Another Republican President, Another Recession.

Lucky Luke said:

Then the two other options are making everyone's votes equal and/or making voting compulsory. Otherwise the drift to the right will continue.

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cannabineer said:

You still have not documented this alleged drift. You also never convincingly laid out how the Democrats are on the right.

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cannabineer said:

oh good grief; videos?
Do you have no respectable referencrs?

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Lucky Luke said:

Videos say allot in a short time. You didn't watch videos in school for history or economics?

The quote said it all i spose.
Sebastian Peady
6 months ago
As an Australian, I often think about how all but the most conservative parties support universal healthcare and gun control. By the definition of the American right, we're socialists. By our definition, it's just standard.

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cannabineer said:

Videos are unreliable. Surely you have seen me disarticulate the qtards for their execrable reference discipline.

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Lucky Luke said:

people are unreliable. we still have heaps of people. Give them both a watch. Don't be to put off by the Socialists leaning.

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cannabineer said:

No. Use printed and reviewed sources if you value credibility.

I guess you haven’t been paying attention after all to my charitable work with the cognitively delayed.

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Lucky Luke said:

Shame. They are both good explanitarty videos. I really like the ratchet effect explanation and it ties in well with what Beau said in this video. All of its good but 5:00 to 6:00 min otherwise.

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TankHankerous said:

The redefining of recession.... has the Biden Administration finally jumped the shark?

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Roger A. Shrubber said:

https://www.politifact.com/factchecks/2022/jul/27/instagram-posts/no-white-house-didnt-change-definition-recession/
another republicunt lie...
keep spreading them, we'll keep knocking them down...

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TankHankerous said:

The redefining of recession.... has the Biden Administration finally jumped the shark?

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Last week US Senator Joe Manchin and Majority Leader Chuck Schumer unexpectedly announced the reconciliation bill that had been declared dead was back. US Senator Kyrsten Sinema and various conservative Democrats could still decide to blow it up. But if all goes well, it could be voted on in the next couple of weeks.

What’s in the $485 billion Inflation Reduction Act of 2022 (IRA22)? The measure addresses three major Democratic priorities:

Climate, health care and taxes.

Clean energy

The $385 billion in climate provisions is the part of the proposal that has perhaps most excited the Democratic base. The Atlantic quotes Sam Ricketts of Evergreen Action enthusing, “I struggle to find enough superlatives to describe this deal.”

The majority of the climate spending centers on $260 billion in tax credits. These replace former and clumsy green energy incentives that couldn’t be used by public utilities and couldn’t be used to incentivize newer forms of non-carbon energy.

The new tax credits provide public and private companies with subsidies for producing renewable energy and for creating renewable technologies like solar panels.

Researchers who analyzed an earlier version of this plan judged it to be extremely cost-effective. They believe it could create $1.5 trillion in economic surplus, while cutting 5 billion tons of carbon from the atmosphere by 2050.

The IRA22 also includes around $80 billion in incentives for car and home-owners.

A $7,500 rebate for new EV purchases for family vehicles could cut carbon emissions substantially, since personal transportation produces about 17 percent of US carbon pollution.

The proposal also includes $27 billion for a federal green bank — a fund that can be used to invest in clean energy. The green bank provides money for low-income households to purchase heat pumps, solar cells and electric cars. States, tribes and municipalities can also compete for grants for green energy projects.

Fossil fuel production

That’s the (substantial!) climate upside of the bill.

The less pleasing aspect is an expansion in carbon fuel production. In the name of energy independence, Manchin and his industry lobby buddies demanded oil and gas leasing in the Gulf of Mexico and off the Alaskan coast.

The bill also prevents the federal government from leasing land for solar or wind unless it has also leased territory to oil and gas developers.

These carve outs, in technical language, suck.

However, climate advocates in general see these concessions as a small price to pay for what is in other respects easily the most substantial effort to fight global warming in US history.

Healthcare

The IRA22 includes $100 billion for healthcare.

The largest chunk of that is $65 billion to expand ACA subsidies.

Tax credits that help some 13 million low-income Americans buy health insurance were set to lapse at the end of this year. That could cause premiums to increase by hundreds of dollars per person in January. Many people would be notified of the upcoming increase just weeks before the election.

The IRA22 extends the subsidies for three years into 2025. That will enable millions of people to retain their health care. It also pushes the next funding cliff out past 2024, so Democrats won’t have to struggle with it right before another election.

The other major health care provision in the bill addresses prescription drug prices.

IRA22 caps out-of-pocket spending on prescription drugs for Medicare beneficiaries at $2,000 per year.

Currently, Medicare recipients continue to pay 5 percent out of pocket for scripts after total charges reach $7,050 per year.

