Federal Budget and Taxes

Morning Must Reads: This Isn't The Dual Mandate You're Looking For

The Federal Reserve, which through its control of the money supply is in charge of one of the key levers for regulating the pace of economic growth, is guided by a dual mandate over inflation and unemployment. If consumer prices begin rising too fast, the Federal Reserve will act to slow economic activity. Likewise, when unemployment rises, the Federal Reserve will act to boost economic growth.

On Wednesday, the Federal Reserve acknowledged that the economy appears to be growing more slowly than anticipated but opted to take no steps to boost growth. This decision elevated concern about the potential of future inflation over the currently high U.S. unemployment rate of 8.2% (Pennsylvania's rate is 7.5%).

Morning Must Reads: The Tax Foundation Has It Both Ways

Paul Krugman catches the Tax Foundation making a bizarre claim about income inequality and in the process reminds us all about the organization's poor track record on the facts.

Morning Must Reads: Red Tape Is for the Unlucky In Pennsylvania

Click To EnlargeAfter signing legislation complicating the determination of eligibility for unemployment insurance, the Corbett administration is laying off frontline workers in Philadelphia who help recently unemployed workers determine their eligibility.

Morning Must Reads: Elected Officials Are Supposed To Do No Harm

The New York Times has a good editorial this morning based on analysis by Josh Bivens and Heidi Shierholz at the Economic Policy Institute on just how much state and local budget cuts have hurt job growth. Bottom line, the editorial says, Congress could lower the unemployment rate substantially by providing more federal aid to states.

Midday Must Reads: Are We Getting What We Bargained for with the Gas Industry?

Stealthily included in the flurry of bills passed as part of the Pennsylvania budget is a provision that puts a moratorium of up to six years on gas drilling in parts of southeastern Pennsylvania. Columnist Walter Brasch, writing in the Hazelton Standard Speaker, had a few questions for the lawmakers who approved that concept.

Morning Must Reads: Special Needs Kids, Unemployment Insurance, Student Loan Debt and CEO Pay

Welcome back from the Memorial Day Weekend! The Pittsburgh Post-Gazette this morning explores the impact of charter schools on school districts.

The New York Times reports on declining aid to the unemployed.

Third and State This Week: An Education Priorities Problem, Payday Lending, and a Bait and Switch

All of us at Third and State hope you have a great Memorial Day Weekend. Before heading to your weekend barbecues, check out our blog wrap. We wrote this week about a statewide day of action for education, a new survey of school districts squeezed by budget cuts, and a bait and switch approach to tax credit programs for private school scholarships. We also had posts on payday lending, the prevailing wage and more. 

IN CASE YOU MISSED IT

  • On education and the state budget, Mark Price summed up the news coverage from the statewide day of action to mark Education Advocacy Week and explained why the state's approach to school funding is more a priorities problem than a revenue problem. Chris Lilienthal blogged about a new survey of school districts indicating that more cuts to the classroom are on the way thanks in part to state funding cuts. And Stephen Herzenberg wrote that the political marketing of private school scholarship tax credits as alternatives for students in distressed communities is a bait and switch.
  • On federal tax policy and the economy, Chris Lilienthal shared a Marketplace interview with wealthy venture capitalist Nick Hanauer who said that investing in the middle class, rather than tax breaks for the wealthy, is the key to future and shared prosperity.
  • And in Morning Must Reads this week, Mark Price highlighted an editorial on why legalizing predatory payday loans would be bad for Pennsylvania, and passed on a letter to the editor showing that actual Pennsylvania job creators support the state's prevailing wage law.

More blog posts next week. Keep us bookmarked and join the conversation!

Venture Capitalist: The Middle Class (Not the Wealthy) Are the Engine of Economic Growth

On Friday, Marketplace had an interesting interview with a wealthy venture capitalist named Nick Hanauer who recently gave a TED talk on income inequality that generated some controversy because he made a strong case for raising taxes on wealthy earners. Give a listen to the full interview below.

Here's the takeaway:

Prosperity for people like me is a consequence of the number of customers I have, not the tax rate that I pay. If low taxes were the way that people like me created wealth, then we'd be starting our companies in the Congo or Somalia or Afghanistan, but we're not. We come to places where there are lots and lots of customers...

Morning Must Reads: Training and Education? Let Them Go To The Pittsburgh Opera

When workers lose their jobs in a recession, they have time that could be spent in training programs targeted to the needs of employers. Of course, there is a hitch: during a recession, employers are not hiring, so at the very time there are lots of people available to train, employers don't need new workers. As the economy improves (like it is now), it opens the door to training tied to the needs of businesses that are hiring. 

Morning Must Reads: The Impact of Economic Austerity, Student Loans and the Geography of Manufacturing

The U.S. economy is growing, albeit too slowly to make a substantial and badly needed dent in the unemployment rate. Growth in the U.S. economy will almost certainly mean continued growth in the Pennsylvania economy.

The most important risk to Pennsylvania's job growth in 2012 remains job losses among teachers, nurses and other public servants caused by federal and state budget cuts. 

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