Wall Street Breakfast: Must-Know News [View article]
Here's excerpts from the CBO Report:
Under current law, revenues are expected to increase by 15 percent in 2013, about 4 percentage points more than CBO projected in February and substantially more than the expected growth of about 3 percent in nominal GDP this year. [ Believe that?]
Revenues have increased robustly so far this year in part because of the expiration of the 2 percentage-point payroll tax cut in January 2013. In addition, receipts of individual income taxes have been boosted by three factors: -Beginning in January, tax rates on personal income above certain thresholds went up; -Some high-income taxpayers realized more income late in calendar year 2012 in anticipation of changes in tax law and therefore paid taxes on that income in fiscal year 2013; and -Personal income rose for reasons not related to the changes in tax provisions.
For that reason, CBO’s baseline projections of mandatory spending reflect the automatic spending reductions required by the Budget Control Act of 2011 (Public Law 112-25) and expected changes in the economy, demographics, and other factors. [Automatic spending reductions - will that stick?]
Total outlays are projected to decline slightly relative to GDP through 2015 and then to rise in most years through 2023, reaching 22.6 percent of GDP—above the 21.0 percent of GDP that has been the average for the past 40 years. [They project higher outlays as % of GDP, but lower deficits???]
CBO projects that, under current law, the government’s net interest spending will more than double as a share of GDP in the coming decade—from 1.4 percent in 2014 to 3.2 percent in 2023. [Net interest to more than double - but lower deficits?],
Amazing Demographic Trends In The 50-And-Older Workforce [View article]
Freddie, do you believe these numbers from CBO's latest projections:
From the CBO Report:
Under current law, revenues are expected to increase by 15 percent in 2013, about 4 percentage points more than CBO projected in February and substantially more than the expected growth of about 3 percent in nominal GDP this year. [ Believe that?]
Revenues have increased robustly so far this year in part because of the expiration of the 2 percentage-point payroll tax cut in January 2013. In addition, receipts of individual income taxes have been boosted by three factors: -Beginning in January, tax rates on personal income above certain thresholds went up; -Some high-income taxpayers realized more income late in calendar year 2012 in anticipation of changes in tax law and therefore paid taxes on that income in fiscal year 2013; and -Personal income rose for reasons not related to the changes in tax provisions.
For that reason, CBO’s baseline projections of mandatory spending reflect the automatic spending reductions required by the Budget Control Act of 2011 (Public Law 112-25) and expected changes in the economy, demographics, and other factors. [Automatic spending reductions - will that stick?]
Total outlays are projected to decline slightly relative to GDP through 2015 and then to rise in most years through 2023, reaching 22.6 percent of GDP—above the 21.0 percent of GDP that has been the average for the past 40 years. [They project higher outlays as % of GDP, but lower deficits???]
CBO projects that, under current law, the government’s net interest spending will more than double as a share of GDP in the coming decade—from 1.4 percent in 2014 to 3.2 percent in 2023. [Net interest to more than double - but lower deficits?],
David Tepper And The Coming 'Cash On The Sidelines' [View article]
From the CBO Report:
Under current law, revenues are expected to increase by 15 percent in 2013, about 4 percentage points more than CBO projected in February and substantially more than the expected growth of about 3 percent in nominal GDP this year. [ Believe that?]
Revenues have increased robustly so far this year in part because of the expiration of the 2 percentage-point payroll tax cut in January 2013. In addition, receipts of individual income taxes have been boosted by three factors: -Beginning in January, tax rates on personal income above certain thresholds went up; -Some high-income taxpayers realized more income late in calendar year 2012 in anticipation of changes in tax law and therefore paid taxes on that income in fiscal year 2013; and -Personal income rose for reasons not related to the changes in tax provisions.
For that reason, CBO’s baseline projections of mandatory spending reflect the automatic spending reductions required by the Budget Control Act of 2011 (Public Law 112-25) and expected changes in the economy, demographics, and other factors. [Automatic spending reductions - will that stick?]
