An upbeat news release from the Treasury Department as we approach the holiday break: Wells Fargo and Citigroup have repaid $45 billion in TARP money, bringing total repayments to $164 billion. In addition, Treasury now expects that the portion of TARP that stabilized the banking system will actually generate a profit for taxpayers. (Of course, [...]
Archive for December, 2009
TARP Repayments Reach $164 Billion
Posted in Finance, tagged Finance, TARP on December 24, 2009 | Leave a Comment »
Don’t Double Count the Medicare Savings in Health Reform
Posted in Budget, Health, Politics, tagged Budget, CBO, Health, Politics on December 23, 2009 | 2 Comments »
In order to pay for coverage expansions (and other spending increases), the Senate health bill includes a mix of tax increases and spending reductions. Notable among these are several provisions that would reduce future Medicare spending and increase Medicare revenues. Some opponents of the bill have argued that the spending reductions would eventually drive providers [...]
Q3 Growth Revised Down Again, Now 2.2%
Posted in Economy, tagged GDP, Macroeconomics on December 22, 2009 | Leave a Comment »
Q3 keeps looking weaker. The original estimate of Q3 GDP growth came in at a healthy 3.5% annual pace. The second estimate was a respectable 2.8%. And this morning, the Bureau of Economic Analysis released its third estimate: an underwhelming 2.2%. Growth of 2.2% is, of course, much better than the sharp declines in the [...]
The Worst Decade for Stock Investors
Posted in Finance, tagged Finance, Stock Market on December 21, 2009 | 2 Comments »
According to this morning’s Wall Street Journal, the 2000s are on track for a dismal record: the worst performance of U.S. stocks in any decade on record. According to data from the Yale International Center for Finance, stocks have fallen about 0.5% per year, on average, during the current decade. Unless stocks stage a healthy [...]
Bending the Federal Health Cost Curve (Maybe)
Posted in Budget, Health, Politics, tagged Budget, CBO, Health, Politics on December 19, 2009 | 4 Comments »
UPDATE: The Congressional Budget Office discovered an error in its original cost estimate for the revised Senate health bill. CBO originally projected that the Independent Payment Advisory Board (IPAB) created by the bill would lead to substantial reductions in Medicare spending beyond 2019. CBO’s revised estimate shows significantly smaller IPAB savings in future decades. CBO’s new [...]
Key Budget Changes in the Senate Health Bill
Posted in Budget, Health, Politics, tagged Budget, Health, Politics, Taxes on December 19, 2009 | Leave a Comment »
Majority Leader Harry Reid released his revised health care bill today; the Congressional Budget Office followed shortly thereafter with its cost estimate. Leader Reid has made many changes to his original bill. The one you will hear the most about, just because it is amusing, is that the tax on cosmetic surgery (the “bo-tax”) has [...]
Talking about TARP and Chairman Bernanke
Posted in Budget, Economy, Finance, Macroeconomics, Politics, tagged Bernanke, Federal Reserve, TARP on December 17, 2009 | Leave a Comment »
The Business News Network of Canada interviewed me yesterday about TARP and Fed Chairman Bernanke’s “Person of the Year” award from Time Magazine. Here’s a link to the video of the interview. Going in, I was focused on the following talking points: Within current budget rules, the Congress can indeed use unspent TARP money to [...]
Fed Chairman Bernanke Submits 70 Answers to His Take-Home Exam
Posted in Economy, Finance, Macroeconomics, Politics, tagged Federal Reserve, Lehman on December 15, 2009 | 1 Comment »
A few weeks ago, Fed Chairman Ben Bernanke appeared before the Senate Banking Committee for his confirmation hearing. Following the normal ritual, Committee members made their statements and peppered Bernanke with questions about every economic topic under the sun. That much is well-known (and was closely followed on CNBC). What’s less well-known is that Bernanke [...]
Another Issue With Redirecting TARP Money
Posted in Budget, Finance, tagged Budget, TARP on December 14, 2009 | 1 Comment »
Last week I noted two challenges that Congress will face if it wants to use unused TARP money to “pay for” new spending efforts. The first is that each dollar of redirected TARP money generates only 50 cents in budget “savings” (because TARP budgeting uses credit principles that immediately recognize the potential for some money [...]
When Do Regulations Turn Private Insurance into Government Insurance?
Posted in Budget, Health, tagged Budget, CBO, Health on December 13, 2009 | 3 Comments »
Summary: A new Senate health proposal might turn private insurance into government insurance, at least from CBO’s perspective. In the 1990s, the Congressional Budget Office dealt a key blow to President Clinton’s health legislation when it decided that the reforms would move large portions of the health care system into the government and thus onto [...]
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