President Barack Obama on Monday struck a deal with Republicans to extend the Bush-era tax cuts and federal unemployment insurance as well as a host of other tax breaks, but now he faces an uphill battle to convince reluctant members of his own party to go along.
Ignoring Democratic opposition, President Obama agreed to the compromise package, which cuts taxes on businesses in an effort to help the economy recover.
The deal capped weeks of negotiations between leaders in Congress and an administration team led by U.S. Treasury Secretary Timothy Geithner. Ultimately, Obama accepted a deal that contradicts his long-held position that tax cuts should only be extended for lower and middle-class earners in exchange for a 13-month extension of jobless benefits for the long-term unemployed.
Barack Obama
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We Want to Hear From You: What Do You Think Of President Obama's Proposed Tax Deal?
For months now, U.S. President Barack Obama watched as the expiration date for the Bush tax cuts drew closer and closer – with no signs of compromise among Congressional Republicans.
So in an attempt to beat the Dec. 31 deadline – and the big tax increase facing American individuals and businesses – President Obama on Monday struck a controversial compromise with Republicans.
Pundits are now questioning his call. Did President Obama cave to pressure, or did he pull off a sly political coup? Will this decision aid a still-struggling U.S. recovery, or will it add to the mountain of existing U.S. debt and stick future generations with the tab?
So in an attempt to beat the Dec. 31 deadline – and the big tax increase facing American individuals and businesses – President Obama on Monday struck a controversial compromise with Republicans.
Pundits are now questioning his call. Did President Obama cave to pressure, or did he pull off a sly political coup? Will this decision aid a still-struggling U.S. recovery, or will it add to the mountain of existing U.S. debt and stick future generations with the tab?
No Rest for the Weary: Unemployment to Remain High Through 2011 and Beyond
Stocks are up nearly 70% from their bear market lows. Corporate profits are rising. And the economy is expanding. Yet the unemployment rate continues to hover around 10%.
Neither President Barack Obama's $787 billion stimulus program, nor the U.S. Federal Reserve's quantitative easing has generated enough good news to convince companies to hire meaningful numbers of new workers.
Of the 8.7 million people who lost their jobs during the recession, more than 7.3 million are still without work. There are still nearly five job seekers for every job opening. In fact, adding in workers who are working part time but looking for full-time work and those who have given up looking all together brings the "real" unemployment rate to a staggering 17% compared to 16.5% last year, the latest government report shows.
Neither President Barack Obama's $787 billion stimulus program, nor the U.S. Federal Reserve's quantitative easing has generated enough good news to convince companies to hire meaningful numbers of new workers.
Of the 8.7 million people who lost their jobs during the recession, more than 7.3 million are still without work. There are still nearly five job seekers for every job opening. In fact, adding in workers who are working part time but looking for full-time work and those who have given up looking all together brings the "real" unemployment rate to a staggering 17% compared to 16.5% last year, the latest government report shows.
Money Morning Mailbag: Tobin Tax a Healthy Solution to Wall Street Greed
Last week Money Morning Contributing Editor Martin Hutchinson presented an open letter to U.S. President Barack Obama and members of Congress regarding passage of a Tobin tax.
The simple solution of a Tobin tax handles three of the U.S. government's biggest challenges: It resolves the controversy over expiring Bush tax cuts, helps reduce the federal budget deficit, and offers more regulation over controversial Wall Street profits.
Hutchinson said a Tobin tax – a tax on financial transactions – is the one tax increase that would not damage the already fragile U.S. economy.
The simple solution of a Tobin tax handles three of the U.S. government's biggest challenges: It resolves the controversy over expiring Bush tax cuts, helps reduce the federal budget deficit, and offers more regulation over controversial Wall Street profits.
Hutchinson said a Tobin tax – a tax on financial transactions – is the one tax increase that would not damage the already fragile U.S. economy.
Will Midterm Elections Ignite a Stock Market Rally?
The Democrats and Republicans have spent a record $3.5 billion in preparation for this year's midterm elections. But regardless of the outcome - whether you're a Democrat or Republican - the good news is that the stock market traditionally has performed well during midterm election cycles.
"The question is, 'Did the markets go up in the midterm election years by more than average in non-election years?' Brian Gendreau, market strategist for Financial Network told U.S. News & World Report. "And the answer is, 'Yes, by a huge amount more.'"
In the period from 1922 to 2006, the average gain of the Dow Jones Industrial Average over the 90 trading days following midterm elections (roughly November until mid-March) was 8.5%, according to a new study authored by Gendreau. That's almost 5% higher than the Dow's gains in non-election years.
