Press Release by Senator Kevin Brady
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| For Immediate Release April 3, 2009 | Statement of Congressman Kevin Brady Ranking Republican House Member Employment Data Further Undermine Credibility of Administration Budget Forecast | Press Release #111-5 Contact: Christopher Frenze Executive Director (202) 225-3923 | |
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| | I would like to join in welcoming Commissioner Hall before the Committee this morning. The employment data released this morning show the impact of the deepening recession. Payroll employment declined by 663,000 in March, with losses broadly shared among major industry groups. The unemployment rate increased to 8.5 percent, and current trends suggest that further increases are likely in coming months. The job figures reported today add to the growing body of evidence indicating that the Administration’s economic forecast is much too optimistic. The unemployment rate is already significantly above the Administration’s forecast for all of 2009. The Administration projects that real GDP will fall 1.2 percent in 2009 and rise 3.2 percent in 2010, compared with a Blue Chip Consensus forecast of a decline of 2.6 percent in 2009 and an increase of 1.9 percent in 2010. The CBO forecast of a 3.0 percent decline in 2009 GDP also shows how far off the Administration is likely to be for 2009. The Administration’s unduly optimistic economic assumptions are a major problem. These optimistic assumptions are a key foundation of the President’s budget proposals, and lead to artificially low deficit and debt projections. No wonder The Economist called the assumptions in the Administration’s budget “deeply flawed” in an article entitled, “Wishful, and dangerous, thinking.” Their effect is to make the Administration’s expansive new spending proposals look less threatening than they actually are. The reason the Democrats’ Congressional budget resolution got so far off track is that it is based on the President’s budget proposals. This is why a variety of accounting gimmicks are needed to hide the true costs of the Administration’s dangerous spending spree in the Democrats’ House budget resolution. As the Washington Post said last week, in this resolution “Congress deals a blow to ‘honest budgeting.’” The Democrats now are attempting to shoehorn expensive Administration proposals based on unrealistic economic assumptions into a House budget resolution that uses more realistic economic assumptions from the CBO. A realistic economic forecast would indicate that the fiscal situation is already very grim, with exploding deficits and debt for the foreseeable future. According to a recent study of many financial crises by Professors Kenneth Rogoff and Carmen Reinhart that has become an instant classic, the The Democrats’ budget will add yet more deficit spending and debt to the huge amounts of each already in the pipeline. The result will be much higher taxes and inflation in the future, and lower economic growth. Higher inflation in coming years will further reduce the American standard of living as incomes and retirement funds are further eroded. The last time Democrats controlled both ends of I’m pleased to welcome the panel of witnesses before us today. TARP certainly raises a number of very troubling issues, but the central one is why we still do not have a credible, effective, and transparent financial rescue plan in place. | |
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| 433 Cannon House Office Building • | ||
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OPEC Dollar Excuse for high oil prices debunked
CONGRESS OF THE UNITED STATES
JOINT ECONOMIC COMMITTEE
JOINT ECONOMIC COMMITTEE
WASHINGTON, D.C. -- The OPEC oil cartel’s attempt to blame high oil prices on the lower foreign exchange value of the dollar is refuted in a new study released today by Congressman Jim Saxton, ranking Republican member of the Joint Economic Committee (JEC). The new staff study, The Dollar and Oil, analyzes a number of factors contributing to high oil prices, including the cartel’s supply restrictions and inadequate investments made by members of OPEC. As late as 2004, OPEC maintained a price target range of $22 to $28 per barrel. Despite sharply higher world demand and continual price pressures since, the cartel has continued to restrict its oil production even as prices surged well over $120 per barrel.
“The oil cartel always seems to have an opportunistic and disingenuous explanation for oil price increases at any point in time, and the foreign exchange value of the dollar is merely the latest excuse,” Saxton said. “Even with oil prices at sky-high levels, the head of OPEC recently asked, ‘Why should we invest in spare capacity that will not be used? We see plenty of spare capacity until 2020.’ Obviously, the OPEC cartel is quite satisfied with the current supply and demand conditions in the oil market.
“If OPEC were to ramp up its production capacity and produce more oil, oil prices would fall. The lifting cost of oil in the key Persian Gulf producing states is less than $5 per barrel, so the monopoly profits generated by the cartel’s supply restrictions are truly obscene at current market prices of oil. As the study notes, excessive oil prices caused by the cartel amount to an “OPEC tax” on already struggling economies around the world,” Saxton concluded.
08-4 Frontiers of Real-Time Data Analysis by Dean Croushore
Working Papers 2008: Abstracts
FRONTIERS OF REAL-TIME
This paper describes the existing research (as of February 2008) on real-time data analysis, divided into five areas: (1) data revisions; (2) forecasting; (3) monetary policy analysis; (4) macroeconomic research; and (5) current analysis of business and financial conditions. In each area, substantial progress has been made in recent years, with researchers gaining insight into the impact of data revisions. In addition, substantial progress has been made in developing better real-time data sets around the world. Still, additional research is needed in key areas, and research to date has uncovered even more fruitful areas worth exploring.
