Posts Tagged ‘unemployment benefits’

Cookies for Susie and Obama’s “Temporary” Tax Compromise

Courtesy of Mish 

Woman with tray of cookies

President Obama has agreed to a tax deal that’s bound to please deficit-hawk hypocrites on both sides of the aisle. The cost is a mere $30 billion spread over 10 years. Spreading the cost over 10 years is an interesting concept given that the extensions are "temporary" for only 2 years.

Of course the last extension was "temporary" and the next extension will be "temporary" as well which makes me wonder about that $30 billion cost.

I have a better idea, why don’t we just "temporarily" extend these deals until 2020 and be done with it? We might be in a genuine recovery by then.

Of course we will then have to factor in the idea that we may need to "temporarily" extend the benefits "one" more time lest we sink the nascent 2020 recovery.

Obama’s Proposed "Compromise"

Inquiring minds may be asking "Just how compromising is the compromise, and more importantly, what’s in it for Susie?" Those are very good questions. The answers can be found in the article Obama Agrees to Extend Tax Cuts for Everyone for Two Years.

President Barack Obama said he’ll agree to a two-year extension of all Bush-era tax cuts in exchange for extending federal unemployment insurance. The plan also would cut the payroll tax by 2 percentage points.

Obama said he would accept a lower rate for the estate tax than Democrats wanted in order to break a stalemate over extending the Bush tax cuts before Congress adjourns. The current tax rates, enacted in 2001 and 2003, are set to expire Dec. 31.

Without the compromise, middle-income families would become “collateral damage for political warfare here in Washington,” Obama said in televised remarks. He said he still believes the nation can’t afford to permanently extend the top tax rates.

“This compromise is an essential step on the road to recovery,” Obama said.

In addition to keeping the current tax rates for all Americans, the plan outlined by Obama would extend aid for the long-term unemployed for another 13 months. The payroll tax — which funds Social Security and Medicare — would be cut by 2 percentage points during 2011 to help spur hiring.

Obama also endorsed allowing a full deduction for equipment purchases that currently must be deducted over time. The proposal would accelerate $200 billion in tax savings for companies in the first


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We Can Only Dream

We Can Only Dream

Courtesy of Michael Panzner of Financial Armageddon 

Children play with giant bubbles at the Glastonbury Festival 2010 in south west England, June 23, 2010. Picture taken June 23, 2010. REUTERS/Luke MacGregor (BRITAIN - Tags: ENTERTAINMENT SOCIETY)

Reports like those that follow help make it clear that the problems we face are structural rather than cyclical. Myriad bad policies and a distorted sense of economic reality — no doubt fed by ruthlessly self-interested corporate and political interests — encouraged large numbers of Americans to acquire knowledge, skills, and perspectives that are really only relevant in an easy-money-fueled economy.

Once the bubble bursts, however, they are as unprepared for changing times as a proverbial fish out of water. And yet, we still have a growing chorus of mindless Keynesians, ivory tower economists, Wall Street strategists, and assorted other pseudo-experts pushing for more stimulus, more borrowing, more tax cuts — more of the hair of the dog that bit us to begin with.

If government is going to do anything at all — which seems inevitable, like it or not — wouldn’t it be better if the those in charge focused on telling people the cold, hard truth about where things stand; directed efforts towards helping Americans adjust to a new operating environment, instead of the one that is not coming back; and, rejigged policy incentives — like those that favor borrowing and homeownership — in ways that might prove more beneficial in the long run?

