Afflictions of liberty

Obama may have grasped that the ideal of freedom Americans so fiercely cling to is fracturing their society.

After a year of setback and struggle, Barack Obama last week sought to revive his programme, to reboot the American Dream. A generally solemn State of the Union address culminated in a rousing call to the nation "to start anew, to carry the dream forward, and to strengthen our union once more".

Commentary focused on the president's efforts to connect with the needs of middle-class America, those blue-collar workers whose lives are profoundly affected by the jobs market, taxation and interest rates.

But another feature of this address is just as remarkable – for its absence. The word "liberty" was entirely missing, and the term "freedom" was used only once.

Prior to Obama's election, these terms had been liberally sprinkled over every address for the last 25 years. They represent a mission statement for America that has become hardwired into its logic circuitry.

If You’re 50 and Haven’t Saved A Dime

You’re 50, recently laid off, and now forced to figure out what work you’ll do for the next 15 years or more and how you’ll ever retire.

You’d dreamed of leaving your job at 65, vacationing in Tuscany, taking a trip around the world, or perhaps spending your afternoon on the golf course. But the reality is the economic downturn has tripled the number of unemployed wokers ages 55 to 64 over the past two years, compared with a doubling in the overall unemployment rate.

That means right now, for you, Job Number One is figuring out the next career you’ll embark on. This is the “new retirement” that many Baby Boomers (born between 1946-1964) must now envision.

The rise in job losses, grim prospects for Social Security benefits, and paltry personal savings has created a situation where many Boomers must put off retirement from the workforce because they simply cannot afford it. Even before the recession, the Congressional Budget Office predicted the Social Security Administration would be doling out more money than it took in by 2020, which would deplete the trust fund and cause a severe cut in benefits by 2043. Read the rest of this entry »

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Unemployment Rate Holds At 10%

The Labor Department released it’s December job’s report on Friday which saw job losses climb once again, after revisions showed a slight gain of 4,000 jobs from November. While the unemployment rate remained at 10%, that figure is a little misleading because it doesn’t factor in the growing number of people that have stopped looking for work.

Nonfarm payroll employment edged down (-85,000) in December, and the unemployment rate was unchanged at 10.0 percent, the U.S. Bureau of Labor Statistics reported today. Employment fell in construction, manufacturing, and wholesale trade, while temporary help services and health care added jobs.

While the pace of job losses has definitely slowed over the past few months, many economists still expect a weak labor market for years to come. The unemployment rate has doubled from 5% and over 7 million jobs have been lost since December 2007.

That being said many forecasts expect the economy to grow around 3% this year but the main reason will be that there is still a lot of government stimulus that is working it’s way through the system. But while inflation is not a problem for the moment, it is something the central bank will have to deal with eventually. Read the rest of this entry »

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Proposed Bank Regulations Would Limit Risk Taking

The President proposed new regulations for the banking industry this week, in an effort to curb risk taking as well as limiting the size of some of the nation’s largest banks. Former Federal Reserve Chairman Paul Volcker now one of Obama’s key economic advisers has been advocating stricter limits on the banking sector or some time.

The proposed regulations would eliminate proprietary trading at banks as well as the investment or running of equity and hedge funds. It would also seek to slow consolidation in the banking industry by putting new caps on market share of liabilities.

They want banks to be more like banks and limit the activities that put customer deposits at risk. It’s also clear the government wants to avoid the “too big” to fail scenario that the nation went through last year. Read the rest of this entry »

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US Economy Likely Grew 4.6% in Fourth Quarter

The U.S. economy likely grew at its fastest pace in nearly four years in the fourth quarter as businesses made less-aggressive cutbacks on inventories, a government report showed on Friday.

A Reuters survey predicted that gross domestic product, which measures total goods and services output within U.S. borders, expanded at a 4.6 percent annual rate, up from 2.2 percent in the third quarter.

Analysts reckon the change in inventories could constitute as much as three-quarters of the GDP figure and overstate the strength of the recovery from the longest and deepest downturn since the Great Depression 70 years ago.

“We shouldn’t dismiss it (GDP number), but the problem is the inventory cycle really doesn’t last that long. It’s not what we call self-sustaining growth,” said Paul Ashworth, senior U.S. economist at Capital Economics in Toronto.

