Macroeconomics

Who Controls America — George Carlin — Videos

Posted on May 15, 2013. Filed under: American History, Banking, Blogroll, College, Communications, Diasters, Economics, Employment, Federal Government, Federal Government Budget, Fiscal Policy, Foreign Policy, government, government spending, High School, history, Inflation, Investments, Language, Law, Life, Links, Macroeconomics, Monetary Policy, Money, People, Philosophy, Politics, Raves, Religion, Resources, Security, Strategy, Talk Radio, Tax Policy, Technology, Video, War, Wealth, Wisdom | Tags: Comedy, Culture, Entertainment, Entropy, George Carlin, Videos, Who Controls American, Who Owns The Coun try |

The Owners of the Country

Entropy fan

The Genius George Carlin

George Carlin: Brain Droppings

George Carlin Interview

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Robert Littell — The Company: A Novel of the CIA — Videos

Posted on May 13, 2013. Filed under: American History, Banking, Blogroll, Business, College, Communications, Economics, Education, Employment, Federal Government, Federal Government Budget, Fiscal Policy, Foreign Policy, government, government spending, history, History of Economic Thought, Inflation, Language, Law, liberty, Life, Links, Macroeconomics, media, Microeconomics, Monetary Policy, Money, People, Philosophy, Politics, Raves, Talk Radio, Tax Policy, Technology, Unemployment, Video, War, Wealth, Wisdom | Tags: Book, Books, Cambridge Spies, Central Intelligence Agency, Film, Kim Philby, Robert Littell, Spies, The Company, Videos |

The Company [2007] 1/3

THE COMPANY [2007] 2/3

THE COMPANY [2007] 3/3

Background Articles and Videos

Tinker, Tailor, Soldier, Spy: 1 – Return To The Circus

Tinker, Tailor, Soldier, Spy: 2 – Tarr Tells His Story

Tinker, Tailor, Soldier, Spy: 3 – Smiley Tracks The Mole

Tinker, Tailor, Soldier, Spy: 5 – Tinker Tailor

Tinker, Tailor, Soldier, Spy: 6 – Smiley Sets A Trap

Tinker, Tailor, Soldier, Spy: 7 – Flushing Out The Mole

Cambridge Spies | Sub. ITA Episodio 1 di 4

Cambridge Spies | Sub. ITA Episodio 2 di 4

Cambridge Spies | Sub. ITA Episodio 3 di 4

Cambridge Spies | Sub. ITA Episodio 4 di 4

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James Grant Interviewed by James Turk–Federal Reserve, National Debt, Money, Gold — Videos

Posted on May 11, 2013. Filed under: Banking, Blogroll, Books, College, Communications, Demographics, Economics, Education, Employment, Federal Government, Federal Government Budget, Fiscal Policy, government spending, Inflation, Investments, Law, liberty, Life, Links, Macroeconomics, media, Monetary Policy, Money, People, Philosophy, Politics, Psychology, Radio, Raves, Taxes, Technology, Unemployment, Video, Wealth, Wisdom | Tags: Bonds, deficit spending, gold, James Grant, Money, national debt, Stocks, The Fed, The Federal Reserve System, USA |

James Grant and James Turk discuss gold, the Fed and the fiscal situation of the USA

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The Skyrocketing U.S. National Debt and Unfunded Liabilities For Medicare and Social Security — Videos

Posted on May 4, 2013. Filed under: American History, Banking, Blogroll, Climate, College, Constitution, Demographics, Diasters, Economics, Education, Employment, Federal Government, Federal Government Budget, Fiscal Policy, Foreign Policy, government spending, history, Immigration, Inflation, Investments, Law, liberty, Life, Links, Literacy, Macroeconomics, media, Microeconomics, Monetary Policy, Money, People, Philosophy, Politics, Public Sector, Raves, Strategy, Talk Radio, Tax Policy, Taxes, Unemployment, Unions, Video, War, Wealth, Wisdom | Tags: Bankruptcy of the United States, Business, deficit spending, deficits, Federal Reserve System, government, Gross National Debt, Jobs, Money, national debt, Politics, Publicly Held Debt, Unfunded Liabilities, Who Holds The Publicly Held Debt |

U.S. Debt Clock

http://www.usdebtclock.org/

What Are the Dangers of Too Much Debt?

Economy Is Still Americans’ Top Concern

http://www.gallup.com/poll/146708/americans-worries-economy-budget-top-issues.aspx

Most Important Problem

http://www.gallup.com/poll/146708/americans-worries-economy-budget-top-issues.aspx

Democrats Split On How To Deal With Nation’s Debt, Key Leaders Come Out Against Spending Cuts

Chairman Hensarling Opening Statement at Hearing with Federal Reserve Chairman Bernanke

Chairman Hensarling’s Opening Statement at Hearing with FHFA Director Edward J. DeMarco

US Debt A Threat To National Security

U.S. National Debt Documentary Part 1

U.S. National Debt Documentary Part 2

U.S. National Debt Documentary Part 3

U.S. National Debt Documentary Part 4

U.S. National Debt Documentary Part 5

U.S. National Debt Documentary Part 6

‘US hides real debt, in worse shape than Greece’

Does Government Have a Revenue or Spending Problem?

What If the National Debt Were Your Debt?

How Big Is the U.S. Debt?

Funding Government by the Minute

Why Not Print More Money?

Yaron Answers: Can The U.S. Go Bankrupt?

US Debt Crisis – Perfectly Explained

Deficits, Debts and Unfunded Liabilities: The Consequences of Excessive Government Spending

Capitalism Without Guilt – Yaron Brook on morals of capitalism.

The Budget and Economic Outlook: Fiscal Years 2013 to 2023

Economic growth will remain slow this year, CBO anticipates, as gradual improvement in many of the forces that drive the economy is offset by the effects of budgetary changes that are scheduled to occur under current law. After this year, economic growth will speed up, CBO projects, causing the unemployment rate to decline and inflation and interest rates to eventually rise from their current low levels. Nevertheless, the unemployment rate is expected to remain above 7½ percent through next year; if that happens, 2014 will be the sixth consecutive year with unemployment exceeding 7½ percent of the labor force—the longest such period in the past 70 years.

If the current laws that govern federal taxes and spending do not change, the budget deficit will shrink this year to $845 billion, or 5.3 percent of gross domestic product (GDP), its smallest size since 2008. In CBO’s baseline projections, deficits continue to shrink over the next few years, falling to 2.4 percent of GDP by 2015. Deficits are projected to increase later in the coming decade, however, because of the pressures of an aging population, rising health care costs, an expansion of federal subsidies for health insurance, and growing interest payments on federal debt. As a result, federal debt held by the public is projected to remain historically high relative to the size of the economy for the next decade. By 2023, if current laws remain in place, debt will equal 77 percent of GDP and be on an upward path, CBO projects (see figure below).

Such high and rising debt would have serious negative consequences: When interest rates rose to more normal levels, federal spending on interest payments would increase substantially. Moreover, because federal borrowing reduces national saving, the capital stock would be smaller and total wages would be lower than they would be if the debt was reduced. In addition, lawmakers would have less flexibility than they might ordinarily to use tax and spending policies to respond to unexpected challenges. Finally, such a large debt would increase the risk of a fiscal crisis, during which investors would lose so much confidence in the government’s ability to manage its budget that the government would be unable to borrow at affordable rates.

Under Current Law, Federal Debt Will Stay at Historically High Levels Relative to GDP

The federal budget deficit, which shrank as a percentage of GDP for the third year in a row in 2012, will fall again in 2013, if current laws remain the same. At an estimated $845 billion, the 2013 imbalance would be the first deficit in five years below $1 trillion; and at 5.3 percent of GDP, it would be only about half as large, relative to the size of the economy, as the deficit was in 2009. Nevertheless, if the laws that govern taxes and spending do not change, federal debt held by the public will reach 76 percent of GDP by the end of this fiscal year, the largest percentage since 1950.

With revenues expected to rise more rapidly than spending in the next few years under current law, the deficit is projected to dip as low as 2.4 percent of GDP by 2015. In later years, however, projected deficits rise steadily, reaching almost 4 percent of GDP in 2023. For the 2014–2023 period, deficits in CBO’s baseline projections total $7.0 trillion. With such deficits, federal debt would remain above 73 percent of GDP—far higher than the 39 percent average seen over the past four decades. (As recently as the end of 2007, federal debt equaled just 36 percent of GDP.) Moreover, debt would be increasing relative to the size of the economy in the second half of the decade.

Those projections are not CBO’s predictions of future outcomes. As specified in law, CBO’s baseline projections are constructed under the assumption that current laws generally remain unchanged, so that they can serve as a benchmark against which potential changes in law can be measured.

Revenues

Federal revenues will increase by roughly 25 percent between 2013 and 2015 under current law, CBO projects. That increase is expected to result from a rise in income because of the growing economy, from policy changes that are scheduled to take effect during that period, and from policy changes that have already taken effect but whose full impact on revenues will not be felt until after this year (such as the recent increase in tax rates on income above certain thresholds).

As a result of those factors, revenues are projected to grow from 15.8 percent of GDP in 2012 to 19.1 percent of GDP in 2015—compared with an average of 17.9 percent of GDP over the past 40 years. Under current law, revenues will remain at roughly 19 percent of GDP from 2015 through 2023, CBO estimates.

Outlays

In CBO’s baseline projections, federal spending rises over the next few years in dollar terms but falls relative to the size of the economy. During those years, the growth of spending will be restrained both by the strengthening economy (as spending for programs such as unemployment compensation drops) and by provisions of the Budget Control Act of 2011 (Public Law 112-25). Although outlays are projected to decline from 22.8 percent of GDP in 2012 to 21.5 percent by 2017, they will still exceed their 40-year average of 21.0 percent. (Outlays peaked at 25.2 percent of GDP in 2009 but have fallen relative to GDP in the past few years.)

After 2017, if current laws remain in place, outlays will start growing again as a percentage of GDP. The aging of the population, increasing health care costs, and a significant expansion of eligibility for federal subsidies for health insurance will substantially boost spending for Social Security and for major health care programs relative to the size of the economy. At the same time, rising interest rates will significantly increase the government’s debt-service costs. In CBO’s baseline, outlays reach about 23 percent of GDP in 2023 and are on an upward trajectory.

Changes from CBO’s Previous Projections

The deficits projected in CBO’s current baseline are significantly larger than the ones in CBO’s baseline of August 2012. At that time, CBO projected deficits totaling $2.3 trillion for the 2013–2022 period; in the current baseline, the total deficit for that period has risen by $4.6 trillion. That increase stems chiefly from the enactment of the American Taxpayer Relief Act of 2012 (P.L. 112-240), which made changes to tax and spending laws that will boost deficits by a total of $4.0 trillion (excluding debt-service costs) between 2013 and 2022, according to estimates by CBO and the staff of the Joint Committee on Taxation. CBO’s updated baseline also takes into account other legislative actions since August, as well as a new economic forecast and some technical revisions to its projections.

Looming Policy Decisions May Have a Substantial Effect on the Budget Outlook

Current law leaves many key budget issues unresolved, and this year, lawmakers will face three significant budgetary deadlines:

Automatic reductions in spending are scheduled to be implemented at the beginning of March; when that happens, funding for many government activities will be reduced by 5 percent or more.
The continuing resolution that currently provides operational funding for much of the government will expire in late March. If no additional appropriations are provided by then, nonessential functions of the government will have to cease operations.
A statutory limit on federal debt, which was temporarily removed, will take effect again in mid-May. The Treasury will be able to continue borrowing for a short time after that by using what are known as extraordinary measures. But to avoid a default on the government’s obligations, the debt limit will need to be adjusted before those measures are exhausted later in the year.

Budgetary outcomes will also be affected by decisions about whether to continue certain policies that have been in effect in recent years. Such policies could be continued, for example, by extending some tax provisions that are scheduled to expire (and that have routinely been extended in the past) or by preventing the 25 percent cut in Medicare’s payment rates for physicians that is due to occur in 2014. If, for instance, lawmakers eliminated the automatic spending cuts scheduled to take effect in March (but left in place the original caps on discretionary funding set by the Budget Control Act), prevented the sharp reduction in Medicare’s payment rates for physicians, and extended the tax provisions that are scheduled to expire at the end of calendar year 2013 (or, in some cases, in later years), budget deficits would be substantially larger over the coming decade than in CBO’s baseline projections. With those changes, and no offsetting reductions in deficits, debt held by the public would rise to 87 percent of GDP by the end of 2023 rather than to 77 percent.

In addition to those decisions, lawmakers will continue to face the longer-term budgetary issues posed by the substantial federal debt and by the implications of rising health care costs and the aging of the population.

Economic Growth Is Likely to Be Slow in 2013 and Pick Up in Later Years

The U.S. economy expanded modestly in calendar year 2012, continuing the slow recovery seen since the recession ended in mid-2009. Although economic growth is expected to remain slow again this year, CBO anticipates that underlying factors in the economy will spur a more rapid expansion beginning next year.

Even so, under the fiscal policies embodied in current law, output is expected to remain below its potential (or maximum sustainable) level until 2017 (see figure below). By CBO’s estimates, in the fourth quarter of 2012, real (inflation-adjusted) GDP was about 5½ percent below its potential level. That gap was only modestly smaller than the gap between actual and potential GDP that existed at the end of the recession because the growth of output since then has been only slightly greater than the growth of potential output. With such a large gap between actual and potential GDP persisting for so long, CBO projects that the total loss of output, relative to the economy’s potential, between 2007 and 2017 will be equivalent to nearly half of the output that the United States produced last year.

The Economic Outlook for 2013

CBO expects that economic activity will expand slowly this year, with real GDP growing by just 1.4 percent. That slow growth reflects a combination of ongoing improvement in underlying economic factors and fiscal tightening that has already begun or is scheduled to occur—including the expiration of a 2 percentage-point cut in the Social Security payroll tax, an increase in tax rates on income above certain thresholds, and scheduled automatic reductions in federal spending. That subdued economic growth will limit businesses’ need to hire additional workers, thereby causing the unemployment rate to stay near 8 percent this year, CBO projects. The rate of inflation and interest rates are projected to remain low.

The Economic Outlook for 2014 to 2018

After the economy adjusts this year to the fiscal tightening inherent in current law, underlying economic factors will lead to more rapid growth, CBO projects—3.4 percent in 2014 and an average of 3.6 percent a year from 2015 through 2018. In particular, CBO expects that the effects of the housing and financial crisis will continue to fade and that an upswing in housing construction (though from a very low level), rising real estate and stock prices, and increasing availability of credit will help to spur a virtuous cycle of faster growth in employment, income, consumer spending, and business investment over the next few years.

Nevertheless, under current law, CBO expects the unemployment rate to remain high—above 7½ percent through 2014—before falling to 5½ percent at the end of 2017. The rate of inflation is projected to rise slowly after this year: CBO estimates that the annual increase in the price index for personal consumption expenditures will reach about 2 percent in 2015. The interest rate on 3 month Treasury bills—which has hovered near zero for the past several years—is expected to climb to 4 percent by the end of 2017, and the rate on 10-year Treasury notes is projected to rise from 2.1 percent in 2013 to 5.2 percent in 2017.

The Economic Outlook for 2019 to 2023

For the second half of the coming decade, CBO does not attempt to predict the cyclical ups and downs of the economy; rather, CBO assumes that GDP will stay at its maximum sustainable level. On that basis, CBO projects that both actual and potential real GDP will grow at an average rate of 2¼ percent a year between 2019 and 2023. That pace is much slower than the average growth rate of potential GDP since 1950. The main reason is that the growth of the labor force will slow down because of the retirement of the baby boomers and an end to the long-standing increase in women’s participation in the labor force. CBO also projects that the unemployment rate will fall to 5.2 percent by 2023 and that inflation and interest rates will stay at about their 2018 levels throughout the 2019–2023 period.

