Free Republic

It might be a bit cynical, not to mention premature, to call President Bush's new $2.9 trillion budget "dead on arrival." But the myriad proposals on everything from the Pentagon to the National Park Service are certainly going to be massaged a bit-mutilated in some cases, probably-by the new Democratic-controlled Congress. One thing you can bank on, though, is that when all is said and done, nixed and negotiated, Uncle Sam will still be in the red. As the White House figures it, the federal government will be spending $244 billion more than it collects in 2007 (or about 1.8...

Last night's première of the 14th season of the reality television show Survivor had a ripped-from-the-headlines feel about it. As usual, the 19 castaways–"marooned" in the Fiji Islands this time around–were divided into two tribes. But instead of each group getting an empty beach where they had to somehow build a shelter from palm fronds and whatnot, one tribe–after winning an immunity challenge–got to settle at a campsite with a "fancy" shelter, kitchen, and bathroom that the combined group had constructed earlier from Home Depot-quality building supplies. So there you have it, a quasi-Marxist battle on prime-time CBS between the...

Call it Operation Enduring Tax Cuts. President Bush's $2.9 trillion fiscal 2008 budget attempts to balance the federal budget by 2012. According to the proposal, the U.S. government would run a $61 billion surplus that year, though the projected deficits in 2010 ($94.4 billion) and 2011 ($53.8 billion) would be so small relative to the size of a projected $18 trillion economy–0.6 percent and 0.3 percent of gross domestic product–as to be financially insignificant. The nonpartisan Congressional Budget Office also shows the budget moving into balance after 2010, but there is a key difference from the Bush budget: The CBO...

Maybe the U.S. economy added 111,000 jobs last month, but maybe it didn't. Given that the Labor Department later revised higher its monthly jobs numbers 75 percent of the time last year, there's a good chance the final number for January will be somewhere north of 111,000. (More than one economist has called these preliminary payroll numbers "useless.") I'm really more interested in what's been happening with consumer confidence. While there's been plenty of talk about growing income inequality and worker angst–often by me–Americans have been getting more optimistic. Here are the key takeaways from today's University of Michigan consumer...

Is the Unemployment Rate About to Collapse? Know what's really impressive about today's boffo 3.5 percent GDP growth number for the fourth quarter? It wasn't so long ago that Wall Street economists were wondering if the number would be a "one-handle"–meaning growth between 1.0 and 1.9 percent. And instead of a "hard or "soft" landing, investment pros are now talking about a "growth scare" where a surprisingly robust economy would push the Federal Reserve into raising interest rates. In any event, I am starting to lend more personal credence to the theory that a combination of strong growth, fat corporate...

Laura Ingraham, the willowy, conservative radio talker, really nailed it. She was speaking last Friday night as part of a panel discussion at a "conservative summit" in Washington held by National Review magazine. Ingraham said she was impressed by Jim Webb's televised rebuttal to President Bush's State of the Union address, particularly the part that hit on economics. In his talk, the newbie U.S. senator from Virginia launched a populist attack on the Bush economic years, railing about growing income inequality, skyrocketing CEO pay, outsourcing, and the so-called middle-class squeeze. Although Webb's stern speaking manner and improbable hair are easy...

Call it the Rocky Economy–as in Rocky Balboa. During 2006, the U.S. economy took a beating (a 38 percent rise in gasoline prices, 100 basis points in Fed rate hikes, the end of the housing bubble) and got knocked hard to the mat (gross domestic product growth fell from 5.6 percent in the first quarter to 2.0 in the third). But now it looks as if the Rocky Economy is back on its feet and throwing haymakers. (OK, a merciful end to the over-the-top cinematic boxing analogy.) Just look at today's powerful retail sales numbers for December. They rose a...

Cut Corporate Taxes to Boost Wages? To boost future wage growth, Democrats have suggested raising the minimum wage, making college more affordable, and tweaking the tax code to try to prevent U.S. companies from moving jobs overseas. Here's another idea, one it seems that only the GOP could love–but it was actually adopted by Spain's Socialist Party-led government earlier this year, Germany's Social Democrats in 2000, and Britain's Labor Party in 1999: Cut corporate income taxes. The combined top federal, state, and local corporate tax rate in the United States is 39.3 percent, the second highest (after Japan) among the...

