South-Westerns' Economic News Summaries
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EconNews Online is South-Western's service to provide summaries of the latest economics news stories. Review the brief summaries and, for stories of interest, select the full summary.
TAXES, SPENDING, AND DEFICITS 
Title  Brief Summary 
Overhauling the Alternative Minimum Tax
Full Summary
Democrats are seeing to lead the way in an overhaul of the alternative minimum tax. If it is left unchanged it will increase taxes on tens of millions of families as early as 2008. The democratic plan wants to shield all but the very rich from this alternative calculation of income taxes.
(Updated May, 2007)
Tough Tone On Inflation
Full Summary
Despite signs of a weakening economy, Federal Reserve chairman Bernanke still talks tough on inflation. In a recent conference on monetary issues, Bernanke indicated that he was far less worried about signs of weaker economic growth than he was about the danger of higher prices.
(Updated July, 2006)
Death to the "Death Tax"?
Full Summary
Congress is debating the full repeal of the estate tax. Republicans promote the repeal, while Democrats generally oppose elimination of the so called "death tax". The debate over the tax will likely result in a political compromise between the two parties.
(Updated July, 2006)
Ouch! Tax Hike for Americans Working Overseas
Full Summary
American expatriates have a nasty surprise in store when they compute their 2006 income taxes. Many Americans living and working overseas enjoy employer allowances for housing, schools, and trips back home. Previously exempt from U.S. taxes, the cost of these items will now be subject to U.S. income taxes.
(Updated June, 2006)
Tax Revenues on the Rise
Full Summary
Unexpected tax revenue increases from the American economy are expected to shrink the federal budget deficit by almost $100 billion in 2005. The Bush administration cites the increase in tax revenues as an indication that their tax cuts have stimulated the economy and are now paying for themselves.
(Updated September, 2005)
America's Hidden Tax
Full Summary
The U.S. tax code includes provisions that many analysts describe as a hidden tax. The alternative minimum tax may require tens of millions of American taxpayers to pay additional taxes in the next several years.
(Updated June, 2005)
Bush Wants Private Accounts for Social Security
Full Summary
President George W. Bush continues to push for private accounts in the Social Security System. Mr. Bush puts the issue at the top of his domestic agenda, but has yet to convince a majority in either house of Congress on the worthiness of his plan.
(Updated April, 2005)
A Simpler, Fairer Income Tax?
Full Summary
President Bush has named two former senators to lead a bipartisan advisory panel. Their task: to come up with a simpler and fairer income tax structure for U.S. citizens.
(Updated March, 2005)
Politics, Fairness, and the Tax Code
Full Summary
In this election year, proposed personal income tax code reforms bring up questions related to politics and fairness. The divide appears to be along political lines, with Republicans pushing for some kind of a consumption tax to replace the current income tax. Democrats respond by suggesting such a tax would favor the wealthy at the expense of middle-income citizens.
(Updated December, 2004)
Greenspan's Long Term Solution to the Deficit Includes Social Security and Medicare Cuts
Full Summary
Federal Reserve chairman Alan Greenspan has extended the discussion about the looming federal deficit by suggesting that Social Security and Medicare programs be cut as an alternative to raising taxes to cover future obligations. The comments reflect the view that the only solution to the huge and growing deficit is to raise taxes or cut benefits and Greenspan believes the spending cuts are the best alternative for long-term growth in the economy.
(Updated April, 2004)
Greenspan's Long Term Outlook
Full Summary
While reporting a generally upbeat outlook for the economy, Federal Reserve chairman Greenspan also hinted at the possibility of long term problems for the economy if the federal budget deficit continues to grow. He worries that it could lead to higher interest rates and increase U.S. indebtedness to the rest of the world.
(Updated April, 2004)
Can Housing Continue to Lift the Economy?
Full Summary
The best year for new housing in twenty-five years is leading some analysts to raise their forecasts for the housing industry in 2004. This is very good news for an economy that has been relying on the building, buying and refinancing of homes for a steady driving force in the economy.
(Updated March, 2004)
The Long Run Effect of the 2004 Deficit
Full Summary
A record federal budget deficit of $477 billion is expected in 2004, according to the Congressional Budget Office. They also predict accumulated deficits over the next 10 years will total $1.9 trillion. Economist worries that the huge deficits could have a negative effect on long-term economic growth.
(Updated March, 2004)
Long-Term Affects of the Deficit
Full Summary
The news on the federal budget deficit for 2003 appears to be very favorable. After the Office of Management and Budget projected a record deficit of $455 billion, the deficit came in at only $375 billion. Appearances, however, are not always what they seem.
(Updated January 4, 2004)
Budget Deficit Hits Record High
Full Summary
An expected budget deficit of $374 billion in 2003 is a record high in absolute (constant) dollar terms. The budget deficit is a result of a generally weak economy, spending for war and homeland security, and the Bush administration's tax cuts.
(Updated November, 2003)
Winners, Losers, and the Tax Cut
Full Summary
The recently legislated tax cuts will put a trillion dollars in the hands of American consumers over the next six years, but because present government expenditures are far outstripping revenues the tax cuts may represent a mixed blessing. With the discrepancy between spending and revenue, the government will have to engage in massive spending cuts or Americans will face a much larger tax bill in the future
(Updated October 17, 2003)
To Spend or Not to Spend
Full Summary
Bush's tax-cut package has fattened paychecks and provided tax-credit checks to millions of Americans. Most experts agree that what American consumers do with these windfalls are critical to the economic recovery.
(Updated September 10, 2003)
Will the Deficit Hurt Bush?
