CCCWiki - User contributions [en]

User:WestbergBenedict100

2012-10-29T22:22:37Z

90.209.153.213: Created page with "IN AN ordinary American presidential election, a candidate who had earned a fortune in business and then paid an absurdly low tax rate would barely raise eyebrows. Americans have..."

IN AN ordinary American presidential election, a candidate who had earned a fortune in business and then paid an absurdly low tax rate would barely raise eyebrows. Americans have long considered wealth something to admire and pursue, not vilify and redistribute. Alexis de Tocqueville said he knew �of no country�where a profounder contempt is expressed for the theory of the permanent equality of property.�

But this is no ordinary election. That so much scrutiny has fallen both on how Mitt Romney earned his fortune (in the ruthless world of private equity) and his tax rate (15%, less than what some middle-class families pay) is a sign something has changed. For that, credit a decade in which the median family in America saw its real income fall by 7%, even as the top 1% grabbed a share of national income unseen since the 1920s (see article), and a level of unemployment that, though falling, remains troublingly high. Not many Americans like the tactics or fashion choices of Occupy Wall Street, but quite a few share the movement�s opinion that the economy is tilted in favour of the wealthy.

And so the rich are now a campaign issue. Barack Obama calls for �millionaires and billionaires� to �pay their fair share�: introduce a minimum tax rate on millionaires and return the top income-tax rate to 39.6% from 35%, and the other 98% of Americans would not have to pay more, he claims. Republicans shoot back that raising any taxes would destroy jobs and business confidence. They think you can fill the budget hole by spending cuts alone; many want to cut taxes further.

Neither side is talking sense. America�s rich should indeed pay more tax; but marginal rates should not go up.

History shows that deficit reduction works best when most of the burden falls on spending cuts. That means that middle-class entitlements will have to be reduced, no matter what Mr Obama tells his supporters. But, just as in every other budget squeeze, a portion must come from higher taxes, no matter what the Republicans say.

Democrats say only the top 1% need pay more; that�s misleading. Others will have to pay too. But more of the increase should be shouldered by the rich who have done so well from recent trends. Technological change and globalisation have sharpened demand for the most skilled workers, in particular superstars, be they athletes or hedge-fund managers, thus sharply increasing inequality. Tax policy has exacerbated this trend instead of mitigating it. George Bush junior slashed top income-tax rates as well as rates on dividends and capital gains, which explains why Warren Buffett and Mr Romney have such low tax rates.

Follow the money

However, restoring the top income tax rates, as Mr Obama proposes, is not the best way of extracting extra revenue from the rich. It would raise revenues of about 0.3% of GDP and do nothing to make America�s grotesquely complicated tax system more efficient. It would be far better to close or limit loopholes and deductions, currently worth up to 7% of GDP, which distort behaviour (by, for example, encouraging people to take out big mortgages) and mostly benefit the affluent. Some deductions, including mortgage relief, would have to be phased out in stages; but many could go immediately. In a similar way, equalising the rates on capital, dividends and ordinary income would make it possible to lower America�s corporate tax rate, currently one of the rich world�s highest.

The result would be lower rates, more revenue and a more efficient and progressive tax system. If that�s where the debate about wealth ends, it will have been worth it.

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WestbergBenedict100

2012-10-29T22:22:32Z

User:WarrenMoeller704

2012-10-25T01:38:30Z

90.209.153.213: Created page with "What really caused the eurozone crisis? World leaders probably spent more time worrying about the eurozone crisis than anything else in 2011. And that was in the year that feat..."

What really caused the eurozone crisis?

World leaders probably spent more time worrying about the eurozone crisis than anything else in 2011.

And that was in the year that featured the Arab Spring, the Japanese tsunami and the death of Osama Bin Laden. What's more, 2012 looks set to be not much different. But as eurozone governments hammer out new rules to limit their borrowing, are they missing the point of the crisis?

