ECONOMIC PERSPECTIVES

In the February 24, 2010 Politico article " Address jobs now and deficits later ," Lawrence Mishel and David M. Walker explain the role of economic growth in increasing government revenues and argue the U.S. may need to increase short-term deficits to promote long-term prosperity. President Barack Obama is in a difficult position when it comes to deficits. Today's high deficits will have to go even higher to help address unemployment. At the same time, many Americans are increasingly concerned about escalating deficits and debt. What's a president to do? The answer, from a policy perspective, is not that hard: A focus on jobs now is consistent with addressing our deficit problems ahead. The difficulty is that many politicians and news organizations often cast deficit debates as a dichotomy: You either care about them or you don’t. But this is rarely accurate. The fact that the two of us, who have philosophical differences on the proper role of government, find much to

In the February 23, 2010 Slate article " Tax Fraud: Debunking the claim that higher income-tax rates reduce GDP ," Eliot Spitzer explains that the rich and powerful have a long history of saying that paying taxes has a devastating effect on economic output, but it is untrue.

In the February 19, 2010 article " True Unemployment Figure Reveals Recession Far From Over ," Simon Maierhofer reports one of the lesser-used measures of labor market activity suggests conditions are worse that the more popular metrics suggest. Surprising as it is, for nearly a year, investors have shrugged off mounting jobless claims and rising unemployment as an ingredient that is not really required for an economic recovery. They have begun to believe in a non-existent phenomenon; a 'jobless recovery.' The Dow Jones, S&P 500, and Nasdaq after losing about 3% each, are now in a state of flux marking the first time in months that concerns over unemployment were raising suspicions. Does that mean that the trend of the 'new bull market' in stocks has changed? Or are we in for further declines? The real numbers Today's headline reports reveal that the unemployment numbers, surprisingly, seem to be improving. In reality, unemployment spiked to an all-tim

In the February 16, 2010 U.S. News & World Report article " Why Politicians Can't Create Real Jobs ," Rick Newman says "The history of recessions offers some unwelcome news for all those in Washington who think they have the power to boost hiring." Jobs used to return quickly after recessions. After the downturn that ended in 1975, it took only two months for the unemployment rate to peak and then start falling. In 1982, unemployment peaked the very same month that the recession ended and then dropped as sharply as it had risen. That was when the U.S. economy was less globalized and more self-contained. Foreign companies found it difficult to compete with American ones. When recessions ended, things went back to normal and many employers simply rehired the people they had laid off. That's not how it works anymore. After the 1991 recession, it took 15 months for the unemployment rate to peak and net job growth to resume. After the 2001 recession, it took

Bonds are classified as "junk" when they are perceived as having excessive risk of default. But because they are riskier, they frequently offer a higher rate of return than bonds with a better credit rating. The February 10, 2009 article " Citi Field bonds cut to 'junk' status " provides an example of junk bonds: NEW YORK – Citi Field's bonds have been lowered to junk status by Standard & Poors and Moody's Investors Service because the company that insures the reserve fund for many of them is having financial troubles. The bonds' underlying rating was dropped from Baa3, an investment grade, to Ba1, a speculative grade, by Moody's last Thursday. Standard and Poors cut the bonds from BBB to BB+ on Tuesday while still giving them a "stable outlook." The Mets sold $613.1 million of three types of bonds in 2006 and an additional $82.28 million of bonds last year. Ambac Assurance Corp., the company having financial difficulty, insur

Obama's budget deficits to rise from wars, recession y Steven Thomma, McClatchy Newspapers Mon Feb 1, 5:05 pm ET WASHINGTON — Fighting wars and lingering effects from a deep recession, President Barack Obama will run up a record $1.56 trillion budget deficit this year and is proposing a 2011 federal budget that would spend $1.27 trillion more than the government takes in next year. Even with plans to scale back after that, his budget proposal Monday calls for deficits of more than $700 billion a year for at least a decade and relies on outside help from an as-yet un-appointed commission to bring them down more. "It's a budget that reflects the serious challenges facing the country," Obama said at the White House . "We're at war. Our economy has lost 7 million jobs over the last two years. And our government is deeply in debt after what can only be described as a decade of profligacy." While he said that he wanted to bring the deficit down later, he warne