Updated February 5, 2013, to correct an error in note “a” to Table 1-7.

http://www.cbo.gov/publication/43907

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Employment Level Still 3 Million Jobs Less Then Peak Level in November 2007 Plus Short 9 Million Jobs For Population Growth in Last 65 Months — 12 Million Job Shortage — Stagflation — DOW hits 15000, NASDAQ hits 12 year high — Buy Low–Sell High — Sell Your U.S. Bonds and Stocks Now — Videos

Posted on May 3, 2013. Filed under: American History, Banking, Blogroll, Business, College, Communications, Economics, Education, Energy, Federal Government, Federal Government Budget, Fiscal Policy, government, government spending, history, Homes, Inflation, Investments, Language, Law, liberty, Links, Literacy, Macroeconomics, Math, media, Microeconomics, Monetary Policy, Money, Philosophy, Politics, Public Sector, Rants, Raves, Tax Policy, Unemployment, Unions, Video, War, Wealth, Wisdom | Tags: BLS, Buy Low, Civilian Labor Force, Discourages Workers, DOW hits 15000, Economics, Employment Level, Employment Situation Summary, Labor Force Participation Rate, NASDAQ hits 12 year high, New Entrants, Politics, Sell High, Stagflation, Stock Rallly, Teenage Unemployment Rate, U-3, U-6, Unemployment Level, Unemployment Rate, Videos |

DOW hits 15000, NASDAQ hits 12 year high

May 3rd 2013 CNBC Stock Market Squawk Box (April Jobs Report)

Jobless Rate Falls to Four-Year Low, and More

Jobs Pop, Unemployment Rate Drops

Data extracted on: May 3, 2013 (11:51:32 AM)

Labor Force Statistics from the Current Population Survey

Employment Level

143,579,000

Series Id:           LNS12000000
Seasonally Adjusted
Series title:        (Seas) Employment Level
Labor force status:  Employed
Type of data:        Number in thousands
Age:                 16 years and over

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2000	136559(1)	136598	136701	137270	136630	136940	136531	136662	136893	137088	137322	137614
2001	137778	137612	137783	137299	137092	136873	137071	136241	136846	136392	136238	136047
2002	135701	136438	136177	136126	136539	136415	136413	136705	137302	137008	136521	136426
2003	137417(1)	137482	137434	137633	137544	137790	137474	137549	137609	137984	138424	138411
2004	138472(1)	138542	138453	138680	138852	139174	139556	139573	139487	139732	140231	140125
2005	140245(1)	140385	140654	141254	141609	141714	142026	142434	142401	142548	142499	142752
2006	143150(1)	143457	143741	143761	144089	144353	144202	144625	144815	145314	145534	145970
2007	146028(1)	146057	146320	145586	145903	146063	145905	145682	146244	145946	146595	146273
2008	146378(1)	146156	146086	146132	145908	145737	145532	145203	145076	144802	144100	143369
2009	142153(1)	141644	140721	140652	140250	140005	139898	139481	138810	138421	138665	138025
2010	138439(1)	138624	138767	139296	139255	139148	139167	139405	139388	139097	139046	139295
2011	139253(1)	139471	139643	139606	139681	139405	139509	139870	140164	140314	140771	140896
2012	141608(1)	142019	142020	141934	142302	142448	142250	142164	142974	143328	143277	143305
2013	143322(1)	143492	143286	143579
1 : Data affected by changes in population controls.

Civilian Labor Force Level

155,238,000

Series Id:           LNS11000000
Seasonally Adjusted
Series title:        (Seas) Civilian Labor Force Level
Labor force status:  Civilian labor force
Type of data:        Number in thousands
Age:                 16 years and over

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2000	142267(1)	142456	142434	142751	142388	142591	142278	142514	142518	142622	142962	143248
2001	143800	143701	143924	143569	143318	143357	143654	143284	143989	144086	144240	144305
2002	143883	144653	144481	144725	144938	144808	144803	145009	145552	145314	145041	145066
2003	145937(1)	146100	146022	146474	146500	147056	146485	146445	146530	146716	147000	146729
2004	146842(1)	146709	146944	146850	147065	147460	147692	147564	147415	147793	148162	148059
2005	148029(1)	148364	148391	148926	149261	149238	149432	149779	149954	150001	150065	150030
2006	150214(1)	150641	150813	150881	151069	151354	151377	151716	151662	152041	152406	152732
2007	153144(1)	152983	153051	152435	152670	153041	153054	152749	153414	153183	153835	153918
2008	154063(1)	153653	153908	153769	154303	154313	154469	154641	154570	154876	154639	154655
2009	154232(1)	154526	154142	154479	154742	154710	154505	154300	153815	153804	153887	153120
2010	153455(1)	153702	153960	154577	154110	153623	153709	154078	153966	153681	154140	153649
2011	153244(1)	153269	153358	153478	153552	153369	153325	153707	154074	154010	154096	153945
2012	154356(1)	154825	154707	154451	154998	155149	154995	154647	155056	155576	155319	155511
2013	155654(1)	155524	155028	155238
1 : Data affected by changes in population controls.

Labor Force Participation Rate

63.3%

Series Id:           LNS11300000
Seasonally Adjusted
Series title:        (Seas) Labor Force Participation Rate
Labor force status:  Civilian labor force participation rate
Type of data:        Percent or rate
Age:                 16 years and over

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2000	67.3	67.3	67.3	67.3	67.1	67.1	66.9	66.9	66.9	66.8	66.9	67.0
2001	67.2	67.1	67.2	66.9	66.7	66.7	66.8	66.5	66.8	66.7	66.7	66.7
2002	66.5	66.8	66.6	66.7	66.7	66.6	66.5	66.6	66.7	66.6	66.4	66.3
2003	66.4	66.4	66.3	66.4	66.4	66.5	66.2	66.1	66.1	66.1	66.1	65.9
2004	66.1	66.0	66.0	65.9	66.0	66.1	66.1	66.0	65.8	65.9	66.0	65.9
2005	65.8	65.9	65.9	66.1	66.1	66.1	66.1	66.2	66.1	66.1	66.0	66.0
2006	66.0	66.1	66.2	66.1	66.1	66.2	66.1	66.2	66.1	66.2	66.3	66.4
2007	66.4	66.3	66.2	65.9	66.0	66.0	66.0	65.8	66.0	65.8	66.0	66.0
2008	66.2	66.0	66.1	65.9	66.1	66.1	66.1	66.1	66.0	66.0	65.9	65.8
2009	65.7	65.8	65.6	65.7	65.7	65.7	65.5	65.4	65.1	65.0	65.0	64.6
2010	64.8	64.9	64.9	65.1	64.9	64.6	64.6	64.7	64.6	64.4	64.6	64.3
2011	64.2	64.2	64.2	64.2	64.2	64.0	64.0	64.1	64.2	64.1	64.1	64.0
2012	63.7	63.9	63.8	63.6	63.8	63.8	63.7	63.5	63.6	63.8	63.6	63.6
2013	63.6	63.5	63.3	63.3

Unemployment Level

11,659,000

Series Id:           LNS13000000
Seasonally Adjusted
Series title:        (Seas) Unemployment Level
Labor force status:  Unemployed
Type of data:        Number in thousands
Age:                 16 years and over

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2000	5708	5858	5733	5481	5758	5651	5747	5853	5625	5534	5639	5634
2001	6023	6089	6141	6271	6226	6484	6583	7042	7142	7694	8003	8258
2002	8182	8215	8304	8599	8399	8393	8390	8304	8251	8307	8520	8640
2003	8520	8618	8588	8842	8957	9266	9011	8896	8921	8732	8576	8317
2004	8370	8167	8491	8170	8212	8286	8136	7990	7927	8061	7932	7934
2005	7784	7980	7737	7672	7651	7524	7406	7345	7553	7453	7566	7279
2006	7064	7184	7072	7120	6980	7001	7175	7091	6847	6727	6872	6762
2007	7116	6927	6731	6850	6766	6979	7149	7067	7170	7237	7240	7645
2008	7685	7497	7822	7637	8395	8575	8937	9438	9494	10074	10538	11286
2009	12079	12881	13421	13826	14492	14705	14607	14819	15005	15382	15223	15095
2010	15016	15078	15192	15281	14856	14475	14542	14673	14577	14584	15094	14354
2011	13992	13798	13716	13872	13871	13964	13817	13837	13910	13696	13325	13049
2012	12748	12806	12686	12518	12695	12701	12745	12483	12082	12248	12042	12206
2013	12332	12032	11742	11659

Unemployment Rate U-3

7.5%

Series Id:           LNS14000000
Seasonally Adjusted
Series title:        (Seas) Unemployment Rate
Labor force status:  Unemployment rate
Type of data:        Percent or rate
Age:                 16 years and over

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2000	4.0	4.1	4.0	3.8	4.0	4.0	4.0	4.1	3.9	3.9	3.9	3.9
2001	4.2	4.2	4.3	4.4	4.3	4.5	4.6	4.9	5.0	5.3	5.5	5.7
2002	5.7	5.7	5.7	5.9	5.8	5.8	5.8	5.7	5.7	5.7	5.9	6.0
2003	5.8	5.9	5.9	6.0	6.1	6.3	6.2	6.1	6.1	6.0	5.8	5.7
2004	5.7	5.6	5.8	5.6	5.6	5.6	5.5	5.4	5.4	5.5	5.4	5.4
2005	5.3	5.4	5.2	5.2	5.1	5.0	5.0	4.9	5.0	5.0	5.0	4.9
2006	4.7	4.8	4.7	4.7	4.6	4.6	4.7	4.7	4.5	4.4	4.5	4.4
2007	4.6	4.5	4.4	4.5	4.4	4.6	4.7	4.6	4.7	4.7	4.7	5.0
2008	5.0	4.9	5.1	5.0	5.4	5.6	5.8	6.1	6.1	6.5	6.8	7.3
2009	7.8	8.3	8.7	9.0	9.4	9.5	9.5	9.6	9.8	10.0	9.9	9.9
2010	9.8	9.8	9.9	9.9	9.6	9.4	9.5	9.5	9.5	9.5	9.8	9.3
2011	9.1	9.0	8.9	9.0	9.0	9.1	9.0	9.0	9.0	8.9	8.6	8.5
2012	8.3	8.3	8.2	8.1	8.2	8.2	8.2	8.1	7.8	7.9	7.8	7.8
2013	7.9	7.7	7.6	7.5

16-19 Years (Teenage) Unemployment Rate

24.1%

Series Id:           LNS14000012
Seasonally Adjusted
Series title:        (Seas) Unemployment Rate – 16-19 yrs.
Labor force status:  Unemployment rate
Type of data:        Percent or rate
Age:                 16 to 19 years

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2000	12.7	13.8	13.3	12.6	12.8	12.3	13.4	14.0	13.0	12.8	13.0	13.2
2001	13.8	13.7	13.8	13.9	13.4	14.2	14.4	15.6	15.2	16.0	15.9	17.0
2002	16.5	16.0	16.6	16.7	16.6	16.7	16.8	17.0	16.3	15.1	17.1	16.9
2003	17.2	17.2	17.8	17.7	17.9	19.0	18.2	16.6	17.6	17.2	15.7	16.2
2004	17.0	16.5	16.8	16.6	17.1	17.0	17.8	16.7	16.6	17.4	16.4	17.6
2005	16.2	17.5	17.1	17.8	17.8	16.3	16.1	16.1	15.5	16.1	17.0	14.9
2006	15.1	15.3	16.1	14.6	14.0	15.8	15.9	16.0	16.3	15.2	14.8	14.6
2007	14.8	14.9	14.9	15.9	15.9	16.3	15.3	15.9	15.9	15.4	16.2	16.8
2008	17.8	16.6	16.1	15.9	19.0	19.2	20.7	18.6	19.1	20.0	20.3	20.5
2009	20.7	22.2	22.2	22.2	23.4	24.7	24.3	25.0	25.9	27.1	26.9	26.6
2010	26.0	25.4	26.2	25.5	26.6	26.0	26.0	25.7	25.8	27.2	24.6	25.1
2011	25.5	24.0	24.4	24.7	24.0	24.7	24.9	25.2	24.4	24.1	23.9	22.9
2012	23.4	23.7	25.0	24.9	24.4	23.7	23.9	24.5	23.7	23.7	23.6	23.5
2013	23.4	25.1	24.2	24.1

Average Weeks Unemployed

36.5%

Series Id:           LNS13008275
Seasonally Adjusted
Series title:        (Seas) Average Weeks Unemployed
Labor force status:  Unemployed
Type of data:        Number of weeks
Age:                 16 years and over

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2000	13.1	12.6	12.7	12.4	12.6	12.3	13.4	12.9	12.2	12.7	12.4	12.5
2001	12.7	12.8	12.8	12.4	12.1	12.7	12.9	13.3	13.2	13.3	14.3	14.5
2002	14.7	15.0	15.4	16.3	16.8	16.9	16.9	16.5	17.6	17.8	17.6	18.5
2003	18.5	18.5	18.1	19.4	19.0	19.9	19.7	19.2	19.5	19.3	19.9	19.8
2004	19.9	20.1	19.8	19.6	19.8	20.5	18.8	18.8	19.4	19.5	19.7	19.4
2005	19.5	19.1	19.5	19.6	18.6	17.9	17.6	18.4	17.9	17.9	17.5	17.5
2006	16.9	17.8	17.1	16.7	17.1	16.6	17.1	17.1	17.1	16.3	16.2	16.1
2007	16.3	16.7	17.8	16.9	16.6	16.5	17.2	17.0	16.3	17.0	17.3	16.6
2008	17.5	16.9	16.5	16.9	16.6	17.1	17.0	17.7	18.6	19.9	18.9	19.9
2009	19.8	20.1	20.9	21.6	22.4	23.9	25.1	25.3	26.7	27.4	29.0	29.7
2010	30.4	29.8	31.6	33.2	33.9	34.4	33.8	33.6	33.4	34.0	34.1	34.8
2011	37.3	37.4	39.2	38.6	39.5	39.6	40.4	40.3	40.4	38.9	40.7	40.7
2012	40.2	39.9	39.5	39.1	39.6	39.7	38.8	39.3	39.6	39.9	39.7	38.1
2013	35.3	36.9	37.1	36.5

Unemployment Level New Entrants

1,280,000

Series Id:                  LNS13023569
Seasonally Adjusted
Series title:               (Seas) Unemployment Level – New Entrants
Labor force status:         Unemployed
Type of data:               Number in thousands
Age:                        16 years and over
Unemployed entrant status:  New entrants

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2000	394	420	429	406	466	427	433	499	415	402	419	490
2001	444	396	378	457	468	467	448	485	473	481	495	515
2002	484	507	538	527	497	549	545	612	536	479	591	535
2003	599	584	630	635	630	661	669	652	686	636	593	693
2004	676	666	631	652	718	649	702	704	695	734	700	702
2005	621	753	712	764	710	650	630	626	607	638	673	633
2006	616	711	636	591	517	646	639	646	612	572	591	586
2007	622	599	615	620	530	640	602	588	668	696	678	679
2008	677	656	704	625	797	786	835	821	815	819	763	803
2009	779	999	874	901	965	1002	1004	1085	1150	1100	1326	1240
2010	1199	1192	1155	1188	1201	1170	1207	1279	1211	1277	1272	1308
2011	1352	1289	1308	1301	1220	1231	1278	1260	1370	1289	1271	1286
2012	1258	1382	1421	1362	1347	1316	1299	1268	1253	1302	1326	1291
2013	1287	1279	1316	1280

Not in Labor Force, Search For Work and Available

2,347,000

Series Id:                       LNU05026642
Not Seasonally Adjusted
Series title:                    (Unadj) Not in Labor Force, Searched For Work and Available
Labor force status:              Not in labor force
Type of data:                    Number in thousands
Age:                             16 years and over
Job desires/not in labor force:  Want a job now
Reasons not in labor force:      Available to work now

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Annual
2000	1207	1281	1219	1216	1113	1142	1172	1097	1166	1044	1100	1125	1157
2001	1295	1337	1109	1131	1157	1170	1232	1364	1335	1398	1331	1330	1266
2002	1532	1423	1358	1397	1467	1380	1507	1456	1501	1416	1401	1432	1439
2003	1598	1590	1577	1399	1428	1468	1566	1665	1544	1586	1473	1483	1531
2004	1670	1691	1643	1526	1533	1492	1557	1587	1561	1647	1517	1463	1574
2005	1804	1673	1588	1511	1428	1583	1516	1583	1438	1414	1415	1589	1545
2006	1644	1471	1468	1310	1388	1584	1522	1592	1299	1478	1366	1252	1448
2007	1577	1451	1385	1391	1406	1454	1376	1365	1268	1364	1363	1344	1395
2008	1729	1585	1352	1414	1416	1558	1573	1640	1604	1637	1947	1908	1614
2009	2130	2051	2106	2089	2210	2176	2282	2270	2219	2373	2323	2486	2226
2010	2539	2527	2255	2432	2223	2591	2622	2370	2548	2602	2531	2609	2487
2011	2800	2730	2434	2466	2206	2680	2785	2575	2511	2555	2591	2540	2573
2012	2809	2608	2352	2363	2423	2483	2529	2561	2517	2433	2505	2614	2516
2013	2443	2588	2326	2347

Not in Labor Force, Searched for Work and Available,

Discouraged Reasons For Not Currently Looking

835,000

Series Id:                       LNU05026645
Not Seasonally Adjusted
Series title:                    (Unadj) Not in Labor Force, Searched For Work and Available, Discouraged Reasons For Not Currently Looking
Labor force status:              Not in labor force
Type of data:                    Number in thousands
Age:                             16 years and over
Job desires/not in labor force:  Want a job now
Reasons not in labor force:      Discouragement over job prospects (Persons who believe no job is available.)