* The eurozone has agreed a new "fiscal compact"
* Eurozone leaders have agreed to a tough set of rules - insisted on by Germany - that will limit their governments' "structural" borrowing (that is, excluding any extra borrowing due to a recession) to just 0.5% of their economies' output each year. It will also limit their total borrowing to 3%. These rules are supposed to stop them accumulating too much debt, and make sure there won't be another financial crisis.
* But didn't they already agree to this back in the '90s?
* Hang on a minute. They agreed to exactly the same 3% borrowing limit back in 1997, when the euro was being set up. The "stability and growth pact" was insisted on by German finance minister Theo Waigel (centre of image). What happened?
* So who kept to the rules?
* Italy was the worst offender. It regularly broke the 3% annual borrowing limit. But actually Germany - along with Italy - was the first big country to break the 3% rule. After that, France followed. Of the big economies, only Spain kept its nose clean until the 2008 financial crisis; the Madrid government stayed within the 3% limit every year from the euro's creation in 1999 until 2007. Not only that - of the four, Spain's government also has the smallest debts relative to the size of its economy. Greece, by the way, is in a class of its own. It never stuck to the 3% target, but manipulated its borrowing statistics to look good, which allowed it to get into the euro in the first place. Its waywardness was uncovered two years ago.
* 3/9 Italy
Worst offender
* 5/9 Germany
First to break rules
* 6/9 France
Offender
* 9/9 Spain
Top of the Class
* But the markets have other ideas
* So surely Germany, France and Italy should be in trouble with all that reckless borrowing, while Spain should be reaping the rewards of its virtue? Well, no. Actually Germany is the "safe haven" - markets have been willing to lend to it at historically low interest rates since the crisis began. Spain on the other hand is seen by markets as almost as risky as Italy. So what gives?
* So what really caused the crisis?
* There was a big build-up of debts in Spain and Italy before 2008, but it had nothing to do with governments. Instead it was the private sector - companies and mortgage borrowers - who were taking out loans. Interest rates had fallen to unprecedented lows in southern European countries when they joined the euro. And that encouraged a debt-fuelled boom.
* Good news for Germany...
* All that debt helped finance more and more imports by Spain, Italy and even France. Meanwhile, Germany became an export power-house after the eurozone was set up in 1999, selling far more to the rest of the world (including southern Europeans) than it was buying as imports. That meant Germany was earning a lot of surplus cash on its exports. And guess what - most of that cash ended up being lent to southern Europe.
* ...bad news for southern Europe
* But debts are only part of the problem in Italy and Spain. During the boom years, wages rose and rose in the south (and in France). But German unions agreed to hold their wages steady. So Italian and Spanish workers now face a huge competitive price disadvantage. Indeed, this loss of competitiveness is the main reason why southern Europeans have been finding it so much harder to export than Germany.
* ...and a nasty dilemma
* So to recap, government borrowing - which has ballooned since the 2008 global financial crisis - had very little to do with creating the current eurozone crisis in the first place, especially in Spain (Greece's government is the big exception here). So even if governments don't break the borrowing rules this time, that won't necessarily stop a similar crisis from happening all over again.

Spain and Italy are now facing nasty recessions, because no-one wants to spend. Companies and mortgage borrowers are too busy repaying their debts to spend more. Exports are uncompetitive. And now governments - whose borrowing has exploded since the 2008 financial crisis savaged their economies - have agreed to drastically cut their spending back as well. But...
* Cut spending...
* ...and you are pretty sure to deepen the recession. That probably means even more unemployment (already over 20% in Spain), which may push wages down to more competitive levels - though history suggests this is very hard to do. Even so, lower wages will just make people's debts even harder to repay, meaning they are likely to cut their own spending even more, or stop repaying their debts. And lower wages may not even lead to a quick rise in exports, if all of your European export markets are in recession too. In any case, you can probably expect more strikes and protests, and more nervousness in financial markets about whether you really will stay in the euro.
* Don't cut spending...
* ...and you risk a financial collapse. The amount you borrow each year has exploded since 2008 due to economic stagnation and high unemployment. But your economy looks to be chronically uncompetitive within the euro. So markets are liable to lose confidence in you - they may fear your economy is simply too weak to support your ballooning debtload. Meanwhile, other European governments may not have enough money to bail you out, and the European Central Bank says its mandate doesn't allow it to. And if they won't lend to you, why would anyone else?

WarrenMoeller704

2012-10-25T01:38:27Z

User:Jo-AnnParke732

2012-10-23T06:30:45Z

90.209.153.213: Created page with "BARELY a week goes by without a report on the level of confidence among consumers, businesspeople and investors. Optimism is what�s wanted�Keynes talked of the �animal spir..."

