Mandatory spending programs like Social Security, Medicare, and Medicaid account for over 60% of total U.S. federal spending currently and are projected to reach over 67% by 2022. These programs are very popular but their rising costs due to an aging population and increasing healthcare costs threaten the long-term federal budget outlook. Policymakers will need to make difficult choices to reform these programs in order to reduce spending and put the federal budget on a sustainable path. Options include raising the retirement age, changing benefits calculations, and increasing premiums, but there are no easy solutions.
The document discusses the history and role of the Federal Reserve, including how it responded during the financial crisis by lowering interest rates and purchasing mortgage and Treasury securities to stabilize markets. While some argue the Fed should be ended due to concerns over its private ownership and lack of audits, most experts agree that the Fed plays an important role in the economy and its quantitative easing programs have helped support economic recovery.
The document proposes establishing a Government Investment Enterprise (GIE) to create a national foreclosure mitigation program. The GIE would hold equity investments in single-family residences to help restore the mortgage market. It would use existing TARP and GSE funds, without requiring new funding. The current foreclosure crisis is prolonged due to inefficiencies in programs like HAMP that often do not find an optimal solution for all parties. The proposed GIE aims to better match borrower ability with holder criteria to find a balanced solution and stabilize the housing market.
“Ironically, if central bank ‘financial repression’ continues to work and increases
economic growth, we will likely see markedly higher bond yields by year-end
following intervention by the Fed to rein in stimulus as unemployment falls.“
The document provides commentary on macroeconomic conditions and trends in various countries/regions. Key points include:
1) A second Greek bailout is likely as the country works to implement austerity measures to reduce its deficit. However, there is uncertainty around reaching agreements on debt restructuring.
2) Consumer confidence fell in the US, Eurozone, and UK as economies showed signs of slowing. Growth is expected to remain weak.
3) The Portuguese government unveiled new fiscal measures but the country's fiscal position may be worse than expected due to risks from state-owned enterprises and public-private partnerships.
4) German unemployment declined further but the resilience of its economy is unsustainable amid the debt crisis; French
This complete deck can be used to present to your team. It has PPT slides on various topics highlighting all the core areas of your business needs. This complete deck focuses on Financial Crisis PowerPoint Presentation Slides and has professionally designed templates with suitable visuals and appropriate content. This deck consists of total of twenty eight slides. All the slides are completely customizable for your convenience. You can change the colour, text and font size of these templates. You can add or delete the content if needed. Get access to this professionally designed complete presentation by clicking the download button below. https://bit.ly/3fyIZc7
The document provides an overview of the global financial crisis that began in 2007. It discusses several causes, including the housing slump and subprime mortgage crisis in the United States. It also examines impacts such as bank failures, home foreclosures, and federal reserve intervention. Key events described include the Bear Stearns bailout and nationalization of Northern Rock. Proposed solutions discussed include increased regulation and further actions by the Federal Reserve to stabilize markets.
The document discusses federal spending and the upcoming debates around raising the debt ceiling and passing a fiscal year 2012 budget. It notes that while both political parties agree deficit reduction is needed, they disagree on the extent and nature of spending cuts versus tax increases. The document summarizes two major budget proposals - the House GOP plan from Paul Ryan focusing on large spending cuts, and President Obama's plan relying more on a mix of cuts and tax hikes. It expects the final fiscal year 2012 budget will include substantial outlay reductions but the composition remains unclear.
The document compares and analyzes the similarities and differences between the 1980s savings and loan crisis and the 2008 subprime mortgage crisis. It provides background on what triggered each crisis, statistics on their costs and impacts, timelines of key events, comparisons of the underlying causes, and summaries of the government actions taken in response to each crisis.
The document discusses the history and role of the Federal Reserve, including how it responded during the financial crisis by lowering interest rates and purchasing mortgage and Treasury securities to stabilize markets. While some argue the Fed should be ended due to concerns over its private ownership and lack of audits, most experts agree that the Fed plays an important role in the economy and its quantitative easing programs have helped support economic recovery.
The document proposes establishing a Government Investment Enterprise (GIE) to create a national foreclosure mitigation program. The GIE would hold equity investments in single-family residences to help restore the mortgage market. It would use existing TARP and GSE funds, without requiring new funding. The current foreclosure crisis is prolonged due to inefficiencies in programs like HAMP that often do not find an optimal solution for all parties. The proposed GIE aims to better match borrower ability with holder criteria to find a balanced solution and stabilize the housing market.
“Ironically, if central bank ‘financial repression’ continues to work and increases
economic growth, we will likely see markedly higher bond yields by year-end
following intervention by the Fed to rein in stimulus as unemployment falls.“
The document provides commentary on macroeconomic conditions and trends in various countries/regions. Key points include:
1) A second Greek bailout is likely as the country works to implement austerity measures to reduce its deficit. However, there is uncertainty around reaching agreements on debt restructuring.
2) Consumer confidence fell in the US, Eurozone, and UK as economies showed signs of slowing. Growth is expected to remain weak.
3) The Portuguese government unveiled new fiscal measures but the country's fiscal position may be worse than expected due to risks from state-owned enterprises and public-private partnerships.
4) German unemployment declined further but the resilience of its economy is unsustainable amid the debt crisis; French
This complete deck can be used to present to your team. It has PPT slides on various topics highlighting all the core areas of your business needs. This complete deck focuses on Financial Crisis PowerPoint Presentation Slides and has professionally designed templates with suitable visuals and appropriate content. This deck consists of total of twenty eight slides. All the slides are completely customizable for your convenience. You can change the colour, text and font size of these templates. You can add or delete the content if needed. Get access to this professionally designed complete presentation by clicking the download button below. https://bit.ly/3fyIZc7
The document provides an overview of the global financial crisis that began in 2007. It discusses several causes, including the housing slump and subprime mortgage crisis in the United States. It also examines impacts such as bank failures, home foreclosures, and federal reserve intervention. Key events described include the Bear Stearns bailout and nationalization of Northern Rock. Proposed solutions discussed include increased regulation and further actions by the Federal Reserve to stabilize markets.
The document discusses federal spending and the upcoming debates around raising the debt ceiling and passing a fiscal year 2012 budget. It notes that while both political parties agree deficit reduction is needed, they disagree on the extent and nature of spending cuts versus tax increases. The document summarizes two major budget proposals - the House GOP plan from Paul Ryan focusing on large spending cuts, and President Obama's plan relying more on a mix of cuts and tax hikes. It expects the final fiscal year 2012 budget will include substantial outlay reductions but the composition remains unclear.
The document compares and analyzes the similarities and differences between the 1980s savings and loan crisis and the 2008 subprime mortgage crisis. It provides background on what triggered each crisis, statistics on their costs and impacts, timelines of key events, comparisons of the underlying causes, and summaries of the government actions taken in response to each crisis.