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Annual
2000	236	267	258	331	280	309	266	203	253	232	236	269	262
2001	301	287	349	349	328	294	310	337	285	331	328	348	321
2002	328	375	330	320	414	342	405	378	392	359	385	403	369
2003	449	450	474	437	482	478	470	503	388	462	457	433	457
2004	432	484	514	492	476	478	504	534	412	429	392	442	466
2005	515	485	480	393	392	476	499	384	362	392	404	451	436
2006	396	386	451	381	323	481	428	448	325	331	349	274	381
2007	442	375	381	399	368	401	367	392	276	320	349	363	369
2008	467	396	401	412	400	420	461	381	467	484	608	642	462
2009	734	731	685	740	792	793	796	758	706	808	861	929	778
2010	1065	1204	994	1197	1083	1207	1185	1110	1209	1219	1282	1318	1173
2011	993	1020	921	989	822	982	1119	977	1037	967	1096	945	989
2012	1059	1006	865	968	830	821	852	844	802	813	979	1068	909
2013	804	885	803	835

Total Unemployment Rate U-6

13.9%

Series Id:           LNS13327709
Seasonally Adjusted
Series title:        (seas) Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers
Labor force status:  Aggregated totals unemployed
Type of data:        Percent or rate
Age:                 16 years and over
Percent/rates:       Unemployed and mrg attached and pt for econ reas as percent of labor force plus marg attached

2000	7.1	7.2	7.1	6.9	7.1	7.0	7.0	7.1	7.0	6.8	7.1	6.9
2001	7.3	7.4	7.3	7.4	7.5	7.9	7.8	8.1	8.7	9.3	9.4	9.6
2002	9.5	9.5	9.4	9.7	9.5	9.5	9.6	9.6	9.6	9.6	9.7	9.8
2003	10.0	10.2	10.0	10.2	10.1	10.3	10.3	10.1	10.4	10.2	10.0	9.8
2004	9.9	9.7	10.0	9.6	9.6	9.5	9.5	9.4	9.4	9.7	9.4	9.2
2005	9.3	9.3	9.1	8.9	8.9	9.0	8.8	8.9	9.0	8.7	8.7	8.6
2006	8.4	8.4	8.2	8.1	8.2	8.4	8.5	8.4	8.0	8.2	8.1	7.9
2007	8.4	8.2	8.0	8.2	8.2	8.3	8.4	8.4	8.4	8.4	8.4	8.8
2008	9.2	9.0	9.1	9.2	9.7	10.1	10.5	10.8	11.0	11.8	12.6	13.6
2009	14.2	15.1	15.7	15.9	16.4	16.5	16.5	16.7	16.7	17.1	17.1	17.1
2010	16.7	17.0	17.0	17.1	16.6	16.5	16.5	16.5	16.8	16.7	16.9	16.6
2011	16.2	16.0	15.8	16.0	15.8	16.1	16.0	16.1	16.3	16.0	15.5	15.2
2012	15.1	15.0	14.5	14.5	14.8	14.8	14.9	14.7	14.7	14.5	14.4	14.4
2013	14.4	14.3	13.8	13.9

Background Articles and Videos

Employment Situation Summary

Transmission of material in this release is embargoed                   USDL-13-0785
until 8:30 a.m. (EDT) Friday, May 3, 2013

Technical information:
 Household data:       (202) 691-6378  *  cpsinfo@bls.gov  *  www.bls.gov/cps
 Establishment data:   (202) 691-6555  *  cesinfo@bls.gov  *  www.bls.gov/ces

Media contact:         (202) 691-5902  *  PressOffice@bls.gov

                       THE EMPLOYMENT SITUATION -- APRIL 2013

Total nonfarm payroll employment rose by 165,000 in April, and the unemployment 
rate was little changed at 7.5 percent, the U.S. Bureau of Labor Statistics 
reported today. Employment increased in professional and business services, 
food services and drinking places, retail trade, and health care.

Household Survey Data

The unemployment rate, at 7.5 percent, changed little in April but has 
declined by 0.4 percentage point since January. The number of unemployed 
persons, at 11.7 million, was also little changed over the month; however, 
unemployment has decreased by 673,000 since January. (See table A-1.)

Among the major worker groups, the unemployment rate for adult women
(6.7 percent) declined in April, while the rates for adult men (7.1
percent), teenagers (24.1 percent), whites (6.7 percent), blacks (13.2
percent), and Hispanics (9.0 percent) showed little or no change. The
jobless rate for Asians was 5.1 percent (not seasonally adjusted),
little changed from a year earlier. (See tables A-1, A-2, and A-3.)

In April, the number of long-term unemployed (those jobless for 27
weeks or more) declined by 258,000 to 4.4 million; their share of the
unemployed declined by 2.2 percentage points to 37.4 percent. Over the
past 12 months, the number of long-term unemployed has decreased by
687,000, and their share has declined by 3.1 percentage points. (See
table A-12.)

The civilian labor force participation rate was 63.3 percent in April,
unchanged over the month but down from 63.6 percent in January. The
employment-population ratio, 58.6 percent, was about unchanged over
the month and has shown little movement, on net, over the past year.
(See table A-1.)

In April, the number of persons employed part time for economic
reasons (sometimes referred to as involuntary part-time workers)
increased by 278,000 to 7.9 million, largely offsetting a decrease in
March. These individuals were working part time because their hours
had been cut back or because they were unable to find a full-time job.
(See table A-8.)

In April, 2.3 million persons were marginally attached to the labor
force, essentially unchanged from a year earlier. (The data are not
seasonally adjusted.) These individuals were not in the labor force,
wanted and were available for work, and had looked for a job sometime
in the prior 12 months. They were not counted as unemployed because
they had not searched for work in the 4 weeks preceding the survey.
(See table A-16.)

Among the marginally attached, there were 835,000 discouraged workers
in April, down by 133,000 from a year earlier. (The data are not
seasonally adjusted.) Discouraged workers are persons not currently
looking for work because they believe no jobs are available for them.
The remaining 1.5 million persons marginally attached to the labor
force in April had not searched for work in the 4 weeks preceding the
survey for reasons such as school attendance or family responsibilities. 
(See table A-16.)

Establishment Survey Data

Total nonfarm payroll employment increased by 165,000 in April, with
job gains in professional and business services, food services and
drinking places, retail trade, and health care. Over the prior 12
months, employment growth averaged 169,000 per month. (See table B-1.)

Professional and business services added 73,000 jobs in April and has
added 587,000 jobs over the past year. In April, employment rose in
temporary help services (+31,000), professional and technical services
(+23,000), and management of companies (+7,000).

Within leisure and hospitality, employment in food services and
drinking places rose by 38,000 over the month. Job growth in the food
services industry averaged 25,000 per month over the prior 12 months.

Retail trade employment increased by 29,000 in April. The industry
added an average of 21,000 jobs per month over the prior 12 months. In
April, job growth occurred in general merchandise stores (+15,000) and
in health and personal care stores (+5,000).

Health care added 19,000 jobs in April. Within the industry, employment 
rose in ambulatory health care services (+14,000). Over the prior 12 
months, job growth in health care averaged 24,000 per month. In April, 
employment also continued its upward trend in social assistance (+7,000).

Employment changed little over the month in construction, with small
offsetting movements in the residential and nonresidential components.
Construction gained an average of 27,000 jobs per month over the prior 
6 months. Manufacturing employment was unchanged in April.

Employment in other major industries, including mining and logging,
wholesale trade, transportation and warehousing, financial activities,
and government, showed little change over the month.

The average workweek for all employees on private nonfarm payrolls
decreased by 0.2 hour in April to 34.4 hours. Within manufacturing, 
the workweek decreased by 0.1 hour to 40.7 hours, and overtime declined 
by 0.1 hour to 3.3 hours. The average workweek for production and
nonsupervisory employees on private nonfarm payrolls decreased by 0.1
hour to 33.7 hours. (See tables B-2 and B-7.)

In April, average hourly earnings for all employees on private nonfarm
payrolls rose by 4 cents to $23.87. Over the year, average hourly
earnings have risen by 45 cents, or 1.9 percent. In April, average
hourly earnings of private-sector production and nonsupervisory
employees edged up by 2 cents to $20.06. (See tables B-3 and B-8.)

The change in total nonfarm payroll employment for February was
revised from +268,000 to +332,000, and the change for March was
revised from +88,000 to +138,000. With these revisions, employment
gains in February and March combined were 114,000 higher than
previously reported.

____________
The Employment Situation for May is scheduled to be released on
Friday, June 7, 2013, at 8:30 a.m. (EDT).

Employment Situation Summary Table A. Household data, seasonally adjusted

[Numbers in thousands]

CategoryApr.
2012Feb.
2013Mar.
2013Apr.
2013Change from:
Mar.
2013-
Apr.
2013Employment status Civilian noninstitutional population242,784244,828244,995245,175180Civilian labor force154,451155,524155,028155,238210Participation rate63.663.563.363.30.0Employed141,934143,492143,286143,579293Employment-population ratio58.558.658.558.60.1Unemployed12,51812,03211,74211,659-83Unemployment rate8.17.77.67.5-0.1Not in labor force88,33289,30489,96789,936-31 Unemployment rates Total, 16 years and over8.17.77.67.5-0.1Adult men (20 years and over)7.57.16.97.10.2Adult women (20 years and over)7.47.07.06.7-0.3Teenagers (16 to 19 years)24.925.124.224.1-0.1White7.46.86.76.70.0Black or African American13.113.813.313.2-0.1Asian (not seasonally adjusted)5.26.15.05.1-Hispanic or Latino ethnicity10.39.69.29.0-0.2 Total, 25 years and over6.86.36.26.1-0.1Less than a high school diploma12.511.211.111.60.5High school graduates, no college7.97.97.67.4-0.2Some college or associate degree7.56.76.46.40.0Bachelor’s degree and higher4.03.83.83.90.1 Reason for unemployment Job losers and persons who completed temporary jobs6,8806,5226,3296,41081Job leavers989956986864-122Reentrants3,3363,3403,1763,151-25New entrants1,3621,2791,3161,280-36 Duration of unemployment Less than 5 weeks2,5672,6672,4642,474105 to 14 weeks2,8412,7822,8382,8481015 to 26 weeks1,9841,6951,7371,96723027 weeks and over5,0404,7974,6114,353-258 Employed persons at work part time Part time for economic reasons7,8967,9887,6387,916278Slack work or business conditions5,2105,1364,9065,129223Could only find part-time work2,3932,5782,5762,527-49Part time for noneconomic reasons18,86818,90818,74518,908163 Persons not in the labor force (not seasonally adjusted) Marginally attached to the labor force2,3632,5882,3262,347-Discouraged workers968885803835– Over-the-month changes are not displayed for not seasonally adjusted data.
NOTE: Persons whose ethnicity is identified as Hispanic or Latino may be of any race. Detail for the seasonally adjusted data shown in this table will not necessarily add to totals because of the independent seasonal adjustment of the various series. Updated population controls are introduced annually with the release of January data.

Employment Situation Summary Table B. Establishment data, seasonally adjusted

ESTABLISHMENT DATA
Summary table B. Establishment data, seasonally adjusted
Category	Apr. 2012	Feb. 2013	Mar. 2013(p)	Apr. 2013(p)
EMPLOYMENT BY SELECTED INDUSTRY (Over-the-month change, in thousands)
Total nonfarm	112	332	138	165
Total private	120	319	154	176
Goods-producing	6	75	15	-9
Mining and logging	0	4	0	-3
Construction	-4	48	13	-6
Manufacturing	10	23	2	0
Durable goods(1)	8	12	7	1
Motor vehicles and parts	1.0	6.4	4.1	2.4
Nondurable goods	2	11	-5	-1
Private service-providing(1)	114	244	139	185
Wholesale trade	13.2	4.7	2.9	4.1
Retail trade	30.4	25.8	-3.9	29.3
Transportation and warehousing	-15.1	-5.3	-6.7	4.2
Information	0	18	2	-9
Financial activities	5	15	5	9
Professional and business services(1)	45	93	64	73
Temporary help services	14.7	27.5	25.5	30.8
Education and health services(1)	22	31	46	28
Health care and social assistance	20.7	37.0	26.5	26.1
Leisure and hospitality	14	63	38	43
Other services	0	-1	-8	4
Government	-8	13	-16	-11

WOMEN AND PRODUCTION AND NONSUPERVISORY EMPLOYEES(2) AS A PERCENT OF ALL EMPLOYEES
Total nonfarm women employees	49.4	49.3	49.3	49.3
Total private women employees	47.8	47.8	47.8	47.9
Total private production and nonsupervisory employees	82.6	82.6	82.6	82.6

HOURS AND EARNINGS ALL EMPLOYEES
Total private
Average weekly hours	34.5	34.5	34.6	34.4
Average hourly earnings	$23.42	$23.82	$23.83	$23.87
Average weekly earnings	$807.99	$821.79	$824.52	$821.13
Index of aggregate weekly hours (2007=100)(3)	96.3	97.9	98.3	97.9
Over-the-month percent change	0.1	0.5	0.4	-0.4
Index of aggregate weekly payrolls (2007=100)(4)	107.6	111.2	111.7	111.5
Over-the-month percent change	0.2	0.7	0.4	-0.2

HOURS AND EARNINGS PRODUCTION AND NONSUPERVISORY EMPLOYEES
Total private
Average weekly hours	33.7	33.8	33.8	33.7
Average hourly earnings	$19.72	$20.03	$20.04	$20.06
Average weekly earnings	$664.56	$677.01	$677.35	$676.02
Index of aggregate weekly hours (2002=100)(3)	103.6	105.6	105.7	105.5
Over-the-month percent change	0.1	0.9	0.1	-0.2
Index of aggregate weekly payrolls (2002=100)(4)	136.4	141.2	141.4	141.3
Over-the-month percent change	0.3	1.1	0.1	-0.1

DIFFUSION INDEX(5) (Over 1-month span)
Total private (266 industries)	58.3	61.7	56.2	53.9
Manufacturing (81 industries)	54.9	56.8	51.9	44.4
Footnotes (1) Includes other industries, not shown separately. (2) Data relate to production employees in mining and logging and manufacturing, construction employees in construction, and nonsupervisory employees in the service-providing industries. (3) The indexes of aggregate weekly hours are calculated by dividing the current month’s estimates of aggregate hours by the corresponding annual average aggregate hours. (4) The indexes of aggregate weekly payrolls are calculated by dividing the current month’s estimates of aggregate weekly payrolls by the corresponding annual average aggregate weekly payrolls. (5) Figures are the percent of industries with employment increasing plus one-half of the industries with unchanged employment, where 50 percent indicates an equal balance between industries with increasing and decreasing employment. (p) Preliminary

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Ben Bernanke Boom Bubble Blower Busted By The Bubble Film — Videos

Posted on May 1, 2013. Filed under: American History, Banking, Blogroll, Business, College, Communications, Diasters, Economics, Education, Employment, Federal Government, Federal Government Budget, Fiscal Policy, Food, Foreign Policy, government, government spending, history, History of Economic Thought, Homes, Inflation, Investments, Language, Law, liberty, Life, Links, Literacy, Macroeconomics, Math, media, Microeconomics, Monetary Policy, Money, People, Philosophy, Politics, Rants, Raves, Taxes, Technology, Transportation, Unemployment, Video, War, Wealth, Wisdom | Tags: Economics, Recession, Videos, Friedrick Hayek, Ludwig von Mises, Jim Rogers, inflation, Banking, fiscal policy, monetary policy, economic growth, Money, Quantitative Easing, Ben Bernanke, Housing, Peter Schiff, Tom Woods, Marc Faber, Savings, Keynesians, Austrian School of Economics, Boom, Bust, Jim Grant, Creating Money, David Stockman, Bubble, Federal Funds Rate, Bubble Busting, Misallocation of Resources, Joseph Salerno, Robert Murphy, Roger Garrison, Housing Bubble |

Ben Bernanke Is The Most Dangerous Man In US History

BREAKING 2013 Economic Collapse Peter Schiff

The Bubble film official trailer

Raw footage of Jim Rogers interview – The Bubble film

Raw Footage of Doug Casey Interview from The Bubble

Raw footage of Jim Grant interview from The Bubble film

Raw footage of Peter Schiff Interview from The Bubble

The Bubble – Raw footage of Marc Faber interview

Raw Footage of Peter Wallison Interview from The Bubble

Raw Footage of Joseph Salerno Interview from The Bubble

Raw Footage of Robert Murphy interview from The Bubble

Raw footage of Roger Garrison Interview from The Bubble

Raw footage of Ron Paul interview from The Bubble film

The Bubble film panel at Freedom Fest 2012

U.S. Debt Clock

http://www.usdebtclock.org/

Background Articles and Videos

The American Dream By The Provocateur Network

Slow “growth”,GDP makeover, Keynesians demand more debt and inflation

The Fed, Ben Bernanke & the Economy (4/30/13)

Coming Economic Collapse Peter Schiff RT America

Austrian Theory of the Trade Cycle | Roger W. Garrison

Tom Woods Discusses his New Documentary, The Bubble

Director of “The Bubble” Jimmy Morrison interview with ManifestLiberty.com Part 1/2

Director of “The Bubble” Jimmy Morrison interview with ManifestLiberty.com Part 2/2

Fed Keeps Interest Rates Low, Continues Bond Buying Program

The Federal Reserve held fast to its ultra-accommodative monetary policy Wednesday, solidified by what board members described as an economy weakened by fiscal policy.

