Want a discount on a house? Drive way out of town - Yahoo Finance

 

Ever since the Greeks built temples on high and the Egyptians erected pyramids in the sand, real estate has always been all about location. Never has that been more true than today, specifically when it comes to price. As millennials and active baby boomers flock to urban cores, embracing shared cars and bicycles, the discount for living farther away from town is growing.

"In my 26 years in the business, the price discount available to someone who is willing to commute has never been greater," John Burns of John Burns Real Estate Consulting wrote in a new report.

Take the Chicago area: Home prices in closer-in Deerfield are about 15 percent below their peak in 2006, but keep going out the interstate, and home prices are still as much as 30 percent below peak, according to the report. The same is true in Los Angeles, where home prices in the close-in suburb of Glendale are now 2 percent above peak, but further out in Palmdale they are a striking 37 percent below peak.

"We're still a little bit under prerecession pricing, whereas the inner jurisdictions are now above prerecession pricing," said Brian Cullen, head of development at Willowsford, a 4,000 acre residential community in Ashburn, Virginia, about an hour's drive from Washington. "People will make a value decision that they want to live in Willowsford, that they want a community that offers a lot of things they want, and that the driving isn't that challenging for them."

On a fall weekend in Willowsford, Ian Walsh throws a baseball with his three young sons on the front lawn of their spacious new colonial. It's days like this that make the commute during the week to downtown D.C. all worthwhile.

"It's easy to look at the math, the amount of square footage you can get inside your house, including the land, just the size of house you can get for the dollar, just drops dramatically as you get a little bit outside of the city," said Walsh.

Home prices in Ashburn are still over 15 percent below their recent peak, and that, according to Walsh at least, is an easy trade-off for the drive.

"When I get out here and into the neighborhood, I kind of feel the stress of the city roll off my shoulders a little bit and relax almost instantly, and any sort of stress from work or the commute is kind of wiped away when I pull in," he added.

For families with children, the suburbs have until now been the preferred option, but changes in demographics and social behavior are fighting that "norm." The Burns report looked at driving habits and found that for those ages 20-24 today just 78 percent have a driver's license, compared with 93 percent back in the late 1970s. Even though more workers today telecommute, they still show strong demand for urban neighborhoods.

"Prices are so ridiculous," said Jane Fairweather, a real estate agent in Bethesda, Maryland, one of the closest suburbs to Washington that now boasts a growing and pricey urban core of its own. "For those who have money, they will pay the premium, whatever that is, to live in a walkable community. I'm sure there's a price that people would say 'no,' but I don't know what that is to tell you the truth!"

Realtors used to say you get $1,000 in savings per mile as you drive outside of the city. The farther you go, the more you get for your money. That is no longer the case, as the nation's urban housing markets have recovered from the recession far faster than the so-called exurbs, or, the areas beyond the close-in suburbs.

"This 'drive until you qualify' discount far exceeds the industry rule of thumb today," Burns said.

That, in turn, may mean that there is a lot more room for prices to grow in the far-out suburbs. Buyers could be looking at a better investment in the long run, but only if they're willing to take the long drive.

Want a discount on a house? Drive way out of town - Yahoo Finance

CBPP Projections Show Long-Term Budget Outlook Has Improved Significantly Since 2010 But Remains Challenging | Center on Budget and Policy Priorities

9/14, 2015

by

Richard Kogan, Paul N. Van de Water, and Cecile Murray

Under current budget policies, the nation’s fiscal outlook is stable for the rest of this decade and then worsens gradually, according to CBPP’s new long-term budget projections.

Policymakers should not ignore the long-run budget problems, which remain challenging.  No deficit or debt crisis looms, however, and promoting further labor market improvements remains the nation’s most immediate economic concern.  Policymakers should therefore avoid too much deficit reduction too soon, which would weaken the economic recovery, and focus deficit-reduction efforts on measures that take effect after the labor market has more fully recovered.

Policymakers should avoid too much deficit reduction too soon.Under our projections of current policies, the federal debt will be virtually flat in relation to the economy for the next several years and then slowly rise.  The ratio of debt to gross domestic product (GDP) — which was 74 percent at the end of fiscal year 2014 — will drop slightly to 73 percent by 2017 but grow to 92 percent by 2040, we project.  That’s a marked improvement over the situation just five years ago (see Figure 1), but policymakers need to take further significant steps to address the problem.

A stable — or declining — debt-to-GDP ratio is a common goal for fiscal stability.  Although a rising debt ratio is advantageous when the economy is operating well below its potential, as it was in the Great Recession and ensuing sluggish recovery, a rising debt ratio in a strong, high-employment economy, in contrast, reflects an unsustainable budget policy that ultimately jeopardizes financial stability and long-term growth.  Policymakers should reduce projected debt-to-GDP ratios through carefully designed policies that strengthen the economic recovery in the near term, while putting in place equitable and balanced deficit reduction that grows in size over time.  (See box.)

These long-run budget projections are not a prediction.  Rather, they show what will likely happen, under reasonable expectations of how the economy will perform in coming decades, if policymakers continue current laws and policies — that is, without reducing projected deficits or  expanding them (by cutting taxes or boosting spending without covering the cost).

Our new projections update those we published in May 2014 to reflect the latest Congressional Budget Office (CBO) ten-year and long-term budget projections, the latest projections by the Social Security and Medicare trustees, changes in budgetary policies, and other recent developments.^[1]  On a comparable basis, our new projections are very similar to last year’s.  The technical note at the end of this paper provides more information about how we made the projections.

Figure 1

&nbs;&nbs;

The Revenue Outlook

Federal revenues are projected to continue at their current level of a bit over 18 percent of GDP in 2016 through 2025.  After 2025, two trends — rising real incomes that push people into higher tax brackets (so-called “real bracket creep”) and growing, taxable withdrawals from tax-favored retirement accounts by an aging population — will help push up revenues gradually as a percentage of GDP.^[2]  By 2040, they are projected to reach 19.4 percent of GDP, close to their level in the final years of the Clinton Administration.  (See Figure 2.)

Figure 2

&nbs;&nbs;

The Spending Outlook

Federal outlays are projected to rise from 20.6 percent of GDP in 2015 to 23.6 percent of GDP in 2040.  Only about one-third of the rise stems from primary, or non-interest, spending — that is, spending on programs that pay benefits to ordinary Americans and carry out the functions of government.  (See Figure 2.)  The bulk of the rise stems from net interest, as interest rates rise from historic lows and the federal debt gradually mounts.

