declined since then and now stands at 63.8 percent. (See figure 1.) According to the Bureau of Labor Statistics, the ratio of compensation to output for the nonfarm business sector fluctuated around 65 percent until the early 1980s and has declined steadily since, from 63 percent during the 1980s and 1990s to 58.2 percent most recently. Finally, a 2011 study of income tax returns and demographic data by the CBO (CBO 2011) finds that labor’s share of income decreased from 75 percent in 1979 to 67 percent in 2007.

Source: Federal Reserve Bank of Cleveland

***
Source: Federal Reserve Bank of Cleveland
***

Most of the rise in income inequality since 1980 has been attributed to an increase in the returns to education and in the wage differential between high-skilled and low-skilled labor. Over time, the marginal productivity of high-skilled workers has increased relative to low-skilled workers, which has driven the demand for their labor higher and raised their relative compensation. As a result of this change, labor income became less evenly distributed and more concentrated at the top.

However, part of the increase in income inequality was due to the decline in labor’s share of income, and the associated shift from the more evenly distributed type of income to the more concentrated one.

Limits Of Measuring Income Inequality
A caveat about income inequality from the Federal Reserve Bank of Cleveland from the above cited Economic Commentary:
There are limits to what income inequality measures. For starters, it indicates inequality of outcomes, not of opportunities. It focuses on income, not on welfare, which depends on other variables such as consumption, leisure, health, and public goods. On one hand, income inequality does not respond to changes in the level of income, remaining constant when all households earn proportionally more (or less). On the other hand, it changes all the same regardless of whether the richest households earn more or the poorest households earn less. And, since it provides a snapshot of the relative dispersion of income across households in a given year, part of it is simply explained by the fact that households earn a variable income during the different stages of their lives. That part does not reflect lifetime income inequality. Because inequality responds similarly to very different factors, it is as important to learn why it has risen.

Friday, October 12, 2012

Intrade Price For 2012 Electoral College Tie Jumps Over 300 Percent

The Intrade security for a 2012 Electoral College tie has jumped to its highest price since the security's inception. The price is still low at 10 but that is more than a 300 percent increase from the previous close of 2.4.

Source: Intrade

Recession's Decline In Consumer Consumption Due To Loss Of Wealth And Income And Not Household Debt Deleveraging

From Federal Reserve Bank Of Boston Public Policy Brief, "U.S. Household Deleveraging: What Do the Aggregate and Household-Level Data Tell Us?" by Daniel Cooper, Senior Economist:
This policy brief analyzes the impact of household debt repayment on consumer spending during and after the Great Recession by using aggregate and household-level data. Overall, the data show little evidence that deleveraging affected household consumption. Rather, movements in consumption prior to, during, and following the Great Recession are consistent with the standard relationships implied by fluctuations in household income and net worth.

Ratio Of Job Seekers To Job Openings Is Declining

From The Wall Street Journal Real Time Economics, "Vital Signs Chart: 3.5 Unemployed for Every Job Opening" by Conor Dougherty:
For almost three years now, the U.S. has added private-sector jobs. At the same time, many discouraged workers have left the workforce, meaning less competition for those still seeking jobs.

Source: The Wall Street Journal

US Corporate Tax On Foreign Earnings Discourages US Investment By American Companies

From The Wall Street Journal, "Corporate Taxes, the Myths and Facts: U.S. companies don't get a tax break for moving plants overseas.They are, however, socked with an extra bill for bringing home earnings." by " by John Engler:
According to the nonpartisan congressional Joint Committee on Taxation, there are no specific tax credits or deductions for moving plants and jobs overseas.
***
The [US corporate tax] system has simply not kept up with the demands of today's global marketplace, where 95% of the world's consumers live outside the U.S. All other G-8 countries—and 28 of the 34 member nations of the Organization for Economic Cooperation and Development—use "territorial" tax systems. This means a company's sales in foreign markets are taxed at the rate of that local market—the same rate borne by other competitors.