Total outlays are projected to decline slightly relative to GDP through 2015 and then to rise in most years through 2023, reaching 22.6 percent of GDP—above the 21.0 percent of GDP that has been the average for the past 40 years. [They project higher outlays as % of GDP, but lower deficits???]
CBO projects that, under current law, the government’s net interest spending will more than double as a share of GDP in the coming decade—from 1.4 percent in 2014 to 3.2 percent in 2023. [Net interest to more than double - but lower deficits?],
mobyss....that action on the part of China would be interesting to watch.....especially with their penchant for gold. But, at this point, the Yuan is almost down to 6.0 to the dollar. I predict under 6 within 6 months.
Jason....ummm, I.....uhhh, must make a confession. Sorry....but I have to be honest. I have actually increased my holdings of "cash" outside the banking system. There... I said it. I am a "reserve" killer.
David Tepper And The Coming 'Cash On The Sidelines' [View article]
CR says: "What if the budget deficit shrinks so fast that it substantially weakens the economy?"
Well, I don't know that I can put together a coherent scenario where the budget deficit shrinks rapidly. I don't know that I can even put together a scenario where the budget deficit shrinks in the next 5 years.
The Real Experiment That Is Being Carried Out In Japan [View article]
US Fed says that by 2020, us job growth will be 1/5 of current 180,000 a month. That's 6 years from now and we'll be nearly stagnant real GDP growth. What's going on in Japan is coming to America.
U.S. jobs could return to pre-recession levels by 2014, according to some economists. The latest Wall Street Journal survey of economists, forecasters said they expect employers to add just under 180K jobs a month over the next 12 months, about the same pace as the past two years, but that should pick up as the economy continues to gather steam. For the full year, economists expect 2.4% growth - which is better than the past two years. [View news story]
And here's what the FED is forecasting for 2020.
"Current projections are for the annual growth rate of the labor force to slow from about 1 percent currently to about 0.2 percent, on average, after 2020."
That's 1/5th the rate of job creation. Take that 180,000 / month number down to 36,000. Can you say FLAT GDP growth.
The End Of The Consumer? What The Long-Term Decline Of Consumption Means For Investors [View article]
Conclusions from "A Primer on the Macroeconomic Implications of Population Aging"
"The fundamental conclusion of our study is that, barring a significant increase in labor force participation, population aging will lead to a reduction in per capita consumption relative to a baseline in which the demographic composition of the population does not change."
"For example, currently there are about 5 adults of working age for every person 65 and over, and the elderly constitute about 12 percent of the population. In 2030, by which time most of the baby boomers will have retired, the ratio is projected to be about three working-age adults per older person, and the elderly are expected to be about 19 percent of the population."
"Current projections are for the annual growth rate of the labor force to slow from about 1 percent currently to about 0.2 percent, on average, after 2020."
U.S. jobs could return to pre-recession levels by 2014, according to some economists. The latest Wall Street Journal survey of economists, forecasters said they expect employers to add just under 180K jobs a month over the next 12 months, about the same pace as the past two years, but that should pick up as the economy continues to gather steam. For the full year, economists expect 2.4% growth - which is better than the past two years. [View news story]
IMHO, we will not add 180,000 new jobs per month. The number will be smaller, probably 125,000. We will not see 2.5% GDP growth, probably less than 2.0%. The new normal with aging workforce will be lower than historical GDP, and with lower birth rates, will be lower than normal job creation.
Is A QE Exit Really Scary? [View article]
Wall Street Breakfast: Must-Know News [View article]
Under current law, revenues are expected to increase by 15 percent in 2013, about 4 percentage points more than CBO projected in February and substantially more than the expected growth of about 3 percent in nominal GDP this year. [ Believe that?]