This document summarizes the arguments presented during a congressional hearing on H.R. 1207, a bill that would audit the Federal Reserve. Supporters argue that the Fed's secrecy is unnecessary and that its actions are already politicized. They claim taxpayers deserve transparency given the trillions loaned. Opponents argue auditing would undermine the Fed's independence and ability to effectively conduct monetary policy. They say the Fed is already transparent and accountable within legal limits. The document also discusses the Fed's role in bailouts and lending to foreign governments and central banks.
Lower interest rates have hurt consumer incomes and spending by reducing interest payments to consumers. However, increased dividend payments from companies to consumers have provided a slight offset. Lower consumer energy prices have also increased consumers' spending power by $100 billion compared to 2008 levels. While some factors restraining consumer spending have improved, employment needs to increase further to boost income and spending growth in 2012.
The document discusses the causes and impacts of the subprime mortgage crisis that began in 2008. It describes how loose lending practices led to many borrowers taking out loans they could not afford, resulting in mass foreclosures when borrowers defaulted. This undermined the mortgage industry and global credit markets. The crisis significantly impacted the US and European economies through loss of home equity and wealth, rising unemployment, and declining GDP.
The document summarizes the US subprime crisis and its aftermath. It discusses:
- The origins of the crisis in the collapse of subprime mortgage markets in 2007.
- How risky lending practices, deregulation, and the housing bubble led to the crisis.
- The key events like the Lehman Brothers bankruptcy in 2008 that caused the crisis to spread globally.
- The consequences including economic recession in the US and worldwide, rising inequality, and diminished US influence internationally.
The Case for AAA Underlying Municipal BondsIan Welch
4
Intent
• Create AAA Underlying Portfolio
• Create Default Resistant Portfolio
• Take advantage of sell side pressure
• Take advantage of negative perception of municipal bond market to amass AAA bonds
In November 2011, after months of debate, Congress was unable to arrive at an agreement to gradually reduce
the U.S. deficit. As a result, they deferred any decision by implementing a process called sequestration, scheduled
to take effect in January 2013. This draconian option was thought sufficient to motivate both political parties to
focus on resolving their differences. It was never intended to actually take effect, as it will trigger across- the- board
spending cuts of $1.2 trillion over 10 years to both domestic and defense programs. For more info: www.nafcu.org/nifcus
Introducing Subprime Mortgage Crisis PowerPoint Presentation Slides. The presentation highlights the impact of the financial crisis of the year in percentages. Take the advantage of our ready-to-use PPT template to showcase fall in housing prices, unemployment, etc. during a crisis. The impact of a great recession on investment banks is also discussed in this presentation. This content-ready slide design also illustrates the significant financial bubble burst of financial years. Highlight the cost of the financial crisis and its key members. The effects of the crisis on the economy of the US can be effectively discussed using our PPT theme. Showcase how the crisis started spreading in various other parts of the country with the use of this PPT visual. Depict how CDO customers protect themselves during the recession. Explain the effect of subprime in many countries with this PPT theme. Further, describe the current scenario after a decade of a financial crisis in the US. Explain fed tapering, quantitative easing, etc. effectively by using this PPT slideshow. At last, the presentation discusses the vision, mission, and goals of the company. https://bit.ly/2PeSvsw
The document summarizes key points from a bond market town hall meeting. It discusses the impact of the S&P downgrade of US debt, the relatively strong position of the US economy compared to other AAA rated countries, and challenges with the political environment in Washington. It also reviews municipal and corporate bond defaults historically being rare for investment grade bonds. The document analyzes current bond yields and factors that could influence future interest rate movements.
A credit crisis occurs when the availability of loans decreases or the cost of loans increases suddenly. It is often caused by a period of reckless lending that results in losses for lenders when borrowers default on loans. The 2007-2008 global financial crisis began as a subprime mortgage crisis in the United States, where heavy lending and defaults on housing loans starting in 2006 led to over $1.3 trillion in subprime mortgages outstanding by 2007. Major banks and financial institutions reported over $435 billion in losses by mid-2008. Central banks provided loans to increase liquidity as banks became unwilling or unable to lend, while governments announced bank rescue packages worth hundreds of billions of dollars.
Sovereign Bancorp reported third quarter 2007 earnings of $58.2 million, down from $184 million in the third quarter of 2006, due to disruptions in the mortgage and credit markets. Net interest income was $457 million and the net interest margin was 2.74%. Non-interest income fell to $141 million due to losses from capital markets and mortgage banking. The provision for credit losses increased to $162.5 million due to higher reserves for home equity and auto loans. Capital ratios declined slightly but remained strong.
This document provides an overview of the 2008 subprime mortgage crisis in the United States. It defines subprime loans as high-risk loans given to borrowers with poor credit. In the early 2000s, low interest rates and rising home prices fueled increased subprime lending. However, starting in 2006, subprime borrowers began defaulting on mortgages as home prices declined. These mortgage defaults led to losses in mortgage-backed securities, hurting financial institutions and triggering a global recession. India was less impacted than other countries due to regulations that limited exposure of its financial system to global markets.
The document provides an overview of the subprime mortgage crisis, including:
1) It explains what subprime and prime loans are and defines what a crisis is.
2) The housing bubble burst as home prices declined after peaking in 2006, increasing foreclosures.
3) This sent a shock through the financial system as investment banks and other institutions incurred major losses on mortgage-backed securities.
The Case for AAA Underlying Municipal Bondsmauiwelch
This document provides an overview of the municipal bond market and makes a case for investing in bonds with underlying AAA credit ratings from states and municipalities. It notes that there is currently limited supply of bonds directly rated AAA. The strategy proposed is to create a portfolio of only AAA-rated underlying bonds to take advantage of their strong credit quality and limited supply. Key data on default rates and credit fundamentals are presented for AAA-rated states and municipalities to demonstrate the historically strong credit performance of these issues.
The Federal Open Market Committee, the Fed’s policymaking arm, will meet on November 2-3. Clearly, there are some differences of opinion among senior Fed officials regarding the appropriate path for monetary policy. However, the dissenters (those wanting to do less) are a small minority. The FOMC will come together with a somewhat less troublesome near-term economic outlook (no recession in the near term), but there are more concerns about growth in 2012.
The Great Recession document summarizes the causes and effects of the late-2000s financial crisis and recession in the United States. It discusses how a housing bubble fueled by subprime lending burst, triggering a credit crunch and widespread economic impacts. The recession resulted in job losses, rising unemployment, and high foreclosure rates. Government responses included stimulus packages under Presidents Bush and Obama, as well as financial bailouts. The recovery was predicted to be slow due to persistent effects of financial crises on economic growth.
The document summarizes the subprime mortgage crisis. It begins by explaining what subprime mortgages are and how they differ from conventional mortgages. It then describes how the housing bubble developed in the late 1990s and early 2000s as subprime lending increased and home prices rose rapidly. Eventually, the bubble burst in 2006-2007 as subprime borrowers defaulted on adjustable rate mortgages. This led to billions lost in mortgage-backed securities and major financial institutions suffering huge losses, with some like Lehman Brothers collapsing entirely.