BARELY a week goes by without a report on the level of confidence among consumers, businesspeople and investors. Optimism is what�s wanted�Keynes talked of the �animal spirits� that influence economic activity. Pessimists are routinely denounced as Jeremiahs. Those who try to bet on falling prices find their activities are restricted.

A cheery disposition may be necessary for societies to function. Daniel Kahneman, a psychologist and Nobel economics laureate, has a chapter in his book �Thinking Fast and Slow� which describes overconfidence as �the engine of capitalism�. No entrepreneur can be sure that his planned investment will succeed but if no one took a risk, new products and jobs would never be created. A certain blindness to the odds may be necessary. According to Mr Kahneman, the chances of an American small business surviving for five years are just 35%. But ask individual entrepreneurs about their prospects and 81% think they have a better than seven-in-ten chance of success.

This self-confidence may be innate, just as most people think they are better-than-average drivers. And it would seem logical that the most optimistic people gravitate towards entrepreneurship. That is good for consumers, who can select from a wider variety of products. Even the failed businesses serve a purpose. Daniel Gross, a journalist, wrote a book claiming that bubbles were good for economies since they leave behind infrastructure (canals, railways, fibre-optic cable) that can last for generations.

But it is hard to make such a case for all bubbles. Anyone who has driven past a row of empty houses in the Irish countryside will realise that optimism can lead to wasteful investment. And Mr Kahneman cites studies that show how overoptimistic chief executives (as measured by the amount of stock they own) were more likely to gear up their balance-sheets and pay too much for acquisitions.

The problem with overoptimism was illustrated by the investment-bank collapses of 2008. The men who reached the top of such risk-taking organisations had, by definition, been successful in their previous bets. They believed this was due to skill, not luck, making them too sanguine about their ability to ride out the crisis.

A further problem with optimism is thus that it is pro-cyclical. The greatest moment of success for optimists will occur at the peak of a boom, when they will feel their instincts have been justified. Previous house-price rises will make buyers more optimistic about borrowing more money; and banks will be more optimistic about the prospect of being repaid.

Financial assets are highly unusual in that rising prices tend to elicit higher demand. Analysts extrapolate recent rapid profits growth into the future, even though profits cannot rise faster than GDP indefinitely. If markets were truly efficient, price-earnings ratios should be lower than average at the top of the cycle, since investors should anticipate a reversion to the mean. Instead, high p/e ratios and rapid profits growth tend to go together.

Jo-AnnParke732

2012-10-23T06:30:39Z

User:BeckerColquitt373

2012-10-19T19:29:52Z

90.209.153.213: Created page with "The chairman of a meeting of Eurozone finance ministers says fresh conditions will be attached to a 130bn euro ($170bn; �110bn) bailout for Greece. Jean-Claude Juncker said an..."

The chairman of a meeting of Eurozone finance ministers says fresh conditions will be attached to a 130bn euro ($170bn; �110bn) bailout for Greece.

Jean-Claude Juncker said an extra 325 million euros ($432m; �273m) in savings for 2012 will be needed.

The Greek parliament will also have to pass the package of cuts and reforms on Sunday.

And political leaders will have to promise to continue to implement the reforms after elections in April.

"Despite the important progress achieved over the last days, we did not yet have all necessary elements on the table to take decisions today," Mr Juncker, the Luxembourg prime minister, said.

"All these measures are important to ensure a smooth implementation of the programme also after the upcoming general elections.

"These three elements, those I mentioned, need to be in place before we can take decisions," Mr Juncker added.

He further welcomed "assurances provided by the Greek government that all the necessary elements will be put in place in the coming days," Reuters reports.

BeckerColquitt373

2012-10-19T19:29:47Z

User:CandyStrawser428

2012-10-18T12:04:18Z

90.209.153.213: Created page with "he proportion of shops in Britain lying empty has hit a new record of 14.6% in February, according to figures compiled by the Local Data Company. Vacancy rates had begun to stab..."

he proportion of shops in Britain lying empty has hit a new record of 14.6% in February, according to figures compiled by the Local Data Company.

Vacancy rates had begun to stabilise at the end of 2011, but they have risen in January and February, the LDC said.

It is further evidence of a difficult start to the year for retailers.