Full Summary
An expected budged deficit of $455 billion this year is sending waves of optimism through the democratic ranks. The democratic contenders for the presidential bid are pointing to the deficit as a huge failure of the Bush administration's economic policy while the republicans point to terrorism and two wars to explain shift from a surplus to a deficit..
(Updated August 27, 2003)
Tools of the Trade
Full Summary
The Federal Reserve Bank (Fed) is always at the ready to conduct policy that improves the overall operation of the economy. In an historic shift, the Fed announced it is more concerned with deflation than with inflation.
(Updated June 2, 2003)
Discipline, Not Deficits
Full Summary
With a projected budget deficit of $157 billion in fiscal year 2002, Greenspan cautioned Congress to keep the federal budget deficit under control, arguing that even though interest rates are at a 40-year low, higher interest rates would result from a breakdown of budget discipline.
(Updated October 10, 2002)
Where There's Smoke, There's Controversy
Full Summary
Ohio is considering increasing its cigarette tax. The benefits would include more state revenue and lower cigarette consumption. Disadvantages would be increased out-of-state purchases and the tax burden being borne by the poor, minorities, and the less educated.
(Updated October 10, 2002)
At A Minimum
Full Summary
The AMT was originally enacted to prevent the very wealthy from escaping their income tax obligations. This year, approximately 2.6 million taxpayers will be affected, and the burden on the AMT will fall on families with incomes between $75,000 to $500,000, canceling some of the benefits of the Bush tax cut.
(Updated October 10, 2002)
More Guns… So Says the President's Budget
Full Summary
President Bush submitted a $2.13 trillion budget for the next fiscal year that calls for significant increases in defense spending and homeland security. The President cited the new realities of war and a need to prevent terrorist attacks as justification for his reorientation of federal spending.
(Updated March 20, 2002)
Debating Deficits
Full Summary
President Bush submitted his $2.13 trillion budget, which will result in budget deficits replacing what had been forecasts of a surplus in fiscal years 2003 through 2005. There is a controversy as to whether budget deficits and rising debt harm the economy by pushing up long-term interest rates.
(Updated March 20, 2002)
Why So High?
Full Summary
Since last January, the Federal Reserve has cut its target federal funds rate by 4.75 percentage points to 1.75 percent. Long-term interest rates, which guide interest rates on mortgages and many consumer and business loans, have increased in recent months rather than following short-term rates. Some economists blame the fiscal policies of the Bush Administration as the reason for the rise in long-term rates. Others argue that rates have risen anticipating that the economy would rebound strongly this year and that the Fed would start increasing short-term rates.
(Updated February 13, 2002)
Going, Going . . .
Full Summary
For the coming fiscal year, according to the most optimistic forecast, analysts predict a balanced budget and a more likely outcome of a return to deficit spending.
(Updated November 1, 2001)
The Silence of the Reaganites
Full Summary
Both George W. Bush and Ronald Reagan made a tax cut an important part of their Administration's initiatives, but the Bush tax cut is being justified on Keynesian grounds, whereas Reagan preached supply-side economics to support his cuts.
(Updated March 1, 2001)
Even Surpluses Need Rules
Full Summary
Will government deficits return? Even though lowered tax rates coupled with increases in government spending do not necessarily result in government deficits, it may be that the 'natural' inclination of Congress and the Administration to spend whatever surplus it has on hand will push us to deficits once again.
(Updated March 1, 2001)
Sophistry, Surpluses and Social Security
Full Summary
It appears that political rhetoric generated during budget deliberations has created an artificial crisis - stories are reported that the recommendations of one party or the other-if they became law-would bankrupt social security and millions of social security recipients would not receive checks. This crisis has been generated by political need and faulty reasoning.
(Updated November 1, 1999)
The Paradox of Thrift, Japenese Style
Full Summary
Japan, at the urging of the U.S., has been spending at a feverish pace in order to stimulate its economy into recovery. As a consequence of the spending and recession, annual budget deficits grew and total debt has almost doubled. Rising debt levels tend to produce higher long-term interest rates which would affect the development of many Asian economies.
(Updated October 1, 1999)
Federal Budget Boosts Region
Full Summary 
President Clinton recently announced his fiscal 2000 budget. While interest in the budget typically focuses on national issues, the federal budget has a powerful influence on regional growth and development.
(Updated April 1, 1999)
The Budget in Black
Full Summary 
Clinton unveiled a nearly $1.8 trillion federal budget proposal that has increased federal spending on a number of new or expanded programs that contains no across-the-board tax cut, and the Republican Congress is not happy over the increased size and role of government as outlined in the proposal.
(Updated March 1, 1999)
Looking Even Better
Full Summary 
After decades of deficits, the U.S. budget went into the black last year and forecasts predicted that the budget surpluses would continue for at least the next few years.
(Updated February 1, 1999)
Surplus Season
Full Summary 
After 28 years during which the federal government spent more than it received in tax revenues, the federal budget is now in surplus. Fiscal restraint was an important factor in propelling the economy forward and creating the economic strength that has so far insulated the U.S. economy from the Asian economic turmoil. The question now being debated is what to do with the surplus.
(Updated November 11, 1998)
How Much is Too Much?
Full Summary 
The goal of fiscal policy during these past years has been to reduce the budget deficit to zero. When forecasters first projected a federal budget surplus, the projections were accompanied by statements that surpluses were only temporary....
(Updated May 22, 1998)
Surprise Surplus
Full Summary
After all these years of talking about budget deficits, is it time to start thinking about budget surpluses? According to some economists, the recent budget agreement between President Clinton and Congress, coupled with our current rate of economic growth could generate budget surpluses listing into the next century.
(Updated January 15, 1998)
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