Oh well, we can only dream.

~~~

"U.S. Jobless Rate Hints at Permanent Shift" (The Globe and Mail)

As the United States continues its battle with high unemployment, policy makers are confronting a troubling question: What if they’ve been taking the wrong approach to fixing the ailing job market?

Some prominent economists and policy makers are…suggesting the real problem isn’t lack of consumer spending – it’s that the unemployed don’t have the right skills to fill the jobs that are open.

These people are now theorizing that the financial crisis has altered the structure of the U.S. labour market, perhaps permanently.

If they’re right, the Obama administration and the Federal Reserve will need to change their approach to increasing employment because their current one, which is aimed at stoking spending, could end up exacerbating the conditions that led to the financial crisis.

Raghuram Rajan, a professor at the University of Chicago’s Booth School of Business, argues the U.S.’s high unemployment rate is the result of structural changes rather than a cyclical downturn in demand. He reasons the U.S. housing bubble


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32 States Borrow $37.8 Billion Total to Make Unemployment Payments

32 States Borrow $37.8 Billion Total to Make Unemployment Payments; CA Tops List at $6.9 Billion; Bill to Extend Benefits Until DEC in Congress

Courtesy of Mish  

Inquiring minds are reading the Economic Policy Journal for clues on how much states are borrowing to make unemployment insurance claims.

The totals are not pretty. As of May 20, the total balance outstanding by 32 states plus the Virgin Islands is $37.8 billion.

The CINN Group accounts for $14 billion of it.

California $6.9 Billion
Illinois $2.2 Billion
New York $3.2 Billion
New Jersey $1.7 Billion

The worst 4 grouping accounts for $17 billion, nearly 45% of the total.

California $6.9 Billion
Michigan $3.9 Billion
New York $3.2 Billion
Pennsylvania $3.0 Billion

Other Notables

Florida $1.6 billion
Indiana $1.7 billion
North Carolina $2.1 Billion
Ohio $2.3 Billion
Texas $1.0 Billion
Wisconsin $1.4 Billion

I bet the entire amount is forgiven. Any takers?

Note that the Emergency Unemployment Compensation (EUC) Extended to June 2, 2010 is about to run out.

But Wait! More Free Money Cometh

The Public Policy Examiner reports Unemployed must wait for Congress to preserve benefits.

A vote on a new end for unemployment benefits will not come until next week. On Thursday morning, Sen. Max Baucus (D-MT) and Rep. Sandy Levin (D-MI) proposed amending H.R. 4213 to extend benefits until December 31, 2010.

The amended bill, American Jobs and Closing Tax Loopholes Act, would extend COBRA health benefits until the end of the year.

Other plans accompany the benefits extension effort. Rep. Bob Filner (Dist. 51) plans to help San .Diegans in economic trouble by passing George Miller’s Local Jobs for America Act. Filner says the city would get 3,263 jobs, with more jobs expected in the other county communities. The bill targets communities with high unemployment.

Rep. Susan Davis (Dist. 53), on Wednesday, was one of three legislators introducing the COBRA Health Benefits Extension Act, H.R. 5324. The unemployed could receive COBRA benefits past the standard 18 months, as long as they needed. At least until Obama’s health exchanges arrive.

Damn, I am sure glad there is a nascent economic recovery. Otherwise, who knows how bad this could get.


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$45 Billion Boondoggle of Which $33 Billion Goes To Homebuilders

$45 Billion Boondoggle of Which $33 Billion Goes To Homebuilders

Courtesy of Mish

The Senate approved yet another plan to stimulate the economy. It’s called throwing $33 billion at homebuilders. This is of course doing nothing but giving money to the greedy pigs that helped create this mess. However, that is the way Washington works.

Senate Majority Leader Harry Reid even had the gall to brag about it. Please consider Senate Approves Extended U.S. Homebuyer Tax Credit.

The U.S. Senate approved a $45 billion plan to expand a tax credit for first-time homebuyers, extend jobless benefits and provide tax refunds to money-losing companies.

Lawmakers voted 98-0 for the measure, sending it to the House, where Majority Leader Steny Hoyer of Maryland said in a statement it will receive a vote as early as tomorrow. The bill then would be forwarded to President Barack Obama for his signature.

The plan would be the first major extension of provisions in February’s economic stimulus plan. The $8,000 homebuyers’ tax credit, slated to expire this month, would continue until April 30 and be expanded to include people with higher incomes and some who already own homes. That would cost about $10 billion in the fiscal year that began Oct. 1, according to Congress’s Joint Committee on Taxation.

The measure includes $2.4 billion to extend unemployment benefits for as many as 20 weeks, enough to aid the jobless through the holiday season. It would loosen tax rules for homebuilders and other money-losing companies to let them claim an estimated $33 billion in tax refunds this year, according to Joint Committee on Taxation estimates.

“Republicans used every trick in the book to slow and stall and ensure we can’t do important work,” Senate Majority Leader Harry Reid, a Nevada Democrat, said today.

Other Stimulus Measures

Lawmakers are still considering whether to extend several other elements of the stimulus package, including subsidies to help the jobless buy health insurance and increased funds for food stamps. Obama has called for sending seniors $250 checks because they won’t get a cost-of-living increase next year in their Social Security checks.

