The
proposals would mainly benefit energy industries, reduce taxes and
regulations for businesses generally, and continue the attack on the
Affordable Care Act. It is a mix that leaves many economists, including
several conservatives, underwhelmed.
Friday, October 24, 2014
Judge dismisses Tea Party group's lawsuit against IRS over targeting
A federal judge recently dismissed the lawsuit against the IRS that said Tea Party groups were illegally targeted by the IRS. The judge dismissed the case because the party was granted non profit status. However, the Tea Party group believes that this will not stop the IRS from illegal targeting groups in the future. We touched on this in class slightly. What are you opinions? Should the judge have dismissed the case so soon, simply because the party was granted non profit status? What should be done to make sure that the IRS does not target parties unlawfully in the future? http://www.foxnews.com/politics/2014/10/23/judge-dismisses-tea-party-group-lawsuit-against-irs-over-targeting/?intcmp=latestnews
Thursday, October 23, 2014
Relaxed Mortgage-Lending Rules
Three US agencies signed off on relaxed mortgage-lending rules, helping complete a long-stalled provision of the Dodd-Frank financial-overhaul law (WSJ).
The rules are intended to improve the quality of loans by giving banks a financial incentive to ensure mortgages can be repaid. The initial rules required that banks hold 5% of the risk of mortgages packaged and sold to investors or require a 20% borrower down payment. But regulators, concerned that overly stringent rules would harm the housing market’s recovery, backtracked on the 20% down payment (WSJ).
Two republicans SEC commissioners opposed the news rules, saying that relaxed lending laws such as these significantly contributed to the most recent financial crisis.
Do you think that banks should be required to take on some of the risk? Will this relaxation of lending laws lead to problems in the financial market? Or are there enough new regulations to prevent another crisis? Are these laws important because they extend credit to poor borrowers? Or are they just a way for banks to :again avoid having any skin in the game" (NYT)?
Read more in the Times and in the the Journal.
Social Security Increase
The bump in social security pay this year is 1.7% which translates to roughly a $20 increase. In this short video they talk about how this small increase is not enough to allow people, mostly senior citizens, to live off of with the rising of prices. Take a look at the video. Do you think that the increase or bump in social secuirty is enough? Should the bump be higher? what do you think that the government could do to lessen the impact of bumping social security? Any other thoughts on the video?
http://video.foxbusiness.com/v/3853675438001/the-social-security-cost-of-living-adjustment-not-enough/?intcmp=obnetwork
http://video.foxbusiness.com/v/3853675438001/the-social-security-cost-of-living-adjustment-not-enough/?intcmp=obnetwork
We can only hope for a do-nothing Congress.....really?
Anticipating a takeover of Congress, Republicans have assembled an
economic agenda that reflects their small-government, antiregulation
philosophy, but also suggests internal divisions that could hinder a
united front against President Obama — much as happened in the 1990s,
when a Republican-led Congress confronted President Bill Clinton.
Gridlock is here to stay. According to the article, expectations are low. The best one can hope for is marginal change and no self inflicted pain such as another government shutdown.
Economists See Limited Gains in G.O.P. Plan - NYTimes.com
economic agenda that reflects their small-government, antiregulation
philosophy, but also suggests internal divisions that could hinder a
united front against President Obama — much as happened in the 1990s,
when a Republican-led Congress confronted President Bill Clinton.
“Some
of those things will help,” Matthew J. Slaughter, an economics
professor at Dartmouth College, said after reviewing nearly four dozen
measures that House Republicans have labeled “jobs bills.” He cited some
business tax cuts, for example, even as he cautioned about the cost of
such actions.
of those things will help,” Matthew J. Slaughter, an economics
professor at Dartmouth College, said after reviewing nearly four dozen
measures that House Republicans have labeled “jobs bills.” He cited some
business tax cuts, for example, even as he cautioned about the cost of
such actions.