Hancock Holding Company reported a 69% increase in first quarter 2009 net income compared to fourth quarter 2008. Net income was $14.0 million for first quarter 2009, up from $8.3 million in fourth quarter 2008. Compared to first quarter 2008, net income was down 30%. Non-performing assets increased to $44.3 million as of March 31, 2009, with non-accrual loans rising to $38.3 million. However, net charge-offs declined 53 basis points from fourth quarter 2008 to 0.67% of average loans. Overall, while asset quality issues continue to impact results, the company showed improvement in key metrics compared to previous quarters.
Impacts of Federal Spending Changes on DC Commercial Real Estatekottmeier
Federal spending impacts the DC region's economy and commercial real estate market. While cuts are proposed for FY2011 and FY2012, key agencies for the region like HHS saw increases in 2011. Long term trends still point to overall growth in federal budgets. The region has historically fared well even when federal spending slows as the private sector picks up. Defense remains important for Northern Virginia but the region has diversified. Federal employment declines may slow absorption temporarily but the office market typically performs well as private sector demand recovers.
The document summarizes the subprime mortgage crisis and its global impacts. It began with loose lending practices in the US that led to a housing bubble. When housing prices declined and borrowers defaulted, it sparked a financial crisis as risky loans were bundled into securities that spread the risks throughout the global financial system. Major banks and financial institutions collapsed. Credit tightened globally and stock markets plunged significantly. The crisis also impacted economies worldwide through tightening credit, falling markets, and reduced trade and business activity. While government interventions helped stabilize markets, full recovery will take time as the financial systems remain fragile.
Eco 203 entire course principles of macroeconomicsProfessorLance
This document outlines an entire economics course covering macroeconomic principles and policies. It includes multiple discussion prompts and assignments on topics like human capital, opportunity costs, market allocation of resources, inflation, fiscal and monetary policy, government budget deficits, foreign investment, and economic transitions. Students are asked to discuss these topics, respond to classmates, and write a final paper on expansionary fiscal and monetary policy. The final paper must be 5-6 pages and include at least 4 scholarly sources on how governments use fiscal and monetary tools to stimulate aggregate demand, GDP, and employment during an economic recession.
Eco 203 entire course principles of macroeconomicsProfessorLance
This document outlines an entire economics course covering various macroeconomic topics. It includes 14 discussion prompts that require students to analyze concepts from the readings and respond to other students' posts. The readings cover topics such as economic systems, fiscal and monetary policy, inflation, unemployment, government spending, budget deficits, foreign investment, and transitioning economies. Students are asked to discuss how policies like government stimulus and central bank actions affect aggregates like GDP, spending, and employment. The final paper requires students to describe how the government would conduct expansionary fiscal and monetary policy to stimulate the economy out of recession.
This document summarizes the arguments presented during a congressional hearing on H.R. 1207, a bill that would audit the Federal Reserve. Supporters argue that the Fed's secrecy is unnecessary and that its actions are already politicized. They claim taxpayers deserve transparency given the trillions loaned. Opponents argue auditing would undermine the Fed's independence and ability to effectively conduct monetary policy. They say the Fed is already transparent and accountable within legal limits. The document also discusses the Fed's role in bailouts and lending to foreign governments and central banks.
Lower interest rates have hurt consumer incomes and spending by reducing interest payments to consumers. However, increased dividend payments from companies to consumers have provided a slight offset. Lower consumer energy prices have also increased consumers' spending power by $100 billion compared to 2008 levels. While some factors restraining consumer spending have improved, employment needs to increase further to boost income and spending growth in 2012.
The document discusses the causes and impacts of the subprime mortgage crisis that began in 2008. It describes how loose lending practices led to many borrowers taking out loans they could not afford, resulting in mass foreclosures when borrowers defaulted. This undermined the mortgage industry and global credit markets. The crisis significantly impacted the US and European economies through loss of home equity and wealth, rising unemployment, and declining GDP.
The document summarizes the US subprime crisis and its aftermath. It discusses:
- The origins of the crisis in the collapse of subprime mortgage markets in 2007.
- How risky lending practices, deregulation, and the housing bubble led to the crisis.
- The key events like the Lehman Brothers bankruptcy in 2008 that caused the crisis to spread globally.
- The consequences including economic recession in the US and worldwide, rising inequality, and diminished US influence internationally.
The Case for AAA Underlying Municipal BondsIan Welch
4
Intent
• Create AAA Underlying Portfolio
• Create Default Resistant Portfolio
• Take advantage of sell side pressure
• Take advantage of negative perception of municipal bond market to amass AAA bonds
In November 2011, after months of debate, Congress was unable to arrive at an agreement to gradually reduce
the U.S. deficit. As a result, they deferred any decision by implementing a process called sequestration, scheduled
to take effect in January 2013. This draconian option was thought sufficient to motivate both political parties to
focus on resolving their differences. It was never intended to actually take effect, as it will trigger across- the- board
spending cuts of $1.2 trillion over 10 years to both domestic and defense programs. For more info: www.nafcu.org/nifcus
Introducing Subprime Mortgage Crisis PowerPoint Presentation Slides. The presentation highlights the impact of the financial crisis of the year in percentages. Take the advantage of our ready-to-use PPT template to showcase fall in housing prices, unemployment, etc. during a crisis. The impact of a great recession on investment banks is also discussed in this presentation. This content-ready slide design also illustrates the significant financial bubble burst of financial years. Highlight the cost of the financial crisis and its key members. The effects of the crisis on the economy of the US can be effectively discussed using our PPT theme. Showcase how the crisis started spreading in various other parts of the country with the use of this PPT visual. Depict how CDO customers protect themselves during the recession. Explain the effect of subprime in many countries with this PPT theme. Further, describe the current scenario after a decade of a financial crisis in the US. Explain fed tapering, quantitative easing, etc. effectively by using this PPT slideshow. At last, the presentation discusses the vision, mission, and goals of the company. https://bit.ly/2PeSvsw
The document summarizes key points from a bond market town hall meeting. It discusses the impact of the S&P downgrade of US debt, the relatively strong position of the US economy compared to other AAA rated countries, and challenges with the political environment in Washington. It also reviews municipal and corporate bond defaults historically being rare for investment grade bonds. The document analyzes current bond yields and factors that could influence future interest rate movements.
A credit crisis occurs when the availability of loans decreases or the cost of loans increases suddenly. It is often caused by a period of reckless lending that results in losses for lenders when borrowers default on loans. The 2007-2008 global financial crisis began as a subprime mortgage crisis in the United States, where heavy lending and defaults on housing loans starting in 2006 led to over $1.3 trillion in subprime mortgages outstanding by 2007. Major banks and financial institutions reported over $435 billion in losses by mid-2008. Central banks provided loans to increase liquidity as banks became unwilling or unable to lend, while governments announced bank rescue packages worth hundreds of billions of dollars.
Sovereign Bancorp reported third quarter 2007 earnings of $58.2 million, down from $184 million in the third quarter of 2006, due to disruptions in the mortgage and credit markets. Net interest income was $457 million and the net interest margin was 2.74%. Non-interest income fell to $141 million due to losses from capital markets and mortgage banking. The provision for credit losses increased to $162.5 million due to higher reserves for home equity and auto loans. Capital ratios declined slightly but remained strong.