The composition of federal non-interest spending will also change significantly by 2040.  Because of an aging population and rising health care costs, Social Security, Medicare, Medicaid, and health insurance subsidies will grow substantially — both as a percentage of GDP and as a share of total federal spending — while all other programs as a whole will shrink.  Social Security and the major health programs, which today account for 53 percent of non-interest spending, are projected to reach 69 percent of the total in 2040, with all other programs representing a correspondingly smaller share.

Social Security.  Benefits under the Old-Age, Survivors, and Disability Insurance programs (together known as Social Security) will rise slowly but steadily in the next two decades — from a bit under 5 percent of GDP today to just over 6 percent in the 2030s — and then stabilize.  That pattern largely mirrors the aging of the population and is dampened by the scheduled rise in the program’s full retirement age — which was historically 65, is now 66, and will climb to 67 between 2017 and 2022.  (Each year that the full retirement age is raised lowers benefits across the board for future retirees by about 7 percent, regardless of whether they claim benefits early or work until the full retirement age or beyond).^[3]

The Debt-to-GDP Ratio

Generally, the debt-to-GDP ratio should rise only during hard times or major emergencies and then decline during good times.  That enables the government to combat recessions through tax cuts and spending increases and to alleviate hardship during bad times, while creating a presumption against policies that markedly increase the debt during good times.

A stable debt-to-GDP ratio is a key test of fiscal sustainability.  Increases in the dollar amount of debt are not a serious concern as long as the economy is growing at least as fast.  Between 1946 and 1974, for example, debt held by the public grew significantly in dollar terms but — thanks to economic growth — plummeted as a percentage of GDP, from 109 percent to 24 percent.

Some suggest that certain debt-to-GDP ratios have a particular meaning in terms of their effect on the economy.  In reality, there are no absolute thresholds.

Until a few years ago, for instance, many pointed to a 2010 analysis by economists Carmen Reinhart and Kenneth Rogoff suggesting that debt-to-GDP ratios of 90 percent or more are associated with significantly slower economic growth.  But the authors have acknowledged computational errors in their original work and clarified that there is no “magic threshold” for the debt ratio above which countries suddenly pay a marked penalty in terms of slower economic growth.  To the extent that countries with higher levels of debt experience slower growth, there is not much evidence that the high debt caused the slow growth; the reverse is just as likely to be true — that the slow growth caused the high debt — or some combination of the two effects.

Similarly, some analysts call for a debt ratio of 60 percent of GDP or less, a goal that the European Union and the International Monetary Fund (IMF) adopted some years ago.  No economic evidence supports this or any other specific target, however, and IMF staff have made clear that the 60 percent criterion is arbitrary and should not guide near-term fiscal policy in the wake of the recent financial crisis, which drove up government debt worldwide.  IMF recently stated, “Our results do not identify any clear debt threshold above which medium-term growth prospects are dramatically compromised.”^a

All else being equal, a lower debt-to-GDP ratio is preferred because of the additional flexibility it provides policymakers facing economic or financial crises and the lower interest burden it carries.  But all else is never equal.  Lowering the debt ratio comes at a cost, requiring larger spending cuts, higher revenues, or both.  That is why we emphasize the importance of not only the quantity but also the quality of deficit reduction, which should not hinder the economic recovery or cut spending in areas that can boost future productivity or harm vulnerable members of society.

^a Andrea Pescatori, Damiano Sandri, and John Simon, Debt and Growth: Is There a Magic Threshold?, International Monetary Fund WP/14/34, February 2014, p. 4.

Medicare.  Net outlays for Medicare benefits — that is, total payments minus the premiums that enrollees pay — are expected to rise from 3 percent of GDP today to 5 percent of GDP in 2040.  Medicare fundamentally faces the same demographic pressures as Social Security.  But Medicare faces an extra cost pressure: the tendency of medical costs, fueled by technological advances and increased utilization, to outpace GDP growth.  The cost controls and delivery system reforms in the Affordable Care Act (ACA), plus other developments in health care delivery, are expected to curb (though not eliminate) that pressure.  Our projections are based on current law and assume that policymakers will retain the ACA’s cost-control provisions.

Medicaid, CHIP, and health insurance subsidies.  Medicaid — a joint federal and state program — provides acute health care coverage and long-term supports and services to eligible low-income people, while the Children’s Health Insurance Program (CHIP) covers many low-income children through capped grants to states.  The ACA expanded the reach of Medicaid, at state option, and created new state-based marketplaces to enable millions of people without other coverage to buy health insurance at reasonable prices and without exclusions for pre-existing conditions or other restrictions that often made coverage unaffordable.

Figure 3

&nbs;&nbs;

In the short term, the ACA expansion of enrollment in state-based marketplaces will push up spending for this trio of programs from 2.2 percent this year to 2.5 percent in 2017.  After 2025, demographic and cost pressures will lead this category of health spending to reach 2.9 percent of GDP in 2040.

The fact that health care costs remain the largest driver of increased future spending should not obscure how dramatically their projected costs have fallen over the last few years.  As Figure 1 shows, in January 2010 we projected that debt would exceed 200 percent of GDP by 2040; we now project less than half that ratio.  Much of the improvement is from lower health care costs:  in January 2010 we projected that Medicare and Medicaid together would cost 11.1 percent of GDP in 2040, but (based on the latest projections from CBO and the Medicare actuaries) we now project that Medicare, Medicaid including the ACA expansion, CHIP, plus the new marketplace subsidies will together cost 7.9 percent of GDP, or about 30 percent lower than the previous estimate.  (See Figure 3.)  This development has substantially improved the long-run fiscal outlook.

Other program spending.  This category includes hundreds of programs for which Congress appropriates funding on an annual basis — known as defense and non-defense discretionary programs — as well as entitlement or mandatory programs such as SNAP (formerly food stamps), pensions for federal civilian and military retirees, veterans’ disability and education benefits, the refundable portions of the Earned Income Tax Credit and certain other tax credits, Supplemental Security Income (SSI) for poor elderly and disabled people, unemployment insurance, Temporary Assistance for Needy Families (TANF), farm price supports, and various smaller programs.