Consumer confidence also slipped back in February, the latest survey from Nationwide indicated, largely due to concerns about employment prospects.
Continue reading the main story
�Start Quote

It is a timely reminder to the government... of the significant challenges facing town and city centres up and down the country�

End Quote Matthew Hopkinson Local Data Company

* High Street casualties
* Cautious consumers 'pay off debt'
* Job woes hit consumer confidence
* Sharp decline in UK retail sales

There was an increase in the number of respondents describing their economic situation as bad.

"Consumers also scaled back their expectations for the future, with the forward-looking aspects of the index weakening during the month," said Nationwide chief economist Robert Gardner.

New figures from the Bank of England, also released on Friday, back this up.

Cautious consumers are choosing to pay off credit cards and loans, rather than take on new borrowing, the data indicate.

Evans Cycles, one of the UK's biggest bike retailers, told the BBC's Today programme that it was having to be very conscious about prices.

"We are peddling into a headwind in terms of the consumer economy," said chief executive Nick Wilkinson. "Confidence remains low, getting people to spend money on a bike is about persuading them that it is value for money."

However, Nationwide added that the number of consumers planning to buy household goods - an indicator of confidence - was higher in February than a year earlier.

This reflects official retail sales data for the month, published by the Office for National Statistics (ONS) on Thursday.

Sales volumes declined by a larger-than-expected 0.8% in February, the ONS said.

But they were still 1% higher than a year earlier.
'Damaged' High Streets

The Local Data Company said the rise in empty premises was "not unexpected" as retailers continue to cut back and even go bust.

Game, which has 600 High Street branches in the UK, said this week that it was going into administration after key suppliers stopped doing business with them. It is continuing to trade while it tries to find a solution to its debt problems.
Continue reading the main story
'Most at risk towns and cities'

* Bradford
* Derby
* Wolverhampton
* Southampton
* Hull
* Sheffield
* Swindon
* Warrington
* Stockport
* Nottingham

Source: BNP Paribas Real Estate ranks retail centres according to likelihood of more shops closing and the place's ability to withstand a weakening economy

"It is a timely reminder to the government, who are due to respond to the Portas Review this month, of the significant challenges facing town and city centres up and down the country," said LDC director Matthew Hopkinson.

Retail consultant and TV presenter Mary Portas was asked by the government to look at ways to revitalise struggling town centres.

Her report, published in December 2011, recommended cutting regulations and proposed a bigger role for street markets in town centres.

"It's crucial that the government responds to Mary's review with a menu of recommendations next week that local people, councils and businesses can 'pick and mix' to help start to reverse the damage that many of our high streets have suffered," said Ian Fletcher, director of policy at the British Property Federation.

CandyStrawser428

2012-10-18T12:04:13Z

User:ClaudelleTabb241

2012-10-17T17:22:52Z

ClaudelleTabb241

2012-10-17T17:22:46Z

User:AllainPease739

2012-10-15T20:15:21Z

90.209.153.213: Created page with "More and more people on "relatively modest salaries" are being dragged into becoming higher-rate taxpayers, Budget analysis suggests. The number of higher rate taxpayers, who pa..."

More and more people on "relatively modest salaries" are being dragged into becoming higher-rate taxpayers, Budget analysis suggests.

The number of higher rate taxpayers, who pay a chunk of their income at the 40% tax level, could rise from 3.7m last year to 5m by 2014.

The Institute for Fiscal Studies (IFS) made the prediction after studying changes to tax levels in the Budget.

However, lower-income families will benefit from the changes.

In the Budget, the government also decided to end age-related tax allowances for pensioners.

The IFS said that move will cause pensioners to lose 0.25% of their income in 2014.

'Millionaires pay less'

Shadow chancellor Ed Balls criticised the changes to pension allowances.

"The fact is the normal increase in the state pension just keeps up with inflation, but cuts to personal allowances in the Budget will mean 4.4 million pensioners are worse off in real terms," he said.

"It's now even clearer that this was a Budget that asked millions to pay more so millionaires could pay less."

But Chancellor George Osborne told the BBC that no pensioner would be worse off in cash terms, including the "largest increase in the state pension" next month.

"The net changes made by this government, including introducing this triple lock, mean that pensioners are better off."

The tax-free chunk of income, known as the personal allowance, is rising for the under-65s to �9,205 in April 2013.

The IFS said this would cost the Treasury an estimated �3.5bn, and would mean 675,000 fewer people would pay income tax.