“But,”
added Mr. Slaughter, who served on President George W. Bush’s Council
of Economic Advisers, “it just struck me as sort of a compendium of
modest expectations. If you ask me, ‘What’s your ballpark guess for how
many jobs are going to be created?,’ it’s just not many.”
added Mr. Slaughter, who served on President George W. Bush’s Council
of Economic Advisers, “it just struck me as sort of a compendium of
modest expectations. If you ask me, ‘What’s your ballpark guess for how
many jobs are going to be created?,’ it’s just not many.”
Gridlock is here to stay. According to the article, expectations are low. The best one can hope for is marginal change and no self inflicted pain such as another government shutdown.
Economists See Limited Gains in G.O.P. Plan - NYTimes.com
Wednesday, October 22, 2014
Why Gas Prices Are Falling.
Anyone that has filled up recently has noticed that gas prices have started to creep down to near $3 a gallon. The lower cost of both oil and gas would save Americans 70-200 Billion dollars. There is a very unreported reason as to why these prices are falling. The worlds supply and demand for oil and gas are changing. Demand in Europe has slowed dramatically because of the economic turmoil and supply has dramatically increased due to the fact that the United States has increased its supply by 50% since 2008. New technologies like fracking and horizontal drilling have developed more than 100,000 jobs, and have allowed the United States to greatly increase its oil supply.
What are your thoughts on the US increasing its oil supply? What are your thoughts of tracking and horizontal drilling? Are these things economically beneficial or are the costs to high for the United States?
http://www.foxnews.com/opinion/2014/10/21/real-reason-gas-prices-are-falling/
What are your thoughts on the US increasing its oil supply? What are your thoughts of tracking and horizontal drilling? Are these things economically beneficial or are the costs to high for the United States?
http://www.foxnews.com/opinion/2014/10/21/real-reason-gas-prices-are-falling/
Higher Interest Rates for Poorer People?
Laws aimed to protect poor borrowers from high interest rates have recently been overturned in many states. There are two sides to this debate:
The lenders who lobbied for overturning the maximum interest rates that could be charged argued that this was necessary to keep up with costs:
The lenders argued that interest rate caps had not kept pace with the increased costs of doing business, including running branches and hiring employees. Unless they can make an acceptable profit, the industry says, lenders will not be able to offer loans allowing people with damaged credit to pay for car repairs or medical bills.
Some lawmakers and concerned military Generals however argue that the law is unnecessary and will hurt poor borrowers:
“There was simply no need to change the law," said Rick Glazier, a North Carolina lawmaker, who opposed the industry’s effort to change the rate structure in his state. "It was one of the most brazen efforts by a special interest group to increase its own profits that I have ever seen."
Read more in the NYT article here: States Ease Interest Rate Laws That Protected New Borrowers
Do you agree or disagree with governments allowing these lenders to increase interest rates? Do high interest rates makes it harder for people with less wealth to rise up the socioeconomic ladder? Or do these interest rates help people who otherwise would not qualify for loans receive financial support? Other thoughts?
The lenders who lobbied for overturning the maximum interest rates that could be charged argued that this was necessary to keep up with costs:
The lenders argued that interest rate caps had not kept pace with the increased costs of doing business, including running branches and hiring employees. Unless they can make an acceptable profit, the industry says, lenders will not be able to offer loans allowing people with damaged credit to pay for car repairs or medical bills.
Some lawmakers and concerned military Generals however argue that the law is unnecessary and will hurt poor borrowers:
“There was simply no need to change the law," said Rick Glazier, a North Carolina lawmaker, who opposed the industry’s effort to change the rate structure in his state. "It was one of the most brazen efforts by a special interest group to increase its own profits that I have ever seen."
Read more in the NYT article here: States Ease Interest Rate Laws That Protected New Borrowers
Do you agree or disagree with governments allowing these lenders to increase interest rates? Do high interest rates makes it harder for people with less wealth to rise up the socioeconomic ladder? Or do these interest rates help people who otherwise would not qualify for loans receive financial support? Other thoughts?
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