Over the next ten years, this broad category — which spiked to nearly 14 percent of GDP in 2009, during the economic downturn — is projected to fall as a percentage of GDP from 9.2 percent in 2015 to 7.4 percent in 2025.  Both these figures are well below the 11.1 percent average of the last four decades.  Almost all of the drop from 2015 to 2025 occurs in discretionary spending and is concentrated between now and 2021, as the caps and sequestration provisions of the 2011 Budget Control Act (BCA) squeeze defense and non-defense programs alike, and as the war in Afghanistan and similar military operations continue to wind down.  Spending for the mandatory programs in this part of the budget also drifts down as a percentage of GDP, though less precipitously; unlike Social Security and the major health programs, most other mandatory programs do not face particular demographic or cost pressures, and some — such as unemployment insurance and SNAP — shrink naturally as the economy recovers.^[4]

After 2021 (for discretionary programs) and after 2025 (for the entire “other program spending” category), we assume that outlays keep pace with inflation and population growth — in other words, that real spending per person remains constant.  That’s consistent with the historical pattern: we’ve generally found that these categories of spending rise faster than inflation and population growth only a) if Congress affirmatively acts to increase these programs, which is by definition not consistent with a projection of current law or policy; or b) during recessions, when unemployment insurance and similar automatic stabilizers rise temporarily but then fall back to normal levels when the economy recovers.  Keeping pace with inflation and population growth implies a continued downward drift in this spending category as a percentage of GDP, from 7.4 percent in 2025 to 6.2 percent in 2040.^[5]

Interest.  Unlike every other spending category, net interest doesn’t reflect explicit funding decisions by policymakers.  Instead, it’s jointly determined by the amount of borrowing fueled by policymakers’ other spending and revenue decisions (in other words, by the debt) and by the interest rates set in financial markets.

Today, federal net interest costs represent 1.2 percent of GDP, almost matching the historic lows posted in the 1950s through early 1970s, when federal debt was far smaller.  But today’s low interest rates, which are holding down borrowing costs, will not last forever.  As a result, by 2025, net interest costs are expected to climb to 2.7 percent of GDP, even though the debt hardly rises (from 74 percent to 76 percent of GDP) during that period.  By 2040, we expect net interest to reach 3.3 percent of GDP and debt to reach 92 percent of GDP.

Assuring Solvency for Social Security and Medicare

Assuring long-run solvency for the Social Security and Medicare Hospital Insurance (HI) trust funds would substantially improve the long-run budget picture.  Like other organizations’ long-term projections, ours assume that full benefits will continue to be paid even after those trust funds are exhausted.  Nevertheless, the programs lack legal authority to pay full benefits in that situation.  Their trustees project that the HI fund will be exhausted in 2030 and the combined Social Security trust funds in 2034.^[6]  In those years, incoming revenues would support 86 percent of Medicare HI benefits and about three-quarters of Social Security benefits.^[7]

Bringing the Social Security and HI trust funds into financial balance — through tax increases, benefit cuts, or some combination of the two — would forestall much of the projected rise in the debt-to-GDP ratio.  If Social Security and HI expenditures equaled their revenues in each year after the projected depletion of those trust funds, federal debt would peak at 84 percent of GDP in 2033 and decline to 79 percent of GDP by 2040.  The “Trust Fund Solvency” line in Figure 4 assumes that solvency is restored to the trust funds abruptly, through a sudden benefit cut or tax increase once the assets of the trust funds are depleted.  Since, by law, benefit payments cannot exceed amounts available in the trust funds, it is indeed plausible to assume that, one way or another, solvency will be restored to the trust funds.  Phasing in some combination of additional revenues and lower benefits more gradually, starting sooner, might produce slightly lower debt ratios than those shown here.

Figure 4

&nbs;&nbs;

To summarize, policymakers can avert about three-quarters of the projected 18-point increase in the debt ratio through 2040 by restoring solvency to the trust funds through revenue increases, benefit reductions, or a combination of the two.

Uncertainty of Long-Run Projections

Users of these or any long-run budget projections should keep in mind that they are highly uncertain.  CBO recently estimated, for example, that if productivity in the economy grew by ½ percent a year less or more rapidly than it projects, the debt ratio in 25 years would be about 17 percentage points higher or lower.^[8]  Thus, the debt ratio in 2040 under current budgetary policies could easily be as high as 110 percent of GDP or as low as 76 percent, given our projection of 92 percent.

Likewise, if interest rates over the 2016-2040 period are one-half of a percentage point higher or lower than we project, the debt ratio in 2040 would be roughly 10 percentage points higher or lower than we project, all else equal.  Since other critical variables such as health care costs are also inherently difficult to predict, the actual range of estimating uncertainty surrounding these long-run projections is even greater.

In addition to uncertainty about the economic future, considerable policy uncertainty surrounds our projections.  As the technical note explains, our projections approximate a continuation of current laws and policies.  But consider the “tax extenders,” a set of tax provisions primarily benefiting businesses that policymakers routinely extend for a year or two at a time, most of which expired at the end of 2014.  Suppose that policymakers revive and continue these extenders without offsetting their cost.  Suppose also that policymakers repeal or circumvent the sequestration of discretionary funding, both defense and non-defense, without offsetting those costs, and that war costs continue at current, real levels indefinitely instead of winding down.  Those three additional costs would increase the 2040 debt ratio by 7 percentage points, 8 percentage points, and 5 percentage points, respectively, producing a 2040 debt ratio of 112 percent of GDP rather than 92 percent.

Read more of this report by clicking on the following:   CBPP Projections Show Long-Term Budget Outlook Has Improved Significantly Since 2010 But Remains Challenging | Center on Budget and Policy Priorities

Bond Market’s $2.46 Trillion Dilemma May Not Be So Serious - Bloomberg Business

 

For bond investors worried about what might happen when the Federal Reserve starts whittling down its $2.46 trillion of Treasuries, there’s good news.

You’ll barely even notice.

The central bank plans to reduce its debt holdings sometime after it starts raising interest rates, and the concern is that the Fed’s attempt to reverse its unprecedented easy-money policies will trigger a jump in borrowing costs.

But even if the Fed doesn’t buy any bonds to replace the $216 billion in Treasuries coming due next year, yields would hardly budge, according to JPMorgan Chase & Co., which looked at how much they moved during the Fed’s debt-purchase program.

“It would not have an impact, and that’s the news here,” said Lou Crandall, chief economist at Wrightson ICAP LLC, a research firm that specializes in analyzing Fed policy and Treasury financing. “Letting Treasuries run off is a freebie.”

It’s the latest surprise in a market that keeps confounding Wall Street’s best and brightest, who have repeatedly gotten it wrong calling for the end of the bull market in bonds.

Keeping a lid on yields is not only critical for investors, but it’s also crucial for the U.S. government as it finances a debt load that’s more than doubled to $18 trillion since the credit crisis. And the implications extend to governments, businesses and consumers around the world as Treasuries serve as the benchmark for trillions of dollars of debt globally.

Policy Risk

The Fed ended its bond-buying stimulus, popularly known as quantitative easing, or QE, in October 2014, but it’s been maintaining the size of its holdings by reinvesting money from maturing debt into more securities.

In the past five years, the central bank spent almost $200 billion on reinvestments in Treasuries alone.