That 5 percent doesn’t sound like much, but for those with medication costing thousands of dollars, or with large numbers of prescriptions, it can become a major financial burden.

The bill would also restrict increases on prescription drug price increases for Medicare patients and for patients with private insurance. Manufacturers that increased prices faster than inflation would have to pay a rebate.

Finally, the bill gives the government the ability to negotiate prices of high-cost drugs for Medicare recipients. Only a few drugs would be subject at first, but it would gradually increase to 20 by 2029.

The exact savings here depend on the drugs that are selected and what the prices end up being. But the CBO estimates the provision could save the government $101.8 billion. The inflation rebate provision could add another $100.7 billion in savings.

The IRA22 saves another $120 billion through repeal of a complicated Trump era drug rebate rule.

Taxes

IRA22 substantially increases taxes on the wealthy.

Most analyses treat this as a funding mechanism. But taxing the rich is important in its own right to control runaway inequality and prevent the powerful from seizing control of the country’s institutions and political processes.

The biggest tax increase is a 15 percent corporate minimum tax.

Trump cut the US corporate tax rate from 35 percent to 21 percent in 2017. Many corporations use write-offs and tax shelters to pay even less than that. Some pay nothing at all.

The new tax would end that.

It imposes a minimum of 15 percent on all corporations with over $1 billion in profits. This should raise $313 billion in revenue over a decade.

Another big chunk of revenue is expected to come from improved enforcement. The bill spends $80 billion to beef up the IRS.

Of that, $45 billion would go toward enforcement. Some $25 billion would go toward operations support. Another $4.75 billion would go to IT modernization, and $3 billion to taxpayer services.

The IRS budget has been systematically cut by the Congress for more than a decade. Republicans in particular have seen starving the agency as a way to protect their wealthy base. As a result, the IRS hasn’t had the funds they’ve needed to pursue tax cheats.

The tax gap between what is owed and what is collected may be as high as $1 trillion a year.

IRA22 estimates that the additional funds for tax enforcement will result in revenue of $124 billion.

The bill also closes the carried interest loophole, which allows private equity and hedge funds to pay tax on their income at a lower capital gains rate rather than at the rate normally paid by wage earners. This should raise $14 billion.

Inflation Reduction

Overall, the bill is designed to lower the deficit by $300 billion over 10 years. Schumer and Manchin believe that raising taxes and increasing revenue should have an anti-inflationary effect.

Manchin also argues that moving away from fossil fuels will help the US avoid inflationary spirals. And the drug price controls should keep health care costs down.

Will the bill actually fight inflation? Probably not in the short term. The name is more of a gimmick than anything. But if a gimmick gets Manchin on board, so be it.

What’s missing?

There are a lot of things that aren’t in this bill.

Progressives had hoped to expand Medicare to cover vision, hearing and dental benefits during this Congress. Biden wanted to spend $400 billion on universal preschool and affordable childcare.

Neither are in the final package.

The IRA22 also doesn’t renew the expanded child tax credit. The program lifted millions of children out of poverty in 2021 before it was allowed to expire in 2022. Allowing such a vital, successful program to evaporate is a tragedy.

Perhaps most disturbing, IRA22 includes zero spending on COVID mitigation.

The pandemic continues to kill more than 400 people a day, 2,800 people a week. New variants continue to develop, cases remain high and the healthcare system is facing staffing shortages.

But funds for vaccine development and distribution have dried up, and the Congress has largely abandoned the issue.

It’s easy to get discouraged when you contemplate the crises that our government refuses to confront. But for all its failures, IRA22 also offers much reason for hope.

Its prescription drug benefits and ACA subsidies provide real, material help for seniors, independent small businesspeople and the less affluent. Its tax provisions address growing inequality for the first time in decades. And its climate measures finally take real strides toward preserving the planet for future generations.

If the Congress can pass this, it will be a real victory for the Democrats, the country and the planet.

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Last week’s report on economic output recharged speculation about whether the U.S. economy is in a recession. Gross domestic product shrank for the second quarter in a row, a common, but unofficial, definition of a recession.

But GDP isn’t the only measure that matters, especially in the tangled mess of the pandemic economy.

The National Bureau of Economic Research (NBER) has the final say on whether a period of economic decline is a recession, a determination that can lag for months. NBER economists consult a wide range of indicators that suggest this year’s economy stands on sturdier ground than in recent recessions.

Americans feel bad about the economy, and there’s no doubt that soaring priceson everyday essentials are making it harder to get by. But a recession isn’t a measure of how hard it is to make ends meet. It is, as defined by NBER, a downturn that is deep, diffused and lasts for at least a few months.

