Dan Gross has been one of the more bullish voices in the econoblogosphere this spring/summer, and his latest piece for Slate is sure to be controversial. In it, he explains how deficits and surpluses show up out of nowhere and disappear just as quickly…
The fiscal 2010 deficit—$1 trillion and counting—is an encouraging sign.
Let me explain. Federal tax revenues are highly leveraged to economic growth and to the performance of markets, corporations, and rich people. This means they can be volatile. When markets and profits boom, capital gains taxes, payroll and income taxes, and corporate income taxes flow like a mighty stream. As a result, it’s not uncommon for tax receipts to rise 6 percent or 7 percent in a year when the economy grows by 3 percent. This volatility works to the downside, too. When the economy contracts and markets crash, capital gains and corporate income tax revenues dry up. For example, corporate income taxes (click here and scroll down to Page 30) fell from $370 billion in fiscal 2007 to $304 billion in fiscal 2008 (down 18 percent), and then plunged to $138 billion in fiscal 2009 (down 55 percent). In fiscal 2009, a period in which the economy shrunk about 2.6 percent, government receipts plummeted 16 percent, from $2.5 trillion to $2.1 trillion. To aggravate matters, some government spending is countercyclical. That means that in good times, when tax receipts are high, less money is spent on stimulus and social welfare benefits. In bad times, when tax receipts are ebbing, more money goes out the door. And that’s why surpluses and deficits can materialize out of nowhere.
He goes on to point out how the deficit for 2009 came in below expectations as a result of asset price refaltion and other factors. Without being a fan of long-term entitlements and debt, he makes an interesting case based on the numbers for a toning down of the deficit-hawk rhetoric.
Summary: The stock market rises on days when the FOMC releases its policy statement, probably as a result of some uncertainty being removed for market participants. This pattern has existed for more than 30 years. The Fed's ability to "jawbone" the market higher is no more exceptional now than it was during any prior bull market.
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Morgan Stanley's chief economist this week stated ...
The U.S. economy is on track to grow at a 2.4 percent annualized rate in the third quarter, the Atlanta Federal Reserve's GDP Now forecast model showed on Friday, following the latest data on inventories, trade and consumer spending this week.
Every day that goes by brings more shady deals from Trump's past – now Cuba, more stuff about his foundation, his taxes! No wonder he doesn't want to release his taxes either – who the heck knows is buried in there.
In the meantime, Trump gets up at 5:00 AM to tweet about Alicia Machado! What a despicable coward little man-child!
I admit I find it hard to keep up the sense of humor about things these days. We laughed a lot during the Bush years, didn't we, my fellow pony aficionados. Trump should just make me laugh and laugh and laugh and laugh. But with Bush we could sorta pretend that people voted for him because they didn't quite see him for what he was. There's no doing that with Trump. Trump is Trump. He won't win, but a lot of...
Below looks at Commodities ETF DBC over the past decade. Since the highs in 2008, DBC has been a great asset to avoid. Is it time to start paying attention and potentially own this hard hit ETF? Check out the rare price situation below in DBC.
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The CRB (Commodities Index) has been down 5-years in a row, this has never happened in the history of commoditi...
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I was so pleased yesterday by the announcement that I have joined the Research team at GoldCore as it meant that I could finally start talking about it and was back in a role that lets me indulge in my passion by researching and geeking out on all things gold, silver and money.
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Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer. One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."
Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.
Genetic components are the DNA sequences that are 'inherited.' Some of these genes are stronger than others in their expression (e.g., eye color). Yet, some genes turn on or off due to external factors (environmental), and it is und...
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