Interest rates will remain at historically low levels while the U.S. central bank will not alter its $85 billion a month asset purchasing program, the Fed’s Open Markets Committee decided at this week’s meeting.

While recent meetings have been remarkable for signs of dissent over the long-standing Fed policy, the sentiment this month turned towards concerns about “downside risks” to growth, though the FOMC made no mention of the recent set of weak economic data.

The Federal Reserve held fast to its ultra-accommodative monetary policy Wednesday, solidified by what board members described as an economy weakened by fiscal policy.

While stocks have soared to new highs, the economy remains in slow-growth mode as it has throughout Chairman Ben Bernanke’s term, which began just before the onset of the financial crisis.

The stock market reacted little to the 2 pm news, maintaining an earlier selloff spurred over jobs fears.

Fed officials have long bemoaned Washington fiscal policy, with Congress and the White House in a continued stalemate that has resulted in a raft of mandated tax increases and spending cuts known as the sequester.

The May FOMC statement kept up the heat.

“Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy is restraining economic growth,” the statement said.

The Fed’s decision came the same day as a report on private payrolls fell well below expectations, indicating just 119,000 new jobs created, a seven-month low.

While critics worry about inflation, the Fed continued to conclude that “expectations have remained stable.”

The Fed has vowed to keep interest rates exceptionally low until unemployment falls to 6.5 percent from its current 7.6 percent and until inflation reaches 2.5 percent from its current 1.5 percent.

-By CNBC.com Senior Writer Jeff Cox.

http://www.cnbc.com/id/100695681

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Paul Kengor — The Communist — Frank Marshall Davis: The Untold Story of Barack Obama’s Mentor — Videos

Posted on April 29, 2013. Filed under: American History, Blogroll, Books, College, Communications, Constitution, Crime, Economics, Education, Employment, Federal Government, Federal Government Budget, Foreign Policy, government spending, history, Inflation, Investments, Law, liberty, Life, Links, Literacy, Macroeconomics, media, Microeconomics, People, Philosophy, Politics, Psychology, Rants, Raves, Tax Policy, Unemployment, Video, Wealth | Tags: arack Obama's Mentor, Barack Obama, Books, Frank Marshall Davis, Glenn Beck, Is Barack Obama a Communist, lies, Marxist, Obama, Obama is a Marxist-Lenist, Paul Kengor, Photos, President Barack Obama, The Communist, The Untold Story of B, Videos |

Paul Kengor & Glenn Beck “The Communist” on GBTV Frank Marshall Davis Barack Obama’s Mentor

WATCH The Communist author Paul Kengor w/ Glenn Beck on the Radio Frank Marshall Davis Obama Mentor

Paul Kengor (1 of 3)

Paul Kengor (2 of 3)

Paul Kengor (3 of 3)

Paul Kengor on Frank Marshall Davis

Frank Marshall Davis Interview

Who is the REAL Barack Obama?

Is Barack Obama a communist?

“If I wanted America to fail”

Background Articles and Videos

Who was Frank Marshall Davis? (This is a 32-page analysis of the FBI file by Cliff Kincaid and Herbert Romerstein.) PDF
The Frank Marshall Davis Network in Hawaii (Andrew Walden examines the remnants of the Davis network in Hawaii). PDF
Pages from the FBI File (This 40-page report includes selected pages from the FBI file which document Davis’s Communist history and pro-Soviet and anti-white views). PDF
FBI File #1 (PDF)
FBI File #2 (PDF)
FBI File #3 (PDF)
FBI File #4 (PDF)
FBI File #5 (PDF)
FBI File #6 (PDF)
The Communist Party of Frank Marshall Davis (PDF)

Frank Marshall Davis – Rice & Roses Documentary (part 1/3)

Frank Marshall Davis – Rice & Roses Documentary (part 2/3)

Frank Marshall Davis – Rice & Roses Documentary (part 3/3)

Obama’s Real Father is Communist Frank Marshall Davis?

Michael Savage on Obama’s REAL Father; Dreams From My Real Father DVD; Savage Nation

Glenn Beck – Presidential Lies “Do You Know Anybody Like Barack Obama?”

Barack Obama 1995 Interview on Dreams From My Father Part 1

Barack Obama 1995 Interview on Dreams of My Father Part 2

Background Articles and Videos

Meltdown (pt 1-4) The Secret History of the Global Financial Collapse 2010

Meltdown (pt 2-4) The Secret History of the Global Financial Collapse 2010

Meltdown (pt 3-4) The Secret History of the Global Financial Collapse.2010

Meltdown – pt 4-4 The Secret History of the Global Financial Collapse (2010)

The Fall of Lehman Brothers

Goldman Sachs: Power and Peril – Documentary

The Ascent of Money: A Financial History of The World by Niall Ferguson Epsd. 1-5 (Full Documentary)

The Fall of the Dollar – The Death of a Fiat Currency part 1

The Fall of the Dollar – The Death of a Fiat Currency part 2

The First 12 Hours of a US Dollar Collapse

LIFE HIDDEN TRUTH 2013 GLOBAL FINANCIAL CRISIS

Billionaires Dumping Stocks, Economist Knows Why

Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast.

Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate. He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.

In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.

With 70% of the U.S. economy dependent on consumer spending, Buffett’s apparent lack of faith in these companies’ future prospects is worrisome.

Unfortunately Buffett isn’t alone.

Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. During the second quarter of the year, Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee.

Finally, billionaire George Soros recently sold nearly all of his bank stocks, including shares of JPMorgan Chase, Citigroup, and Goldman Sachs. Between the three banks, Soros sold more than a million shares.

So why are these billionaires dumping their shares of U.S. companies?

After all, the stock market is still in the midst of its historic rally. Real estate prices have finally leveled off, and for the first time in five years are actually rising in many locations. And the unemployment rate seems to have stabilized.

It’s very likely that these professional investors are aware of specific research that points toward a massive market correction, as much as 90%.

One such person publishing this research is Robert Wiedemer, an esteemed economist and author of the New York Times best-selling book Aftershock.

Editor’s Note: Wiedemer Gives Proof for His Dire Predictions in This Shocking Interview.

Before you dismiss the possibility of a 90% drop in the stock market as unrealistic, consider Wiedemer’s credentials.

In 2006, Wiedemer and a team of economists accurately predicted the collapse of the U.S. housing market, equity markets, and consumer spending that almost sank the United States. They published their research in the book America’s Bubble Economy.

The book quickly grabbed headlines for its accuracy in predicting what many thought would never happen, and quickly established Wiedemer as a trusted voice.

A columnist at Dow Jones said the book was “one of those rare finds that not only predicted the subprime credit meltdown well in advance, it offered Main Street investors a winning strategy that helped avoid the forty percent losses that followed . . .”

The chief investment strategist at Standard & Poor’s said that Wiedemer’s track record “demands our attention.”

And finally, the former CFO of Goldman Sachs said Wiedemer’s “prescience in (his) first book lends credence to the new warnings. This book deserves our attention.”

In the interview for his latest blockbuster Aftershock, Wiedemer says the 90% drop in the stock market is “a worst-case scenario,” and the host quickly challenged this claim.

Wiedemer calmly laid out a clear explanation of why a large drop of some sort is a virtual certainty.

It starts with the reckless strategy of the Federal Reserve to print a massive amount of money out of thin air in an attempt to stimulate the economy.

“These funds haven’t made it into the markets and the economy yet. But it is a mathematical certainty that once the dam breaks, and this money passes through the reserves and hits the markets, inflation will surge,” said Wiedemer.

“Once you hit 10% inflation, 10-year Treasury bonds lose about half their value. And by 20%, any value is all but gone. Interest rates will increase dramatically at this point, and that will cause real estate values to collapse. And the stock market will collapse as a consequence of these other problems.”

Read Latest Breaking News from Newsmax.com http://www.moneynews.com/MKTNews/billionaires-dump-economist-stock/2012/08/29/id/450265?PROMO_CODE=110D8-1&utm_source=taboola#ixzz2RhO2R5ey
Urgent: Should Obamacare Be Repealed? Vote Here Now!

http://www.moneynews.com/MKTNews/billionaires-dump-economist-stock/2012/08/29/id/450265?PROMO_CODE=110D8-1&utm_source=taboola

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2.5% First Quarter 2013 Real Annual Growth in Gross Domestic Product (GDP) — Stagflation — Government GDP Calculation of Investment To Include Intangibles R&D — Videos

Posted on April 26, 2013. Filed under: American History, Blogroll, Business, College, Communications, Economics, Education, Employment, Federal Government, Federal Government Budget, Fiscal Policy, government, government spending, history, History of Economic Thought, Investments, Law, liberty, Life, Links, Literacy, Macroeconomics, media, Microeconomics, People, Philosophy, Politics, Raves, Talk Radio, Tax Policy, Taxes, Technology, Unions, Video, War, Wisdom | Tags: BEA, Business Investment, GDP, Gross Domestic Product, New Way of Calculating GDP, Peter Schiff, Research By Defense Contractors, USA |

Ken Langone: Regulation Biggest Issue Hurting U.S. Economy

April 26 (Bloomberg) — Ken Langone, founder & CEO at Invemed Associates, talks with Bloomberg’s Erik Schatzker and Sara Eisen about first-quarter U.S. GDP, the impact of regulations and the anti-business stance of the Obama Administration. He speaks on Bloomberg Television’s “Market Makers.”

Peter Schiff We re in Depression, Dollar Crisis Coming

[

GDP Propaganda Exposed

Data shift to lift US economy 3%

By Robin Harding in Washington

The US economy will officially become 3 per cent bigger in July as part of a shake-up that will see government statistics take into account 21st century components such as film royalties and spending on research and development.

Billions of dollars of intangible assets will enter the gross domestic product of the world’s largest economy in a revision aimed at capturing the changing nature of US output.

Brent Moulton, who manages the national accounts at the Bureau of Economic Analysis, told the Financial Times that the update was the biggest since computer software was added to the accounts in 1999.

“We are carrying these major changes all the way back in time – which for us means to 1929 – so we are essentially rewriting economic history,” said Mr Moulton.

The changes will affect everything from the measured GDP of different US states to the stability of the inflation measure targeted by the Federal Reserve. They will force economists to revisit policy debates about everything from corporate profits to the causes of economic growth.

The revision, equivalent to adding a country as big as Belgium to the estimated size of the world economy, will make the US one of the first adopters of a new international standard for GDP accounting.

“We’re capitalising research and development and also this category referred to as entertainment, literary and artistic originals, which would be things like motion picture originals, long-lasting television programmes, books and sound recordings,” said Mr Moulton.

At present, R&D counts as a cost of doing business, so the final output of Apple iPads is included in GDP but the research done to create them is not. R&D will now count as an investment, adding a bit more than 2 per cent to the measured size of the economy.

GDP will soar in small states that host a lot of military R&D, but barely change in others, widening measured income gaps across the US. R&D is expected to boost the GDP of New Mexico by 10 per cent and Maryland by 6 per cent while Louisiana will see an increase of just 0.6 per cent.

Creative works are expected to add a further 0.5 per cent to the overall size of the US economy. Around one-third of that will come from movies, one-third from TV programmes, and one-third from books, music and theatre.

Deficits in defined benefit pension schemes will also be included because what companies have promised to pay out will be measured, rather than the cash they pay into plans.

“We will now show a liability for underfunded plans, which particularly has large ramifications for the government sector, where both at the state level and the federal level we have large underfunded plans,” said Mr Moulton.

The changes are in addition to a comprehensive revision of the national accounts that takes place every five years based on an economic census of nearly 4m US businesses.

Steve Landefeld, BEA director, said it was hard to predict the overall outcome given the mixture of new methodology and data updates. “What’s going to happen when you mix it with the new source data from the economic census . . . I don’t know,” he said.

But he said the revisions were unlikely to alter the picture of what has happened to the economy in recent years. “I wouldn’t be looking for large changes in trends or cycles.”

http://www.ft.com/cms/s/0/52d23fa6-aa98-11e2-bc0d-00144feabdc0.html#axzz2Rb5G6QBg

US GDP Will Be Revised Higher By $500 Billion Following Addition Of “Intangibles” To Economy

Submitted by Tyler Durden

Those who have been following the US debt to GDP ratio now that the US officially does not have a debt ceiling indefinitely, may have had the occasional panic attack seeing how this country’s leverage ratio is rapidly approaching that of a Troika case study of a PIIG in complete failure. And at 107% debt/GDP no explanations are necessary. Luckily, the official gatekeepers of America’s economic growth (with decimal point precision), the Bureau of Economic Analysis have a plan on how to make the US economy, which is now growing at an abysmal 1.5% annualized pace, or about 5 times slower than US debt growing at 7.5% annually, catch up: magically make up a number out of thin air, and add it to the total. And it literally is out of thin air: according to the FT the addition will constitute of a one-time addition of intangibles, amounting to 3% of total US GDP, or more than the size of Belgium at $500 billion, to the US economy.

From FT:

The US economy will officially become 3 per cent bigger in July as part of a shake-up that will see government statistics take into account 21st century components such as film royalties and spending on research and development.

Billions of dollars of intangible assets will enter the gross domestic product of the world’s largest economy in a revision aimed at capturing the changing nature of US output.

Brent Moulton, who manages the national accounts at the Bureau of Economic Analysis, told the Financial Times that the update was the biggest since computer software was added to the accounts in 1999.

“We are carrying these major changes all the way back in time – which for us means to 1929 – so we are essentially rewriting economic history,” said Mr Moulton.

What exactly will constitute GDP growth going forward? In a word, intangibles: films, books, magazines and iTunes songs.

“We’re capitalising research and development and also this category referred to as entertainment, literary and artistic originals, which would be things like motion picture originals, long-lasting television programmes, books and sound recordings,” said Mr Moulton.

At present, R&D counts as a cost of doing business, so the final output of Apple iPads is included in GDP but the research done to create them is not. R&D will now count as an investment, adding a bit more than 2 per cent to the measured size of the economy.

Nothing like adding intangibles in the fluid, ever-changing definition of what constitutes an economy.

Naturally, the only reason for this artificial “boost” to the US economy which apparently can be any old arbitrary number agreed upon by a few accountants, and which always goes up post revision, never down, is to make US debt/GDP under 100% once again, if only very briefly. Surely a few months later something else can be “added” to GDP making the US economy appear better than it is once more.

Finally, all of the above is a distraction for idiots.

As most people should know by know (this logically excludes economists), the only factor leading to economic “growth” is the expansion of liabilities of the financial system, whereby new credit (in a healthy environment, not one centrally-planned by several Princeton real-world rejects, where the central bank is forced to create all credit expansion with money that never leaves the banks and the capital markets closed loop) creates new money, creates demand for products and services, and circulates in the economy.

This can be seen in the chart below which shows the nearly perfect correlation between total bank liabilities in the US, as per the Fed’s Flow Of Funds report, and total US GDP.

Bottom line: the BEA can capitalize air consumption if it thinks it will make US GDP soar, but unless new credit and bank liabilities are created not due to forced supply but demand, and unless the private financial sector is finally willing to start lending money (which for the entire duration of QE it has not) US growth will stall and then proceed to decline.

Case in point: total US commerical bank loans are still lower than they were the day Lehman filed.

In other words, all the GDP “growth” since the Lehman failure has come on the back of money “created” by the Fed.

And there are still those who think the Fed will ever unwind…

http://www.zerohedge.com/news/2013-04-21/us-gdp-will-be-revised-higher-500-billion-following-addition-intangibles-economy

EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, FRIDAY, APRIL 26, 2013

BEA 13-18

* See the navigation bar at the right side of the news release text for links to data tables,
contact personnel and their telephone numbers, and supplementary materials.