Waste of Money

Senator Christopher Bond, a Missouri Republican, called the tax credit a waste of money, saying studies show that most of those claiming the break would have bought homes anyway.

Goldman Sachs Group Inc. said in a research note yesterday


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CHART OF THE DAY: UNEMPLOYMENT NOW LASTS LONGER THAN BENEFITS

CHART OF THE DAY: UNEMPLOYMENT NOW LASTS LONGER THAN BENEFITS

Courtesy of The Pragmatic Capitalist

From Bloomberg:

For the first time, the average amount of time it takes fired employees to find a new job exceeds the length of their standard unemployment benefits.

The CHART OF THE DAY shows the average duration of unemployment is now 26.2 weeks, longer than the 26 weeks of state benefits normally provided to workers who lose their jobs. It’s the first time that has occurred since the Bureau of Labor Statistics began keeping records in 1948.

 CHART OF THE DAY: UNEMPLOYMENT NOW LASTS LONGER THAN BENEFITS

The jobless rate rose to 9.8 percent in September, while payrolls fell by 263,000, a Labor Department report showed today in Washington.

Congress has extended unemployment benefits twice — first in July 2008 and then as part of the stimulus bill signed in February. Currently, the unemployed are eligible for a total of 46 weeks of benefits, and those in states where the unemployment rate is more than 6 percent are eligible for 59 weeks.

Those additional benefits expire at the end of the year, and about 1.3 million people will exhaust them by then, according to the National Employment Law Project. An extension of benefits, which was passed by the House of Representatives, is being held up in the Senate by lawmakers who object because their states would be excluded from the plan.

The purple line on the chart shows 5.4 million people have now been out of work for at least 27 weeks, representing 35.6 percent of the total number of unemployed, the most since the agency began keeping statistics in 1948.

Source: Bloomberg

 


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500,000 Will Exhaust Unemployment Benefits by September, 1.5 Million by Year-end

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500,000 Will Exhaust Unemployment Benefits by September, 1.5 Million by Year-end

end of the line, unemployment benefitsCourtesy of Mish

The Emergency Unemployment Compensation (EUC) program began in June 30,2008. Benefits under the act have now been extended twice. Unless Obama extends the program a third time, it’s the end of the line for many receiving unemployment benefits.

Please consider First wave of jobless exhaust unemployment benefits.

Thousands of jobless Pennsylvanians are joining the growing ranks of people around the country who are exhausting unemployment benefits, as some experts worry about another blow to a stumbling economy.

Gov. Ed Rendell said 17,800 Pennsylvanians exhausted their jobless benefits in the week that ended Saturday, the first big wave of Pennsylvanians to do so. He urged legislators to pass a bill to extend the benefits.

Around the country, the number of people exhausting their benefits is piling up. By the end of September, more than 500,000 people will exhaust their benefits checks, with the biggest groups in Pennsylvania, California and Texas, according to estimates by the National Employment Law Project, an advocacy group for low-wage workers based in New York City. That number will nearly triple by the end of the year, the group said.

New York Qualifies For Extended Benefits

As some states exhaust extended benefits other now qualify. In New York, Benefits Extended As State Unemployment Numbers Rise.

The number of jobless New Yorkers across the state jumped significantly during the month of June, according to state Department of Labor statistics released Thursday.

The unemployment rate increased from 8.2 percent in May to 8.7 percent in June. That’s the highest level since October of 1992.

In New York City, the rate increased from nine percent in May to 9.5 percent in June — the highest level in more than a decade. That translates into more than 850,000 people out of work in the state.

"Because of our 8.7 percent unemployment rate, we will qualify for an additional seven weeks of unemployment insurance benefits," said New York State Labor Commissioner M. Patricia Smith. "So right now New Yorkers will be eligible for 79 weeks of unemployment insurance benefits."

Unemployment benefit extensions are expected to help an additional 47,000 jobless New Yorkers who would have lost their benefits in August.

79 Weeks is a long time to be…
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Personal Income Saved by Unemployment Insurance

Here are Jake’s information-loaded charts showing that May’s increase in income reflects an increase in social benefit payments – unemployment benefits doubled in the last year.

Personal Income Saved by Unemployment Insurance

Courtesy of Jake at EconompicData

WSJ reports:

The income of Americans soared in May because of the government’s economic stimulus, leading them to increase spending modestly and boost the saving rate to the highest in 15 years.

Personal income rose at a seasonally adjusted rate of 1.4% compared to the month before, the Commerce Department said Friday. The jump reflected reduced taxes and increased social benefit payments unleashed by the stimulus package.

Up? Yes. Soared? No. Looking at year over year figures, personal income continues to show anemic (or in disposable personal income terms negative) growth.

personal income

Was stimulus the savior? Well, if you classify unemployment (and the extension of these benefits), then yes. The amount of unemployment benefits paid out has doubled in the past 12 months.