By contrast, under the current U.S. system, after an American company pays that local tax, it finds the Internal Revenue Service waiting with a big tax bill when the company tries to bring foreign earnings back to the U.S. Why? Because America's tax law requires the payment of an additional tax—generally the difference between the U.S. rate and the tax rate in the foreign market.

According to J.P. Morgan, U.S. companies today control $1.7 trillion in foreign earnings held outside the U.S., earnings they don't plan to repatriate. If the U.S. were to adopt a territorial system, it would eliminate the tax barrier that discourages American companies from bringing their money home where it could be used for capital investment, R&D dividends or other ways to support economic growth. [Emphasis added.]

Thursday, October 11, 2012

Business Income Is 4 To 6 Times Riskier Than Labor Income (Salary And Wages), Due To Greater Income Fluctuations And Business Terminations: Successful Private Business Owners, For Taking Much More Risk, Should Be Rewarded Much More Than Employees

From Finance and Economics Discussion Series, Divisions of Research & Statistics and Monetary Affairs, Federal Reserve Board, Washington, DC, "The Properties of Income Risk in Privately Held Businesses" by Jason DeBacker, Bradley Heim, Vasia Panousi, Shanthi Ramnath, and Ivan Vidangos, 2012-69:
We note that the [risk] value ... is the closest empirical analog to the theoretical concept of the variance of (uninsurable) idiosyncratic income risk from privately-held businesses that shows up in calibrations of theoretical models in the macro and finance literature.
***
[Private] business income is about four times riskier than labor income. The table shows that, depending on the model, this ratio ranges between 4 - 6.5, so that business income is about 4 to 6 times riskier than labor income.
***
Our paper is the first in the literature to document the properties of business income risk from privately held businesses in the US, using a long time dimension. Utilizing a new, large, and confidential panel of income tax returns for 1987-2009, we find that business income is much riskier than labor income, not only because of the probability of business exit, but also because of higher income fluctuations, conditional on no exit. We show that business income is less persistent, but is also has higher probabilities of extreme upward movement, compared to labor income. Furthermore, the distribution of percent changes for business income is more dispersed, and it indicates that business income faces substantially higher tail risks. Our results suggest that the high income households are more likely to bear both the big positive and the big negative business income risks. ... indicates that business income risk could be responsible for the consumption and the investment spending behavior of the rich, for example during the recent recession.

Wednesday, October 10, 2012

Low And Middle Income, Not The Wealthy, Benefit The Most, In Dollars And Percent Of Income, From Tax Deductions, Exemptions And Preferences

From Bloomberg, "The Real Reason Romney’s Tax Math Doesn't Add Up" by Josh Barro:
The tax preferences that exist today overwhelmingly benefit people with lower and middle incomes, not the wealthy. While tax rate cuts reduce income tax burdens proportionally, as TPC notes, there aren't enough tax preferences for wealthy people to offset Romney's cuts at the top.

To understand this, we can look at the IRS Statistics of Income report for 2009, the most recent year available. Tax returns reporting less than $200,000 of adjusted gross income (AGI) accounted for a total AGI of $5.86 trillion, and taxable income of $3.24 trillion. That is, deductions and exemptions amounted to 45 percent of adjusted gross income for people making under $200,000.

Tax returns with more than $200,000 of AGI (the highest-earning 2.8 percent of filers) had a total of $1.96 trillion in AGI and $1.62 trillion in taxable income. For this high-income group, deductions and exemptions were just 18 percent of adjusted gross income.

Put another way, filers with over $200,000 of income earned 26 percent of all personal income in 2009, but received only 12 percent of tax exemptions and deductions.

Tuesday, October 9, 2012

Wyoming Has The Best, NY Has The Worst State Business Taxes

From Tax Foundation, "2013 State Business Tax Climate Index: Which States Have the Best Tax Systems for Business?" by Joseph Henchman and Scott Drenkard:
The 10 best states in this year's 2013 Index are Wyoming, South Dakota, Nevada, Alaska, Florida, Washington, New Hampshire, Montana, Texas, and Utah. Many of these states do not have one or more of the major taxes, and thus do not have the associated complexity and distortions.