Lisa S. Mataloni:	(202) 606-5304	(GDP)	gdpniwd@bea.gov
Recorded message:	(202) 606-5306
Jeannine Aversa:	(202) 606-2649	(News Media)

National Income and Product Accounts
Gross Domestic Product, First Quarter 2013 (advance estimate)

Real gross domestic product -- the output of goods and services produced by labor and property
located in the United States -- increased at an annual rate of 2.5 percent in the first quarter of 2013 (that
is, from the fourth quarter to the first quarter), according to the "advance" estimate released by the
Bureau of Economic Analysis. In the fourth quarter, real GDP increased 0.4 percent.

The Bureau emphasized that the first-quarter advance estimate released today is based on source
data that are incomplete or subject to further revision by the source agency (see the box on page 3 and
"Comparisons of Revisions to GDP" on page 5). The "second" estimate for the first quarter, based on
more complete data, will be released on May 30, 2013.

The increase in real GDP in the first quarter primarily reflected positive contributions from
personal consumption expenditures (PCE), private inventory investment, exports, residential investment,
and nonresidential fixed investment that were partly offset by negative contributions from federal
government spending and state and local government spending. Imports, which are a subtraction in the
calculation of GDP, increased.

BOX_______________________
Comprehensive Revision of the National Income and Product Accounts

BEA plans to release the results of the 14th comprehensive (or benchmark) revision of the national
income and product accounts (NIPAs) in conjunction with the second quarter 2013 "advance" estimate
on July 31, 2013. More information on the revision is available on BEA’s Web site at
www.bea.gov/gdp-revisions, including a link to an article in the March 2013 issue of the Survey of
Current Business that discusses the upcoming changes in definitions and presentations, including
capitalizing spending on research and development and on entertainment originals and measuring
transactions of defined benefit pension plans on an accrual accounting basis. An article in the May
Survey will describe changes in statistical methods, and an article in the September Survey will describe
the estimates in detail. Revised NIPA table stubs and news release stubs will be available in June.

FOOTNOTE___________________

Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise
specified. Quarter-to-quarter dollar changes are differences between these published estimates. Percent
changes are calculated from unrounded data and are annualized. "Real" estimates are in chained (2005)
dollars. Price indexes are chain-type measures.

This news release is available on www.bea.gov along with the Technical Note and highlights related to this release.
___________________________

The acceleration in real GDP in the first quarter primarily reflected an upturn in private
inventory investment, an acceleration in PCE, an upturn in exports, and a smaller decrease in federal
government spending that were partly offset by an upturn in imports and a deceleration in nonresidential
fixed investment.

Motor vehicle output added 0.24 percentage point to the first-quarter change in real GDP after
adding 0.18 percentage point to the fourth-quarter change. Final sales of computers subtracted 0.01
percentage point from the first-quarter change in real GDP after adding 0.10 percentage point to the
fourth-quarter change.

The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 1.1 percent in the first quarter, compared with an increase of 1.6 percent in the fourth.
Excluding food and energy prices, the price index for gross domestic purchases increased 1.3 percent in
the first quarter, compared with an increase of 1.2 percent in the fourth.

Real personal consumption expenditures increased 3.2 percent in the first quarter, compared with
an increase of 1.8 percent in the fourth. Durable goods increased 8.1 percent, compared with an increase
of 13.6 percent. Nondurable goods increased 1.0 percent, compared with an increase of 0.1 percent.
Services increased 3.1 percent, compared with an increase of 0.6 percent.

Real nonresidential fixed investment increased 2.1 percent in the first quarter, compared with an
increase of 13.2 percent in the fourth. Nonresidential structures decreased 0.3 percent, in contrast to an
increase of 16.7 percent. Equipment and software increased 3.0 percent, compared with an increase of
11.8 percent. Real residential fixed investment increased 12.6 percent, compared with an increase of
17.6 percent.

Real exports of goods and services increased 2.9 percent in the first quarter, in contrast to a
decrease of 2.8 percent in the fourth. Real imports of goods and services increased 5.4 percent, in
contrast to a decrease of 4.2 percent.

Real federal government consumption expenditures and gross investment decreased 8.4 percent
in the first quarter, compared with a decrease of 14.8 percent in the fourth. National defense decreased
11.5 percent, compared with a decrease of 22.1 percent. Nondefense decreased 2.0 percent, in contrast
to an increase of 1.7 percent. Real state and local government consumption expenditures and gross
investment decreased 1.2 percent, compared with a decrease of 1.5 percent.

The change in real private inventories added 1.03 percentage points to the first-quarter change in
real GDP after subtracting 1.52 percentage points from the fourth-quarter change. Private businesses
increased inventories $50.3 billion in the first quarter, following increases of $13.3 billion in the fourth
quarter and $60.3 billion in the third.

Real final sales of domestic product -- GDP less change in private inventories -- increased 1.5
percent in the first quarter, compared with an increase of 1.9 percent in the fourth.

Gross domestic purchases

Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- increased 2.9 percent in the first quarter; it was unchanged in the fourth quarter.

Disposition of personal income

Current-dollar personal income decreased $109.1 billion (3.2 percent) in the first quarter, in
contrast to an increase of $262.3 billion (8.1 percent) in the fourth. The downturn in personal income
primarily reflected a sharp downturn in personal dividend income and a sharp acceleration in
contributions for government social insurance -- a subtraction in the calculation of personal income.
Fourth-quarter personal dividend income was boosted by the payment of accelerated and special
dividends. The acceleration in contributions for government social insurance in the first quarter resulted
from the expiration of the "payroll tax holiday."

Personal current taxes increased $27.2 billion in the first quarter, compared with an increase of
$34.3 billion in the fourth.

Disposable personal income decreased $136.3 billion (4.4 percent) in the first quarter, in contrast
to an increase of $228.0 billion (7.9 percent) in the fourth. Real disposable personal income decreased
5.3 percent, in contrast to an increase of 6.2 percent.

Personal outlays increased $116.3 billion (4.1 percent) in the first quarter, compared with an
increase of $97.0 billion (3.4 percent) in the fourth. Personal saving -- disposable personal income less
personal outlays -- was $313.3 billion in the first quarter, compared with $566.0 billion in the fourth.

The personal saving rate -- personal saving as a percentage of disposable personal income -- was
2.6 percent in the first quarter, compared with 4.7 percent in the fourth. For a comparison of personal
saving in BEA’s national income and product accounts with personal saving in the Federal Reserve
Board’s flow of funds accounts and data on changes in net worth, go to
www.bea.gov/national/nipaweb/Nipa-Frb.asp.

Current-dollar GDP

Current-dollar GDP -- the market value of the nation's output of goods and services -- increased
3.7 percent, or $146.1 billion, in the first quarter to a level of $16,010.2 billion. In the fourth quarter,
current-dollar GDP increased 1.3 percent, or $53.1 billion.

BOX_____________________
Information on the assumptions used for unavailable source data is provided in a technical note
that is posted with the news release on BEA's Web site. Within a few days after the release, a detailed
"Key Source Data and Assumptions" file is posted on the Web site. In the middle of each month, an
analysis of the current quarterly estimate of GDP and related series is made available on the Web site;
click on Survey of Current Business, "GDP and the Economy." For information on revisions, see
"Revisions to GDP, GDI, and Their Major Components."
________________________

BEA's national, international, regional, and industry estimates; the Survey of Current Business;
and BEA news releases are available without charge on BEA's Web site at www.bea.gov. By visiting the
site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements.

* * *

Next release -- May 30, 2013, at 8:30 A.M. EDT for:
Gross Domestic Product: First Quarter 2013 (Second Estimate)
Corporate Profits: First Quarter 2013 (Preliminary Estimate)

Comparisons of Revisions to GDP

Quarterly estimates of GDP are released on the following schedule: the "advance" estimate, based on
source data that are incomplete or subject to further revision by the source agency, is released near the end of the
first month after the end of the quarter; as more detailed and more comprehensive data become available,
the "second" and "third" estimates are released near the end of the second and third months, respectively.
The "latest"” estimate reflects the results of both annual and comprehensive revisions.

Annual revisions, which generally cover the quarters of the 3 most recent calendar years, are usually carried
out each summer and incorporate newly available major annual source data. Comprehensive (or benchmark)
revisions are carried out at about 5-year intervals and incorporate major periodic source data, as well as
improvements in concepts and methods that update the accounts to portray more accurately the evolving U.S.
economy.

The table below shows comparisons of the revisions between quarterly percent changes of current-dollar
and of real GDP for the different vintages of the estimates. From the advance estimate to the second estimate (one
month later), the average revision to real GDP without regard to sign is 0.5 percentage point, while from the
advance estimate to the third estimate (two months later), it is 0.6 percentage point. From the advance estimate to
the latest estimate, the average revision without regard to sign is 1.3 percentage points. The average revision
(with regard to sign) from the advance estimate to the latest estimate is 0.2 percentage point, which is larger
than the average revisions from the advance estimate to the second or to the third estimates. The larger average
revisions to the latest estimate reflect the fact that comprehensive revisions include major improvements, such as
the incorporation of BEA’s latest benchmark input-output accounts. The quarterly estimates correctly indicate the
direction of change of real GDP 97 percent of the time, correctly indicate whether GDP is accelerating or
decelerating 72 percent of the time, and correctly indicate whether real GDP growth is above, near, or below trend
growth more than four-fifths of the time.

Revisions Between Quarterly Percent Changes of GDP: Vintage Comparisons
[Annual rates]

Vintages Average Average without Standard deviation of
compared regard to sign revisions without
regard to sign

____________________________________________________Current-dollar GDP_______________________________________________

Advance to second.................... 0.2 0.6 0.4
Advance to third..................... .1 .7 .4
Second to third...................... .0 .3 .2

Advance to latest.................... .3 1.2 1.0

________________________________________________________Real GDP_____________________________________________________

Advance to second.................... 0.1 0.5 0.4
Advance to third..................... .1 .6 .5
Second to third...................... .0 .2 .2

Advance to latest.................... .2 1.3 1.0

NOTE. These comparisons are based on the period from 1983 through 2009.

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Progressive President Problem — Warfare and Welfare State — Big Government Intervention In Economy At Home and Militarily Abroad — Government Dependency — Serfdom and Collectivism in The New World Order — They Have Won — The Solution — Freedom Force International– Videos

Posted on April 25, 2013. Filed under: American History, Blogroll, Business, College, Communications, Constitution, Crime, Demographics, Economics, Education, Employment, Federal Government, Federal Government Budget, Fiscal Policy, government, government spending, history, History of Economic Thought, Language, Law, liberty, Life, Links, Macroeconomics, media, People, Philosophy, Politics, Rants, Raves, Regulations, Security, Talk Radio, Tax Policy, Taxes, Technology, Terrorism, Video, War, Wealth, Wisdom | Tags: Barack Obama, Big Government, Bilderberg Group, Bill Clinton, Carroll Quigley, CFR, Collectivism, communism, Council of Foreign Relations, Freedom Force International, G. Edward Griffin, George W. Bush, government Dependency, Government Interventionism, Individualism, Jimmy Carter, President George H. W. Bush, Progressive Presidents, Progressives, Round Tables, Socialism, The Creature From Jekyll Island, The Road to Serfdom, Trilateral Commission, Tyranny, United Nations, Warfare and Welfare State |

Mind blowing speech by Robert Welch in 1958 predicting Insiders plans to destroy America

G. Edward Griffin: The Collectivist Conspiracy (Full Length)

An Idea Whose Time Has Come – G. Edward Griffin – Freedom Force International – Full

G. Edward Griffin Promotes Freedom Force International Part 1 of 2

G. Edward Griffin Promotes Freedom Force International Part 2 of 2

Capitalism Without Guilt – Yaron Brook on morals of capitalism.

Invisible Empire A New World Order Defined Full

George W. Bush breaks down at library dedication

Bill Clinton speaks of Carroll Quigley at 1992 Democratic National Convention

Hillary Clinton admits that the CFR runs the Government

Dick Cheney ex-director of CFR talks to David Rockefeller

Americans and Collectivism – TheBlazeTV – The Glenn Beck Program – 2013.04.26

Glenn Beck Predicts New World Order. Global Reset. U.S. Will Be A 3rd World State

Glenn Beck- ‘How Did Communism Become Cool?’

Super rich are in a conspiracy to rule the world – G. Edward Griffin

G. Edward Griffin The Dangerous Servant A Discourse on Government

The Quigley Formula – G. Edward Griffin lecture

“Legalized Plunder of the American People” – G. Edward Griffin

The Shadows of Power: The Council on Foreign Relations and the American Decline | James Perloff

Invisible Empire A New World Order Defined Full

[yotube=http://www.youtube.com/watch?v=NO24XmP1c5E]

THE CREED OF FREEDOM

INTRINSIC NATURE OF RIGHTS
I believe that only individuals have rights, not the collective group; that these rights are intrinsic to each individual, not granted by the state; for if the state has the power to grant them, it also has the power to deny them, and that is incompatible with personal liberty.
I believe that a just state derives its power solely from its citizens. Therefore, the state must never presume to do anything beyond what individual citizens also have the right to do. Otherwise, the state is a power unto itself and becomes the master instead of the servant of society.

SUPREMACY OF THE INDIVIDUAL
I believe that one of the greatest threats to freedom is to allow any group, no matter its numeric superiority, to deny the rights of the minority; and that one of the primary functions of a just state is to protect each individual from the greed and passion of the majority.

FREEDOM OF CHOICE
I believe that desirable social and economic objectives are better achieved by voluntary action than by coercion of law. I believe that social tranquility and brotherhood are better achieved by tolerance, persuasion, and the power of good example than by coercion of law. I believe that those in need are better served by charity, which is the giving of one’s own money, than by welfare, which is the giving of other people’s money through coercion of law.

EQUALITY UNDER LAW
I believe that all citizens should be equal under law, regardless of their national origin, race, religion, gender, education, economic status, life style, or political opinion. Likewise, no class should be given preferential treatment, regardless of the merit or popularity of its cause. To favor one class over another is not equality under law.

PROPER ROLE OF THE STATE
I believe that the proper role of the state is negative, not positive; defensive, not aggressive. It is to protect, not to provide; for if the state is granted the power to provide for some, it must also be able to take from others, and that always leads to legalized plunder and loss of freedom. If the state is powerful enough to give us everything we want, it also will be powerful enough to take from us everything we have. Therefore, the proper function of the state is to protect the lives, liberty, and property of its citizens, nothing more. That state is best which governs least.

THE THREE COMMANDMENTS OF FREEDOM

The Creed of Freedom is based on five principles. However, in day-to-day application, they can be reduced to just three codes of conduct. These are The Three Commandments of Freedom:

INDIVIDUAL RIGHTS
Only individuals have rights, not groups. Therefore, do not sacrifice the rights of any individual or minority for the alleged rights of groups.

EQUALITY UNDER LAW
To favor one class of citizens over others is not equality under law. Therefore, do not endorse any law that does not apply to all citizens equally.

FREEDOM OF CHOICE
The proper function of the state is to protect, not to provide. Therefore, do not approve coercion for any purpose except to protect human life, liberty, or property.

THE THREE PILLARS OF FREEDOM

Another way of viewing these principles is to consider them as the three pillars of freedom. They are concepts that underlie the ideology of individualism, and individualism is the indispensable foundation of freedom.

For the rational and historical support for The Creed of Freedom, see The Chasm in the Issues section of his site. This 21-page document will take 10 to 45 seconds to load depending on the speed of your Internet connection.

Background Articles and Videos

Freedom Force International speaker for Liberty in Pittsburgh

Rare Carroll Quigley interview

Professor Carroll Quigley, Bill Clinton’s mentor at Georgetown University, authored a massive volume entitled “Tragedy and Hope” in which he states: “There does exist and has existed for a generation, an international network which operates, to some extent, in the way the radical right believes the Communists act. In fact, this network, which we may identify as the Round Table Groups, has no aversion to cooperating with the Communists, or any other groups, and frequently does so. I know of the operations of this network because I have studied it for twenty years and was permitted for two years, in the early 1960s, to examine its papers and secret records. I have no aversion to it or to most of its aims, and have, for much of my life, been close to it and to many of its instruments. I have objected, both in the past and recently, to a few of its policies, but in general my chief difference of opinion is that it wishes to remain unknown, and I believe its role in history is significant enough to be known.”

[1 of 5] Rare Carroll Quigley Interview

Carroll Quigley was the historian for the Council on Foreign Relations and author of Tragedy and Hope (tragedy is all the people who must suffer and die for the NWO, and the hope is the NEW WORLD ORDER )

Professor Quigley was a Globalist, he supported the idea NEW WORLD ORDER and wrote about it, he, unlike the elites, thought the people should know about it.