This document provides an overview of the 2008 subprime mortgage crisis in the United States. It defines subprime loans as high-risk loans given to borrowers with poor credit. In the early 2000s, low interest rates and rising home prices fueled increased subprime lending. However, starting in 2006, subprime borrowers began defaulting on mortgages as home prices declined. These mortgage defaults led to losses in mortgage-backed securities, hurting financial institutions and triggering a global recession. India was less impacted than other countries due to regulations that limited exposure of its financial system to global markets.
The document provides an overview of the subprime mortgage crisis, including:
1) It explains what subprime and prime loans are and defines what a crisis is.
2) The housing bubble burst as home prices declined after peaking in 2006, increasing foreclosures.
3) This sent a shock through the financial system as investment banks and other institutions incurred major losses on mortgage-backed securities.
The Case for AAA Underlying Municipal Bondsmauiwelch
This document provides an overview of the municipal bond market and makes a case for investing in bonds with underlying AAA credit ratings from states and municipalities. It notes that there is currently limited supply of bonds directly rated AAA. The strategy proposed is to create a portfolio of only AAA-rated underlying bonds to take advantage of their strong credit quality and limited supply. Key data on default rates and credit fundamentals are presented for AAA-rated states and municipalities to demonstrate the historically strong credit performance of these issues.
The Federal Open Market Committee, the Fed’s policymaking arm, will meet on November 2-3. Clearly, there are some differences of opinion among senior Fed officials regarding the appropriate path for monetary policy. However, the dissenters (those wanting to do less) are a small minority. The FOMC will come together with a somewhat less troublesome near-term economic outlook (no recession in the near term), but there are more concerns about growth in 2012.
The Great Recession document summarizes the causes and effects of the late-2000s financial crisis and recession in the United States. It discusses how a housing bubble fueled by subprime lending burst, triggering a credit crunch and widespread economic impacts. The recession resulted in job losses, rising unemployment, and high foreclosure rates. Government responses included stimulus packages under Presidents Bush and Obama, as well as financial bailouts. The recovery was predicted to be slow due to persistent effects of financial crises on economic growth.
The document summarizes the subprime mortgage crisis. It begins by explaining what subprime mortgages are and how they differ from conventional mortgages. It then describes how the housing bubble developed in the late 1990s and early 2000s as subprime lending increased and home prices rose rapidly. Eventually, the bubble burst in 2006-2007 as subprime borrowers defaulted on adjustable rate mortgages. This led to billions lost in mortgage-backed securities and major financial institutions suffering huge losses, with some like Lehman Brothers collapsing entirely.
Hancock Holding Company reported a 69% increase in first quarter 2009 net income compared to fourth quarter 2008. Net income was $14.0 million for first quarter 2009, up from $8.3 million in fourth quarter 2008. Compared to first quarter 2008, net income was down 30%. Non-performing assets increased to $44.3 million as of March 31, 2009, with non-accrual loans rising to $38.3 million. However, net charge-offs declined 53 basis points from fourth quarter 2008 to 0.67% of average loans. Overall, while asset quality issues continue to impact results, the company showed improvement in key metrics compared to previous quarters.
Impacts of Federal Spending Changes on DC Commercial Real Estatekottmeier
Federal spending impacts the DC region's economy and commercial real estate market. While cuts are proposed for FY2011 and FY2012, key agencies for the region like HHS saw increases in 2011. Long term trends still point to overall growth in federal budgets. The region has historically fared well even when federal spending slows as the private sector picks up. Defense remains important for Northern Virginia but the region has diversified. Federal employment declines may slow absorption temporarily but the office market typically performs well as private sector demand recovers.
The document summarizes the subprime mortgage crisis and its global impacts. It began with loose lending practices in the US that led to a housing bubble. When housing prices declined and borrowers defaulted, it sparked a financial crisis as risky loans were bundled into securities that spread the risks throughout the global financial system. Major banks and financial institutions collapsed. Credit tightened globally and stock markets plunged significantly. The crisis also impacted economies worldwide through tightening credit, falling markets, and reduced trade and business activity. While government interventions helped stabilize markets, full recovery will take time as the financial systems remain fragile.
Eco 203 entire course principles of macroeconomicsProfessorLance
This document outlines an entire economics course covering macroeconomic principles and policies. It includes multiple discussion prompts and assignments on topics like human capital, opportunity costs, market allocation of resources, inflation, fiscal and monetary policy, government budget deficits, foreign investment, and economic transitions. Students are asked to discuss these topics, respond to classmates, and write a final paper on expansionary fiscal and monetary policy. The final paper must be 5-6 pages and include at least 4 scholarly sources on how governments use fiscal and monetary tools to stimulate aggregate demand, GDP, and employment during an economic recession.
Eco 203 entire course principles of macroeconomicsProfessorLance
This document outlines an entire economics course covering various macroeconomic topics. It includes 14 discussion prompts that require students to analyze concepts from the readings and respond to other students' posts. The readings cover topics such as economic systems, fiscal and monetary policy, inflation, unemployment, government spending, budget deficits, foreign investment, and transitioning economies. Students are asked to discuss how policies like government stimulus and central bank actions affect aggregates like GDP, spending, and employment. The final paper requires students to describe how the government would conduct expansionary fiscal and monetary policy to stimulate the economy out of recession.
The document summarizes the June 2009 Federal Open Market Committee meeting. Key discussion points included the economic and financial outlook, the Federal Reserve's large-scale asset purchase program, liquidity facilities, an exit strategy, and inflation and output gaps. The Committee considered three policy alternatives and ultimately chose to keep the size of the large-scale asset purchase program unchanged. Major speeches given during this period addressed definitions of stability and credit easing measures. Retrospective analysis found that the bank stress tests helped restore confidence and 2009 marked a turning point in the crisis.
The U.S. government has a variety of economic goals, including maintaining a stable economy, creating jobs, promoting economic growth, and managing the national debt. The national debt, which is the total amount of money owed by the federal government to creditors, has been a topic of much debate and concern in recent years.
One way to analyze the U.S. debt is to look at its historical trends and current levels. The U.S. debt has increased significantly over the years, reaching over $28 trillion in 2021. This increase in debt can be attributed to a variety of factors, including government spending on social programs, defense, and interest on the debt itself.
Another way to analyze the U.S. debt is to consider its impact on the economy and on future generations. Some argue that a high level of debt can lead to inflation, reduced economic growth, and a burden on future generations who will be responsible for paying off the debt. Others argue that the benefits of government spending outweigh the costs of borrowing, and that the debt is manageable as long as interest rates remain low.
When analyzing the U.S. debt, it is important to consider different perspectives and potential solutions. Some argue for increasing taxes or reducing spending in order to pay down the debt, while others suggest policies such as investing in infrastructure or promoting economic growth as a means of managing the debt. Ultimately, any solution to the U.S. debt will require a combination of economic analysis, political will, and public support.
