South By North Strategies, Ltd.

Some Failure

James Kwak points out an unspoken element of the “failure” of the Super Committee.

To understand the GOP’s victory, consider what the tax landscape would look like if Republicans agreed to everything that Barack Obama asked for in his deficit plan released this September. First of all, taxes for almost all families would hardly change at all. Almost all of the 1997, 2001, and 2003 tax cuts would still be in place. Tax rates for families making less than $250,000 per year would be locked in at the lower rates set in 2001.
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Obama says he wants to roll back the tax cuts for the rich. But as far as I can tell, he only proposes to roll back one of them — the reduction in the top income tax rate. Under his plan, the top tax rate on capital gains and dividends would be made permanent at 18.8 percent — a figure that includes the 15 percent level set by the 2003 tax cut, plus 3.8 percent for the Medicare payroll tax. The estate tax exemption would be $3.5 million, not $1 million as it was before 2001. The Pease and PEP (personal exemption phaseout) provisions that limit deductions and exemptions for high-income taxpayers, which were suspended by the 2001 tax cut, would be killed permanently. As a result, the top marginal tax rate would be down slightly to 43.4 percent (the 39.6 percent level set in 1993, plus 3.8 percent for the Medicare payroll tax).
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How would the government pay for this? Through huge spending cuts.

Food Insecurity In North Carolina

Louisa Warren of the NC Budget and Tax Center documents the extent of food insecurity present in North Carolina and explains the role that the Supplemental Nutrition Assistance Program has played in helping families and the larger economy during the “Great Recession.” From the report…

The number of individuals receiving food assistance through North Carolina’s Food & Nutrition Services has nearly doubled since the Great Recession started in December 2007 (increase of 94.6 percent). The state has added more than 870,000 Tar Heels to its food assistance program – a little more than the population of Charlotte, North Carolina. As of September 2011, nearly 1 in 5 North Carolinians received food assistance.
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At the local level, the number of persons in households receiving food stamps has grown in every county since the recession began. Urban counties have seen the greatest numbers of people enroll in the food stamps program, but rural areas have seen the deepest change in relative terms. The five counties with the largest percentage increases in their food stamp participation rates—at least quadrupling from September 2007 to September 2011—are Dare, Jones, Pender, Gates, and Duplin. Mecklenburg, Guilford, and Wake counties all nearly doubled their food stamp participation rates and have the highest numbers of individuals enrolled in the program.

Around The Dial – November 29, 2011

Economic policy reports, blog postings, and media stories of interest:

• Neal Deal 2.0 worries about student loan debt.
• Rortybomb notes 8 facts about extending unemployment insurance.
• Robert Skidelsky warns against “the wages of economic ignorance.”
• Paul Krugman contemplates a tax on financial transactions.
• Harold Meyerson describes a tension between capitalism and democracy.

SBN In The News: November 2011

South by North Strategies’ analyses of economic issues appeared in several media stories in November.

• The Associated Press: “Occupy Protests: Shop mom-and-pop on Black Friday”
  
• The News & Observer: “State’s jobless rate at 10.4 percent”
• The Charlotte Observer: “State’s jobless rate at 10.4 percent”
• The Winston-Salem Journal: “NC’s jobless rate drops for first time in eight months”
• Triangle Business Journal:  “Counties find myriad ways to pare budgets across N.C.”

Service Activity In The South Atlantic: Nov. 2011

From the Federal Reserve Bank of Richmond’s latest survey of service-sector activity in the South Atlantic (District of Columbia, Maryland, North Carolina, South Carolina, Virginia and West Virginia):

Service sector activity strengthened in November, boosted by improvement in the retail sub-sector, according to the latest survey by the Federal Reserve Bank of Richmond. Revenues at services-providing firms were nearly flat this month, but retail sales jumped and foot traffic rose sharply. Big-ticket sales were flat, however. Retail inventories expanded and merchants were upbeat about potential sales during the next six months. Services providers remained optimistic about revenues in the six months ahead, though their outlook was somewhat less enthusiastic than in October.
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The number of employees in the broad service sector edged down, driven by continuing cuts in retail. In addition, average wage increases were less prevalent in November.
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The pace of service sector price change picked up in November, compared with a month ago. Survey respondents also expected a somewhat faster rate of price increase during the next six months than they predicted last month.