“I know of this network because I have studied it for twenty years and was permitted for two years in the early 1960s to examine its papers and secret records. I have no aversion to it or to most of its aims and have, for much of my life, been close to it and to many of its instruments. I have objected, both in the past and recently, to a few of its policies … but in general my chief difference of opinion is that it wishes to remain unknown, and I believe its role in history is significant enough to be known.” — Dr. Carroll Quigley, Tragedy and Hope

“The powers of financial capitalism had another far reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements, arrived at in frequent private meetings and conferences…”

“The apex of the system was the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the worlds’ central banks which were themselves private corporations…”

“The growth of financial capitalism made possible a centralization of world economic control and use of this power for the direct benefit of financiers and the indirect injury of all other economic groups.” Tragedy and Hope: A History of The World in Our Time (Macmillan Company, 1966,) Professor Carroll Quigley of Georgetown University

“The Council on Foreign Relations is the American branch of a society which originated in England … [and] … believes national boundaries should be obliterated and one-world rule established.” Dr. Carroll Quigley

“As a teenager, I heard John Kennedy’s summons to citizenship. And then, as a student, I heard that call clarified by a professor I had named Carroll Quigley.”President Clinton, in his acceptance speech for the Democratic Party’s nomination for president, 16 July 1992

[2 of 5] Rare Carroll Quigley Interview

[3 of 5] Rare Carroll Quigley Interview

[4 of 5] Rare Carroll Quigley Interview

[5 of 5] Rare Carroll Quigley Interview

The Creature From Jekyll Island (by G. Edward Griffin)

The Creature From Jekyll Island
A Second Look at the Federal Reserve
by G. Edward Griffin

Recorded: 1994

Edward Griffin – The Subversion Factor

CFR – List of Members and Organisations Involved

Jimmy Carter Administration

President Carter (who became a CFR member in 1983) appointed over 60 CFR members to serve in his Administration:

Walter Mondale (Vice-President)

Zbigniew Brzezinski (National Security Advisor)

Cyrus R. Vance (Secretary of State)

W. Michael Blumenthal (Secretary of Treasury)

Harold Brown (Secretary of Defense)

Stansfield Turner (Director of the CIA)

Gen. David Jones (Chairman of the Joint Chiefs of Staff)

Ronald Reagan Administration

There were 75 CFR and Trilateral Commission members under President Reagan:

Alexander Haig (Secretary of State)

George Shultz (Secretary of State)

Donald Regan (Secretary of Treasury)

William Casey (CIA Director)

Malcolm Baldridge (Secretary of Commerce)

Jeanne J. Kirkpatrick (U.N. Ambassador)

Frank C. Carlucci (Deputy Secretary of Defense)

William E. Brock (Special Trade Representative)

George H. W. Bush Administration

During his 1964 campaign for the U.S. Senate in Texas, George Bush said: “If Red China should be admitted to the U.N., then the U.N. is hopeless and we should withdraw.” In 1970, as Ambassador to the U.N., he pushed for Red China to be seated in the General Assembly. When Bush was elected, the CFR member became the first President to publicly mention the “New World Order” and had in his Administration nearly 350 CFR and Trilateral Commission members:

Brent Scowcroft (National Security Advisor)

Richard B. Cheney (Secretary of Defense)

Colin L. Powell (Chairman of the Joint Chiefs of Staff)

William Webster (Director of the CIA)

Richard Thornburgh (Attorney General)

Nicholas F. Brady (Secretary of Treasury)

Lawrence S. Eagleburger (Deputy Secretary of State)

Horace G. Dawson, Jr. (U.S. Information Agency and Director of the Office of Equal Opportunity and Civil Rights)

Alan Greenspan (Chairman of the Federal Reserve Board)

Bill Clinton Administration

When CFR member Bill Clinton was elected, Newsweek magazine would later refer to him as the “New Age President.” In October, 1993, Richard Harwood, a Washington Post writer, in describing the Clinton Administration, said its CFR membership was “the nearest thing we have to a ruling establishment in the United States”.

Albert Gore, Jr. (Vice-President)

Donna E. Shalala (Secretary of Health and Human Services)

Laura D. Tyson (Chairman of the Council of Economic Advisors)

Alice M. Rivlin (Deputy Director of the Office of Management and Budget)

Madeline K. Albright (U.S. Ambassador to the U.N.)

Warren Christopher (Secretary of State)

Clifton R. Wharton, Jr. (Deputy Secretary of State and former Chairman of the Rockefeller Foundation)

Les Aspin (Secretary of Defense)

Colin Powell (Chairman, Joint Chiefs of Staff)

W. Anthony Lake (National Security Advisor)

George Stephanopoulos (Senior Advisor)

Samuel R. ‘Sandy’ Berger (Deputy National Security Advisor)

R. James Woolsey (CIA Director)

William J. Crowe, Jr. (Chairman of the Foreign Intelligence Advisory Board)

Lloyd Bentsen (former member, Secretary of Treasury)

Roger C. Altman (Deputy Secretary of Treasury)

Henry G. Cisneros (Secretary of Housing and Urban Development)

Bruce Babbit (Secretary of the Interior)

Peter Tarnoff (Under Secretary of State for International Security of Affairs)

Winston Lord (Assistant Secretary of State for East Asian and Pacific Affairs)

Strobe Talbott (Aid Coordinator to the Commonwealth of Independent States)

Alan Greenspan (Chairman of the Federal Reserve System)

Walter Mondale (U.S. Ambassador to Japan)

Ronald H. Brown (Secretary of Commerce)

Franklin D. Raines (Economics and International Trade).

George W. Bush Administration

Richard Cheney (Vice President, former Secretary of Defense under President G.H.W. Bush)

Colin Powell (Secretary of State, former Chairman of the Joint Chiefs of Staff under Presidents Bush and Clinton)

Condoleeza Rice (National Security Advisor, former member of President Bush’s National Security Council)

Robert B. Zoellick (U.S. Trade Representative, former Under Secretary of State in the Bush administration)

Elaine Chao (Secretary of Labor)

Brent Scowcroft (Chairman of the Foreign Intelligence Advisory Board, former National Security Advisor to President Bush)

Richard Haass (Director of Policy Planning at the State Department and Ambassador at Large)

Henry Kissinger (Pentagon Defense Policy Board, former Secretary of State under Presidents Nixon and Ford)

Robert Blackwill (U.S. Ambassador to India, former member of President Bush’s National Security Council)

Stephen Friedman (Sr. White House Economic Advisor)

Stephen Hadley (Deputy National Security Advisor, former Assistant Secretary of Defense under Cheney)

Richard Perle (Chairman of Pentagon Defense Policy Board, former Assistant Secretary of Defense in the Reagan administration)

Paul Wolfowitz (Assistant Secretary of Defense, former Assistant Secretary of State in the Reagan administration and former Under Secretary of Defense in the Bush administration)

Dov S. Zakheim (Under Secretary of Defense, Comptroller, former Under Secretary of Defense in the Reagan administration)

I. Lewis Libby (Chief of Staff for the Vice President, former Deputy Under Secretary of Defense).

http://modernhistoryproject.org/mhp?Article=FinalWarning&C=5.3

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Murray Rothbard: Six Stages of the Libertarian Movement — Videos

Posted on April 24, 2013. Filed under: American History, Banking, Blogroll, Business, College, Communications, Culture, Economics, Education, Employment, Federal Government, Federal Government Budget, Fiscal Policy, government, government spending, history, History of Economic Thought, Inflation, Investments, Language, Law, liberty, Life, Links, Literacy, Macroeconomics, Microeconomics, Monetary Policy, Money, People, Philosophy, Politics, Private Sector, Public Sector, Rants, Raves, Regulations, Tax Policy, Taxes, Technology, Unemployment, Unions, Video, War, Wealth, Weapons, Wisdom | Tags: Economics, freedom, Fund Raising, Libertarian Movement., liberty, Murray Rothbard, Poltics |

Murray Rothbard: Six Stages of the Libertarian Movement

Libertarianism | Murray N. Rothbard

The Future of Austrian Economics | Murray N. Rothbard

Lew Rockwell and Tom Woods discuss Rothbard and the Koch Brothers

Lew Rockwell.com Podcast #20 – Memories of Murray

Murray Rothbard Gives a Tribute to Ludwig von Mises

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Masters of Money — Keynes — Hayek — Marx — Videos

Posted on April 24, 2013. Filed under: Blogroll, Politics, Raves, Rants, Economics, Links, People, Life, Investments, Talk Radio, Education, Employment, Communications, Law, Philosophy, Wisdom, liberty, Monetary Policy, Fiscal Policy, government spending, media, history, government, Federal Government, College, Money, Banking, American History, Microeconomics, Inflation, Unemployment, Macroeconomics, Tax Policy, Federal Government Budget, History of Economic Thought | Tags: BBC, capitalism, CPI, depression, economic growth, Economic Thought, Economics, freedom, Friedrick A. Hayek, GDP, GDP Inflator, government intervention, Gross Domestic Product, John Maynard Keynes, Karl Marx, Masters of Money, Photos, Politics, Recession, Videos |

Masters Of Money: 1/3 – John Maynard Keynes (BBC Documentary Series)

Masters Of Money: 2/3 – Friedrich Hayek (BBC Documentary Series)

Masters Of Money: 3/3 – Karl Marx (BBC Documentary Series)

Keynes the Man: Hero or Villain? | Murray N. Rothbard

Modern Myths of Keynesian Economics | Jeffrey M. Herbener

Deck the Halls with Macro Follies

Keynesianism Part I – It’s All About Spending

What GDP Leaves Out: An Austrian Look

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LIBOR Scandal — Videos

Posted on April 23, 2013. Filed under: American History, Banking, Blogroll, Business, College, Communications, Crime, Economics, Education, Federal Government, Foreign Policy, government, government spending, history, Inflation, Investments, Language, Law, liberty, Life, Literacy, Macroeconomics, media, Monetary Policy, People, Philosophy, Politics, Video, Wealth, Wisdom | Tags: Barclays, crime of the century, Fraud, LIBOR Scandal, Videos |

Keiser Report: The Birth of a Scandal

LIBOR investigation by financier Martin Wheatley (10Aug12)

The Wheatley Review of LIBOR: Final Report

LIBOR Scandal More Than Fraud – Whole Game is Rigged

How Barclays manipulated the libor rates

On the Edge with Max Keiser: Libor rigging crime

What is the LIBOR / OIS spread? – MoneyWeek investment tutorials

The LIBOR scandal: what it means for you – MoneyWeek Investment Tutorials

The Biggest Banking Scandal The World Has Ever Seen (6:47)

The Real Story Surrounding LIBOR — A Worldwide Scandal—Is Now A Funeral

Max Keiser: Cancer is How They Will Take It All

[yuotube=http://www.youtube.com/watch?v=LHtLy3AfpMI]

Bernanke grilled on Libor scandal – Rough Cuts

BANKSTERS & Fraud, The LIBOR Scandal

Unknown LIBOR Fraud of The Century (Barclays)

WORLD BANKER MAKES STUNNING CONFESSION

Judge Napolitano: “LIBOR Scandal One of the Largest Bank Orchestrated Frauds in History”

The Department of Justice is reportedly deciding whether to charge banks over growing LIBOR interest rate fixes. The international investment bank Barclays Capital has already paid $450 million in fines for illegally manipulating the rates that banks charge each other to borrow money. That rate affects everything from credit cards to car loans and mortgage rates. Shepard Smith reported that it remains to be seen whether Treasury Secretary Timothy Geithner knew about the rate manipulation when he was head of the Federal Reserve Bank of New York.

Judge Andrew Napolitano explained the importance of the LIBOR interest rate, saying, “Think of it this way, the biggest banks in London each morning announce what they’re going to charge each other for money and that number is averaged … Whatever that rate is, is the baseline for millions of other loans and mortgages around the country.”

Libor scandal

The Libor scandal is a series of fraudulent actions connected to the Libor (London Interbank Offered Rate) and also the resulting investigation and reaction. The Libor is an average interest rate calculated through submissions of interest rates by major banks in London. The scandal arose when it was discovered that banks were falsely inflating or deflating their rates so as to profit from trades, or to give the impression that they were more creditworthy than they were.^[3] Libor underpins approximately $350 trillion in derivatives. It is controlled by the British Bankers’ Association (BBA).^[4]

The banks are supposed to submit the actual interest rates they are paying, or would expect to pay, for borrowing from other banks. The Libor is supposed to be the total assessment of the health of the financial system because if the banks being polled feel confident about the state of things, they report a low number and if the member banks feel a low degree of confidence in the financial system, they report a higher interest rate number. In June 2012, multiple criminal settlements by Barclays Bank revealed significant fraud and collusion by member banks connected to the rate submissions, leading to the scandal.^[5]^[6]^[7]

Because Libor is used in U.S. derivatives markets, an attempt to manipulate Libor is an attempt to manipulate U.S. derivatives markets, and thus a violation of American law. Since mortgages, student loans, financial derivatives, and other financial products often rely on Libor as a reference rate, the manipulation of submissions used to calculate those rates can have significant negative effects on consumers and financial markets worldwide.

On 27 July 2012, the Financial Times published an article by a former trader which stated that Libor manipulation had been common since at least 1991.^[8] Further reports on this have since come from the BBC^[9]^[10] and Reuters.^[11] On 28 November 2012, the Finance Committee of the Bundestag held a hearing to learn more about the issue.^[12]

The British Bankers’ Association said on 25 September 2012 that it would transfer oversight of Libor to UK regulators, as predicted by bank analysts,^[13] proposed by Financial Services Authority Managing Director Martin Wheatley‘s independent review recommendations.^[14] Wheatley’s review recommended that banks submitting rates to Libor must base them on actual inter-bank deposit market transactions and keep records of those transactions, that individual banks’ LIBOR submissions be published after three months, and recommended criminal sanctions specifically for manipulation of benchmark interest rates.^[15] Financial institution customers may experience higher and more volatile borrowing and hedging costs after implementation of the recommended reforms.^[16] The UK government agreed to accept all of the Wheatley Review’s recommendations and press for legislation implementing them.^[17]

Early reports of Libor manipulation

WSJ Libor study

Libor manipulation to lower rate

Hi Guys, We got a big position in 3m libor for the next 3 days. Can we please keep the lib or fixing at 5.39 for the next few days. It would really help. We do not want it to fix any higher than that. Tks a lot.