Assessment 4 Study GuideCiting Shafritz, J. M., Russell, .docxdavezstarr61655
Assessment 4 Study Guide
Citing:
Shafritz, J. M., Russell, E. W., & Borick, C. P. (2013). Introducing public administration
(8th ed.). Upper Saddle River, NJ: Pearson.
Reading Assignment Chapter 13: Public Financial Management
Unit Lesson
Budgeting is an important area within public institutions. This allows the jurisdiction to reference these important documents when there are questions regarding expenditures, line item purchases, and overall capital budgets. Capital budgets normally are written and established in the year prior to the implementation, for example, budgets for 2013 would be asked for during 2012. These budgets can be used for formulating how much of a surplus will be made available for contractors that may be working for the institution, security measures such as cameras that may be needed for security at a public venue, and being able to budget for supplies that are required for everyday functioning capacity within the organization. Budget formatting can be intriguing for most public entities and the professionals working within those organizations.
The size of technological spreadsheets that cite policies and create a timeline for the expenditures being used have a section specially designated for program objectives, and have a section that normally is set aside to delineate the government’s total service effort. The flow of management funds is the backbone of any institution, government entity, or public service venue. Without the flow of monetary compensation and grant money distribution, there will be limited capabilities for the designated organization to perform the work necessary to manage the business. As with many changes over the past several decades, monetary systems and funds being made available are beginning to diminish from the Federal government. The monies that are received, for example, by a fire department can be used to purchase apparatus, new firefighting clothing and protective equipment, and other provisions to support the public organization.
While looking at the budget from the federal, state, local, or community governments, consideration must be given to whether the monies being used and given to local entities are going to be used for economic growth. There will be disagreements concerning the appropriation of funds and fund management for the communities, but also for the main distributor-the federal government. The budget is the key focal point for public administration to function and make decisions. Monies that are received by public entities create a huge sense of power for those who shape the methods of how the monies are going to be spent. The upper management or executives must learn the conceptual framework that is used for budgeting, financing, and the allocation of those funds that have been received. Thus an accountant will be necessary for any good executive team within the organization. There are several different types of budgets that can be issued for an organization:.
Week 3 - Discussion Forum 1Required ResourcesTextsGwartney.docxjessiehampson
Week 3 - Discussion Forum 1
Required Resources
Texts
Gwartney, J. A., Stroup, R. L., Sobel, R. L., & Macpherson, D. A. (2018). Macroeconomics: Private and public choice (16th ed.). Retrieved from https://www.cengage.com
· Chapter 9: An Introduction to Basic Macroeconomic Markets
· Chapter 10: Dynamic Change, Economic Fluctuations, and the AD-AS Model
· Chapter 11: Fiscal Policy: the Keynesian View and the Historical Development of Macroeconomics
· Chapter 12: Fiscal Policy, Incentives, and Secondary Effects
Tamny, J. (2015). Popular economics: What the Rolling Stones, Downton Abbey, and LeBron James can teach you about economics. Retrieved from https://www.redshelf.com
· Chapter 4: It’s the Spending, Stupid: Budget Deficits Really Don’t Matter
· Chapter 22: If They Tell You They Predicted the “Financial Crisis,” They’re Lying
Recommended Resources
Text
Tamny, J. (2015). Popular economics: What the Rolling Stones, Downton Abbey, and LeBron James can teach you about economics. Retrieved from https://www.redshelf.com
· These chapters provide John Tamny’s perspective on a specific fiscal policy: taxes. The author and some other economists are not in favor of higher taxes. He gives the rationale for the government to implement a fiscal policy of lower taxes. This may give you a different perspective and add to your knowledge in answering the Fiscal Policy discussion forum question as well as give more information in working through The Great Recession of 2008-2009: Causes and Responses assignment this week.
· Chapter 1: Taxes are Nothing More than a Price Placed on Work
· Chapter 2: When We Tax Corporations, We Rob Them of Their Future
· Chapter 10: Conclusion: Bulldoze the U.S. Tax Code
Articles
Colvin, G. (2018, October 1). How to spot the next financial crisis. Fortune, 9–10. Retrieved from http://fortune.com/
· The full-text version of this article is available through the EBSCOhost database in the Ashford University Library. This article reflects on some of the causes of the Great Recession. More importantly, the author takes you into the future to discuss when and if another big recession will occur and what some of the triggers might look like. This article may assist you with your The Great Recession of 2008-2009: Causes and Responses assignment this week.
Committee for a Responsible Federal Budget. (2018, December 13). The deficit has never been this high when the economy was this strong (Links to an external site.) [Blog post]. Retrieved from http://www.crfb.org/blogs/deficit-has-never-been-high-when-economy-was-strong
· This blog post discusses the current debt high level in relation to business cycles. The debt is climbing in a very healthy economy which is unusual as debt usually grows during down economies and recessions. This is an interesting perspective and may assist you with your Government Budget Deficits (Debate) discussion forum this week.
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The Democratic sweep scenario assumes that if Democrats control the presidency and both houses of Congress after the election, the Bush tax cuts would be extended only for households earning less than $250,000 per year. This would result in a moderate reduction in the budget deficit over the next few years, falling from 7.3% of GDP in 2012 to 6.3% by 2013 and 5.3% by 2014. However, higher taxes on dividends and capital gains could reduce after-tax cash flows from equities, partially offsetting the benefits from less fiscal austerity. Municipal bonds may benefit from increased value of their tax breaks and smaller cuts to discretionary spending.
1) The US federal budget faces significant challenges, with high deficits and rising debt levels over the past decade due to economic shocks, wars, and stimulus spending.
2) At the end of 2012, major tax cuts are set to expire and spending cuts take effect, which could significantly reduce the deficit but may also harm the economy - this is known as the "fiscal cliff".
3) There are several potential scenarios after the election for addressing the budget issues, including letting the Bush tax cuts expire, focusing on spending cuts, or pursuing a gradual, balanced approach to deficit reduction known as a "fiscal ladder".
This document provides solutions to an ECO 203 Week 2 Quiz. It includes solutions to 10 multiple choice questions covering topics like recessions, inflation, the business cycle, and aggregate supply/demand. It also provides prompts for online discussions on topics like human capital, the role of government, fiscal policy, and efforts to reduce budget deficits. Students are asked to review concepts from assigned readings and respond to other students' posts. A link is provided to access the full quiz solutions.
The document discusses the changing dynamics of public budgeting processes at the national, state, and local levels. It outlines several reforms to budgeting over time, including the 1921 Budget and Accounting Act, the Congressional Budget and Impoundment Control Act of 1974, and deficit control acts of 1986 and 1990. While reforms aim to better allocate resources and improve financial management, they also face weaknesses such as fiscal stress, revenue uncertainty, and erosion of accountability due to complexity. Overall, the budget process remains challenging due to issues like novelty, annual perspectives, and forecasting problems in changing environments.
http://bondsmakeiteasy.org U.S. savings bonds should be reinvigorated to help low- and moderate-income (LMI) families build assets. More and more, those families’ saving needs are ignored by private-sector asset managers and marketers. With a few relatively modest changes, the savings bonds program can be reinvented to help those families save, while still increasing the efficiency of the program as a debt management device.