Time to Raise Taxes? Robert Rubin, Treasury secretary under President Clinton, recently told the Washington Economic Club that "you cannot solve this nation's fiscal problems without increased revenue." Oh, and in case you think that Rubin, a noted deficit hawk, might have been talking about imaginative ways to accelerate the economy–thus raking in more tax revenue–that's not quite what he had in mind. "I think if you were to increase taxes right now, you would have probably about zero negative effect on the economy," Rubin said in response to a question from the high-powered audience. Rubin didn't specify which taxes...

Eight Things Political Junkies Should Consider If you're a politics nut who's betting on the outcome of next week's midterm elections—and whose eyes are bleeding from all the bouncy-bouncy polls—here are a few other factors to consider: — In his morning note today, veteran Washington observer Greg Valliere of Stanford Washington Research writes that he sees a "slight momentum shift toward Republicans," helped by John Kerry's botched joke. "This has been one of the toughest elections in years to handicap, thanks to Iraq, scandals, uncertainty over turnout, etc. Our final call: the Democrats pick up 19 House seats (15 are...

In a television interview last weekend, President Bush said Social Security reform was "still alive" and again declared that it would be one of his top goals when the next Congress convenes. Of course, that's what Bush said right after the 2004 election. And despite pushing the issue hard and personally campaigning for it around the country–60 cities in 60 days in early 2005–the idea's beta version never really took off with the American people, and no legislation was ever submitted. So, what are the chances of reform happening in a Congress that will almost certainly be less hospitable to...

I got an upbeat voice mail—he was returning a phone call—from conservative activist Grover Norquist, founder of Americans for Tax Reform. Maybe Norquist is channeling the same optimistic ether as Rove, or maybe he's just getting a peek at those famous voting metrics tracked by Ken Mehlman, chairman of the Republican National Committee. Maybe both. Norquist, though, highlighted the role of the "investor class" in helping the GOP come Election Day. In Norquist's own words: "Remember what happened in 2002. We were supposed to lose the 2002 election partially because the stock market collapsed, but the people who saw the...

... Jacob Hacker, a Yale political science professor and author of The Great Risk Shift ... is a liberal who would dearly love to see Democrats offer the American public some big and bold proposals–something beyond raising the minimum wage and rolling back President Bush's tax cuts ... Here is Hacker's four-point agenda: 1) "Expand Medicare to move toward health security for all." Under Hacker's Medicare Plus plan, Medicare coverage would be available to all legal U.S. residents not covered by an employer-sponsored health plan. 2) "Move toward universal 401(k)'s." These savings plans would be available to all workers whether...

An Economic Agenda for Republicans No matter what happens on November 7, America is going to end up with a de facto divided government. Even should the GOP keep control of the House and Senate, it would likely be by the narrowest of margins. Most analysts think voters should expect nothing but gridlock for the next two years. So for the heck of it, I asked a couple of pretty smart guys–one on the left, one on the right–what their dream economic agendas would be for the Democrats and Republicans, within broad political reason. Today is Tyler Cowen's turn to...

October Surprise for the Investor Class How will investors affect the midterm congressional elections on November 7? To even begin to tackle the issue beyond a sound bite, you first have to understand what the "investor class" is. Slightly more than half of all U.S. households own stock, either directly or through retirement accounts such as 401(k)'s and IRAs, according to the Investment Company Institute. In the early 1990s, that fraction was only about a third. And in the early 1980s, just a fifth of all households invested in stocks. During the 2004 presidential election, about 46 percent of investors,...

Campaignomics Gas is cheaper. So are houses. What's up with the economy-and how do voters see it? Could it really be as simple as falling gas prices? President Bush is enjoying a bump up in the polls: His approval ratings-as measured by the USA Today/Gallup Poll-have drifted up from the mid-30s in early June to 44 percent now, their highest levels in more than a year. And this rebound comes despite Americans' widespread unhappiness over the war in Iraq, anxiety about rising income inequality, and job insecurity bred of globalization. Gas prices are down more than 66 cents a gallon...

The U.S. economy–still the one to beat? Is America losing its competitive edge? That's one conclusion you could draw by looking at the annual competitiveness rankings just published by the Geneva-based World Economic Forum. (They're the guys who throw the annual Davos wingding for the planet's political and economic elite.) The WEF says that Switzerland–fourth in 2005–is now the world's most competitive economy. Finland and Sweden took the silver and bronze. The United States, which was No.1 last year, had to settle for sixth place this go-around. Going from first to sixth in a ranking isn't such a big deal...