This is the kind of stuff that makes so many people so cynical about how those with the gold make the rules. Somehow unless enough people pay enough attention to stop every single boondogel the politicians seem to keep throwing money at their rich friends. Then those rich friends give a reward the politician’s re-election campaigns for the taxpayer money they received. Traveler taxes awarded to small airports:
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Passengers pay as many as six separate taxes and fees on a single airline ticket, adding up to more than $104 billion since 1997, the AP found. Yet these assessments often are overlooked by the millions who click the “buy” button to purchase tickets online, even though they can exceed 25 percent of the total airfare.
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Congress will decide later this year whether to curtail the huge public subsidy for small airports, while pilots’ associations, airport managers and other interested groups are fighting to keep it.
Any guess on what they will do? I would guess fund their friends and themselves. It is true if the public actually pays attention then I believe they would stop until they think the public won’t notice and then slip the millionaire subsidies back in.
The article includes many more examples.
This is one of the many problems with the existing health care system in the USA. That system now costs 16% of USA GDP – the highest cost anywhere.
The USA economy has strengths and weaknesses. The strengths have allowed the health care system to function poorly and still be tolerated. It has reached a point where it cannot be tolerated in its current form.
Related: Starbucks: Respect for Workers and Health Care – Health Care Crisis
C.K. Prahalad on Democratising Commerce: The Challenge for the 21st Century – audio – pdf:
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we cannot have in the 21st century a society which does not pay attention to five billion or 80 per cent of people who do not get the ability to participate in the benefits of globalisation. If we just leave them alone and do not pay attention to them I think it is very hard to maintain both peace and some form of law and order.
Listen to more podcasts from the Times: Ten of the world’s leading business thinkers provide the latest thinking in economics, management, finance, strategy and marketing.
Congressional Budget Office on the Alternative Minimum Tax (AMT):
The Looming Challenge of the Alternative Minimum Tax, Alan D. Viard, Federal Reserve Bank of Dallas:
Related: Families Face Alternative Minimum Tax, NPR – Brookings Institution article on the AMT – Preparation Softens Blow of Alternative Minimum Tax – IRS on the AMT
The Great Risk Shift by Jacob Hacker presents some interesting data. I don’t always agree with his conclusions but I think the information he presents is interesting.
The most interesting piece of data to me: The chance of a 50% drop in income in 1970 was 7% for any person. By 2002 it had grown to 16%. While this seems to include some questionable “data” such as divorces, retirees… Still the fairly steady climb (see chart page 31) from 1970 to 2002 shows this is one factor that should be a consideration in saving and spending plans. Don’t assume you will earn more and more every year. You will likely have some fairly large drops in income during your lifetime. Plan for it.
Some more interesting data in 1992 7.9% of 25-34 year olds in the USA had debt payments over 40% of their income. In 2001 that rose to 13.3%. In 1984 median wealth for families with a head of household 55-64 was 4 1/2 times as wealth as those of 25-34 year olds, in 2003 it was 13 1/2 times as great. (page 99)
While the average 401(k) balance is $47,000 the median balance is $13,000 (a relatively few large balances skew the average to make it much higher).
Overall I tend to look at the data he presents and think people better consider these realities and plan knowing them. Jacob Hacker seems to more often say that this is unreasonable and show the hardships faced by those that either could not plan better (it was out of there hands which I would agree is part of the problem and requires some public policy changes) or who choose not to (which I would find the case more often than he would). Well worth reading in my opinion.
The Real Threat Isn’t Housing by Michael Mandel:
The massive amount of additional production is a key reason why the U.S. has not faced upward pressure on prices. And good productivity gains gave the economy enough momentum to fight off the disasters of 2001–the terrorist attacks, the stock market crash, the collapse of Enron–with only a minimal recession.
But the bonanza starts to disappear if productivity growth drops much further below its current level. Such a decline is a lot more possible than most economists realize or are willing to accept.
Related: Manufacturing Productivity – Be Thankful for Lean Thinking – Manufacturing Jobs Data: USA and China
Job growth weakest in two years:
The unemployment rate fell 4.5 percent from 4.6 percent in January. The consensus among economists was that the unemployment rate would stay at 4.6 percent, although a bit more than 20 percent of those surveyed by Reuters had been looking for a rise to 4.7 percent. Few had forecast a decline.
Wages are now up 4.1 percent from a year earlier, and kept worker pay ahead of price increases. There was a 2.1 percent increase in prices over the 12 months ending in January
The recent history is that the initial estimates have been revised up consistently – which means the accuracy of the initial read is less reliable recently that it had been previously.
Employers downshift out of hire gear:
it is natural and perhaps overdue that hiring should slow down, given the below-trend economic growth that the U.S. economy started showing with the second quarter of 2006. “Employment is a lagging indicator,” he said.
Bernanke Calls for Stronger Regulation of Fannie, Freddie
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His solution: “Tying the portfolios to a purpose that provides measurable benefits to the public would help to ensure that society in general — not just GSE shareholders — receives a meaningful return in exchange for accepting the risks inherent in the portfolios,” Bernanke said in the text of remarks prepared for delivery by satellite to a gathering of community bankers in Hawaii.
Buffett’s letter to shareholders. Always a required read for investors.
Interesting. The following (and more in the letter – page 15) is extremely important.
would describe the situation if our imports were $.76 trillion – a full 6% of GDP – and we had no exports.) Making these purchases that weren’t reciprocated by sales, the U.S. necessarily transferred ownership of its assets or IOUs to the rest of the world. Like a very wealthy but self-indulgent family, we peeled off a bit of what we owned in order to consume more than we produced.
Related: On Warren Buffett – 2004 Annual Report by Buffett
Highly recommended: the World Bank’s latest China Quarterly by Brad Setser:
Brad’s blog is one of those in our blogroll for a reason: when he highly recommends a report that is a good indication of value. Enjoy reading the report.
Related: Top 10 Manufacturing Countries – Manufacturing Data – Accuracy Questions – Manufacturing Jobs Data: USA and China