“

”

Barclays Bank trader in New York to submitter, 13 September 2006^[18]

On 16 April 2008, The Wall Street Journal released a controversial article, and later study, suggesting that some banks might have understated borrowing costs they reported for the Libor during the 2008 credit crunch that may have misled others about the financial position of these banks.^[19]^[20] In response, the BBA claimed that the Libor continued to be reliable even in times of financial crisis. Other authorities contradicted The Wall Street Journal article saying there was no evidence of manipulation. In its March 2008 Quarterly Review, the Bank for International Settlements stated that “available data do not support the hypothesis that contributor banks manipulated their quotes to profit from positions based on fixings.”^[21] Further, in October 2008, the International Monetary Fund published its regular Global Financial Stability Review which also found that “Although the integrity of the U.S. dollar Libor-fixing process has been questioned by some market participants and the financial press, it appears that U.S. dollar Libor remains an accurate measure of a typical creditworthy bank’s marginal cost of unsecured U.S. dollar term funding.”^[22]

A study by economists, Snider and Youle, in April 2010, however, corroborated the results of the earlier Wall Street Journal study that the Libor submissions by some member banks were being understated.^[23] Unlike the earlier study, Snider and Youle suggested that the reason for understatement by member banks was not that the banks were trying to appear strong, especially during the financial crisis period of 2007 to 2008, but rather that the banks sought to make substantial profits on their large Libor interest-linked portfolios.^[24] For example, in the first quarter of 2009, Citigroup had interest rate swaps of notional value of $14.2 trillion, Bank of America had interest rate swaps of notional value of $49.7 trillion and JP Morgan Chase had interest rate swaps of notional value of $49.3 trillion.^[25] Given the large notional values, a small unhedged exposure to the Libor could generate large incentives to alter the overall Libor. In the first quarter of 2009, Citigroup for example reported that it would make that quarter $936 million in net interest revenue if interest rates would fall by .25 percentage points a quarter, and $1,935 million if they were to fall by 1 percentage point instantaneously.^[26]

Central banks aware of Libor flaws

The Governor of the Bank of England, Mervyn King, by the end of 2008, described the Libor to the UK Parliament saying “It is in many ways the rate at which banks do not lend to each other, .. it is not a rate at which anyone is actually borrowing.”^[27]^[28]

The New York Federal Reserve in July 2012, released documents dating back to 2007 which showed that they were aware that banks were lying about their borrowing costs when setting Libor and chose to take no action against them at that time.^[29]^[30] Released minutes from the Bank of England indicated similarly that the bank and its deputy governor Paul Tucker were also aware as early as November 2007 of industry concerns that the Libor rate was being underreported.^[31]^[32] In one 2008 document a Barclays employee told a New York Fed analyst, “We know that we’re not posting an honest Libor, and yet we are doing it, because if we didn’t do it, it draws unwanted attention on ourselves.”^[30]

The documents show that in early 2008 a memo written by then New York Fed President Tim Geithner to Bank of England chief Mervyn King looked into ways to “fix” Libor.^[33]^[34] While the released memos suggest that the New York Fed helped to identify problems related to Libor and press the relevant authorities in the UK to reform, there is no documentation that shows any evidence that Geithner’s recommendations were acted upon or that the Fed tried to make sure that they were. In October 2008, several months after Geithner’s memo to King, a Barclays employee told a New York Fed representative that Libor rates were still “absolute rubbish.”^[30]

Regulatory investigations

The Wall Street Journal reported in March 2011 that regulators were focusing on Bank of America Corp., Citigroup Inc. and UBS AG in their probe of Libor rate manipulation.^[35] A year later, it was reported in February 2012 that the U.S. Department of Justice was conducting a criminal investigation into Libor abuse.^[36] Among the abuses being investigated were the possibility that traders were in direct communication with bankers before the rates were set, thus allowing them an unprecedented amount of insider knowledge into global instruments.^[37] In court documents, a trader from the Royal Bank of Scotland claimed that it was common practice among senior employees at his bank to make requests to the bank’s rate setters as to the appropriate Libor rate, and that the bank also made on occasions rate requests for some hedge funds.^[38] One trader’s messages from Barclays Bank indicated that for each basis point (0.01%) that Libor was moved, those involved could net “about a couple of million dollars”.^[37]

The Canadian Competition Bureau was reported on 15 July 2012 to also be carrying out an investigation into price fixing by five banks of the yen denominated Libor rates. Court documents filed indicated that the Competition Bureau had been pursuing the matter since at least January 2011. The documents offered a detailed view of how and when the international banks allegedly colluded to fix the Libor rates. The information was based on a whistleblower who traded immunity from prosecution in exchange for turning on his fellow conspirators. In the court documents, a federal prosecutor for the bureau stated that the “IRD (interest-rate derivatives) traders at the participant banks communicated with each other their desire to see a higher or lower yen LIBOR to aid their trading positions”. The alleged participants are the Canadian branches of the Royal Bank of Scotland, HSBC, Deutsche Bank, JP Morgan Bank, and Citibank, as well as ICAP (Intercapital), an interdealer broker.^[39]

Fines for manipulation

Libor manipulation to raise rate

Pls go for 5.36 libor again, very important that the setting comes as high as possible … thanks.

“

”

Barclays Bank trader in New York to submitter, 29 July 2007^[18]

On 27 June 2012, Barclays Bank was fined $200 million by the Commodity Futures Trading Commission,^[5] $160 million by the United States Department of Justice^[6] and £59.5 million by the Financial Services Authority^[7] for attempted manipulation of the Libor and Euribor rates.^[40] The United States Department of Justice and Barclays officially agreed that “the manipulation of the submissions affected the fixed rates on some occasions”.^[41]^[42]^[43]

Barclays manipulated rates for at least two reasons. Routinely, from at least as early as 2005, traders sought particular rate submissions to benefit their financial positions. Later, during the 2007–2012 global financial crisis, they artificially lowered rate submissions to make their bank seem healthy.^[6]

Following the interest rate rigging scandal, Marcus Agius, chairman of Barclays, resigned from his position.^[44] One day later, Bob Diamond, the chief executive officer of Barclays, also resigned from his position.^[45]^[46] Bob Diamond was subsequently questioned by the Parliament of the United Kingdom regarding the manipulation of Libor rates. He said he was unaware of the manipulation until that month, but mentioned discussions he had with Paul Tucker, deputy governor of the Bank of England.^[47] Tucker then voluntarily appeared before parliament, to clarify the discussions he had with Bob Diamond. He said he had never encouraged manipulation of the Libor, and that other self-regulated mechanisms like the Libor should be reformed.^[48]

On 19 December 2012, UBS agreed to pay regulators $1.5bn ($1.2bn to the US Department of Justice and the Commodity Futures Trading Commission, £160m to the UK Financial Services Authority and 60m CHF to the Swiss Financial Market Supervisory Authority) for its role in the scandal.^[49] The investigations revealed that UBS traders had colluded with other panel banks and had made over 2,000 written requests for movements in rates from at least January 2005 to at least June 2010 to benefit their trading positions.^[50] According to transcripts released by the U.K.’s Financial Services Authority, UBS traders also offered financial inducements to interdealer brokers to help manipulate rates by spreading false information. In one exchange between a UBS banker identified as Trader A and an interdealer broker, the banker wrote “if you keep 6s [i.e. the six month JPY LIBOR rate] unchanged today … I will f—ing do one humongous deal with you … Like a 50,000 buck deal, whatever … I need you to keep it as low as possible … if you do that …. I’ll pay you, you know, 50,000 dollars, 100,000 dollars… whatever you want … I’m a man of my word.” Subsequent trades between UBS and this broker generated more than $250,000 in fees to the broker.^[51]^[52]

US Assistant Attorney General Lanny Breuer described the conduct of UBS’s as “simply astonishing” and declared the US would seek, as a criminal matter, the extradition of traders Tom Hayes and Roger Darin.^[49] The bank has stated that these and other fines would probably result in a significant fourth-quarter loss in 2012.^[49] The fine levied by the FSA, reduced due to the bank’s cooperation, was the largest in the agency’s history.^[49]

Breadth of scandal becomes apparent

By 4 July 2012 the breadth of the scandal was evident and became the topic of analysis on news and financial programs that attempted to explain the importance of the scandal.^[53] Two days later, it was announced that the U.K. Serious Fraud Office had also opened a criminal investigation into manipulation of interest rates. The investigation was not limited to Barclays.^[54]^[55] It has been reported since then that regulators in at least ten countries on three different continents are investigating the rigging of the Libor and other interest rates.^[56]^[57] Around 20 major banks have been named in investigations and court cases.^[58]

Early estimates are that the rate manipulation scandal cost U.S. states, counties, and local governments at least $6 billion in fraudulent interest payments, above $4 billion that state and local governments have already had to spend to unwind their positions exposed to rate manipulation.^[59] An increasingly smaller set of banks are participating in setting the Libor, calling into question its future as a benchmark standard, but without any viable alternative to replace it.^[60]

United States investigations

The United States Congress began investigating on 10 July. Senate Banking Committee Chairman Tim Johnson (D., S.D.) said he would question Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke about the scandal during scheduled hearings. Rep. Randy Neugebauer (R., Texas) of the House Financial Services Committee, wrote New York Federal Reserve (New York Fed) President William Dudley. He was seeking records of communications between the New York Fed and Barclays between August 2007 and November 2009 related to Libor-like rates.^[61]

On 4 October 2012, Republican U.S. Senators Chuck Grassley and Mark Kirk announced that they were investigating Treasury Secretary Tim Geithner for complicity with the rate manipulation scandal. They accused Geithner of knowledge of the rate-fixing, and inaction which contributed to litigation that “threatens to clog our courts with multi-billion dollar class action lawsuits” alleging that the manipulated rates harmed state, municipal and local governments. The senators said that an American-based interest rate index is a better alternative which they would take steps towards creating.^[62]

Federal Housing Finance Agency Inspector General and auditor Steve A. Linick said in a 3 November memo that Fannie Mae and Freddie Mac may have lost more than $3 billion because of the manipulation.^[63]

Parliamentary investigation

Appearing before Parliament on 16 July, Jerry del Missier, a former senior Barclays executive, said that he had received instructions from Robert Diamond to lower rates after Diamond’s discussions with bank regulators. He said that he had received information of a conversation between Diamond and Paul Tucker, deputy governor of the Bank of England, in which they had discussed the bank’s financial position at the height of the 2008 financial crisis. It was his understanding that senior British government officials had instructed the bank to alter the rates. Del Missier’s testimony followed statements from Diamond in which he denied that he had told his deputies to report false Libor rates. Speaking before Parliament the previous week, Tucker stated that he had shared concerns regarding Barclays Libor rates because the markets might view Barclays to be at risk if its Libor submissions continued to be higher than those of other international banks. In the midst of the Lehman Brothers collapse, there was concern the bank might need to be bailed out if the financial markets perceived it was a credit risk. Tucker told the committee, “I wanted to make sure that Barclays’ day-to-day funding issues didn’t push it over the cliff.”^[64]

Libor banks are sued in civil court

Libor fixing operates as a cartel

Libor fixing a banking cartel

It’s just amazing how Libor fixing can make you that much money or lose if opposite. It’s a cartel now in London.

“

”

RBS trader in Singapore to Deutsche Bank trader, 19 August 2007^[65]

In court documents filed in Singapore, Royal Bank of Scotland (RBS) trader Tan Chi Min told colleagues that his bank could move global interest rates and that the Libor fixing process in London had become a cartel. Tan in his court affidavit stated that the Royal Bank of Scotland knew of the Libor rates manipulation and that it supported such actions. In instant messages, traders at RBS extensively discussed manipulating Libor rates. In a released transcript of a 21 August 2007 chat, Jezri Mohideen, who was the head of yen products in Singapore, asked to have the Libor fixed in a conversation with other traders:^[65]

Mohideen: “What’s the call on the Libor?”

Trader 2: “Where would you like it, Libor that is?”

Trader 3: “Mixed feelings, but mostly I’d like it all lower so the world starts to make a little sense.”

Trader 4: “The whole HF [hedge fund] world will be kissing you instead of calling me if Libor move lower.”

Trader 2: “OK, I will move the curve down 1 basis point, maybe more if I can.”

In another conversation on 27 March 2008, Tan asked that RBS raise its Libor submission and noted that an earlier lower figure that the bank had submitted had cost his team 200,000 pounds. In other released instant chats, Tan made it clear that the Libor fixing process had become a highly lucrative money making cartel. Tan in a conversation with traders at other banks, including Deutsche Bank’s Mark Wong said on 19 August 2007:^[65]

Tan: “It’s just amazing how Libor fixing can make you that much money or lose if opposite. It’s a cartel now in London.”

Wong: “Must be damn difficult to trade man, especially [if] you [are] not in the loop.”

Mortgage rates manipulated on reset date

Homeowners in the US filed a class action lawsuit in October 2012 against twelve of the largest banks which alleged that Libor manipulation made mortgage repayments more expensive than they should have been.

Statistical analysis indicated that the Libor rose consistently on the first day of each month between 2000 and 2009 on the day that most adjustable-rate mortgages had as a change date on which new repayment rates would “reset”. An email referenced in the lawsuit from the Barclay’s settlement, showed a trader asking for a higher Libor rate because “We’re getting killed on our three-month resets.”^[66] During the analysed period, the Libor rate rose on average more than two basis points above the average on the first day of the month, and between 2007 and 2009, the Libor rate rose on average more than seven and one-half basis points above the average on the first day of the month.^[67]

The five lead plaintiffs included a pensioner whose home was repossessed after her subprime mortgage was securitized into Libor-based collateralized debt obligations, sold by banks to investors, and foreclosed. The plaintiffs could number 100,000, each of whom has lost thousands of dollars.^[68] The complaint estimates that the banks earned hundreds of millions, if not billions of dollars, in wrongful profits as a result of artificially inflating Libor rates on the first day of each month during the complaint period.^[67]

Municipalities lost billions due to rigging

The city of Baltimore and others in the US filed a class action lawsuit in April 2012 against Libor setting banks which alleged that the manipulation of Libor caused payments on their interest rate swaps to be smaller than they should have been.^[69] Before the financial crisis, states and localities bought $500 billion in interest rate swaps to hedge their municipal bond sales. It is estimated that the manipulation of Libor cost municipalities at least $6 billion. These losses were in addition to $4 billion that localities had already paid to unwind backfiring interest rate swaps.^[70]

Municipalities began using interest rate swaps to hedge their municipal bond sales in the late 1990s. At this time, investment bankers began offering local governments a way to save money on the sale of municipal bonds. The banks suggested instead of selling fixed interest rate bonds that local governments sell variable interest rate bonds which typically have interest rates as much as one percentage point lower than fixed interest rate bonds. For a municipal government this could mean saving as much as $1 million a year on the sale of a $100 million bond.^[71]

In order to hedge costs on the sale of variable interest rate bonds, which can rise and fall with the market, local governments, such as Baltimore, purchased interest rate swaps which exchange a variable interest rate for a fixed interest rate.^[72] In a swap deal, when the interest rate rises, the swap seller pays the local government the increased cost on the bond, while when the interest rate falls, the swap seller saves and pays the local government the decreased cost on the bond. The interest rate swap mechanism generally works well, however, between 2007 and 2010 the payments to local governments on their swaps artificially decreased but the cost on their bonds remained at actual market rates. This was because most interest rate swaps are linked to the Libor interest rate, while municipal bond rates are linked to the SIFMA Municipal Bond Index interest rate. During the financial crisis the two benchmark rates decoupled. Municipalities continued to pay on their bonds at the actual market Sifma rate but were paid on their interest rate swaps at the artificially lower Libor rate.^[71]

Reactions and impact on banking regulation

The cost to colluding and suspect banks from litigation, penalties, and loss of confidence may drive down finance industry profits for years. The cost of litigation from the scandal may exceed that of asbestos lawsuits.^[73]

United States

US experts such as Former Assistant Secretary of the Treasury Paul Craig Roberts have argued that the Libor Scandal completes the picture of public and private financial institutions manipulating interest rates in order to prop up the prices of bonds and other fixed income instruments, and that “the motives of the Fed, Bank of England, US and UK banks are aligned, their policies mutually reinforcing and beneficial. The Libor fixing is another indication of this collusion.”^[74] In that perspective they advocate stricter bank regulation, and a profound reform of the Federal Reserve System.

Former Citigroup Chairman and CEO Sandy Weill, considered one of the driving forces behind the considerable financial deregulation and “mega-mergers” of the 1990s, surprised financial analysts in Europe and North America by calling for splitting up the commercial banks from the investment banks. In effect, he says: “Bring back the Glass-Steagall Act of 1933 which led to half a century, free of financial crises.” ^[75]

Europe

Mainland European scholars discussed the necessity of far-reaching banking reforms in light of the current crisis of confidence, recommending the adoption of binding regulations that would go further than the Dodd–Frank Act: notably in France where SFAF and World Pensions Council (WPC) banking experts have argued that, beyond national legislations, such rules should be adopted and implemented within the broader context of separation of powers in European Union law, to put an end to anti-competitive practices akin to exclusive dealing and limit conflicts of interest.^[76]^[77] This perspective gained ground after the unraveling of the Libor scandal, with mainstream opinion leaders such as the Financial Times‘ editorialists calling for the adoption of an EU-wide “Glass–Steagall II”.^[78]

Naomi Wolf of The Guardian suggested in an editorial that the “notion that the entire global financial system is riddled with systemic fraud – and that key players in the gatekeeper roles, both in finance and in government, including regulatory bodies, know it and choose to quietly sustain this reality – is one that would have only recently seemed like the frenzied hypothesis of tinhat-wearers”.^[79] Following Tim Geithner‘s promotion to Treasury Secretary, Wolf commented, “It is very hard, looking at the elaborate edifices of fraud that are emerging across the financial system, to ignore the possibility that this kind of silence – ‘the willingness to not rock the boat’ — is simply rewarded by promotion to ever higher positions, ever greater authority. If you learn that rate-rigging and regulatory failures are systemic, but stay quiet, well, perhaps you have shown that you are genuinely reliable and deserve membership of the club.”^[79]

Recommendations

The British Bankers’ Association said on 25 September that it would transfer oversight of Libor to UK regulators, as proposed by Financial Services Authority Managing Director Martin Wheatley and CEO-designate of the new Financial Conduct Authority.^[14] On 28 September, Wheatley’s independent review was published, recommending that an independent organization with government and regulator representation, called the Tender Committee, manage the process of setting Libor under a new external oversight process for transparency and accountability. Banks that make submissions to Libor would be required to base them on actual inter-bank deposit market transactions and keep records of their transactions supporting those submissions. The review also recommended that individual banks’ Libor submissions be published, but only after three months, to reduce the risk that they would be used as a measure of the submitting banks’ creditworthiness. The review left open the possibility that regulators might compel additional banks to participate in submissions if an insufficient number do voluntarily. The review recommended criminal sanctions specifically for manipulation of benchmark interest rates such as the Libor, saying that existing criminal regulations for manipulation of financial instruments were inadequate.^[15] Libor rates could be higher and more volatile after implementation of the reforms, so financial institution customers may experience higher and more volatile borrowing and hedging costs.^[16] The UK government agreed to accept all of the Wheatley Review’s recommendations and press for legislation implementing them.^[17]