With the U.S. economy on the upswing, the worry is that the Fed will upend the bond market as it starts unwinding the most aggressive stimulus measures in its history.

In addition to raising rates by year-end, a majority of forecasters expect the Fed will let some debt securities mature in the first half of 2016 without plowing the money back into the bond market. Apart from Treasuries, the central bank has also amassed $1.73 trillion of mortgage-backed securities and now holds a total of $4.2 trillion of bonds.

By pulling back, the Fed will start removing one of the biggest sources of Treasuries demand, which has suppressed borrowing costs and helped the U.S. recover from its worst recession in decades. Since the Fed dropped rates to rock-bottom levels in 2008 and embarked on QE, yields on the U.S. 10-year note have fallen from 4 percent to about 2.2 percent today.

Bond Math

“I don’t see how it can’t” push yields higher, said Thomas Simons, a government-debt economist at Jefferies Group LLC, one of 22 dealers that trade directly with the Fed.

JPMorgan’s analysis suggests the increase isn’t likely to be significant. If the Fed allowed all of its Treasuries that mature in 2016 to run off its balance sheet, 10-year yields would rise by about 0.05 percentage point.

The top-ranked firm for fixed-income research by Institutional Investor magazine based its analysis on how much Treasury yields fell when the Fed was buying bonds, which equaled about 0.2 percentage point for every $1 trillion of QE.

Using that math, the Fed’s $1.3 trillion of Treasury holdings that come due through the end of the decade may boost 10-year yields by less than 0.3 percentage point.

The Treasury Department isn’t taking any chances. It’s considering steps that would mitigate potential disruptions to U.S. funding and has signaled it will boost issuance of the shortest-dated debt to plug a potential gap of as much as $850 billion through 2018 if the Fed stops reinvesting.

‘Reasonable Level’

The move would bolster bill supply, which has fallen to multi-decade lows, at a time when regulations may cause demand to soar as much as $900 billion, according to JPMorgan.

In any case, there are plenty of reasons for the Fed to take it slow. With rates pinned near zero since 2008, the central bank may want to make sure its first rate increases don’t choke off economic growth before paring its debt holdings.

Joblessness is at a seven-year low, yet U.S. workers can’t seem to get the pay raises to allow them to spend more.

Consumer prices fell in three of the first six months of the year and traders are questioning whether inflation will reach the Fed’s 2 percent goal any time in the next 10 years.

New York Fed President William C. Dudley told reporters after a June 5 speech in Minneapolis that he’d want rates at a “reasonable level” first before ending reinvestments.

“How far that is -- you know, if it’s 1 percent or 1.5 percent -- I haven’t really reached any definitive conclusion,” Dudley said.

Cold Turkey

Futures traders don’t expect rates to reach 1 percent until at least December 2016, data compiled by Bloomberg show.

The uneven housing recovery may also persuade the Fed to continue its reinvestments in mortgage securities. The central bank has been the biggest buyer of mortgage bonds guaranteed by Fannie Mae and Freddie Mac, which has supported demand since the U.S. housing bust.

“They’re not going to go cold turkey,” said George Goncalves, the head of interest-rate strategy at Nomura Holdings Inc. “I think they taper the reinvestments.”

 

Bond Market’s $2.46 Trillion Dilemma May Not Be So Serious - Bloomberg Business

Ending Greece’s Bleeding - The New York Times

Paul Krugman 

Europe dodged a bullet on Sunday. Confounding many predictions, Greek voters strongly supported their government’s rejection of creditor demands. And even the most ardent supporters of European union should be breathing a sigh of relief.

Of course, that’s not the way the creditors would have you see it. Their story, echoed by many in the business press, is that the failure of their attempt to bully Greece into acquiescence was a triumph of irrationality and irresponsibility over sound technocratic advice.

But the campaign of bullying — the attempt to terrify Greeks by cutting off bank financing and threatening general chaos, all with the almost open goal of pushing the current leftist government out of office — was a shameful moment in a Europe that claims to believe in democratic principles. It would have set a terrible precedent if that campaign had succeeded, even if the creditors were making sense.

What’s more, they weren’t. The truth is that Europe’s self-styled technocrats are like medieval doctors who insisted on bleeding their patients — and when their treatment made the patients sicker, demanded even more bleeding. A “yes” vote in Greece would have condemned the country to years more of suffering under policies that haven’t worked and in fact, given the arithmetic, can’t work: austerity probably shrinks the economy faster than it reduces debt, so that all the suffering serves no purpose. The landslide victory of the “no” side offers at least a chance for an escape from this trap.

But how can such an escape be managed? Is there any way for Greece to remain in the euro? And is this desirable in any case?

The most immediate question involves Greek banks. In advance of the referendum, the European Central Bank cut off their access to additional funds, helping to precipitate panic and force the government to impose a bank holiday and capital controls. The central bank now faces an awkward choice: if it resumes normal financing it will as much as admit that the previous freeze was political, but if it doesn’t it will effectively force Greece into introducing a new currency.

Specifically, if the money doesn’t start flowing from Frankfurt (the headquarters of the central bank), Greece will have no choice but to start paying wages and pensions with i.o.u.s, which will de facto be a parallel currency — and which might soon turn into the new drachma.

Suppose, on the other hand, that the central bank does resume normal lending, and the banking crisis eases. That still leaves the question of how to restore economic growth.

In the failed negotiations that led up to Sunday’s referendum, the central sticking point was Greece’s demand for permanent debt relief, to remove the cloud hanging over its economy. The troika — the institutions representing creditor interests — refused, even though we now know that one member of the troika, the International Monetary Fund, had concluded independently that Greece’s debt cannot be paid. But will they reconsider now that the attempt to drive the governing leftist coalition from office has failed?

I have no idea — and in any case there is now a strong argument that Greek exit from the euro is the best of bad options.

 

Imagine, for a moment, that Greece had never adopted the euro, that it had merely fixed the value of the drachma in terms of euros. What would basic economic analysis say it should do now? The answer, overwhelmingly, would be that it should devalue — let the drachma’s value drop, both to encourage exports and to break out of the cycle of deflation.

 

Of course, Greece no longer has its own currency, and many analysts used to claim that adopting the euro was an irreversible move — after all, any hint of euro exit would set off devastating bank runs and a financial crisis. But at this point that financial crisis has already happened, so that the biggest costs of euro exit have been paid. Why, then, not go for the benefits?

Would Greek exit from the euro work as well as Iceland’s highly successful devaluation in 2008-09, or Argentina’s abandonment of its one-peso-one-dollar policy in 2001-02? Maybe not — but consider the alternatives. Unless Greece receives really major debt relief, and possibly even then, leaving the euro offers the only plausible escape route from its endless economic nightmare.