If you wish to download the WP08-4, please copy the link below into your browser:
http://www.philadelphiafed.org/files/wps/2008/wp08-4.pdf
FRONTIERS OF REAL-TIME
Associate Professor of Economics and Rigsby Fellow
University of Richmond
Visiting Scholar
Federal Reserve Bank of Philadelphia
March 2008
University of Richmond
Visiting Scholar
Federal Reserve Bank of Philadelphia
March 2008
This paper describes the existing research (as of February 2008) on real-time data analysis, divided into five areas: (1) data revisions; (2) forecasting; (3) monetary policy analysis; (4) macroeconomic research; and (5) current analysis of business and financial conditions. In each area, substantial progress has been made in recent years, with researchers gaining insight into the impact of data revisions. In addition, substantial progress has been made in developing better real-time data sets around the world. Still, additional research is needed in key areas, and research to date has uncovered even more fruitful areas worth exploring.
If you wish to download the WP08-4, please copy the link below into your browser:
http://www.philadelphiafed.org/files/wps/2008/wp08-4.pdf
Labor Market Weakness: won' t be improved by tax increases and protecsionism
April 4th, JOINT ECONOMIC COMMITTEE
SENATE OF UNITED STATES OF AMERICA
WASHINGTON, D.C. -- Congress should not react to disappointing labor market figures and other economic data by enacting policies reminiscent of the Hoover Administration, Congressman Jim Saxton, ranking member of the Joint Economic Committee (JEC) said today. This morning, the Labor Department released data showing no statistically meaningful change in payroll employment in March and an increase of the unemployment rate to 5.1 percent. Recent weak economic data have led some to compare current economic policies to those of the Hoover Administration, without apparently knowing what the Hoover Administration’s policies actually were.
“Those who compare recent economic conditions and policies to those of the Hoover era should recall the mistakes made in the Revenue Act of 1932,” Saxton said today “Instead of reducing the tax burden, Congress passed and President Hoover signed into law steep increases in personal income tax rates, estate tax rates, and many other taxes.”
“As I have previously noted, the top personal income tax rate was raised from 25 percent in 1931 to 63 percent under the 1932 Act, more income was subjected to the income tax, and the estate tax burden was more than doubled. The salient provisions of the 1932 Act moved in exactly the opposite direction of the recent tax relief legislation passed in 2001, 2002, and 2003. However, many of the critics of the recent tax relief legislation advocate increases in taxes reminiscent of those contained in the 1932 Revenue Act, even as they exaggerate the degree of recent economic weakness by evoking the Great Depression.
“It is absurd to compare current economic conditions to those of the Hoover years, a time when the unemployment rate was as high as 24 percent. Unfortunately, there are Americans now experiencing unemployment and other difficulties, but these are nothing like the scale seen in the Great Depression
“It is especially ironic for those portraying the current economic situation in the darkest possible colors to advocate huge tax increases. If the economy were as weak as the critics contend, a tax increase would only repeat the destructive mistakes of the Hoover era. Tax increases impose additional economic costs on the economy in any phase of the business cycle, but would be particularly destructive at a time when the economic and employment outlook is fragile. Protectionism in addition to tax increases was demonstrated to be an especially lethal policy mix during the 1930s, but the majority in Congress seems oblivious to this fact,” Saxton concluded.
SENATE OF UNITED STATES OF AMERICA
LABOR MARKET WEAKNESS: WON'T BE IMPROVED BY TAX INCREASES AND PROTECSIONISM
- Hoover Policy must be rejected -
by Senator Jim Saxton
- Hoover Policy must be rejected -
by Senator Jim Saxton
WASHINGTON, D.C. -- Congress should not react to disappointing labor market figures and other economic data by enacting policies reminiscent of the Hoover Administration, Congressman Jim Saxton, ranking member of the Joint Economic Committee (JEC) said today. This morning, the Labor Department released data showing no statistically meaningful change in payroll employment in March and an increase of the unemployment rate to 5.1 percent. Recent weak economic data have led some to compare current economic policies to those of the Hoover Administration, without apparently knowing what the Hoover Administration’s policies actually were.
“Those who compare recent economic conditions and policies to those of the Hoover era should recall the mistakes made in the Revenue Act of 1932,” Saxton said today “Instead of reducing the tax burden, Congress passed and President Hoover signed into law steep increases in personal income tax rates, estate tax rates, and many other taxes.”
“As I have previously noted, the top personal income tax rate was raised from 25 percent in 1931 to 63 percent under the 1932 Act, more income was subjected to the income tax, and the estate tax burden was more than doubled. The salient provisions of the 1932 Act moved in exactly the opposite direction of the recent tax relief legislation passed in 2001, 2002, and 2003. However, many of the critics of the recent tax relief legislation advocate increases in taxes reminiscent of those contained in the 1932 Revenue Act, even as they exaggerate the degree of recent economic weakness by evoking the Great Depression.
“It is absurd to compare current economic conditions to those of the Hoover years, a time when the unemployment rate was as high as 24 percent. Unfortunately, there are Americans now experiencing unemployment and other difficulties, but these are nothing like the scale seen in the Great Depression
“It is especially ironic for those portraying the current economic situation in the darkest possible colors to advocate huge tax increases. If the economy were as weak as the critics contend, a tax increase would only repeat the destructive mistakes of the Hoover era. Tax increases impose additional economic costs on the economy in any phase of the business cycle, but would be particularly destructive at a time when the economic and employment outlook is fragile. Protectionism in addition to tax increases was demonstrated to be an especially lethal policy mix during the 1930s, but the majority in Congress seems oblivious to this fact,” Saxton concluded.
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