US Economy


Why housing incentives must go

As debate continues to rage about the rising US public debt, it is becoming increasingly obvious that politicians are going to have to tackle some sacred cows if they are serious about cutting the deficit. These include areas that have traditionally been immune from cuts, such as defense, social security and Medicare. These three alone


The folly of fiscal austerity

I have already expressed my view on this blog that it is a mistake to conflate the fiscal issues of the United States with those currently faced by troubled euro zone countries like Greece. Predictably, this has upset some commenters, who insist that unless the US takes urgent action to slash its budget deficit, the


US Treasury’s Housing Report Gets it Half Right

Earlier this month, the US Treasury released its much anticipated report to Congress on Reforming America’s Housing Finance Market.  At only 31 pages, the report is a refreshingly easy read. It identifies clearly and concisely what went wrong with mortgage financing and lays out three broad options for reform aimed at: Encouraging greater private sector involvement in the mortgage market


The US Government’s Debt Spiral

Following on from my previous post on the impending US municipal bond crisis, I want to provide a brief overview of the debt time bomb facing the US Federal Government. Karl Denninger at Market Ticker has provided a nice analysis of the US Treasury’s 1 February presentation to the Borrowing Advisory Committee (Hat tip Bernard Hickey for the link). Denninger


US Municipal Bonds: The Next Crisis?

Municipal bonds are bonds issued by lower level governments (county, city or state) in the United States to raise capital for public works projects, such as sewerage, water treatment plants and roads. For decades, municipal bonds have been a favourite amongst investors in the higher tax brackets since they pay higher yields than Treasury bonds and are also exempt


US Democratic Party Shoots Itself in the Foot

The United States Democratic Party has a problem. Following the 2010 Census, which showed strong population growth in Republican held states, six House of Representative seats and Electoral College votes are to be reapportioned toward states won by John McCain (the 2008 Republican candidate) from states won by President Barrack Obama (see below map). This loss


Short looks good, Long looks bad.

The merry go round of US economics continued overnight. Equity traders went off into hyperoptimistic land on the back of perceived profits.   U.S. stocks rose, with the Standard & Poor’s 500 Index gaining the most in two weeks, after companies from United Parcel Service Inc. to AT&T Inc. and Qualcomm Inc. increased profit forecasts.