And let’s be clear: if Greece ends up leaving the euro, it won’t mean that the Greeks are bad Europeans. Greece’s debt problem reflected irresponsible lending as well as irresponsible borrowing, and in any case the Greeks have paid for their government’s sins many times over. If they can’t make a go of Europe’s common currency, it’s because that common currency offers no respite for countries in trouble. The important thing now is to do whatever it takes to end the bleeding.

ABOVE IS FROM:  Ending Greece’s Bleeding - The New York Times

Ceroni Piping to break ground on $5.5M building in November - News - Rockford Register Star - Rockford, IL

 

BELVIDERE — Ceroni Piping Co. plans to break ground on a 30,000-square-foot building in November.

The $5.5 million facility will replace farmland and a house near the intersection of U.S. 20 and Interstate 90 in Cherry Valley.

The company leases space at 1372 Ipsen Road in Belvidere.

“We’ve been in the area since 1998 doing mechanical contracting and piping work," CEO/President Steve Ceroni said. "It’s finally settled down enough economically where it looks like it’s stable enough to build something permanent in a new location.

“We started with about four guys in our office, and I think we’re up to about a dozen now."

The size of field crews fluctuates, depending on the size and number of projects.

The company contracts field teams through Plumbers & Pipefitters Local 23 to install piping systems, do pumping and heating process work, and manage construction projects. Among its projects is helping dismantle the NDK Crystal tower in Belvidere. An explosion there in December 2009 sent thousands of pounds of debris soaring hundreds of feet from the building, wounding two people and killing a trucker in the parking lot of the Belvidere Oasis off I-90.

Local 23 business manager Rick Beck said Ceroni Piping is the second-largest contractor in northwest Illinois between Belvidere and the Mississippi River. It and hires about 45 union members to do field work each year. The company once hired 180 union workers for a project at Chrysler.

Ceroni Real Estate, a division of Ceroni Piping, closed a deal on 22.5 acres of farmland at 974 U.S. 20 in June 2014. The company plans to split the land into three subdivisions, building on one and selling the others.

“It’s going to be really just an upgrade for our office facilities, and then we’ll have (metal) fabrication, too," Ceroni said. "We do that now, but there’s a possibility (fabrication) could expand. ... Right now (recovery) is a slow, slow process for the area ... but we’re hopeful."

Ceroni Piping to break ground on $5.5M building in November - News - Rockford Register Star - Rockford, IL

Scott Walker's economic problem - Business Insider

 

MADISON, Wis. (AP) — Scott Walker has transformed Wisconsin politics, winning three elections in four years and signing laws that weaken unions, crippling a key ally of the Democratic Party.

But the likely Republican presidential contender has had less success changing Wisconsin's economy and budget. The state lags in job growth and its budget faces a shortfall. It's a record that complicates Walker's path in early primary states as he sells himself as a reformer.

"Most of his activity was more politically focused than economically, job-creation focused," said John Torinus, a Milwaukee businessman and venture capitalist who nevertheless praises some of Walker's moves. "He was going to concentrate on job creation with a laser-like focus and he got distracted."

Wisconsin has added private-sector jobs at a lower rate than the national average since July 2011 — six months after Walker took office. Walker promised in the 2010 campaign that if elected his policies would create 250,000 private sector jobs. But only about 145,000 such jobs were created over his first four years.

Wisconsin ranked 40th in private sector job growth for the 12 months ending in September, said the U.S. Bureau of Labor Statistics. Walker has called hiring in his state the "gold standard" for measuring his performance.

Still, there are positive economic signs Walker relies on to defend his record. Wisconsin's unemployment rate has dropped from 8.1 percent to 5 percent over his time in office. The state has seen a higher rate of new businesses starting than the rest of the country and income growth for Wisconsin residents has exceeded the national average.

Per capita income growth in Wisconsin exceeded per capita American income growth.

Walker "wasn't afraid to set big, bold goals to get Wisconsin back on track," said AshLee Strong, spokeswoman for Walker's political group, Our American Revival. "The governor is now taking his reform ideas that led to this economic success in Wisconsin and sharing them nationally."

Heavily reliant on manufacturing, Wisconsin has perennially lagged the nation in job creation and often used fiscal tricks to paper over budget deficits. Walker vowed to change that when he ran in 2010. His most renowned move, just six weeks into his first term in 2011, was to curtail public unions' collective bargaining power while also forcing them to pay more for pension and health care benefits. ..

Read the entire article:  Scott Walker's economic problem - Business Insider

Think Millennials Prefer The City? Think Again. | FiveThirtyEight

 

Here’s the usual media narrative: Millennials prefer cities to suburbs. They love renting lofts and disdain single-family homes; they ride the subway (or take an Uber) because they barely know how to drive. Where their parents wanted green lawns and cul-de-sacs, today’s young Americans want walkable neighborhoods and local bars with plenty of craft beers on draft.

The numbers tell a different story. Whether by choice or economic circumstance, young Americans are still more likely to leave the city for the suburbs than the other way around.

According to U.S. Census Bureau data released this week, 529,000 Americans ages 25 to 29 moved from cities out to the suburbs in 2014; only 426,000 moved in the other direction. Among younger millennials, those in their early 20s, the trend was even starker: 721,000 moved out of the city, compared with 554,000 who moved in.¹ Somewhat more people in both age groups currently live in the suburbs than in the city.

Indeed, for all the talk of the rebirth of American cities, the draw of the suburbs remains powerful. Across all ages, races, incomes and education groups, more Americans are still moving out of cities than in. (Urban populations are still growing, but because of births and immigration, not internal migration.)

The common narrative isn’t entirely wrong about the long-term trend lines. Millennials are moving to the suburbs at a much lower rate than past generations did at the same age. In the mid-1990s, people ages 25 to 29 were twice as likely to move from the city to the suburbs as vice versa. Today, they’re only about a quarter more likely. But even that slowdown appears to be mostly about people delaying their move to the suburbs, not forgoing it entirely. Today’s 30- to 44-year-olds are actually heading for the suburbs at a significantly faster rate than in the 1990s.

The Census Bureau’s definition of the suburbs is broad, covering anywhere that’s inside a metropolitan area but outside a principal city. So the latest data doesn’t distinguish between classic picket-fence suburbs and the kind of faux-urban, walkable suburban developments that have become more common in recent years.

But a survey released earlier this year found that most millennials still want a traditional suburban experience, complete with big single-family homes. The American Community Survey, which provides a more granular look than the data released this week, tells much the same story, said Jed Kolko, chief economist of the real estate site Trulia.