"The question is, 'Did the markets go up in the midterm election years by more than average in non-election years?' Brian Gendreau, market strategist for Financial Network told U.S. News & World Report. "And the answer is, 'Yes, by a huge amount more.'"
In the period from 1922 to 2006, the average gain of the Dow Jones Industrial Average over the 90 trading days following midterm elections (roughly November until mid-March) was 8.5%, according to a new study authored by Gendreau. That's almost 5% higher than the Dow's gains in non-election years.
An Open Letter to Washington: How to Fix the Deficit and End the Bush-Tax-Cuts Debate
Dear Mr. President and members of Congress:
In the months that follow Tuesday's midterm elections, and into the New Year, you all face three very significant challenges. You must:
Let me explain.
In the months that follow Tuesday's midterm elections, and into the New Year, you all face three very significant challenges. You must:
- Find a solution to the Bush-tax-cuts controversy.
- Rein in the huge-and-growing U.S. budget deficit.
- And better police Wall Street, which got us into this mess in the first place.
Let me explain.
To see Hutchinson's solution, and to see how to join our campaign, please read on...
Investment Strategies: Three Ways to Profit - No Matter Who Wins Tuesday's Midterm Elections
If you're worried that next week's midterm elections could further cloud an already-uncertain investment landscape, take a page from the investment playbook of Money Morning's Keith Fitz-Gerald: Position yourself to profit no matter which party wins on Tuesday.
During an interview with Fox Business Network journalist Stuart Varney yesterday (Tuesday), Fitz-Gerald detailed three strategies that will afford investors both safety and significant profit potential - whether the Democrats or Republicans carry the day.
During an interview with Fox Business Network journalist Stuart Varney yesterday (Tuesday), Fitz-Gerald detailed three strategies that will afford investors both safety and significant profit potential - whether the Democrats or Republicans carry the day.
For the full story - and a look at the video - please click here...
We Want to Hear From You: What Are the Top Three Issues You Want To See Addressed After Midterm Elections?
A tense Congressional tug-of-war will come to an end in less than a week, when the intensely sought-after seats in the U.S. House of Representatives and Senate are filled after the Nov. 2 midterm elections.
The Republican-Democrat contest is the hottest in years. The voter debate is about which candidates will be the most likely to lift the United States out of a morass marked by near-double-digit unemployment, sluggish economic growth and a terrifying $1.29 trillion budget deficit.
As campaigning time wanes, it's clear that an increasing number of seats are vulnerable.
"Let me tell you something," U.S. Vice President Joe Biden wrote Monday. "I've been around campaigns for a long time and I have never seen a midterm election with this many races in play."
Experts described this campaign season as more volatile than most because of a major possible shift in power.
The Republican-Democrat contest is the hottest in years. The voter debate is about which candidates will be the most likely to lift the United States out of a morass marked by near-double-digit unemployment, sluggish economic growth and a terrifying $1.29 trillion budget deficit.
As campaigning time wanes, it's clear that an increasing number of seats are vulnerable.
"Let me tell you something," U.S. Vice President Joe Biden wrote Monday. "I've been around campaigns for a long time and I have never seen a midterm election with this many races in play."
Experts described this campaign season as more volatile than most because of a major possible shift in power.
Investors Flock to Gold and Silver on Recovery Worries
Investors worried about the global economic recovery pushed gold prices to fresh highs on Friday, marking the third time in a week the shiny metal set a new record. Silver also climbed to its highest price in thirty years.
Spot gold climbed above $1,282 an ounce in New York and London as a weakening dollar spurred demand from investors for wealth protection, while silver rose to $21.44 an ounce, its highest level since 1980.
Bullion, which usually moves inversely to the dollar, posted its biggest weekly gain since May as the greenback touched a five-week low against the euro.
Holdings in gold- backed exchange-traded products (ETP) reached a record this month as investors sought protection from financial turmoil and the prospect of slowing economic growth.
Spot gold climbed above $1,282 an ounce in New York and London as a weakening dollar spurred demand from investors for wealth protection, while silver rose to $21.44 an ounce, its highest level since 1980.
Bullion, which usually moves inversely to the dollar, posted its biggest weekly gain since May as the greenback touched a five-week low against the euro.
Holdings in gold- backed exchange-traded products (ETP) reached a record this month as investors sought protection from financial turmoil and the prospect of slowing economic growth.
Obama Stimulus More About Politics Than Jobs
U.S. President Barack Obama yesterday (Wednesday) finished unveiling of a $350 billion stimulus package that the White House hopes will assuage the fears of troubled homeowners and create jobs. But with midterm elections looming and Congressional Democrats expected to sustain heavy losses, it's unlikely the plan will even get passed - much less generate any meaningful economic growth.