Fiscal Year 2011-2012 is referred to as the "Cliff Year" because Louisiana faces a $1.6 billion budget shortfall that will be difficult to address. Over 90% of Louisiana's $25.5 billion budget is protected from cuts, so the shortfall must be absorbed by discretionary funding, resulting in cuts over 60% to affected departments. The shortfall is projected to continue through FY2015 even with strong revenue growth, necessitating permanent budget cuts or revenue increases. Addressing the shortfall will require politically difficult decisions about taxes, fees, dedications or expenditures.
Fiscal Year 2011-2012 is referred to as the "Cliff Year" because Louisiana faces a $1.6 billion budget shortfall that will be difficult to address. While the total state budget is $25.5 billion, over 90% of funds are restricted or dedicated, leaving only $2.6 billion of discretionary general funds. Absorbing the entire $1.6 billion shortfall from this unrestricted portion would require cutting it by over 60%. Options to help close the gap include increasing some fees, cutting some statutory dedications, and reducing some unprotected non-discretionary spending, though many of these options are politically challenging.
In the coming months and years, lawmakers will face a number of important budget-related deadlines, or Fiscal Speed Bumps, that will require legislative action. These Fiscal Speed Bumps will present challenges, risks, and opportunities. Addressed irresponsibly, they could cause serious disruptions and/or add as much as $3 trillion to the debt over the next decade above what current law would allow. But if dealt with thoughtfully, they offer an opportunity to pursue reforms that would grow the economy, improve the policy landscape, and reduce the risk of an uncontrollably growing national debt.
The document discusses two topics: reducing the federal government's discretionary powers and achieving a balanced government budget. For reducing discretionary powers, it summarizes the advocates' view that government spending is inferior to private spending and the critics' view that government spending disrupts efficient allocation of resources. For balanced budgets, it outlines the advocates' position that it increases investment and economic responsibility and the critics' argument that it ties the government's hands and could worsen recessions. The author concludes by supporting the critics' views on both topics.
Joyce performance informed budgeting in the united states—tastes great or les...icgfmconference
Philip Joyce, George Washington University describes US federal deficit and debt questioning whether the United States will restore fiscal responsibility suggesting that performance management is not as high a priority for the current administration as other issues
The document discusses the national debt of the United States, which currently stands at over $18 trillion. It explores the history of rising US debt levels and the economic effects of increasing versus consolidating the debt. Increasing debt leads to higher interest rates, less investment, and reduced GDP growth. Consolidating debt has short-term negative effects but long-term benefits like lower interest rates and more funding for programs. The document also examines threats of sovereign default and financial crises based on examples from other countries.
ADBI Working Paper Series Financial Inclusion and Financial Stability: Curren...Dr Lendy Spires
This document discusses financial inclusion and financial stability. It argues that greater financial inclusion can enhance financial stability in several ways:
1) Financial inclusion poses risks at the institutional level but these are not systemic in nature, as evidence shows that low-income groups maintain solid financial behavior during crises.
2) The risk profile of inclusive institutions is characterized by many small clients and transactions, posing minimal risk to financial stability.
3) Risks at the institutional level can be managed with prudent tools and effective consumer protection. Potential costs of inclusion are outweighed by long-term benefits of a deeper, more diversified financial system.
This document discusses financial inclusion and financial stability. It argues that greater financial inclusion can enhance financial stability by cushioning the impact of financial crises at the local level. While financial inclusion poses some risks at the institutional level, these are not systemic in nature and can be managed with prudent regulation. The potential costs of inclusion are outweighed by long-term benefits of a deeper, more diversified financial system that is more resilient to shocks. Innovations to promote inclusion may strengthen financial systems rather than weakening them.
This document contains answers to questions for an Economics 203 Week 1 Quiz. It discusses topics like how income and demand relate, different types of investment, factors that can shift demand curves, production decisions regarding labor and technology, how price and quantity relate, the role of government in redistributing income and allocating resources, and more. It provides context and questions for online discussions on topics such as human capital, the roles of government and private sectors, impacts of changes in aggregate demand, how inflation affects different groups, fiscal policy approaches like stimulus packages, national debt and budget deficits, and efforts to reduce deficits.
Similar to Weekly Economic Commentary_12172012 (20)
1. L P L F IN A NCI A L RE SE A R C H
Weekly Economic Commentary
December 17, 2012
This Is Mandatory Reading
John Canally, CFA As Congress and the President work together to avoid the looming fiscal
Economist cliff during the lame duck session of Congress, a more intransient problem
LPL Financial remains in the background: the United States’ structural budget deficit. In
our Weekly Economic Commentaries of October 29, 2012 (Budget Debate),
November 19, 2012 (Budget Myths), and November 26, 2012 (Budget
Highlights Defense), we wrote about how often the budget was mentioned during the
campaign season and how the nation’s long-term budget problem cannot
This week’s commentary continues our series
be solved by eliminating waste, fraud, and abuse, domestic discretionary
on the long-term U.S. budget problems and
possible solutions. programs, and foreign aid alone. In addition, we put the nation’s defense
spending in context of the larger budget picture. In our view — a view
Mandatory spending on programs like Social
Security, Medicare, and Medicaid are very shared by most nonpartisan budget experts — all aspects of the budget
popular and well entrenched in the American must be on the table during the fiscal cliff deliberations, and again in 2013
system, but they need to be addressed to fix as lawmakers hammer out a longer term fix to our budget mess that has led
the long-term budget problem. to the overspending of revenues by about $1 trillion per year over each of
As in other large areas of the U.S. budget, the past five years.
there are no easy fixes, and hard choices will
have to be made.
Setting the Stage
Please see the LPL Financial Research Weekly Calendar on page 3
In late 2010, three different nonpartisan organizations released plans that
would put the United States on a path toward a balanced budget, using a
combination of revenue/tax increases and spending cuts to achieve that goal.
These organizations are:
§§ The President’s National Commission on Fiscal Responsibility and
Reform (commonly known as Bowles-Simpson);
§§ Bipartisan Policy Center (commonly known as Rivlin-Domenici); and
§§ Pew-Peterson Commission on Budget Reform.
1 Subsets of Mandatory Spending in Fiscal Year 2012
While each plan differed on certain aspects of the longer term fix for our
Mandatory Spending Fiscal Year 2012 budget woes, they all generally agreed that there are no easy answers
and no quick fixes. Both Democrats and Republicans populated the three
OTHER 3%
MEDICARE commissions. Some hold (or once held) elected office, while others served
Federal Budget Outlays AND 22% in the federal government or were on the boards of the many think tanks in
MEDICAID and around Washington. All were focused on finding bipartisan solutions to
the problem.