“The fastest population growth right now is in the lowest-density neighborhoods, the suburb-iest suburbs,” Kolko said.

So why has the “city-loving millennials” story gained so much traction? Kolko has a theory: As American cities have become safer and more expensive, they have become increasingly dominated by the affluent and well-educated — exactly the people who drive the media narrative.

“Your typical young, elite-media-outlet journalist probably is more likely to be living more years in the city than 20 years ago,” Kolko said.

Kolko stressed that’s a theory — he doesn’t have solid data to back it up. But for the record, I’m 34 and live in Brooklyn.

Think Millennials Prefer The City? Think Again. | FiveThirtyEight

4 States Account for Nearly a Third of Underwater Mortgages - Yahoo Finance

The five states with the highest percentage of homes with negative equity are Nevada (24.2%), Florida (23.2%), Arizona (18.7%), Illinois (16.2%) and Rhode Island (15.8%). Just the first four of these states account for about 32% of all underwater mortgages.

The five states with the highest percentages of homes with positive equity are Texas (97.4%), Alaska (97.2%), Montana (97.0%), Hawaii (96.3%) and North Dakota (96.2%).

The five metropolitan areas with the highest percentage of properties with negative equity are Tampa-St. Pete-Clearwater, Fla. (24.8%), Phoenix-Mesa-Scottsdale, Ariz. (18.8%), Chicago-Naperville-Arlington Heights, Ill. (18.5%), Riverside-San Bernardino-Ontario, Calif. (14.8%) and Atlanta-Sandy Springs-Roswell, Ga. (14.6%).

The five metro areas with the highest percentage in positive equity are Houston-The Woodlands-Sugar Land, Texas (97.7%), Dallas-Plano-Irving, Texas (97.1%), Anaheim-Santa Ana-Irvine, Calif. (96.4%), Portland-Vancouver-Hillsboro, Ore. (96.4%) and Denver-Aurora-Lakewood, Colo. (96.2%).

Read the entire article by clicking on the following:  4 States Account for Nearly a Third of Underwater Mortgages - Yahoo Finance

Michigan paying the price now for tax plan to save business - Yahoo News

 

LANSING, Mich. (AP) — On a Tuesday morning in October 2010, a beaming Gov. Jennifer Granholm and executives of the Detroit Three automakers walked into a meeting of Michigan's economic development board to announce the final pieces of an agreement to head off thousands of company layoffs looming for the recession-battered state.

The state would provide $2.9 billion in tax credits to help upgrade Michigan auto plants for the future; the carmakers would agree to add and keep factory jobs on their home turf.

"Today really seals that Michigan will remain the center of automotive manufacturing in the United States and around the globe," declared the term-limited Granholm, a Democrat, a week before voters would choose her successor.

Four years later, few are saying the deals were a bad idea but any sense of celebration is long gone. The bill for the job rescue — and similar ones in other states that used tax credits aggressively — is now coming due and providing a lesson in the downside of such measures.

The auto companies and many others are cashing in hundreds of millions of dollars in credits a year, cutting deeply into state revenues at a time when the budget should be flush with a rising economy. A projected $410 million budget shortfall is triggering cuts in funding for hospitals and diverting K-12 money to other purposes.

Having called such generous tax credits the "heroin drip" of government, Republican Gov. Rick Snyder has stopped awarding new ones despite the risk of hurting business recruitment. He instead is offering a smaller pot of cash for grants and loans.

Even with the tax credit halt, Michigan is still liable for up to $9.4 billion in old credits, which could reduce tax revenue by at least $500 million a year for the next 15 years.

Though its economy is improving and unemployment rate is at a 12-year low, Michigan is going to voters in May to approve a sales tax increase for road improvements it cannot afford.

"It just is a pit in my stomach," said Rep. Ken Yonker, a pro-business Republican who owns a landscaping business outside Grand Rapids. "Why do we keep subsidizing this?"

Auto industry backers insist the tax credits were still money well spent.

Without them, "Michigan would be languishing in the doldrums of 2009," said Mike Johnston, a lobbyist for the Michigan Manufacturers Association.

The budget outlook is also grim in Oklahoma, which dished out tax credits to wind energy developers and other industries to spur its economy. Now, as the state suffers from sliding oil prices, it faces a budget hole of more than $600 million, and the Legislature is telling agencies to prepare for up to 10 percent funding cuts.

Especially distressing to state officials is the suddenness and uncertainty of the financial impact.

In Michigan, about 220 large companies are allowed to subtract from their future business taxes certain amounts for each job they add or keep, with higher deductions for higher-paying jobs. With salaries rising in a better economy, the value of the credits has been going up. And when company revenues rise and create a need to offset the tax liability, large blocks of credits can be redeemed quickly, cutting state revenues.

The state's economic development agency this month revised the estimated liability upward by $2.9 billion, or 44 percent, through 2031.

Aides to Granholm, who now teaches at the University of California, Berkeley, say that any grousing now overlooks the desperate situation five years ago.

General Motors and Chrysler were drowning even with emergency federal loans and ultimately had to file for bankruptcy protection. Michigan was competing with Wisconsin, Tennessee and other auto states over which plants would close. The industry directly supports 15 percent of Michigan's jobs.

"We did what we needed to do in order to save the jobs that we saved," said Fred Hoffman, Granholm's special adviser for economic development.

Hoffman said two Michigan factories — GM's Orion Assembly Plant and Chrysler's Sterling Heights Assembly Plant — would have closed otherwise.

The tax credit backlash is increasing sentiment among some legislators for business to accept a larger burden. Snyder and the GOP-controlled Legislature also slashed business tax rates after he took office in 2011.

"We've got major investments we've got to make in public education and infrastructure," said Rep. Jim Townsend, the top-ranking Democrat on the House Tax Policy Committee, noting that Michigan companies paid the country's third-lowest share of total state and local taxes in 2013.

But Snyder and leading Republicans are pressing companies to schedule the credit redemption in advance to help with budget planning. And the officials are pledging to be wary of the tools used in the future to boost jobs.

"Those were vastly different times," said Steve Arwood, CEO of the Michigan Economic Development Corp., adding, "I don't know what I would have done. I know I probably would have been very concerned for the very fundamentals of our economy."

___

Michigan paying the price now for tax plan to save business - Yahoo News

Union chief says U.S. refinery strike could spread - Yahoo News

 

total of 6,550 USW members are on strike at 15 plants, including 12 refineries accounting for one-fifth of U.S. capacity. Union members work at more than 200 oil terminals, pipelines, refineries and chemical plants in the U.S.

The USW has said it is seeking to retain safety provisions from previous contracts and tighten fatigue standards for workers, as well as win back daily maintenance jobs now done by non-union contractors.