The 10 lowest ranked, or worst, states in the 2012 Index are Maryland, Iowa, Wisconsin, North Carolina, Minnesota, Rhode Island, Vermont, California, New Jersey, and New York. New York slid past New Jersey for the bottom spot by having the worst individual income tax, the sixth-worst unemployment insurance taxes, and the sixth-worst property taxes.

Source: Tax Foundation

When Marginal Tax Rates Are Lowered, Business Owners Work Harder And Increase Firm Revenues

From NBER Working Paper Series, "The Impact Of Tax Incentives On The Economic Activity Of Entrepreneurs" by Jarkko Harju and Tuomas Kosonen, Working Paper 18442:
We ... study empirically to what extent the income tax burden on entrepreneurs affects the output of their firms.
***
The results indicate that decreasing the marginal tax rate of an entrepreneur increases the turnover [revenues] of her firm. Our main specification that compares partnerships with corporations indicates that a 10 percent reduction in the marginal tax rate leads to a 1.7 percent increase in turnover [revenues].
***
there is no indication that more people are being employed. Thus it seems that the reforms did not increase labor demand. Moreover we do not find any statistically significant increase in investments. Therefore the increase in turnover is due to increase in effort that the entrepreneurs exert.

Monday, October 8, 2012

Too Many Teachers: 40 Years Of More Teachers And Smaller Classes Have Not Improved Math And Reading Scores Or HS Graduation Rates

From The Wall Street Journal, "Jay Greene: The Imaginary Teacher Shortage: Forty years and a million more teachers later, student performance is unchanged. Yet Obama and Romney both say schools need more staff." by Jay P Greene:
For decades we have tried to boost academic outcomes by hiring more teachers, and we have essentially nothing to show for it. In 1970, public schools employed 2.06 million teachers, or one for every 22.3 students, according to the U.S. Department of Education's Digest of Education Statistics. In 2012, we have 3.27 million teachers, one for every 15.2 students.

Yet math and reading scores for 17-year-olds have remained virtually unchanged since 1970, according to the U.S. Department of Education's National Assessment of Educational Progress. The federal estimate of high-school graduation rates also shows no progress (with about 75% of students completing high school then and now). Unless the next teacher-hiring binge produces something that the last several couldn't, there is no reason to expect it to contribute to student outcomes.

Locavores Beware: Lead In Eggs From NYC Backyard Chickens

From The New York Times, "Worries About Lead for New York City’s Garden-Fresh Eggs" by Julie Scelfo:
Preliminary results from a New York State Health Department study show that more than half of the eggs tested from chickens kept in community gardens in Brooklyn, Bronx and Queens had detectable levels of lead, unlike their store-bought counterparts.

21 Percent Growth In Seniors Working Since 2008

From The Wall Street Journal Real Time Economics, "More People Over 65 Are Still Working" by John Shipman:
In September, the number of those 65 and over who were employed was up 21% from the same month in 2008, while broad workforce employment was down almost 1.4%. The size of the retirement-age labor force has also increased 23% during the past four years, while the broader labor force is up less than 0.4%.

Source: The Wall St. Journal Real Time Economics

Friday, October 5, 2012

$1.1 Trillion Estimated US Government Deficit For FY 2012

From CBO, "The Federal Budget Deficit Totaled $1.1 Trillion in 2012, CBO Estimates:"
The federal government’s fiscal year 2012 has come to a close, and CBO estimates—in its latest Monthly Budget Review—that the federal budget deficit for the year was about $1.1 trillion, or 7.0 percent of gross domestic product (GDP). Although the deficit is approximately $200 billion lower than the shortfall recorded in 2011, fiscal year 2012 marks the fourth year in a row with a deficit of more than $1 trillion.