Revenues have increased robustly so far this year in part because of the expiration of the 2 percentage-point payroll tax cut in January 2013. In addition, receipts of individual income taxes have been boosted by three factors:
-Beginning in January, tax rates on personal income above certain thresholds went up;
-Some high-income taxpayers realized more income late in calendar year 2012 in anticipation of changes in tax law and therefore paid taxes on that income in fiscal year 2013; and
-Personal income rose for reasons not related to the changes in tax provisions.
For that reason, CBO’s baseline projections of mandatory spending reflect the automatic spending reductions required by the Budget Control Act of 2011 (Public Law 112-25) and expected changes in the economy, demographics, and other factors. [Automatic spending reductions - will that stick?]
Total outlays are projected to decline slightly relative to GDP through 2015 and then to rise in most years through 2023, reaching 22.6 percent of GDP—above the 21.0 percent of GDP that has been the average for the past 40 years. [They project higher outlays as % of GDP, but lower deficits???]
CBO projects that, under current law, the government’s net interest spending will more than double as a share of GDP in the coming decade—from 1.4 percent in 2014 to 3.2 percent in 2023. [Net interest to more than double - but lower deficits?],
GDP Growth - Nominal
2012 15549
2013 16034 3.1%
2014 16646 3.8%
2015 17632 5.9%
2016 18792 6.6%
2017 19959 6.2%
2018 20943 4.9%
2019 21890 4.5%
2020 22854 4.4%
2021 23842 4.3%
2022 24858 4.3%
2023 25910 4.2%
[Real will be, IMHO 1-1.5%, so we must be expecting a lot more inflation]
I don't believe their numbers. Boomers retiring, lower workforce participation, lower fertility, lower productivity growth, EU recession?
Amazing Demographic Trends In The 50-And-Older Workforce [View article]
From the CBO Report:
Under current law, revenues are expected to increase by 15 percent in 2013, about 4 percentage points more than CBO projected in February and substantially more than the expected growth of about 3 percent in nominal GDP this year. [ Believe that?]
Revenues have increased robustly so far this year in part because of the expiration of the 2 percentage-point payroll tax cut in January 2013. In addition, receipts of individual income taxes have been boosted by three factors:
-Beginning in January, tax rates on personal income above certain thresholds went up;
-Some high-income taxpayers realized more income late in calendar year 2012 in anticipation of changes in tax law and therefore paid taxes on that income in fiscal year 2013; and
-Personal income rose for reasons not related to the changes in tax provisions.
For that reason, CBO’s baseline projections of mandatory spending reflect the automatic spending reductions required by the Budget Control Act of 2011 (Public Law 112-25) and expected changes in the economy, demographics, and other factors. [Automatic spending reductions - will that stick?]
Total outlays are projected to decline slightly relative to GDP through 2015 and then to rise in most years through 2023, reaching 22.6 percent of GDP—above the 21.0 percent of GDP that has been the average for the past 40 years. [They project higher outlays as % of GDP, but lower deficits???]
CBO projects that, under current law, the government’s net interest spending will more than double as a share of GDP in the coming decade—from 1.4 percent in 2014 to 3.2 percent in 2023. [Net interest to more than double - but lower deficits?],
GDP Growth - Nominal
2012 15549
2013 16034 3.1%
2014 16646 3.8%
2015 17632 5.9%
2016 18792 6.6%
2017 19959 6.2%
2018 20943 4.9%
2019 21890 4.5%
2020 22854 4.4%
2021 23842 4.3%
2022 24858 4.3%
2023 25910 4.2%
[Real will be, IMHO 1-1.5%, so we must be expecting a lot more inflation]
I don't believe their numbers. Boomers retiring, lower workforce participation, lower fertility, lower productivity growth, EU recession?
David Tepper And The Coming 'Cash On The Sidelines' [View article]
Under current law, revenues are expected to increase by 15 percent in 2013, about 4 percentage points more than CBO projected in February and substantially more than the expected growth of about 3 percent in nominal GDP this year. [ Believe that?]