But there is no exact formula for a recession. For instance, two months in early 2020 were declared a recession, despite being so brief, because the economic decline from the pandemic was so drastic and far-reaching.

“Every recession is unhappy in its own way,” said David Wilcox, senior economist with the Peterson Institute for International Economics and Bloomberg Economics. “It’s important for the Business Cycle Dating Committee to sift through the indicators and make their decision in a flexible way.”

We took a look at where the indicators used by the decision-makers at NBERstand today, compared with recessions over the past 50 years. This year’s economy is far from bulletproof — but it is strikingly different from hard times in the past.

The overall size of the economy

Gross domestic product measures the country’s economic growth by tallying up the value of all its goods and services. It has declined the past two quarters, but GDP often has big revisions after its initial release, averaging a full percentage point of change between the first estimate and its final revision months later.

[Why the U.S. economy shrank]

NBER also takes into account GDP’s less prominent cousin, gross domestic income (GDI), which measures the same thing — economic growth — from a different angle: how much money was earned by making those goods and providing those services.

In practice, the measures aren’t quite equal, but this year they’re pointing in opposite directions: GDP says the economy is shrinking, while GDI says it’s growing.

Averaging the GDP and GDI together, as NBER does, suggests the economy has largely stayed the same in the first three months of the year. Gross domestic income for the second quarter has yet to be reported.

Employment

Employment shows a much stronger picture, especially when compared with past recessions.

NBER looks at two different measures of employment: payrolls reported by businesses and direct household surveys. Both are a big contrast with the job losses seen in the first six months of most previous recessions.

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There are signs that last year’s frenetic labor market is easing: job openings dipped slightly in June after months of record highs, and tech companies are slowing their growth. But unemployment remains at a pandemic low.

“Employment is usually a contemporaneous indicator,” Wilcox said. “If the overall economy was contracting, you’d see it in employment.”

Earning and buying, making and selling

Total income offers an additional angle on employment, because it reflects reductions in working hours that might not result in job losses. And income has largely held steady, even after adjusting for inflation.

[The changing shape of inflation]

Consumer spending remains close to its all-time pandemic highs. Rising prices are putting many households under economic strain, however. Essentials like groceries and gas are taking up a greater part of household budgets, potentially crowding out discretionary spending on goods.

Industry and manufacturing represent only a small part of the economy, but economists consult these measures because they have historically been sensitive to changes in the overall economy.

The Industrial Production Index, which measures the value of items produced in the United States, shows growth far above that of previous recessions.

On the other hand, the inflation-adjusted value of items sold in the United States, measured by real manufacturing and trade sales, has dropped, resembling the patterns of previous recessions. That may be because of how the pandemic reshaped consumer spending: goods spending is starting to cool from its pandemic-fueled frenzy, and service spending has finally risen back to its pre-pandemic levels.

We won’t know for a while whether we are in a recession and, if so, when it began. But the measures that matter to decision-makers at NBER suggest a different and more complicated picture than previous recessions.

If we are in a recession or enter one soon, it may be unlike the most recent economic downturns we’ve faced.

“All of our thinking is based on the last 20 years of recessions,” said Thomas Coleman, an economist at the University of Chicago. “I’m not sure that’s a good guide.”

The Great Recession and the 2020 recession were both tipped off by crises: a financial meltdown and a pandemic suddenly shutting down the economy.

Without a crisis on a similar scale, Coleman says, the next recession will be more like those from the 1970s to the early 2000s, causing significant pain but not repeating the devastating job losses of the past two recessions.

“The question we need to ask,” said Coleman via email, “is ‘do we feel unlucky?’ ”

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WASHINGTON (AP) — America’s hiring boom continued last month as employers added a surprising 528,000 jobs despite raging inflation and rising anxiety about a recession.

July’s hiring was up from 398,000 in June. The unemployment rate slipped to 3.5%.

The U.S. economy shrank in the first two quarters of 2022 — an informal definition of recession. But most economists believe the strong jobs market has kept the economy from slipping into a downturn.

The American job market has repeatedly defied skeptics this year. Economists had expected only 250,000 new jobs this month.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

WASHINGTON (AP) — The American job market has defied raging inflation, rising interest rates, growing recession fears. Month after month, U.S. employers just kept adding hundreds of thousands of workers, at a pace that regularly exceeded the expectations of most economists.

Yet cracks have begun to appear in one of the nation’s pillars of economic strength. Job openings are down, and the number of Americans signing up for unemployment benefits is up.

“When we look across the labor market, we are seeing broad indications of cracks beginning to show,” said Sarah House, senior economist at Wells Fargo. “Overall conditions aren’t nearly as strong as what we were seeing three to six months ago.’’