S O C I A L INCOME9% VETERANS
BENEFITS 2% In early November 2012, the nonpartisan Congressional Budget Office (CBO)
20%
20%SECURITY SECURITY
FEDERAL 4%
AND MILITARY
RETIREMENT
released a report called “Choice for Deficit Reduction,” which “reviews the
magnitude and causes of the federal government’s budgetary imbalance,
Source: CBO, LPL Financial Research 12/17/12
Member FINRA/SIPC
Page 1 of 6
2. W EEK LY ECONOMIC COMMEN TA RY
various options for bringing spending and taxes into closer alignment, and
If you have not done so, we urge you to criteria that lawmakers and the public might use to evaluate different
go to the websites of the nonpartisan approaches to deficit reduction.”
organizations referenced on page 1, as well
as to the CBO site, and review their budget In general, the three commissions (and the CBO) concluded that in order
plans. While the policy prescriptions in any to successfully tackle the longer term deficit problem, formerly politically
of these plans are unlikely to be adopted untouchable areas must be on the table in any serious negotiation. These
“as is” and passed into law, the budget areas include:
concepts discussed in these reports are §§ Social Security;
likely to form the basis of any long-term fix §§ Defense spending;
to our budget problems.
§§ Farm subsidies;
§§ Medicare;
§§ Medicaid;
§§ Personal and corporate tax rates; and
§§ Tax expenditures, more commonly known as personal and corporate tax
deductions (e.g., home mortgage interest, state and local real estate tax,
or charitable contributions).
The plans put forth by the three deficit commissions did vary on the amount
of revenue increases (via some combination of higher tax rates, higher
premiums for Medicare, fewer deductions, and more income subject to
taxation, etc.) relative to spending cuts (across all categories of federal
spending) needed to achieve a long-term path toward fiscal stability.
Slicing and Dicing: Mandatory Spending Is the Largest
Slice of the Pie
As we noted in prior budget-related commentaries, the federal budget can be
sliced and diced several ways. One way to look at the budget is by function
or cabinet post, such as the Department of Labor, Department of the Interior,
Department of Defense, etc. Another way is to group the spending categories
together by legislative mandate — mandatory spending and non-mandatory
spending (also known as discretionary spending). Mandatory spending is
2 Mandatory Spending Expected to Reach 2/3 of All all spending that is not controlled through Congress’ annual appropriation
Federal Spending by 2022 process. For the most part, mandatory spending is based on eligibility criteria
Percent of U.S. Federal Budget Outlays and benefit of payment rules set into law. Examples include Social Security,
Medicare, Medicaid, the Affordable Care Act (aka “Obamacare”), and interest
on the public debt.
Mandatory Mandatory In recent fiscal years, mandatory spending has accounted for the majority of
Discretionary Discretionary
60% 33% 67%
40% all federal spending, and this slice of the pie is set to rise dramatically in the
coming decade. Therefore, curbing mandatory spending, or changing the
way mandatory spending is funded, holds the key to addressing our long-
term budget issues. This week, we will take an in-depth look at mandatory
spending, and explore some of the options available to policymakers to
2012 2022 address these programs over the long term.
Source: CBO 12/17/12
LPL Financial Member FINRA/SIPC Page 2 of 6
3. W EEK LY ECONOMIC COMMEN TA RY
LPL Financial Research Weekly Calendar
U.S. Data Fed Global Notables
2012
17 Dec §§ Empire State Manufacturing Index (Dec) Lacker §§ Eurozone: Trade Balance (Oct)
18 Dec §§ Current Account Balance (Q3) Fisher §§ India: Central Bank Meeting
§§ China: Property Price data (Nov)
§§ Japan: Trade data (Nov)
§§ Sweden: Central Bank Meeting
19 Dec §§ Housing Starts (Nov) §§ China: Leading Indicators (Nov)
§§ Germany: IFO (Dec)
§§ Taiwan: Central Bank Meeting
§§ Norway: Central Bank Meeting
§§ South Korea: Presidential Election
20 Dec §§ Initial Claims (12/15) §§ Japan: Central Bank Meeting
§§ Philadelphia Fed Index (Dec) §§ UK: Retail Sales (Nov)
§§ Existing Home Sales (Nov) §§ Eurozone: Consumer Confidence (Dec)
§§ Leading Indicators (Nov)
§§ GDP (Q3)
21 Dec §§ Personal Income and Spending (Nov)
§§ PCE Deflator (Nov)
§§ Durable Goods Orders (Nov)
§§ University of Michigan Consumer Sentiment and
Inflation Expectations (Dec)
24 Dec
25 Dec §§ Holiday
26 Dec §§ Case-Shiller Home Price Index (Oct)
§§ Richmond Fed Index (Dec)
27 Dec §§ Initial Claims (12/22) §§ Japan: Industrial Production (Nov)
§§ Consumer Confidence (Dec) §§ Japan: CPI (Dec)
§§ New Home Sales (Nov) §§ Japan: Retail Trade (Nov)
28 Dec §§ Chicago Area Purchasing Managers Index (Dec)
§§ Pending Home Sales (Nov)
Hawks: Fed officials who favor the low inflation side of the Fed’s dual mandate of low inflation and full employment
Doves: Fed officials who favor the full employment side of the Fed’s dual mandate
* Voting members of the Federal Open Market Committee (FOMC)
In fiscal year 2012 (which ended on September, 30, 2012), mandatory
spending (Social Security, Medicare, Medicaid, etc.) totaled more than $2
trillion, or about 60% of total federal outlays. According to projections made
in August 2012 by the nonpartisan CBO, mandatory spending will reach $3.9
trillion and will account for more than two-thirds of federal spending. The CBO
projects that spending for Social Security benefits will increase by 75% over
the next 10 years, and that Medicare spending will basically double over that
same time. Medicaid costs are expected to more than double. By comparison,
the CBO projects that GDP will increase by only 60% over the next 10 years
and that federal tax revenue will increase by 117%.
LPL Financial Member FINRA/SIPC Page 3 of 6
4. W EEK LY ECONOMIC COMMEN TA RY
The major drivers of the rising costs are the aging population and rising per-
Medicare: patient medical costs. In a recent report, the CBO notes:
Medicare provides subsidized medical “The increase in spending for health care programs is much greater
insurance for the elderly and for some than the increase for Social Security because the health care
disabled people. Spending for Medicare programs are affected by rising costs per beneficiary and legislated
totaled about $555 billion in 2012, providing expansions in benefits, as well as by the aging of the population.”
coverage for about 50 million people. The
The CBO notes that these three programs (Social Security, Medicare, and
CBO projects that Medicare spending
Medicaid) today account for 10% of gross domestic product (GDP). Under
will continue to rise rapidly over the next
current law, these three programs alone will account for 16% of GDP by the
decade, as baby boomers retire and
mid-2020s. By comparison, the CBO noted, all federal spending (excluding
spending per beneficiary continues to rise.
interest payments but including these three programs) has averaged around
18% of GDP since 1970.