government unemployment insurance benefits

The chart below shows this more clearly. While personal income has stabilized, it has been due to unemployment benefits making up the shortfall in compensation.

personal income, fraction of personal income consisting of unemployment insurance
 
 
They key is what happens now. Unless benefits are extended again (and soon), these figures will turn negative unless you believe the broader economy picks up. There already have been negative signs as the exhaustion rate (i.e. those no longer able to collect benefits) has increased in recent months.
Source: BEA

 


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Kimble Charting Solutions

Apple Bullish Breakout Suggesting Tech Follows In Its Path?

Courtesy of Chris Kimble

Is Apple sending a bullish message to the overall Tech market? Sure could be

Apple (AAPL) is working on a breakout above last year’s highs at (1), after creating a series of higher lows over the past year.

Tech ETF QQQ has been a similar-looking pattern to Apple over the past few months, as it is near old highs while creating higher lows.

Is Apple’s upside breakout suggesting that QQQ will follow in its footsteps and breakout?

Str...



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Phil's Favorites

Fed Chair Powell Met with a Sovereign Wealth Fund in August and Had a Call with a Central Bank Holding Tens of Billions in U.S. Stocks

Courtesy of Pam Martens

Jerome Powell, Chairman of the Federal Reserve

This morning the Federal Reserve pumped another $58.15 billion into Wall Street securities firms under the repo loan program it initiated on September 17. That program has been pumping out hundreds of billions of dollars each week to Wall Street with no authorization from Congress, as far as the public is aware.

We decided to take a look at Federal Reserve Chairman ...



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Zero Hedge

Despite Pushback Against FAA, Boeing Shares Extend Plunge As Analyst Downgrades Accelerate

Courtesy of ZeroHedge View original post here.

Boeing said on Sunday that it told U.S. regulators "multiple times" that it had expanded the role of its MCAS system and that the FAA had observed the system operating in flight tests before the 737 Max was certified for service, according to Bloomberg

The statement was posted online as a result of Friday's ...



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Insider Scoop

10 Biggest Price Target Changes For Monday

Courtesy of Benzinga

  • UBS raised the price target for Teradyne, Inc. (NASDAQ: TER) from $47 to $63. Teradyne shares closed at $58.93 on Friday.
  • Bank of America cut the price target on Boeing Co (NYSE: BA) from $400 to $370. Boeing closed at $344.00 on Friday.
  • Raymond James raised the price target for Kansas City Southern (NYSE: KSU) from $151 to $170. Kansas City Southern shares closed at $145.25 on Friday.
  • H.C. Wainwright boosted Foamix Pharmaceuticals Ltd ...


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Digital Currencies

Five hurdles blockchain faces to revolutionise banking

 

Five hurdles blockchain faces to revolutionise banking

Shutterstock

Courtesy of Markos Zachariadis, Warwick Business School, University of Warwick

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Chart School

Gold Stocks Review

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Gold stocks are swinging back forth between the range, and a break out swing higher is due. Gold stocks are holding a near perfect Wyckoff accumulation pattern. All should get ready to play this sector. Yet we must recognize that gold stocks are a one of the most crazy rides at the stock market fair, so play very carefully.

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The Technical Traders

Treasuries Pause Near Resistance Before The Next Rally

Courtesy of Technical Traders

Our research team believes the US Treasuries and the US Dollar will continue to strengthen over the next 2 to 6+ weeks as foreign market and emerging market credit and debt concerns outweigh any concerns originating from the US economy or political theater.  Overall, the major global economies will likely continue to see strength related to their currencies and debt instruments simply because the foreign market and emerging markets are dramatically more fragile than the more mature major global economies.

We believe the US Treasuries may surprise investors by rallying from current levels, near price resistance, to levels above $151 on the TLT chart. 

Our belief ...



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Lee's Free Thinking

Look Out Bears! Fed New QE Now Up to $165 Billion

Courtesy of Lee Adler

I have been warning for months that the Fed would need new QE to counter the impact of massive waves of Treasury supply. I thought that that would come later, rather than sooner. Sorry folks, wrong about that. The NY Fed announced another round of new TOMO (Temporary Open Market Operations) today.

In addition to the $75 billion in overnight repos that the Fed issued and has been rolling over since Tuesday, next week the Fed will issue another $90 billion. They’ll come in the form of three $30 billion, 14 day repos to be offered next week.

That brings the new Fed QE to a total of $165 billion. Even in the worst days of the financial crisis, I can’t remember the Fed ballooning its balance sheet by $165 bi...



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Biotech

The Big Pharma Takeover of Medical Cannabis

Reminder: We are available to chat with Members, comments are found below each post.

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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