"(The strike spreading) depends on what happens in the next round of negotiations and that those negotiations resume fairly quickly," Gerard in a telephone news conference from Atlanta.

Gerard, who is attending the AFL-CIO winter conference in Atlanta, said no date has been set for resuming negotiations.

A Shell spokesman also said a resumption of talks had not been scheduled as of Tuesday morning. Shell Oil Co, the U.S. arm of Royal Dutch Shell Plc [RDSa.L], is the lead oil company negotiator.

Talks broke off on Friday, after which the USW ordered workers at three Motiva refineries, including the nation's largest, which are co-owned by Shell, to walk off their jobs on Saturday and Sunday.

Sources familiar with the talks told Reuters on Monday that face-to-face negotiations may not resume this week. That was a change from the weekend, when sources said meetings might resume by the middle of this week.

Union chief says U.S. refinery strike could spread - Yahoo News

Scorekeeping change may help GOP pass tax reform - Yahoo News

 

The rules change promises to make it somewhat easier for Republicans to advance legislation such as an overhaul of the loophole-ridden tax code, since the positive economic effects of such legislation would generate greater tax revenue. That means lawmakers would have to come up with less in offsetting revenues to make up for bold cuts in income tax rates.

The House adopted the rule changes on a nearly party-line vote on Tuesday.

Republicans call it "macroeconomic scoring." The rule would direct congressional scorekeepers to incorporate the macroeconomic effects of major legislation into their official cost estimates.

Democrats say the shift to dynamic scorekeeping will drive up the deficit.

"The bottom line is that this is a way to try to fast-track tax cuts for millionaires and make it look like there are not large costs," said Rep. Chris Van Hollen of Maryland, the top Democrat on the Budget Committee.

The rules change comes as Republicans appear likely to replace Congressional Budget Office Director Doug Elmendorf, a Democratic appointee, whose term expired last week. Democrats fear that a new GOP appointee to run the agency would be more likely to take liberties with the new scorekeeping mandate to help drive the GOP agenda. There are several competing models for evaluating the economic effects of legislation and estimates can vary widely….

The new scoring approach would only be required for major legislation in which the budgetary effects of legislation — meaning an increase or decrease in revenue, spending or deficits — are at least 0.25 percent of the size of the economy. Had the rule been in effect last year, the threshold would have been $43 billion.  ….

Read more by clicking on the following:   Scorekeeping change may help GOP pass tax reform - Yahoo News

 

Also see this piece on Scoring in Canada’s Parliament :  http://boonecountywatchdog.blogspot.com/2015/01/who-right-on-dynamic-scoring-ask-canada.html

George Shultz Gone Solar. Now That's a Sign of Thawing in the U.S. Climate Debate - Bloomberg

 

Ronald Reagan’s secretary of state, George Shultz faced off against Muammar Qaddafi, the Soviet Union and Chinese communists.

His latest cause, though, is one few fellow Republicans support: fighting climate change.

Two years ago, Shultz was alarmed when a retired Navy admiral showed him a video of vanishing Arctic sea ice and explained the implications for global stability. Now, the former Cold Warrior drives an electric car, sports solar panels on his California roof and argues for government action against global warming at clean-energy conferences.

Living a life powered “on sunshine,” Shultz, at 93, has a message for the doubters who dominate his own party: “The potential results are catastrophic,” he said in an interview. “So let’s take out an insurance policy.”

A Global Push to Save the Planet

As the United Nations gathers almost 200 governments in Lima this week to discuss new carbon limits for the planet, the U.S., as with so many other issues, looks badly divided. While President Barack Obama has pledged to accelerate reductions to greenhouse gas emissions by 2025 and is using his executive powers to put policies in place, Republicans have retaken the Senate and stand firmly opposed.

When Obama announced an agreement on carbon controls with Chinese President Xi Jinping three weeks ago, incoming Senate leader Mitch McConnell dismissed it as an “unrealistic plan” that would boost electric rates and kill jobs. Yet, there are signs of growing acceptance to the idea that climate change spurred by human actions is a mounting problem.

Poll Support

Across the U.S., a series of weather anomalies -- from a record West Coast drought to Midwest flooding and Superstorm Sandy -- are gradually helping to shift public opinion on climate change, according to a string of recent polls. Two in three Americans now believe global warming is real, according to an October survey of 1,275 people by Yale and George Mason universities. That’s up from 57 percent in January 2010.

“There’s a great middle in this country that basically agrees that something needs to be done,” said James Brainard, the Republican mayor of Carmel, Indiana, who served on a climate preparedness task force organized by Obama. “They can see that weather patterns are changing drastically.”

Read the entire article by clicking on the following:  George Shultz Gone Solar. Now That's a Sign of Thawing in the U.S. Climate Debate - Bloomberg

How far have oil prices fallen?

 

U.S. cities that came back from the dead

Click on the following to view the video:  U.S. cities that came back from the dead

China Just Overtook The US As The World's Largest Economy

By Mike Bird 2 hours ago

Chris Giles at the Financial Times flagged up the change. He also alerted us back in April this year that it was all about to happen.

Basically, the method used by the IMF adjusts for purchasing power parity, explained here.

The simple logic is that prices aren't the same in each country: A shirt will cost you less in Shanghai than San Francisco, so it's not entirely reasonable to compare countries without taking this into account. Though a typical person in China earns a lot less than the typical person in the US, simply converting a Chinese salary into dollars underestimates how much purchasing power that individual, and therefore that country, might have. The Economist's Big Mac Index is a great example of these disparities.

So the IMF measures both GDP in market exchange terms, and in terms of purchasing power. On the purchasing power basis, China is overtaking the US right about now and becoming the world's biggest economy.

Read More:  http://finance.yahoo.com/news/china-just-overtook-us-worlds-090801574.html

Keystone Be Darned: Canada Finds Oil Route Around Obama

 

…By Rebecca Penty, Hugo Miller, Andrew Mayeda and Edward Greenspon

…Thus was born Energy East, an improbable pipeline that its backers say has a highly probability of being built. It will cost C$12 billion ($10.7 billion) and could be up and running by 2018. Its 4,600-kilometer (2,858-mile) path, taking advantage of a vast length of existing and underused natural gas pipeline, would wend through six provinces and four time zones. It would be Keystone on steroids, more than twice as long and carrying a third more crude.

Supertanker Access

Its end point, a refinery in the blue-collar city of Saint John, New Brunswick, operated by a reclusive Canadian billionaire family, would give Canada’s oil-sands crude supertanker access to the same Louisiana and Texas refineries Keystone was meant to supply.