Indeed, the true aim of Obama's new stimulus is to put Republicans in a difficult position.
"The president has changed the conversation from whether to renew or terminate President Bush's tax cuts to his own tax-cut agenda, and is promoting a couple of business-friendly proposals that Republicans have previously promoted," David Wessel wrote in The Wall Street Journal. "So Republicans either oppose them, and look hypocritical, or back him: a win-win for Democrats."
Obama's new proposals employ a front-loaded approach with tax cuts to spur business spending and infrastructure projects to promote job creation.
Indeed, the true aim of Obama's new stimulus is to put Republicans in a difficult position.
"The president has changed the conversation from whether to renew or terminate President Bush's tax cuts to his own tax-cut agenda, and is promoting a couple of business-friendly proposals that Republicans have previously promoted," David Wessel wrote in The Wall Street Journal. "So Republicans either oppose them, and look hypocritical, or back him: a win-win for Democrats."
Obama's new proposals employ a front-loaded approach with tax cuts to spur business spending and infrastructure projects to promote job creation.
How Washington Should Handle the Bush Tax Cuts
The big political issue for the remainder of this year will be the so-called "Bush tax cuts" engineered by U.S. President George W. Bush in 2001 and 2003.
Those tax cuts are scheduled to expire on Dec. 31, with taxes reverting to their 2001 levels.
It's not at all clear which of the cuts will be extended and which will be repealed.
But one thing is clear: The outcome of the Bush-tax-cut debate will have major implications for the U.S. economy.
Those tax cuts are scheduled to expire on Dec. 31, with taxes reverting to their 2001 levels.
It's not at all clear which of the cuts will be extended and which will be repealed.
But one thing is clear: The outcome of the Bush-tax-cut debate will have major implications for the U.S. economy.
To understand the economic implications of extending the Bush tax cuts, please read on...
GM's IPO Filing Reveals Challenges That Could Discourage Investors
When General Motors Co. filed registration papers for an initial public stock offering (IPO) on Wednesday, it also revealed the formidable challenges it faces - some of which may give pause to investors considering taking a stake in the venerable automaker. The 734-page document GM filed with the Securities Exchange Commission (SEC) paints a picture […]
The Midterm Elections: No Panacea for the U.S. Economy
With many of the primaries past, and the November 2010 midterm elections less than five months away, it is worth taking a look at what policy changes we might expect from the next U.S. Congress. Both the political and economic worlds have changed one hell of a lot since the last elections, in 2008.
Thus, even though U.S. President Barack Obama is slated to remain in office until at least 2013, the Congress elected in November will be very different from the one that was elected in November 2008.
Thus, even though U.S. President Barack Obama is slated to remain in office until at least 2013, the Congress elected in November will be very different from the one that was elected in November 2008.
For a view of the future after the U.S. midterm elections, please read on...
Congressional Spat Over Doctor's Medicare Pay Threatens Obama's Healthcare Reform Effort
A Congressional stalemate over how to stave off a hefty pay cut to doctors treating Medicare patients threatens to undermine President Barack Obama's healthcare reform effort - even as the administration mails out a glossy brochure to reassure seniors the healthcare program is on solid ground. For the third time this year, Democrats and Republicans […]
Brit Officials Defend BP on Gulf Oil Spill As it Weighs Dividend Cut
British government officials on Friday took shots at the Obama administration for the barrage of criticism it is leveling at BP PLC (NYSE ADR: BP) over the Gulf oil spill, sparking a rally in its beaten-down shares, even as it weighs cutting or deferring its dividend.
In an apparent swipe at the U.S. President's comments about the British company, Deputy Prime Minister Nick Clegg insisted finger-pointing is unhelpful, "I don't, frankly, think we will reach a solution to stopping release of oil into the ocean any quicker by allowing this to spiral into a tit for tat political diplomatic spat," Clegg told the Daily Mail.
Britain's Chancellor of the Exchequer George Osborne also backed BP with a statement after speaking to BP chief executive Tony Hayward by telephone. "We are all concerned about the human and environmental impact and as the prime minister has said we understand the concerns of the U.S. administration," Osborne told Reuters.
In an apparent swipe at the U.S. President's comments about the British company, Deputy Prime Minister Nick Clegg insisted finger-pointing is unhelpful, "I don't, frankly, think we will reach a solution to stopping release of oil into the ocean any quicker by allowing this to spiral into a tit for tat political diplomatic spat," Clegg told the Daily Mail.
Britain's Chancellor of the Exchequer George Osborne also backed BP with a statement after speaking to BP chief executive Tony Hayward by telephone. "We are all concerned about the human and environmental impact and as the prime minister has said we understand the concerns of the U.S. administration," Osborne told Reuters.