The Labor Department on Friday well report how many jobs were created in July and whether the super-low U.S. unemployment rate has begun to tick higher.

Forecasters, on average, expect the economy to have picked up another 250,000 jobs last month, according to a survey by the data firm FactSet. That would be a solid number in normal times but would mark a big deceleration for 2022: Employers have been hiring an average 457,000 workers a month so far this year.

The unemployment rate is expected to remain at 3.6% — just off a 50-year low — for the fifth consecutive month.

There are, of course, political implications in the numbers being released Friday: Rising prices and the risk of recession are likely to weigh on voters in November’s midterm elections, potentially making it tougher for President Joe Biden’s Democrats to maintain control of Congress.

The economic backdrop is troubling: Gross domestic product — the broadest measure of economic output — fell in both the first and second quarters; consecutive GDP drops is one definition of a recession. And inflation is roaring at a 40-year high.

The resiliency of the current labor market, especially the low jobless rate — is the biggest reason most economists don’t believe a downturn has started yet, though they increasingly fear that one is on the way. History isn’t entirely reassuring: The unemployment rate was even lower — 3.5% — when an 11-month recession began in December 1969.

Recession is not an American problem alone.

In the United Kingdom, the Bank of England on Thursday projected that the world’s fifth-largest economy would slide into recession by the end of the year.

Russia’s war in Ukraine has darkened the outlook across Europe. The conflict has made energy supplies scarce and driven prices higher. European countries are bracing for the possibility that Moscow will keep reducing — and perhaps completely cut off — flows of natural gas, used to power factories, generate electricity and keep homes warm in winter.

If Europeans can’t store enough gas for the cold months, rationing may be required by industry.

Economies have been on a wild ride since COVID-19 hit in early 2020.

The pandemic brought economic life to a near standstill as companies shut down and consumers stayed home. In March and April 2020, American employers slashed a staggering 22 million jobs and the economy plunged into a deep, two-month recession.

But massive government aid — and the Federal Reserve’s decision to slash interest rates and pour money into financial markets — fueled a surprisingly quick recovery. Caught off guard by the strength of the rebound, factories, shops, ports and freight yards were overwhelmed with orders and scrambled to bring back the workers they furloughed when COVID hit.

The result has been shortages of workers and supplies, delayed shipments -- and rising prices. In the United States, inflation has been rising steadily for more than a year. In June, consumer prices jumped 9.1% from a year earlier — the biggest increase since 1981.

The Fed underestimated inflation’s resurgence, thinking prices were rising because of temporary supply chain bottlenecks. It has since acknowledged that the current spate of inflation is not, as it was once referred to, “ transitory.”

Now the central bank is responding aggressively. It has raised its benchmark short-term interest rate four times this year, and more rate hikes are ahead.

Higher borrowing costs are taking a toll. Rising mortgage rates, for instance, have cooled a red-hot housing market. Sales of previously occupied homes dropped in June for the fifth straight month.

Real estate companies — including lending firm loanDepot and online housing broker Redfin — have begun laying off workers.

The labor market is showing other signs of wobbliness.

The Labor Department reported Tuesday that employers posted 10.7 million job openings in June — a healthy number but the lowest since September.

And the four-week average number of Americans signing up for unemployment benefits — a proxy for layoffs that smooths out week-to-week swings — rose last week to the highest level since November, though the numbers may have been exaggerated by seasonal factors.

Friday’s jobs report comes at a critical moment for President Biden, who has maintained that the economy is merely slowing down rather than heading into a recession. Inflation has dogged public support for Biden, yet the administration has stressed that the 3.6% unemployment rate and solid job gains are signs of a healthy economy.

White House press secretary Karine Jean-Pierre said the administration expects the pace of hiring to fall further in the coming months because the unemployment rate is already near historic lows and fewer potential workers are available.

A slower pace of hiring and reduced levels of wage growth could also suggest that inflationary pressures are easing, but it has the White House attempting to convince the American public that less growth is a positive at a moment when Republican lawmakers are saying a recession has already started; they cite the drop in GDP over the first half of the year.

“We’re expecting it to be closer to 150,000 jobs per month,” Jean-Pierre said at Thursday’s briefing. “This kind of job growth is consistent with the lower level of unemployment numbers that we’ve been seeing.”

Economist House at Wells Fargo expects employers to keep adding jobs for a few months. But rising interest rates, she said, will gradually choke off economic growth.

“We are actually looking for outright declines in hiring come the first quarter, maybe second quarter of next year,” she said. “As monetary policy continues to tighten, that’s going to have an effect on overall business conditions and therefore demand for workers.

“Our expectation is that the U.S. economy will slip into recession, probably at the start of the year.”

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hanimmal said:

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