Surge In Part-Time Jobs Responsible For Decline In Unemployment: Along With Upward Revision Of Summer Job Growth Suggests Ending Extended Unemployment Benefits In The Spring Is Putting People Back On The Payroll

The announcement of the lower unemployment rate today, which includes an increase in the number of people in the workforce, and a surge in part-timers who want full-time work, is probably due in a significant part to the ending of the extended unemployment benefits just prior to the beginning of the summer.

From The Wall Street Journal Real Time Economics, "Why Did the Unemployment Rate Drop?" by Phil Izzo:
In September, the number of part-time workers who would like full-time jobs surged by 582,000. That represents about two-thirds of the increase in employment last month and is larger than the drop in the number of unemployed.
Additionally, there was a huge upward revision in job growth for July and August.

From The Wall Street Journal Real Time Economics, "Four Takeaways From Jobs Report" by Ben Casselman:
Big revisions to July, August: The Labor Department revised up its estimate of July jobs growth to 181,000 from 141,000 and its August estimate to 142,000 from 96,000 — a combined addition of 86,000 jobs. That means job growth was significantly stronger over the summer than previously believed,

Thursday, October 4, 2012

Chewing Hard Food In Old Age Keeps Seniors Mentally Alert

From "Chewing ability linked to reduced dementia risk" on ScienceBlog:
few or no teeth makes chewing difficult, which leads to a reduction in the blood flow to the brain. However, to date there has been no direct investigation into the significance of chewing ability in a national representative sample of elderly people.
Now a team comprised of researchers from the Department of Odontology and the Aging Research Center (ARC) at Karolinska Institutet and from Karlstad University have looked at tooth loss, chewing ability and cognitive function in a random nationwide sample of 557 people aged 77 or older. They found that those who had difficulty chewing hard food such as apples had a significantly higher risk of developing cognitive impairments. This correlation remained even when controlling for sex, age, education and mental health problems, variables that are often reported to impact on cognition. Whether chewing ability was sustained with natural teeth or dentures also had no bearing on the effect.

The results are published in the Journal of the American Geriatrics Society (JAGS).

Wednesday, October 3, 2012

First Presidential Debate Knocks 6.5 Percent Off Obama's Reelection Odds On Intrade

At the end of the first presidential debate between Mitt Romney and President Obama, the Intrade security price (odds) for "Barack Obama to be re-elected President in 2012" was 6.5 percent lower than at the debate's start.

The price at the end of the debate was 6.92 or a 69.2 percent chance of reelection for Barack Obama.

UPDATE: At about a hour and a half after the end of the debate, Obama's Intrade reelection security price is down 10.3 percent to 6.64 or a 66.4 percent chance of reelection for Barack Obama.

David Letterman's Top Ten Mistakes About Hydraulic Fracturing (Fracking)

From AEIdeas, "Video: ‘The top ten mistakes David Letterman made on hydraulic fracturing’ " by Mark J. Perry:

NY, NJ Unemployment Higher Now Than During Recession

From Bloomberg, "Why Is Northeastern Unemployment Soaring?" by Evan Soltas:
Unemployment is surging across the Northeast. In two states -- New York and New Jersey -- the statewide rates of unemployment are higher than they were at any point during the recession. In Maine, New Hampshire, Vermont, Connecticut and Pennsylvania, years' worth of progress against unemployment has been reversed in a matter of months.
***
It's not exactly clear what is holding the Northeastern job market back, though. The slow growth in employment is broad: The region lags behind the nation in job creation in seven out of 10 industry categories.

And the region had weak GDP growth in 2011 to match the poor jobs performance. Last year, the Northeast grew at just 1 percent, versus 1.8 percent for the rest of the country. Two Northeastern states -- New Jersey and Maine -- were actually in recession at the state level.

