Clinton Child Tax Credit Proposal Would Help 14 Million Families, Raise 1.5 Million People out of Poverty [feedly]

Clinton Child Tax Credit Proposal Would Help 14 Million Families, Raise 1.5 Million People out of Poverty
http://www.cbpp.org/research/federal-tax/clinton-child-tax-credit-proposal-would-help-14-million-families-raise-15

Clinton Child Tax Credit Proposal Would Help 14 Million Families, Raise 1.5 Million People out of Poverty

OCTOBER 11, 2016

BY

CHUCK MARR

 

CHLOE CHO

Democratic presidential candidate Hillary Clinton's proposed expansion[1] of the Child Tax Credit (CTC) THE EXPANSION WOULD BENEFIT ROUGHLY 14.2 MILLION WORKING FAMILIES.would benefit roughly 14.2 million working families, we estimate based on Census data.[2]  It would lift about 1.5 million people (including about 400,000 children under age 5) above the poverty line and lift another 9.4 million people (including about 1.9 million children under age 5) closer to the poverty line.[3]

It also would increase the incomes of about 5.2 million people, including about 1.1 million children under age 5, living in deep poverty, with incomes below half of the poverty line.

The proposal has three main elements:

1. It would phase in the low-income portion of the CTC starting with the first dollar of earnings for all families with eligible children.  Currently, the CTC does not begin to phase in until a family has more than $3,000 in earnings.  Eliminating that $3,000 threshold would make many extremely poor families newly eligible for the CTC and make many other working-poor families that now receive only a partial CTC eligible for a larger credit.
2. For families with children under age 5, the proposal would phase in the CTC at a rate of 45 cents per dollar of earnings starting with the first dollar of earnings, up from the current 15 cents per dollar of earnings above $3,000.
3. Also for children under age 5, the proposal would double the maximum credit per child, from $1,000 to $2,000.

With these changes, many low-income working parents would see a substantial boost in their credit.  For example, a single mother working 20 hours a week, 50 weeks a year, at the federal minimum wage while raising a toddler and a 7-year-old daughter currently receives a partial CTC of $638.  Under this proposal, she would get the full $3,000 credit for a family with two children of these ages:  $2,000 for the toddler and $1,000 for the older child.

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Tom O'Leary: Pounded by Brexit [feedly]

Pounded by Brexit
http://socialisteconomicbulletin.blogspot.com/2016/10/pounded-by-brexit.html

By Tom O'Leary
The British economy is extremely dependent on inflows of overseas capital. As a result, it is one of the last countries that should ever contemplate leaving the EU without a serious plan for reviving the economy with investment and trade. As we now know, no such plan exists, serious or otherwise. Instead the theme of the Tory party conference was not 'Britain open for business' or a similar claim of questionable authenticity. The message from the Tories was simply 'foreigners go home!'.

Unfortunately, for the overwhelming bulk of the citizens of this country wherever they were born, the practical understanding of economics by major international investors is considerably greater than the leadership of the Tory party. Those overseas investors whose willingness to lend to Britain is decisive for living standards understand that any country whose government insists on cutting itself adrift from the world's largest trading bloc, is reckless about its economic planning and which is determined to push out a section of its workforce vital to its prosperity will not hold the same attractions for investment as previously.

Chart 1 below shows the financial balances of different sectors of the economy over the last two quarters. The Rest of the World represents overseas investors, by far the biggest lender in the economy as a whole. In the first and second quarters of this year overseas investors lent the UK economy £26.5 billion and £29 billion respectively, much larger than in the same period last year. Without this lending the other sectors of the economy combined would have to sharply increase their own savings/reduce their borrowings. This would entail a sharp reduction in expenditure, either falling Consumption or falling Investment or both in order to bring the domestic sectoral borrowing and lending into balance.

Chart 1. UK Net Sectoral Lending, Q1 2016 and Q2 2016, £bn

CG + Central Government, LG = Local Government, PC = Public Corporations, FC = Financial Corporations, PNFCs = Private Non-Financial Corporations, HH and NPISH = Households and Non-profit sectors, RW = Rest of World
Source: ONS

 

Net borrowing from overseas is the necessary counterpart of the huge current account deficits the UK economy has been incurring. The current account is the sum of all payments between an economy and the rest of the world, comprising its net trade balance and its balance on financial transactions. The current account deficit reached a new record low at the end of 2015 at 7% of GDP, although it has since recovered modestly (which may be a seasonal effect).

