Tag: Party

Both parties have a plan for the debt crisis: Do nothing
Unemployment

Both parties have a plan for the debt crisis: Do nothing

Here are the CBO projections.
Since 1950, deficits have equaled or exceeded 5 percent of GDP in only six years (1983, 1985 and 2009-2012), and most of these occurred after deep recessions.
Adding these amounts to government borrowing would increase the federal debt — the total of all past deficits — to more than 100 percent of GDP, about as large as right after World War II.
They warned of an approaching “debt crisis” if ballooning budget deficits weren’t reversed.
On April 9, five Democratic economists issued a rejoinder in The Post, rejecting the Hoover economists’ suggestion that spending cuts for “entitlements” — mainly programs for the elderly and the poor — bear all the burden of cuts.
In today’s dollars, balancing the budget would require annual spending cuts and tax increases of about $1 trillion.
That’s equal to about a fifth of federal spending, which is now being borrowed.
Social Security and other “safety net” programs would have to be reduced, possibly through higher eligibility ages and more means-testing.
These entitlements constitute about 70 percent of federal spending; if they’re ignored, the entire adjustment would fall on other spending (other domestic programs and defense) and taxes.
But a debt crisis does not come slowly and visibly like a rising tide.

Opinion: The Federal Reserve’s Powell might keep the party going longer than expected
Unemployment

Opinion: The Federal Reserve’s Powell might keep the party going longer than expected

That could keep the party going longer, and it could allow workers to capture a larger share of income, even if it means profit margins get squeezed.
Yes, the Fed raised interest rates again this week, and signaled that it intends to push its overnight lending rate even higher over the next two years.
But the Fed has also taken further steps toward dovishness since the beginning of February, when Powell took over from Yellen.
The policy makers’ median forecast for the longer-run unemployment rate fell again to an all-time low of 4.5%.
This means the average Fed policy maker is now as dovish as the most dovish member in 2009.
And with the range of estimates stretching from 4.2% to 4.8%, the most hawkish member of the Fed today is more dovish than the most dovish member in 2010.
Since 2009, the median forecast for interest rates has dropped from 4.25% to just under 3%.
That’s the way the business cycle works: After a recession, profits soar even while millions of people are still without work.
But finally the unemployment rate falls so far that even marginalized people can find work — anyone can get past the bouncer and into the party, if not into the VIP room.
Powell said that the Fed would know that we’ve reached full employment when wages start to really rise (and presumably that’s when the punch bowl should be removed).

Euro slides after populist parties make strong showing in Italian election
Unemployment

Euro slides after populist parties make strong showing in Italian election

The ICE U.S. Dollar Index DXY, -0.02% rose 0.2% to 90.089, rebounding from a 0.4% loss on Friday.
The dollar, which had been in focus over Trump’s comments on impending steel and aluminum tariffs late last week, has stepped back out of the spotlight, as traders focused on political developments in Europe.
The buck fell for two days late last week after Trump revealed the new levies, adding in a tweet that “trade wars are good, and easy to win.” On Monday, the president tweeted about the tariffs with respect to Canada and Mexico, indicating neither would be exempted unless a renegotiated Nafta deal is signed.
Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed.
Also, Canada must.. — Donald J. Trump (@realDonaldTrump) March 5, 2018 Meanwhile, the euro declined as it became clear the Italian election had produced no clear winner, but showed a surge in support for antiestablishment, euroskeptic parties.
The far-right Lega Nord was expected to come in third, just behind the ruling Democratic Party.
The result suggests a coalition will be needed for a government to formed, but none of the potential coalition groups appear to have enough support to avoid a hung government.
“Sweeping gains by antiestablishment, euroskeptic parties, such as the 5 Star Movement and the Lega Nord, highlight the discontent felt by Italians over high levels of immigration and unemployment in Europe’s third-largest economy.
• “A broad grand coalition would be well received by markets, as it could result in political stability and fiscal discipline.
“An antiestablishment alliance of M5S and Lega, the worst-case scenario for markets, looks unlikely due to different programs,” he added.

Euro slides after populist parties’ show of strength in Italian election
Unemployment

Euro slides after populist parties’ show of strength in Italian election

Reuters The euro moved sharply lower on Monday, after initial projections in Italy’s general election showed euroskeptic parties did surprisingly well, indicating that none of the mainstream parties will be able to form a government.
That would be a major political upset, analysts said, raising concerns that Italy may now face months of political uncertainty and a fresh election.
What are currencies doing?
The euro EURUSD, +0.0649% dropped to $1.2288 from $1.2321 late Friday in New York.
Against the pound, the shared currency EURGBP, +0.0560% slipped to £0.8919, from £0.8927.
That move came as traders worried that President Trump’s plans for aluminum and steel tariffs will lead to a global trade war.
The 5 Star Movement — one of Europe’s largest populist parties — looked set to emerge as the biggest party, with around one-third of the vote.
The far-right Lega Nord was expected to come in third, just behind the ruling Democratic Party.
The dollar rebounded on Monday after falling for a second straight day on Friday.
• “A broad grand coalition would be well received by markets, as it could result in political stability and fiscal discipline.