US Birthrate Lowest On Record: Below Great Depression Birthrate: Missed Births Unlikely To Be Made Up Later

From The Wall Street Journal, Real Time Economics, "U.S. Fertility Rate Hits Lowest Level on Record" by Conor Dougherty:
Last year the U.S. fertility rate fell to the lowest level since the government began keeping track of the data, the latest evidence that the recession and slow recovery has markedly altered plans for new children, according to this report released today by the Centers for Disease Control and Prevention.

The overall fertility rate for women in the U.S. — defined as the number of newborns per 1,000 women aged 15 to 44 — was 63.2 last year, down from 64.1 in 2010 and the lowest rate since the government started collecting these statistics in 1920.
***
Ken Johnson, senior demographer at the Carsey Institute at the University of New Hampshire, notes that similar fertility drops occurred during the Great Depression — and never recovered. “The young women never made up for the births that they didn’t have,” he said.

Much of the delay in child-bearing has occurred among younger women, probably because they have more leeway in delaying their families than women who are closing in on the end of their fertility window. The most startling example: Hispanic women between 20 and 24 saw their fertility rate drop to 115 last year from 165 in 2007. White women between 20 and 24 saw their rate fall to 72 from 85 over the same period.

Households Have More Total Debt Than US Government

From EconoMonitor: The Wilder View, "Who has the most debt in the US?" by Rebecca Wilder:

Source: The Wilder View

Source: The Wilder View

Tuesday, October 2, 2012

2400 Millionaires Received Unemployment Benefits

From Bloomberg, "Almost 2,400 Millionaires Pocketed Unemployment Benefits" by Frank Bass:
Almost 2,400 people who received unemployment insurance in 2009 lived in households with annual incomes of $1 million or more, according to the Congressional Research Service.

The report was released after about 1.1 million people exhausted their jobless benefits during the second quarter of 2012, when more than 4.6 million filed initial unemployment claims. Eliminating those payments to high earners is one idea being considered as U.S. lawmakers struggle to curb a projected $1.1 trillion deficit for the fiscal year that ended Sept. 30, with the nationwide jobless rate at 8.1 percent.
It is also one of the reasons that unemployment benefits and other government entitlement benefits do less to create economic growth that often touted by politicians and the media.

If government money substitutes for other household income, savings or borrowing, then total spending will not increase at the consumer level. The government benefit increases government debt dollar for dollar, but does not increase consumer spending dollar for dollar because the government entitlement benefit substitutes, in whole or part, for other private money available for consumer spending at the household or individual level.

Social Security Projected To Run Out Of Funds In 20 Years, CBO Analysis

From Congressional Budget Office analysis, "As the Population Ages, Social Security’s Spending Is Projected to Outpace Its Tax Revenue" October 2, 2012:
CBO estimates that in fiscal year 2012, spending for Social Security totaled $773 billion, equal to about 5 percent of gross domestic product and one-fifth of federal spending. As more members of the baby-boom generation retire and the U.S. population grows older in the coming decades, Social Security outlays are projected to grow more rapidly than the economy and more rapidly than the program’s dedicated tax revenues.

Over the next 10 years, outlays will exceed dedicated tax revenues by about 10 percent, on average. That gap will grow larger in the 2020s, and by 2030, Social Security outlays will be about 6 percent of gross domestic product and will exceed dedicated tax revenues by about 20 percent. As a result, under current law, resources available to the Social Security program will become insufficient to pay full benefits in about 20 years, CBO projects.

With Or Without Health Insurance, People Are Going To The Doctor Less Often

From The Washington Times, "Report: People visiting doctors less often" by Paige Winfield Cunningham:
Americans visit the doctor less than they did a decade ago, but — as is often the case in the complicated world of health care — it’s unclear whether that’s good or bad.

Nonsenior adults visited a medical provider an average of 4.8 times each year in 2001, but by 2010, that average had fallen to 3.9 annual visits, according to a U.S. Census Bureau report released Monday. And not only did people with health coverage see a doctor less frequently, but so did those who lacked insurance and Americans who reported fair or poor health.