Peter Bromberg's UnBlog

The amount of money the federal government takes out of the U.S. economy in taxes will increase by more than 30 percent between 2012 and 2014, according to the Budget and Economic Outlook published today by the CBO. At the same time, according to CBO, the economy will remain sluggish, partly because of higher taxes. Between 2012 and 2014, revenues in CBO’s baseline shoot up by more than 30 percent, mostly because of the recent or scheduled expirations of tax provisions, such as those that lower income tax rates and limit the reach of the alternative minimum tax (AMT), and the imposition of new taxes, fees, and penalties that are scheduled to go into effect. The U.S. economy, CBO projects, will perform “below its potential” for another six years and unemployment will remain above 7 percent for another three . According to the CBO report, federal tax revenues equaled $2.302 trillion in fiscal 2011, and will increase to $2,523 trillion in fiscal 2012, $2,988 trillion in fiscal i...

WASHINGTON—The Senate voted to defeat a resolution that, if successful, would have held up an increase in the country's statutory borrowing limit. The vote triggers a $1.2 trillion increase in the debt ceiling on Friday. The increase brings the total federal government borrowing limit to $16.4 trillion, enough to support Treasury borrowing until past the November elections, but likely not through the end of the year. That could mean that after the elections, a lame-duck session of Congress would have to deal with another increase in the borrowing limit as well as the litany of other divisive issues that will need to be resolved including the question of whether to extend the Bush-era lower tax rates. If you ever doubted that debt is related to the value of the dollar, have a look at this chart (courtesy sharelynx). The price of gold has historically tracked with our national debt. Now: ask yourself what would happen if our debt became so unsustainable that we cou...

On Tuesday the American Tradition Institute’s Environmental Law Center sent the University of Virginia and Michael Mann copies of 40 emails selected as examples of the 27 categories identified as benefitting from the Court’s review of UVA and Mann’s claims that emails in the taxpayer-funded school’s possession are properly subject to the specific exemptions under Virginia’s Freedom of Information Act (VFOIA). These categories range from discussions of professional retaliation against other scientists who challenged Mann’s work, to those sent to or from Mann from or copying an email account covered by other FOI laws, such as the federal Freedom of Information Act. The selected emails include graphic descriptions of the contempt a small circle of largely taxpayer-funded alarmists held for anyone who followed scientific principles and ended up disagreeing with them. For example, in the fifteenth Petitioners’ Exemplar (PE-15), Mann encourages a boycott of one climate journal and a direct...

Here's how they do social security in Chile according to Cato.org. Workers are given the choice as to whether they would like to stay in a pay-as-you-go plan (like we have in the U.S.) or a new system in which they can put their entire payroll tax into a retirement account. That way, they can benefit from compound interest. 93% of Chileans elect to participate in the new system. It's run by 15 private companies. Here's how the country's former Secretary of Labor, Jose Pinera explains what has happened: We guaranteed benefits for the elderly -- we told those people who had already retired that they had nothing to fear from this reform. We also told people entering the labor force for the first time that they had to go to the new system. Today, all workers in Chile are capitalists, because their money is invested in the stock market. And they also understand that if government tomorrow were to create the conditions for inflation, they would be damaged because s...

In a free market, demand is a function of price: the higher the price, the lower the demand. These rules apply equally to both prices and wages. When employers evaluate their labor and capital needs, cost is a primary factor. When the cost of hiring low-skilled workers moves higher, jobs are lost. Despite this, minimum wage hikes, like the ones recently set to take effect, are always seen and reported as an act of governmental benevolence.  Before bringing on another worker, an employer must be convinced that the added productivity will exceed the added cost (this includes not just wages, but all payroll taxes and other benefits.) So if an unskilled worker is capable of delivering only $6 per hour of increased productivity, such an individual is legally unemployable with a minimum wage of $7.25 per hour. Low-skilled workers must compete for employers' dollars with both skilled workers and capital. For example, if a skilled worker can do a job for $14 per hour that two unskil...