The sharp deterioration in the current account balance has arisen because the persistent trade deficit has combined with a fall in the level of payments from overseas that the UK economy receives from its holding of overseas financial assets. This seem to be linked to the shrinking and international retreat of the UK-based banks in the wake of the financial crisis and their forced sale of overseas assets, or their most profitable assets.

 

Chart 2. UK Current Account Balance, as % of GDP

Source: ONS

The UK economy is therefore extremely vulnerable to any decline in an overseas willingness to lend. If this occurs it must be countered by a relative decline in living standards, a forced reduction in expenditure (private or public, Consumption or Investment) and higher interest rates to attract overseas investment, or some combination of these.

There is of course no zero bound on the lending of overseas investors to the UK. Instead of merely reducing their lending and/or demanding a higher interest rate to do so, they may become net sellers of the considerable UK assets they have built up over previous decades, pausing only to pick up some newly cheap assets on the way. The Government's resumed privatisation programme beginning with its remaining stake in Lloyds Bank might fit this description. But this in turn would cause further structural outflows from the UK economy as the yield on those cheaply-purchased assets flows overseas.

This is the importance of the sharp recent decline in the value of the pound and the rise on the interest rates on Government bonds (gilts). The rise in gilt yields means that taxpayers are forced to increase their interest payments, primarily to attract overseas capital.  

Sharp currency devaluations of this kind effectively reduce the international purchasing power of all income denominated in the domestic currency, in this case pounds. As a result, there will be improvement in the current account and trade balances, as imports become too expensive, some exports rise and the value of the yield on overseas assets increases when converted into pounds. 

But this is in effect an enforced 'improvement'. In popular phraseology, an economy living beyond its means has been forced to tighten its belt. Net domestic savings are negative, and overseas investors can choose not to lend to the UK economy. The occasion of this is the outcome of the Brexit vote and the Tory leadership's determination to pursue 'hard Brexit'.

It should be absolutely clear now to all except the wilfully ignorant that the current crisis actually impoverishes the overwhelming majority. All of these are Brexit effects, even before Brexit happens. The Tory party conference signalled that the priority would be anti-immigration, not pro-growth through the Single Market. Blocking access to the Single Market and attempting to lower immigration will both have the effect of lowering living standards further, even when the pound eventually finds a floor.

The alternative is equally clear. The UK should not leave the Single Market and should embrace its essential component Freedom of Movement as both are decisive for future prosperity. Logically, it would be foolish then to leave the EU which simply means having no influence or vote in future developments and would probably entail a sharply increased Budget contribution. Brexit is making us poorer.

 -- via my feedly newsfeed

Eastern Panhandle Independent Community (EPIC) Radio:Am I Crazy? a Hillary landslide?

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Blog: Eastern Panhandle Independent Community (EPIC) Radio
Post: Am I Crazy? a Hillary landslide?
Link: http://www.enlightenradio.org/2016/10/am-i-crazy-hillary-landslide.html

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Eastern Panhandle Independent Community (EPIC) Radio:Occupy: Trump asks you not to vote for him

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Blog: Eastern Panhandle Independent Community (EPIC) Radio
Post: Occupy: Trump asks you not to vote for him
Link: http://www.enlightenradio.org/2016/10/occupy-trump-asks-you-not-to-vote-for.html

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Eastern Panhandle Independent Community (EPIC) Radio:The Pig Poet

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Blog: Eastern Panhandle Independent Community (EPIC) Radio
Post: The Pig Poet
Link: http://www.enlightenradio.org/2016/10/the-pig-poet.html

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Paul Krugman: What About the Planet? [feedly]

Paul Krugman: What About the Planet?
http://economistsview.typepad.com/economistsview/2016/10/paul-krugman-what-about-the-planet.html

Why haven't we heard more about Clinton and Trump's positions on climate change?:

What About the Planet?, by Paul Krugman, NY Times: Our two major political parties are at odds on many issues, but nowhere is the gap bigger or more consequential than on climate.

If Hillary Clinton wins, she will move forward with the Obama administration's combination of domestic clean-energy policies and international negotiation — a one-two punch that offers some hope of reining in greenhouse gas emissions before climate change turns into climate catastrophe.

If Donald Trump wins, the paranoid style in climate politics — the belief that global warming is a hoax perpetrated by a vast international conspiracy of scientists — will become official doctrine, and catastrophe will become all but inevitable. ...

So there is a huge, incredibly consequential divide on climate policy. Not only is there a vast gap between the parties and their candidates, but this gap arguably matters more for the future than any of their other disagreements. So why don't we hear more about it?