From 6 April, people earning taxable incomes of up to �34,370 will pay 20% in tax and people earning between �34,371 and �150,000 are taxed at 40%.

AllainPease739

2012-10-15T20:15:17Z

NorthcuttSaddler436

2012-10-12T23:29:29Z

90.209.153.213: Created page with "The Greek PM has warned the nation of a collapse in living standards if MPs fail to pass an unpopular austerity bill demanded in return for a 130bn-euro ($170bn; �110bn) bailou..."

The Greek PM has warned the nation of a collapse in living standards if MPs fail to pass an unpopular austerity bill demanded in return for a 130bn-euro ($170bn; �110bn) bailout.

In a TV address, Lucas Papademos said Greece was "just a breath away from Ground Zero".

The cabinet has approved the measures but five government ministers resigned.

Unions are holding a 48-hour strike, and thousands of protesters rallied in central Athens against the measures.

Riot police were on standby after clashes on Friday, but the demonstrations were mostly peaceful.

The austerity measures are being demanded by the eurozone and IMF - they must now be passed by the Greek parliament and approved by European finance ministers.

Some MPs from the governing parties are expected to vote against the bill, the BBC's Mark Lowen in Athens reports.

But analysts say the package should still have enough support in parliament, because Pasok, the largest party, and its coalition ally New Democracy account for more than 230 deputies out of a total of 300.
Catastrophe fear

Mr Papademos said the measures would "decide the country's future" and enable it to stay inside the euro.
Continue reading the main story
What went wrong in Greece?

An old drachma note and a euro note
Greece's economic reforms, which led to it abandoning the drachma as its currency in favour of the euro in 2002, made it easier for the country to borrow money.

The opening ceremony at the Athens Olympics
Greece went on a big, debt-funded spending spree, including paying for high-profile projects such as the 2004 Athens Olympics, which went well over its budget.

A defunct restaurant for sale in central Athens
The country was hit by the downturn, which meant it had to spend more on benefits and received less in taxes. There were also doubts about the accuracy of its economic statistics.

A man with a bag of coins walks past the headquarters of the Bank of Greece
Greece's economic problems meant lenders started charging higher interest rates to lend it money. Widespread tax evasion also hit the government's coffers.

Workers in a rally led by the PAME union in Athens on 22 April 2010
There have been demonstrations against the government's austerity measures to deal with its debt, such as cuts to public sector pay and pensions, reduced benefits and increased taxes.

Greek Prime Minister George Papandreou at an EU summit in Brussels on 26 March 2010
The EU, IMF and European Central Bank agreed 229bn euros ($300bn; �190bn) of rescue loans for Greece. Prime Minister George Papandreou quit in November 2011 after trying to call a referendum.

Greece's problems have made investors nervous, which has made it more expensive for other European countries such as Portugal to borrow money.
Eurozone leaders are worried that if Greece were to default, and even leave the euro, it would cause a major financial crisis that could spread to much bigger economies such as Italy and Spain.

Lucas Papademos
Under Prime Minister Lucas Papademos, Greece is trying to negotiate a big write-off of private debts and secure a second bail-out of 130bn euros ($170bn, �80bn) before a 20 March deadline.

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"The social cost of this programme is limited in comparison with the economic and social catastrophe that would follow if we didn't adopt it," he said.

Savings would be lost, the government would be unable to pay wages or salaries, and imports of fuel, medicine and machinery would be disrupted, he added.

Earlier, Greek conservative leader Antonis Samaras said all his party's MPs must vote in favour of the bailout law.

Mr Samaras, whose New Democracy party is a member of the governing coalition, said any rebels would face being dropped as parliamentary candidates.

Deputy Foreign Minister Mariliza Xenogiannakopoulou, who quit on Friday afternoon, is the most senior defection so far.

Her Pasok party, the largest in the coalition, also suffered the loss of a deputy labour minister on Thursday.

The austerity cuts include:

* 15,000 public-sector job cuts
* liberalisation of labour laws
* lowering the minimum wage by 20% from 751 euros a month to 600 euros
* negotiating a debt write-off with banks.

These were presented to a eurozone ministers in Brussels on Thursday evening.

But they want a further 325m euros in savings for this year and also insist that Greek leaders give "strong political assurances" on the implementation of the packages.