I get a lot of valuable information from my various conversations on Google+. One gentleman whose insights I particularly value is Keith Keber . Keith is a real thinker, and although in some respects he seems to be somewhat left of center, we’ve conducted several interesting conversations and debates, and regardless of whether we agree or disagree, he conducts himself in an intelligent and respectful way, and I’m always happy to read his opinions. Keith opines: ----------------------------------------------------------------------------------------------------------- “Few have analyzed the source of private financial support for the Internet Censorship Act (my own pet name for the bill), but I would venture that Big Pharma has spent more on it than Big Entertainment. Here are some familiar names from the House Judiciary Committee on SOPA/PIPA corporate supporters: Alliance for Safe Online Pharmacies (ASOP) Pfizer, Inc Elsevier (as a proxy for Merck) Pharmaceutica...

A recent Pew Center poll reveals some interesting statistics about who believes global warming is mostly because of human activity. There is a large partisan gap in views about the causes of global warming: 51% of Democrats and 40% of independents say the earth is getting warmer mostly because of human activity. But only 19% of Republicans say rising temperatures are mostly attributable to human activity. Of course, if you add all these numbers up based on the percentage of the US population who are Democrats, Republicans, and Independents, you find out that most people do not believe that global warming is mostly because of human activity. Remember, this question is not about just "solid evidence of global warming" -- we already know the earth has warmed and cooled for billions of years -- its about "do you believe the earth is getting warmer mostly because of human activity" . What conclusions can we draw from this? Well, one obvious one is ...

Damnant quod non intellegunt    --They condemn what they do not understand America's central bank, the Federal Reserve, is engaged in a bailout of European banks. This operation is going pretty much unnoticed here in America. The Fed is using what is called a "temporary U.S. dollar liquidity swap arrangement" with the European Central Bank (ECB). There are similar arrangements with the central banks of Canada, England, Switzerland and Japan. The Fed trades or "swaps" dollars for euros. The Fed is compensated by payment of an interest rate (usually 50 basis points, or one-half of 1%) above the overnight index swap rate. The ECB, which guarantees to return the dollars at an exchange rate fixed at the time the original swap is made, then lends the dollars to European banks of its choosing. Why are they doing this? The Fed could  lend directly to U.S. branches of foreign banks. It did a great deal of such lending to foreign banks under var...

On December 6, regarding his proposed 1.9 percent surtax on million-dollar incomes, Harry Reid said: "Millionaire job creators are like unicorns. They’re impossible to find, and they don’t exist… Only a tiny fraction of people making more than a million dollars, probably less than 1 percent, are small business owners. And only a tiny fraction of that tiny fraction are traditional job creators… Most of these businesses are hedge fund managers or wealthy lawyers. They don’t do much hiring and they don’t need tax breaks." The real facts: Millionaire tax filers earn almost a quarter trillion dollars from their businesses. They hire hundreds of thousands of employees to do so. There are a trivial number of millionaire hedge-fund managers and wealthy lawyers (who, according to Harry, do not hire anyone and don’t need tax breaks). The millionaire tax surcharge is not aimed at them, but at the tens of thousands of millionaire business owners. A 1.9 percent surc...

Why would Democrats want the two-month cut instead of the yearlong cut? Because they didn’t want to give the issue up as a political boon. It allowed them to criticize Republicans for hypocritically opposing a tax cut. They settled for Keystone and offsets in exchange for the ability to again bash GOP-ers over their opposition to the tax cut extension two months from now. The House didn’t want to play along. A study came out to demonstrate that a two-month tax cut would be unworkable, allowing them to focus on the timeframe, rather than the tax cut extension itself. Their game? A two-month tax cut extension is a source of too much uncertainty for taxpayers. That's true, but it's not the central issue. Here’s the problem: Whether it’s for two months or a year, a payroll tax cut extension is simply bad policy . In the context of comprehensive Social Security reform, it might make sense to tamper with the payroll tax. But as a half-hearted, gimmicky gesture to pander ...