U.S. Capitol in Washington.Mark Wilson
A roundup of the best economic posts on the Web
Is the next U.S. crisis just a month away?
A post from minyanville.com (via an assist by Naked Capitalism) suggests the next surprise out of the U.S. financial crisis might just pop up in December, when struggling U.S. states are forced to repay billions to Washington.
"Since March of 2009, 31 states have borrowed billions from the federal government to continue paying out unemployment benefits while keeping their UI trust funds from insolvency. The federal stimulus provided for a moratorium on interest payments until December, 2010. And, as you likely know, that's a month from now."
Not the lubricant of growth it once was
The Economist warns about a potential productivity shock resulting from the increased cost of oil extraction.
"...the surge in the crude price to $147 a barrel in July 2008 undoubtedly played its part in exacerbating the recent recession, acting as a tax on Western consumers at a time when confidence was already low. That rise in energy prices was driven by demand, however. A surge propelled by the costs of extraction would be a negative productivity shock for the global economy."
'The Corrosion of America'
Bob Herbert of The New York Times on the decaying state of infrastructure in the United States and the lack of political willpower to fix it - projects that he says could put hundreds of thousands of Americans to work.
"The sorry state of America's infrastructure is a hard-core reflection of what is really going on in this increasingly hapless society, whether we choose to acknowledge it or not."
Top 74 out-earned 19 million Americans in 2009
On tax.com, former Pulitzer prize winning journalist David Cay Johnston digs into the latest U.S. payroll tax data and discovers some frightening numbers:
"Every 34th wage earner in America in 2008 went all of 2009 without earning a single dollar, new data from the Social Security Administration show. Total wages, median wages, and average wages all declined, but at the very top, salaries grew more than fivefold. "
"...You read that right. In the Great Recession year of 2009 (officially just the first half of the year), the average pay of the very highest-income Americans was more than five times their average wages and bonuses in 2008. And even though their numbers shrank by 43 percent, this group's total compensation was 3.2 times larger in 2009 than in 2008, accounting for 0.6 percent of all pay. These 74 people made as much as the 19 million lowest-paid people in America, who constitute one in every eight workers."