Getting the economy on a sustainable growth track remains one of the key challenges facing President Barack Obama, who on Wednesday outlined a raft of measures to create jobs and nurture the recovery. Read the rest of this entry »

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Fed holds rates at record low to aid recovery

The Federal Reserve pledged Wednesday to hold rates at record lows to nurture the economic recovery and lower unemployment. But its decision drew a dissent from one member, signaling the Fed’s challenge in deciding when to pull back stimulus money it pumped into the economy.

The Fed’s statement sketched a mixed picture of the economy. Pointing to weakness, it noted that bank lending is contracting. And it dropped a reference in its previous statement to an improving housing market.

But on the positive side, the Fed said business spending on equipment and software seems to be rising. And it said economic activity”continues to strengthen.”

The Fed said it still expects to end a $1.25 trillion program aimed at driving down mortgage rates as scheduled on March 31. Yet it reiterated that it remains open to changing that timetable if necessary.

Reports on home sales this week pointed to a still-fragile housing market. Read the rest of this entry »

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Iran budgets for $60 price for crude oil

Iran planned next year’s budget based on an oil price of $60 per barrel, nearly double the price from the last year, the official news agency reported on Sunday, indicating rising optimism over energy prices.

Last year, the parliament approved a budget based on $37.5 per barrel for the fiscal year ending in March, reflecting the steep drop in prices that severly impacted the economy. About 80 percent of Iran’s foreign revenue comes from oil exports.

Earlier on Sunday President Mahmoud Ahmadinejad submitted the budget to the Iranian parliament for approval, saying more money would be allocated to agriculture, education and research, as well as to the poor.

He did not give the size of the budget only saying there was “nothing complicated or untransparent” in it.

Iran’s parliament speaker Ali Larijani said the amount would be revealed later, according to IRNA. The budget requires approval of the parliament and a constitutional watchdog. Read the rest of this entry »

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Obama to Announce $38 Billion Business Tax Break

President Barack Obama will propose extending through 2010 a temporary tax incentive that encourages businesses to accelerate purchases of equipment, an administration official said.

The president will call for renewal of the 50 percent “bonus depreciation” in his State of the Union address tonight, said the official, who spoke on condition of anonymity.

Extending the break, which expired Dec. 31, would save companies that make qualified purchases of equipment such as tractors, wind turbines, solar panels and computers a total of $38 billion over this year and next, the official said.

Bonus depreciation was a tax element of the $787 billion economic recovery legislation adopted last February. It also has been a feature of earlier economic stimulus measures, including one adopted in 2003 under President George W. Bush. Read the rest of this entry »

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The Great Recession Continues

The December jobs report has doused the hope that we were at the beginning of a sustained economic recovery.

The unemployment rate managed to hold at 10% in December only because of an extraordinary shrinkage in the labor force: Some 661,000 gave up looking for a job.

Bureau of Labor Statistics’ (BLS) nonfarm payroll data indicate that December job losses totaled 85,000. But the bureau’s household survey, a better and more comprehensive measure of both the unemployed and underemployed, indicated a loss of 589,000 jobs. Since the Great Recession began in 2007, some 8.6 million jobs have been lost, according to the bureau; and small businesses, the normal source for new jobs, are still shedding workers. Fewer than 10% added employees, while more than 20% cut back—and the cuts averaged nearly twice as many per firm as the hires at the expanding companies.

Unemployment, in short, has graduated from being a difficulty, a worry. It is now a catastrophe, with some 15.3 million Americans out of work, according to the BLS. Read the rest of this entry »

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The U.S. Isn’t as Free as It Used to Be

The United States is losing ground to its major competitors in the global marketplace, according to the 2010 Index of Economic Freedom released today by the Heritage Foundation and The Wall Street Journal. This year, of the world’s 20 largest economies, the U.S. suffered the largest drop in overall economic freedom. Its score declined to 78 from 80.7 on the 0 to 100 Index scale.

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File Tax Returns for Past Years

Delaying a past due tax return costs you money.  Act quickly to file a late return.  It’s easier than you think.

File past tax returns.

Filing late will cost you less today than it will in the future -– you may even be eligible for a refund.

Filing a past year’s tax return is important because if you don’t file and you owe taxes for that year, the IRS will place you in their collection process.  Once that happens, you’ll receive a notice at 30-days and at 90-days past due.  Continued neglect of your tax liability can lead to loss of wages or bank accounts and in some cases loss of property.  You’ll also be liable for any penalties and interest — amounts that grow over time.

File taxes online.

You may not even owe taxes.  The government may owe you a refund.   Read the rest of this entry »

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