As you may recall, earlier this year, payroll taxes in the U.S. went up by 2% and I discussed how that tax increase could potentially affect spending. Well, we’re done with first quarter, so how have consumers reacted to that $16 less (based on average weekly earnings on non-farm payrolls) in take-home pay each week?
- Consumer spending increased the first two months of the year (up 0.7% in February and up 0.4% in January).
- Consumer confidence took a temporary hit in January, and then generally recovered in February and March.
And, here’s the real kicker, according to a survey recently done by Bankrate.com, almost half of Americans surveyed (48%) didn’t even notice the payroll tax increase. Read more
You may already know this, but because Santa Claus only works for one night a year, he occupies the rest of his time with detailed statistical analysis. That’s why he keeps detailed lists of all the “naughty” and “nice” children. It is, however, little known that Santa Claus also keeps various sub-lists for his statistical analyses. One of these lists is his Economic Naughty and Nice List. To get on Santa’s Economic Nice List, the subject must be achieving positive results for the economy. Santa’s Economic Naughty List contains those who, through action or inaction, do their economies harm. I happen to have seen a leaked portion of the list (Wikileaks again!) and wanted to share here. Read more
What happens when you combine five economists to come up with six economically sensible policy ideas, and then use the result to create a fake presidential candidate? Well, you get what the folks over at NPR’s Planet Money called “A political candidate who could potentially fix the economy, but would never win an election.” Their group of economists came from such vaunted institutions as Harvard, Cornell, George Mason University, the University of Chicago, and the Center for Economic and Policy Research. They were tasked with finding “major economic policies they could all stand behind.” This would then serve as the basis for an economic platform.
So what policies does this Frankenstein’s Monster of a potential POTUS stand on? Five tax changes and one alteration of the criminal code.
- Read more
The so-called “fiscal cliff” isn’t technically supposed to hit until 2013, when a mixture of tax increases and spending cuts could potentially go into effect. However, participants in the U.S. economy seem to be of two minds about whether the fiscal cliff is going to happen, or is maybe already here. Businesses seem to be acting like the economy already has one foot in the abyss – we’ll call this the pessimistic case. American consumers, on the other hand, seem to be operating under the assumption that all the partisan issues will get fixed before we reach the edge – we’ll call this the optimistic case.