As well, Vladimir Putin’s provocations in Ukraine are spurring interest in that oil from Europe and, strange as it seems, Saint John provides among the fastest shipping times to India of any oil port in North America. Indian companies, having already sampled this crude, are interested in more. That means oil-sands production for the first time would trade in more than dribs and drabs on the international markets. With the U.S. virtually its only buyer, the captive Canadians are subject to price discounts of as much as $43 a barrel that cost Canada $20 billion a year.

Read more by clicking on the following:  http://www.bloomberg.com/news/2014-10-08/keystone-be-darned-canada-finds-oil-route-around-obama.html

State Gas Taxes

The federal government imposes a tax that amounts to about $0.18 per gallon. The money raised through this specific tax is used to finance major repairs to interstate highways and bridges, as well as roads through national parks and other public infrastructure. Recently, the issues surrounding the desperate state of the nation’s road and bridge network have led many to believe that a tax hike might be in order to address the crumbling roads, freeways, and bridges unless another solution is proposed.

On a state level, the tax situation varies wildly from state-to-state. Automotive resource Mojo Motors examined a study recently that broke down the gas prices in each state respectively, and the results are rather intriguing: state-level gasoline taxes (excluding the federal tax) varied from $0.124 cents in Alaska at the least, to $0.505 cents in New York at the highest. You can check out the map below for a complete breakdown of where each state falls:
Read more: http://wallstcheatsheet.com/automobiles/this-chart-will-tell-you-how-much-youre-paying-in-gas-taxes.html/?a=viewall#ixzz3FKQQibwh

Study: Recovery eludes long-term unemployed

Paul Davidson, USA TODAY 5:31 a.m. EDT September 22, 2014

More than 20% of Americans laid off the past five years are still unemployed and one in four who found work is in a temporary job, according to a survey out Monday.

The report underscores that despite a sharp drop in long-term unemployment recently, many people out of work at least six months are still struggling to recoup their former wages and lifestyles. Those idled for years face an even tougher road back to employment.

"While the worst effects of the Great Recession are over for most Americans, the brutal realities of diminished living standards endure for the 3 million American workers who remain jobless years after they were laid off," says Carl Van Horn, director of the Heldrich Center for Workforce Development at Rutgers University.

The center conducted the survey of 1,153 Americans, about 300 of them long-term unemployed, from July 24 to Aug. 3.

The ranks of the long-term unemployed have fallen by 31% the past year to 3 million. But many of those hired are in temporary or part-time slots, or full-time positions that pay less than their previous salaries.

For more of the story:  http://www.usatoday.com/story/money/business/2014/09/22/rutgers-survey-long-term-unemployed/15901129/

Trend Alert: Industries in Desperate Need of Skilled Employees

Worldwide, it is estimated that 69 percent of employers reported having difficulty recruiting the qualified workers they are looking for. At the same time, many countries still face high unemployment.

Besides the economic recessions in different regions, the situation was made worse by the fact that many corporations simply stopped training their people. In misguided attempts to reduce expenses, countless  organizations literally eliminated their training functions. However, as we have highlighted in this publication so often, the real problem is that most countries are just failing to produce workers with the right skills.

In the United States alone, more than 30 million people are unemployed, under-employed, or have given up on looking for a job. As we forecast in our book titled "Impending Crisis: Too Many Jobs, Too Few People", there is already a workforce crisis in the US. This crisis is most acute in four industries: Healthcare,
Information Technology (IT), Aerospace, and Manufacturing.

Highlighted by Dr. Edward Gordon in his new book "Future Jobs: Solving the Employment and Skills Crisis",these four industries are feeling/will feel the most pain now and moving into the near-term future.

Healthcare. We currently have urgent needs for doctors, nurses, pharmacists, lab technicians, therapists, dentists, "and just about anyone who is trained in a broad array of healthcare occupations to cope with a rapidly aging population". "The Bureau of Labor Statistics estimates that by 2020, jobs in this field will grow
by over 20 percent."
IT: The War for Talent is alive and well across the IT sector. Between 2010 and 2011, the sector created over 80,000 new IT jobs. In 2011, CareerBuilder.com posted 30,000 open tech jobs. The problem: many of these positions, required specialized skills of five or more years of IT experience. Gartner, a technology research company, expects 1.9 million IT jobs to be created in the US alone between 2012 and 2015.
Aerospace. According to Boeing's top executive, "Many seasoned and skilled workers are close to retiring, and insufficient numbers of capable workers are being prepared to replace them." In fact, by 2015, 60,000 employees, or 40 percent of its workforce, may be gone. Already, Boeing is suffering from a record order backlog.
Manufacturing. A Boston Consulting Group study warns that by the end of the decade, this shortage in 2011 of 600,000 could rise to over 875,000 highly skilled US workers.

What is needed is major investment in the training and development of our global workforce. Corporations and governments alike need to take notice, but more important, take major action and take it quickly. If corporations and countries are to flourish in the future, this investment is not optional. Those that ignore
this important obligation will ultimately find themselves out of business or bankrupt.
--------------------------------------------------------------------------------
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© Copyright 1998-2014 by The Herman Group, Inc. -- reproduction for publication is encouraged, with the following attribution: From "The Herman
Trend Alert," by Joyce Gioia, Strategic Business Futurist. (336) 210-3548 or http://www.hermangroup.com. The Herman Trend Alert is a registered
trademark of The Herman Group, Inc.

July Unemployment at 9.4%
According to the latest report from the Illinois Department of Employment Security, the unemployment rate for the Rockford metro area in July stood at 9.4%. That is up a half-point from June, following summer job trends seen in previous years, but down from July of last year, when unemployment stood at 11.6%. It’s the lowest July unemployment rate for Winnebago and Boone Counties since 2008, according to IDES.
Unemployment in Stephenson County stands at 8.1% for July, down from 10.2% a year ago.
The state report indicates growth in the professional-business services sector along with to-beexpected
gains in the hospitality and construction industries.

Government Debt Isn't the Problem—Private Debt Is

Richard Vague

Sep 9 2014, 12:10 PM ET

What’s astonishing is how little attention the global debt problem—the extremely high ratio of private debt to GDP—has gotten. Not only does it leave the U.S. and other countries vulnerable to crisis should brisk growth in that ratio resume, but, quite apart from any crisis, the accumulation of higher levels of private debt over decades impedes economic growth. Money that would otherwise be spent on things such as business investment, cars, homes, and vacations is increasingly diverted to making payments on the growing debt— especially among middle- and lower-income groups that compose most of our population and whose spending is necessary to drive economic growth. Debt, once accumulated, constrains demand.

Read the entire article by clicking on the following:  http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/2/