I'm not saying that there has been no reporting on the partisan climate divide, but there has been nothing like, say, the drumbeat of stories about Mrs. Clinton's email server. And it's really stunning that in the three nationally televised forums we've had so far — the "commander in chief" forum involving Mrs. Clinton and Mr. Trump, the first presidential debate and the vice-presidential debate — the moderators have asked not a single question about climate. ...

And this blind spot matters a lot. Polling suggests that millennial voters, in particular, care a lot about environmental protection and renewable energy. But it also suggests that more than 40 percent of young voters believe that there is no difference between the candidates on these issues.

Yes, I know, people should be paying more attention — but this nonetheless tells us how easy it is for voters who rely on TV news or don't read stories deep inside the paper to miss what should be a central issue in this campaign.

The good news is that there are still two debates to go, offering the opportunity to make some amends.

It's time to end the blackout on climate change as an issue. It needs to be front and center — and questions must be accompanied by real-time fact-checking, not relegated to the limbo of he-said-she-said, because this is one of the issues where the truth often gets lost in a blizzard of lies.

There is, quite simply, no other issue this important, and letting it slide would be almost criminally irresponsible.

 -- via my feedly newsfeed

Dean Baker: Slower Pace of Job Growth Continues Into the Fall

Slower Pace of Job Growth Continues Into the Fall

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October 7, 2016 (Jobs Byte)

By Dean Baker

Average weekly earnings for production workers are up just 2.0 percent over the last year.

The Labor Department reported that the economy added 156,000 jobs in September, somewhat less than most economists had projected. The job growth figures were also on net revised down slightly for the prior two months, so that the average for the last three months stands at 192,000. The unemployment rate edged up to 5.0 percent, but this was due to a large number of people entering the workforce, as the employment-to-population ratio (EPOP) also rose by 0.1 percentage point to 59.8 percent, just below the 59.9 percent peak the recovery hit in March. The EPOP for prime age workers reversed its decline last month and stood at 78.0 percent. However this is still more than two full percentage points below its pre-recession peak.

Other news in the household survey was mostly positive. The number of people involuntarily working part-time hit a new low for the recovery. It is now down by more than 3.3 million from the recession peak, although it is still more than 40 percent higher than pre-recession levels. The duration measures of unemployment all fell, with the share of long-term unemployed dropping by 1.2 percentage points, a new low for the recovery.

One negative in the household survey was a modest decline in the share of unemployment due to voluntary job leavers, which remains more than a full percentage point below its pre-recession peak and is four percentage points below the peak hit in 2000.

Most demographic groups saw little change in their unemployment rates, with the major exception of Hispanics. The unemployment rate for Hispanics rose by 0.8 percentage points to 6.4 percent. This was due to a rise of 0.6 percentage points for both adult men and adult women (age 20 and older) and an increase of 3.5 percentage points for teens. These numbers are erratic, so this could just be a statistical fluke, but this sort of single month increase in an otherwise healthy labor market is cause for concern.

On the establishment side, the big job gainers were health care, with 32,700 new jobs; professional technical services, which added 29,900; restaurants with 29,700; construction with 23,000 jobs; temporary help with 23,200; and retail, which added 22,000. Manufacturing lost 13,000 jobs, and government lost 11,000.

The growth in health care jobs is the second consecutive month of relatively slow growth. The sector added 22,300 jobs in August after adding an average of almost 38,000 over the prior 12 months (August to August). There has been little trend in temporary employment, with total growth of just 54,400 over the last year.

The manufacturing sector has been shedding jobs for most of the year and is now down 76,000 jobs since January. The loss of government jobs was almost all due to local education. This reversed gains reported the prior two months that largely reflected earlier starts to the school year.

Employment in the mining sector finally stabilized in September. This sector has lost 220,000 jobs since its peak in September of 2014, or 25.8 percent of total employment. This is the result of massive over supply, which has led to a crash in the world price of oil and other sources of energy.

There was a modest increase in average weekly hours, reversing the decline reported for August. The average hourly wage grew at a 2.6 percent annual rate over the last three months, compared with the average for the prior three months, the same as the pace in August. Because there has been a modest decline in average hours, the average weekly wage has risen by just 2.3 percent over the last year. For production workers, who have seen a larger drop in hours, the average weekly wage has risen by just 2.0 percent.

On the whole this is a moderately positive report. The labor market is continuing to tighten, but at a relatively slow pace. The modest wage growth and the relatively short average workweek suggest that employers are still not facing serious difficulties in finding workers. In addition, the low percentage of unemployment due to voluntary job leavers indicates workers are still not very confident about their labor market prospects.

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John Case
Harpers Ferry, WV

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