Medicaid: As we have noted in prior Weekly Economic Commentaries, policymakers
Medicaid provides medical care for certain face very difficult choices in dealing with the deficit in other areas of the
poor and low-income people. Children's budget (defense, non-defense discretionary, etc.). The choices faced in
Health Insurance Program (CHIP) provides dealing with the runaway pace of mandatory spending are even more
coverage for children in low-income families difficult, given that programs like Social Security and Medicare are both well
that do not qualify for Medicaid. Federal entrenched and among the most popular federal government programs. Still,
spending for Medicaid and CHIP was about the commissions, think tanks, and the CBO have cited several options to rein
$251 billion and $9 billion, respectively, in in mandatory spending.
2012, and over 58 million American receive The options for Social Security fall into five categories, as defined by the latest
Medicaid benefits. The CBO projects that CBO report:
federal Medicaid spending will rise rapidly
§§ Increases in the Social Security payroll tax;
over the coming decades because of
expanding eligibility under the Affordable §§ Changes in the way benefits are calculated;
Care Act, the aging of the population, and §§ Increases in benefits for low earners;
rising costs per beneficiary.
§§ Increases in the full retirement age; and
§§ Reductions in the cost-of-living adjustments that are applied to
Social Security: continuing benefits.
Social Security, the federal government's For example, combining the concepts underlying the bullets above, the CBO
largest single program, provides benefits notes that if the Social Security payroll tax rate was increased immediately
to retired workers (through Old-Age and and permanently by 1.95 percentage points — from the current rate of 12.40%
Survivors Insurance, OASI), to people with to 14.35% — or if scheduled benefits were reduced by an equivalent amount,
disabilities (through Disability Insurance, then the trust funds' projected balance at the end of 2086 would equal
DI) and to their families as well as to some projected outlays for 2087. As noted in the nearby box, under current policies,
survivors of deceased workers. In all, the trust funds would be exhausted by 2038.
more than 56 million Americans currently
Short of eliminating the programs altogether, the policy options to slow the
receive some type of Social Security
pace of spending on Medicare and Medicaid are similar to the options for
benefit. Those benefits are financed
Social Security and include concepts like:
primarily by payroll taxes collected on
people's earnings. The CBO anticipates §§ Raising the eligibility age for Medicare;
that starting in 2016, if current laws remain §§ Raising payroll taxes that go toward funding Medicare;
in place, the program's annual spending
will regularly exceed its tax revenues, and
§§ Cutting the rate of growth of payments to providers of Medicare services;
by 2038, the Social Security trust fund will §§ Repealing some of the components of the Affordable Care Act;
be exhausted (i.e., out of money).
LPL Financial Member FINRA/SIPC Page 4 of 6
5. W EEK LY ECONOMIC COMMEN TA RY
§§ Raising Medicare premiums;
§§ Reforming Medicare cost-sharing rules; and
§§ Reducing Medicare and Medicaid fraud.
While none of these options by themselves completely solves the problem
of medical costs rising faster than the growth rate of GDP, some do make
a sizable dent in the deficit. For example, the Bowles-Simpson budget
commission noted that by combining several of the changes noted above,
Medicare spending could be reduced by $110 billion over the next 10 years.
But this policy option would likely come at a cost to both users of Medicare:
seniors and doctors. Seniors would face sharply higher out-of-pocket health
care costs, which has implications for many other parts of the economy.
For example, seniors would likely cut back on other areas (housing, leisure
activities, etc.) to fund their health care spending. Lower payments to
providers of Medicare services (doctors) would see their income fall (or rise at
a slower) rate, leading some doctors to leave the medical field, and others to
cut back on their own spending, both business and personal.
The bottom line is that much work remains to be done in order to address
the real driver of the nation’s long-term budget woes: mandatory spending,
including Social Security, Medicare, and Medicaid. As with the other possible
budget remedies, there are no easy choices in dealing with mandatory
spending, but the longer we wait to address them, the more difficult it
becomes to address them later on. n
LPL Financial Research 2012 Forecasts
GDP 2%*
Federal Funds Rate 0%^
Private Payrolls +200K/mo.†
Please see our 2012 Outlook for more details on LPL Financial Research forecasts.
LPL Financial Member FINRA/SIPC Page 5 of 6
6. W EEK LY ECONOMIC COMMEN TA RY
IMPORTANT DISCLOSURES
The opinions voiced in this material are for general information only and are not intended to provide specific
advice or recommendations for any individual. To determine which investment(s) may be appropriate for you,
consult your financial advisor prior to investing. All performance reference is historical and is no guarantee
of future results. All indices are unmanaged and cannot be invested into directly.
* ross Domestic Product (GDP) is the monetary value of all the finished goods and services produced
G
within a country's borders in a specific time period, though GDP is usually calculated on an annual basis. It
includes all of private and public consumption, government outlays, investments and exports less imports
that occur within a defined territory.
^ ederal Funds Rate is the interest rate at which depository institutions actively trade balances held at the
F
Federal Reserve, called federal funds, with each other, usually overnight, on an uncollateralized basis.
† rivate Sector – the total nonfarm payroll accounts for approximately 80% of the workers who produce
P
the entire gross domestic product of the United States. The nonfarm payroll statistic is reported monthly,
on the first Friday of the month, and is used to assist government policy makers and economists determine
the current state of the economy and predict future levels of economic activity. It doesn’t include:
- general government employees
- private household employees
- employees of nonprofit organizations that provide assistance to individuals
- farm employees
The economic forecasts set forth in the presentation may not develop as predicted and there can be no
guarantee that strategies promoted will be successful.
Stock investing involves risk including loss of principal.
The index of leading economic indicators (LEI) is an economic variable, such as private-sector wages, that
tends to show the direction of future economic activity.
International investing involves special risks, such as currency fluctuation and political instability, and may
not be suitable for all investors.
INDEX DESCRIPTIONS
China CPI: In total there are about 600 national items used for calculating the all-China CPI. The list of
items is revised annually for representativeness based on purchases reported in the household surveys. The
number of items can change from year to year, but rarely by more than 10 in any given year.
The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban
consumers for a market basket of consumer goods and services.
The Michigan Consumer Sentiment Index (MCSI) ia a survey of consumer confidence conducted by the
University of Michigan. The Michigan Consumer Sentiment Index (MCSI) uses telephone surveys to gather
information on consumer expectations regarding the overall economy.
The SP/Case-Shiller U.S. National Home Price Index measures the change in value of the U.S. residential
housing market. The SP/Chase-Shiller U.S. National Home Price Index tracks the growth in value of real
estate by following the purchase price and resale value of homes that have undergone a minimum of two
arm's-length transactions. The index is named for its creators, Karl Chase and Robert Shiller.
The Empire State Manufacturing Index is a seasonally-adjusted index that tracks the results of the Empire State
Manufacturing Survey. The survey is distributed to roughly 175 manufacturing executives and asks questions
intended to gauge both the current sentiment of the executives and their six-month outlook on the sector.
This research material has been prepared by LPL Financial.
To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial is
not an affiliate of and makes no representation with respect to such entity.
Not FDIC/NCUA Insured | Not Bank/Credit Union Guaranteed | May Lose Value | Not Guaranteed by any Government Agency | Not a Bank/Credit Union Deposit
Member FINRA/SIPC
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