Revenues have increased robustly so far this year in part because of the expiration of the 2 percentage-point payroll tax cut in January 2013. In addition, receipts of individual income taxes have been boosted by three factors:
-Beginning in January, tax rates on personal income above certain thresholds went up;
-Some high-income taxpayers realized more income late in calendar year 2012 in anticipation of changes in tax law and therefore paid taxes on that income in fiscal year 2013; and
-Personal income rose for reasons not related to the changes in tax provisions.
For that reason, CBO’s baseline projections of mandatory spending reflect the automatic spending reductions required by the Budget Control Act of 2011 (Public Law 112-25) and expected changes in the economy, demographics, and other factors. [Automatic spending reductions - will that stick?]
Total outlays are projected to decline slightly relative to GDP through 2015 and then to rise in most years through 2023, reaching 22.6 percent of GDP—above the 21.0 percent of GDP that has been the average for the past 40 years. [They project higher outlays as % of GDP, but lower deficits???]
CBO projects that, under current law, the government’s net interest spending will more than double as a share of GDP in the coming decade—from 1.4 percent in 2014 to 3.2 percent in 2023. [Net interest to more than double - but lower deficits?],
GDP Growth - Nominal
2012 15549
2013 16034 3.1%
2014 16646 3.8%
2015 17632 5.9%
2016 18792 6.6%
2017 19959 6.2%
2018 20943 4.9%
2019 21890 4.5%
2020 22854 4.4%
2021 23842 4.3%
2022 24858 4.3%
2023 25910 4.2%
[Real will be, IMHO 1-1.5%, so we must be expecting a lot more inflation]
I don't believe their numbers. Boomers retiring, lower workforce participation, lower fertility, lower productivity growth, EU recession?
The Real Experiment That Is Being Carried Out In Japan [View article]
"The avoidance of taxes is the only intellectual pursuit that still carries any reward."
Abenomics Is Paying Off [View article]
Is A QE Exit Really Scary? [View article]
Amazing Demographic Trends In The 50-And-Older Workforce [View article]
Abenomics Is Paying Off [View article]
David Tepper And The Coming 'Cash On The Sidelines' [View article]
Well, I don't know that I can put together a coherent scenario where the budget deficit shrinks rapidly. I don't know that I can even put together a scenario where the budget deficit shrinks in the next 5 years.
The Real Experiment That Is Being Carried Out In Japan [View article]
The Real Experiment That Is Being Carried Out In Japan [View article]
U.S. jobs could return to pre-recession levels by 2014, according to some economists. The latest Wall Street Journal survey of economists, forecasters said they expect employers to add just under 180K jobs a month over the next 12 months, about the same pace as the past two years, but that should pick up as the economy continues to gather steam. For the full year, economists expect 2.4% growth - which is better than the past two years. [View news story]
"Current projections are for the annual growth rate of the labor force to slow from about 1 percent currently to about 0.2 percent, on average, after 2020."
That's 1/5th the rate of job creation. Take that 180,000 / month number down to 36,000. Can you say FLAT GDP growth.
The End Of The Consumer? What The Long-Term Decline Of Consumption Means For Investors [View article]
"The fundamental conclusion of our study is that, barring a significant increase in labor force participation, population aging will lead to a reduction in per capita consumption relative to a baseline in which the demographic composition of the population does not change."
"For example, currently there are about 5 adults of working age for every person 65 and over, and the elderly constitute about 12 percent of the population. In 2030, by which time most of the baby boomers will have retired, the ratio is projected to be about three working-age adults per older person, and the elderly are expected to be about 19 percent of the population."
"Current projections are for the annual growth rate of the labor force to slow from about 1 percent currently to about 0.2 percent, on average, after 2020."
The last one is the most compelling IMHO.
U.S. jobs could return to pre-recession levels by 2014, according to some economists. The latest Wall Street Journal survey of economists, forecasters said they expect employers to add just under 180K jobs a month over the next 12 months, about the same pace as the past two years, but that should pick up as the economy continues to gather steam. For the full year, economists expect 2.4% growth - which is better than the past two years. [View news story]