Bloomberg LP CEO Dan Doctoroff told the European Parliament that Bloomberg LP could develop an alternative index called the Bloomberg Interbank Offered Rate that would use data from transactions such as market-based quotes for credit default swap transactions and corporate bonds.^[80]^[81]

References

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^ “The LIBOR Scandal Explained”. Accounting Degree. Retrieved 17 July 2012.
^ “Libor scandal explained and what rate-rigging means to you”. USA Today. July 2012. Retrieved 3 August 2012.
^ Calculating Interest. British Bankers’ Association. Retrieved 17 July 2012.
^ ^a ^b “CFTC Orders Barclays to pay $200 Million Penalty for Attempted Manipulation of and False Reporting concerning Libor and Euribor Benchmark Interest Rates”.
^ ^a ^b ^c “Barclays Bank PLC Admits Misconduct Related to Submissions for the London Interbank Offered Rate and the Euro Interbank Offered Rate and Agrees to Pay $160 Million Penalty”. Department of Justice. 27 June 2012. Retrieved 17 July 2012.
^ ^a ^b “Barclays fined £59.5 million for significant failings in relation to Libor and Euribor”.
^ Keenan, Douglas (27 July 2012), “My thwarted attempt to tell of Libor shenanigans“. Financial Times. (An extended version of this article is on the author’s web site.)
^ BBC News (10 August 2012), “Libor scandal: Review finds system ‘no longer viable’”.
^ BBC News Online (10 August 2012), “Libor review: Wheatley says system must change”.
^ Reuters (7 August 2012), “Libor collusion was rife, culture went right to the top”.
^ “Britischer Finanzexperte berichtet von langjährigen Zinssatz-Manipulationen” - in German. An English summary is on the trader’s web site.[1]
^ “Dissecting Barclays’ Libor woes”. Euro Money. 29 June 2012. Retrieved 7 January 2013. “‘Regulators might look to quote Libor based on actual transactions, though the technical hurdles are enormous. Regulators will try to safeguard the model rather than find an alternative to Libor.’”
^ ^a ^b Main, Carla (26 September 2012). “Libor Spurned, Credit Score Review, Germany’s Audit: Compliance”. Bloomberg. Retrieved 26 September 2012.
^ ^a ^b Alexis Levine and Michael Harquail (5 October 2012) “Wheatley Review May Mean Big Changes for Libor” Blakes Business (Blake, Cassels & Graydon LLP)
^ ^a ^b Karen Brettell (28 September 2012) “Libor reform may add volatility, increase some funding costs” Reuters
^ ^a ^b Ainsley Thomson (17 October 2012) “UK Treasury Minister: Government Accepts Recommendations Of Wheatley Libor Review In Full” Dow Jones Newswires/Fox Business
^ ^a ^b “Behind the Libor Scandal”. The New York Times. 10 July 2012. Retrieved 13 July 2012.
^ http://webcache.googleusercontent.com/search?q=cache:-QRw4n8zTGwJ:online.wsj.com/article/SB120831164167818299.html+bankers+cast+doubt+on+key+rate+amid+crisis&cd=1&hl=en&ct=clnk&gl=us
^ Mollenkamp, Carrick; Whitehouse, Mark (29 May 2008). “Study Casts Doubt on Key Rate”. The Wall Street Journal. Retrieved 24 July 2012.
^ Gyntelberg, Jacob; Wooldridge, Philip (March 2008). “Interbank rate fixings during the recent turmoil”. BIS Quarterly Review (Bank for International Settlements): 70. ISSN 1683-0121. Retrieved 10 July 2012.
^ “Global Financial Stability Report”. World economic and financial surveys (International Monetary Fund): 76. October 2008. ISSN 1729-701X. Retrieved 11 July 2012.
^ Carl Schreck (11 October 2012) “US Students Detected Libor-Fixing Years Before Banking Scandal” RIA Novosti
^ Snider, Conan; Thomas Youle (2 April 2010). “Does the Libor Reflect Banks’ Borrowing Costs?”. Social Science Research Network: 13–14. Retrieved 22 July 2012.
^ Snider, Conan; Thomas Youle (2 April 2010). “Does the Libor Reflect Banks’ Borrowing Costs?”. Social Science Research Network: 11. Retrieved 22 July 2012.
^ Snider, Conan; Thomas Youle (2 April 2010). “Does the Libor Reflect Banks’ Borrowing Costs?”. Social Science Research Network: 12. Retrieved 22 July 2012.
^ Stephanie Flanders (4 July 2012). Inconvenient truths about Libor. BBC News. Retrieved 17 July 2012.
^ (12 January 2009). House of Commons – Treasury – Minutes of Evidence. Q34. Retrieved 17 July 2012.
^ Jill Treanor & Dominic Rushe (13 July 2012). Timothy Geithner and Mervyn King discussed Libor worries in 2008. The Guardian. Guardian News and Media. Retrieved 17 July 2012.
^ ^a ^b ^c Mark Gongloff (13 July 2012). New York Fed’s Libor Documents Reveal Cozy Relationship Between Regulators, Banks. Huffington Post. Retrieved 17 July 2012.
^ Alex Klein (13 July 2012). “Rate-Fixing Scandal Hits U.S.: Fed Drops LIBOR Bombshells”. The Daily Beast.
^ “Attendees”. Bank of England. Retrieved 7 January 2013.
^ Jia Lynn Yang (13 July 2012). Paul Tucker, deputy governor of the Bank of England.Geithner made recommendations on Libor in 2008, documents show. The Washington Post. Retrieved 17 July 2012.
^ 13 July 2012 Libor email from Timothy Geithner to Bank of England. The Guardian Retrieved 17 July 2012.
^ Enrich, David; Mollenkamp, Carrick; and Eaglesham, Jean (18 March 2011). “U.S. Libor Probe Includes BofA, Citi, UBS”. The Wall Street Journal.
^ “U.S. conducting criminal Libor probe”. Reuters. 28 February 2012.
^ ^a ^b “Eagle fried”. The Economist. 30 June 2012. Retrieved 20 July 2012.
^ Armstrong, Rachel (30 March 2012). “Ex-RBS trader says Brevan Howard sought Libor rate change”. Reuters.
^ Julian Beltrame (15 July 2012). Canadian connection to Libor scandal probed by Competition Bureau. National Post. Retrieved 17 July 2012.
^ Pollock, Ian (28 June 2012). “Libor scandal: Who might have lost?”. BBC. Retrieved 28 June 2012.
^ “Statement of Facts”. United States Department of Justice. 26 June 2012. Retrieved 11 July 2012.
^ Taibbi, Matt, Why is Nobody Freaking Out About the LIBOR Banking Scandal?, Rolling Stone, 3 July 2012
^ “Libor scandal: Seven banks face US questioning”. BBC. 16 August 2012.
^ Reuters (2 July 2012). “Barclays chairman resigns over interest rate rigging scandal”. NDTV profit. Retrieved 2 July 2012.
^ “Barclays boss Bob Diamond resigns amid Libor scandal”. BBC. 3 July 2012.
^ Ram, Vidya (4 July 2012). “Bob Diamond resigns as Barclays CEO”. Business Line. Retrieved 19 July 2012.
^ “Bob Diamond questioned by MPs on Barclays Libor scandal: as it happened”. The Telegraph. 4 July 2012. Retrieved 10 July 2012.
^ “Bank of England deputy governor Paul Tucker fights Libor accusations – as it happened”. The Guardian. 9 July 2012. Retrieved 10 July 2012.
^ ^a ^b ^c ^d “UBS fined $1.5bn for Libor rigging”. BBC. 19 December 2012. Retrieved 20 December 2012.
^ http://www.cftc.gov/PressRoom/PressReleases/pr6472-12
^ http://business.time.com/2012/12/20/libor-scandal-yep-its-as-bad-as-we-thought/
^ http://www.fsa.gov.uk/static/pubs/final/ubs.pdf pp.12
^ Capitalism Without Failure coverage of a discussion among Matt Taibbi, Eliott Spitzer, and Dennis Kelleher on Viewpoint with Eliot Spitzer on 4 July 2012 regarding the emerging Libor Scandal
^ Carla Main & Ellen Rosen (9 July 2012). Libor Criminal Probe, CFTC Exemptions, Canada. Businessweek. Retrieved 17 July 2012.
^ Treanor, Jill (6 July 2012). “Serious Fraud Office to investigate Libor manipulation”. The Guardian. Retrieved 10 July 2012.
^ David Enrich & Dana Cimilluca (15 July 2012). Missteps on Libor Doomed Barclays’s Leaders. The Wall Street Journal. Dow Jones & Company. Retrieved 17 July 2012.
^ http://www.bloomberg.com/news/2013-01-28/libor-lies-revealed-in-rigging-of-300-trillion-benchmark.html
^ “The rotten heart of finance”. The Economist. 7 July 2012. Retrieved 17 July 2012.
^ Darrell Preston (10 October 2012) “Rigged Libor costs states, localities $6 billion” Bloomberg
^ John Glover (8 October 2012) “Libor, Set by Fewer Banks, Losing Status as a Benchmark” Bloomberg Business Week
^ Reddy, Sudeep (11 July 2012). “Congress Joins Libor Probes: Focus Includes U.S. Regulators Who Knew About Problem as Early as 2007″. The Wall Street Journal. p. C2. Retrieved 11 July 2012.
^ HITC Business (4 October 2012) “Senators Launch Investigation Into Treasury Secretary Geithner’s Involvement In Libor Manipulation” (FOX Business)
^ Clea Benson (December 19, 2012) “Fannie Mae, Freddie Mac Libor Loss Tops $3 Billion in Audit” Bloomberg
^ Scott, Mark. “Former Senior Barclays Executive Faces Scrutiny in Parliament”. The New York Times. London.
^ ^a ^b ^c Tan, Andrea (26 September 2012). “RBS Instant Messages Show Libor Rates Skewed for Traders”. Bloomberg. Retrieved 30 September 2012.
^ Binham, Caroline (15 October 2012). “US Woman Takes on Banks Over Libor”. Financial Times. Retrieved 15 October 2012.
^ ^a ^b Touryalai, Halah (15 October 2012). “Banks Rigged Libor To Inflate Adjustable-Rate Mortgages: Lawsuit”. Forbes. Retrieved 15 October 2012.
^ Reuters (14 October 2012) “Home owners file class action suit versus banks over Libor: FT” Chicago Tribune Business
^ “In re: Libor-Based Financial Instruments Antitrust Litigation”. 2012 WL 1522306 (S.D.N.Y.) (Trial Pleading). United States District Court, S.D. New York. Retrieved 19 October 2012.
^ Preston, Darrell (8 October 2012). “Rigged Libor Hits States-Localities With $6 Billion: Muni Credit”. Bloomberg. Retrieved 19 October 2012.
^ ^a ^b Gandel, Stephen (11 July 2012). “Wall Street’s latest sucker: Your hometown”. Fortune. Retrieved 19 October 2012.
^ Rushe, Dominic (19 July 2012). “Baltimore and the Libor scandal: ‘We can’t leave any money on the table’”. The Guardian. Retrieved 19 October 2012.
^ Shawn Baldwin (26 October 2012) “LIBOR Liabilities: How litigation will drive down banks profitability for years to come” Forbes
^ Paul Craig Roberts and Nomi Prins (14 July 2012). “The Real Libor Scandal”. OpEd News. Retrieved 15 July 2012.
^ Denning, Steve (25 July 2012). “Rethinking Capitalism: Sandy Weill Says Bring Back Glass-Steagall”. Forbes. Retrieved 25 July 2012. Quoting interview on CNBC’s Squawk-Box.
^ (French)M Nicolas Firzli, Bank Regulation and Financial Orthodoxy: the Lessons from the Glass-Steagall Act, Revue Analyse Financière, Q1 2010, retrieved 8 January 2010
^ Nicolas J. Firzli quoted by Marie Lepesant (11 June 2012). “Le Modèle des Banques Françaises en Question”. Le Parisien (in French). Retrieved 12 June 2012.
^ “Restoring trust after Diamond”. Financial Times. 3 July 2012. Retrieved 15 July 2012. quoting FT Editorial Page.
^ ^a ^b Naomi Wolf (14 July 2012). This global financial fraud and its gatekeepers. The Guardian. Guardian News and Media. Retrieved 17 July 2012.
^ Michelle Price “Libor tender puts focus on data providers”, “Financial News”, 28 September 2012
^ Ben Moshinsky and Lindsay Fortado “U.K. Lawmakers Seek Speedy Overhaul of Libor Following Review”, Bloomberg, 28 September 2012

External links

Barclays Bank

Order Instituting Proceedings, In the matter of: Barclays Bank PLC, United States, Commodity Futures Trading Commission, 27 June 2012.
Statement of Facts, Non-prosecution agreement: Barclays Bank PLC, United States, Department of Justice, 26 June 2012.
Final Notice, Imposing financial penalty: Barclays Bank PLC, United Kingdom, Financial Services Authority, 27 June 2012.

Royal Bank of Scotland

Order Instituting Proceedings, In the matter of: Royal Bank of Scotland PLC, United States, Commodity Futures Trading Commission, 6 February 2013.
Plea agreement: United States of America v. RBS Securities Japan, United States, Department of Justice, 5 February 2013.
Final Notice, Imposing financial penalty: Royal Bank of Scotland PLC, United Kingdom, Financial Services Authority, 6 February 2013.

UBS

Order Instituting Proceedings, In the matter of: UBS AG, United States, Commodity Futures Trading Commission, 19 December 2012.
Statement of Facts, Non-prosecution agreement: UBS AG, United States, Department of Justice, 18 December 2012.
Final Notice, Imposing financial penalty: UBS AG, United Kingdom, Financial Services Authority, 19 December 2012.
FINMA Summary Report UBS LIBOR, Switzerland, Swiss Financial Market Supervisory Authority, 19 December 2012.
United States of America v. Tom Hayes and Roger Darin, United States, Department of Justice, 12 December 2012.
Hayes et al Complaint, Exhibit of Facts, United States, Department of Justice, 12 December 2012.

Government

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Peter Schiff: The Coming Economic Collapse — Videos

Posted on April 16, 2013. Filed under: Banking, Blogroll, Books, Business, College, Communications, Demographics, Diasters, Economics, Education, Federal Government, Federal Government Budget, Fiscal Policy, Macroeconomics, Microeconomics, Monetary Policy, Money, Tax Policy | Tags: banks, Cypris, Economic Collapse, Economics, fiscal policy, monetary policy, Peter Schiff, Politics |

Peter Schiff, Europe is the Warm Up, but America is the Main Event

Peter Schiff – Get Out Now Get Out Of The Dollar

Lou Dobbs versus Peter Schiff

Doug Casey interviews Peter Schiff

Cyprus Is Small, But The Problem Is Enormous

Coming Economic Collapse – Peter Schiff RT America

Peter Schiff Debates Doug Henwood on stimulus deficit spending

Economic Collapse Not Only Possible But IMMINENT w Peter Schiff…

CNBC’s Joe Kernen Talks About Peter Schiff? (Pompous Blowhard, Bad Jacket, Bad Market Calls…)

Peter Schiff – The Fed Unspun: The Other Side of the Story

Schiff: 2/3 of America to Lose Everything Because of This Crisis

A record breaking stock market is distorting a frightening reality: The U.S. is being eaten alive by a horrific cancer that will ultimately destroy the economy and impoverish the vast majority of its citizens.

That’s according to Peter Schiff, the best-selling author and CEO of Euro Pacific Capital, who delivered his harsh warning to investors in a recent interview on Fox Business.

“I think we are heading for a worse economic crisis than we had in 2007,” Schiff said. “You’re going to have a collapse in the dollar…a huge spike in interest rates… and our whole economy, which is built on the foundation of cheap money, is going to topple when you pull the rug out from under it.”

Schiff says that, despite “phony” signs of an economic recovery, the cancer destroying America stems from a lethal concoction of our $16 trillion federal debt and the Fed’s never ending money printing.

Currently, Bernanke and company is buying $1 trillion of Treasury and mortgage bonds a year. That’s about $85 billion per month against a budget deficit that is about the same level.

According to Schiff, these numbers are unsustainable. And the Fed has no credible “exit strategy.”

Eventually interest rates will rise… and when they do, Schiff says, stocks will tank and bonds dip to nothing. Massive new tax hikes will be imposed and programs and entitlements will be cut to the bone.

“The crisis is imminent,” Schiff said. ”I don’t think Obama is going to finish his second term without the bottom dropping out. And stock market investors are oblivious to the problems.”

“We’re broke, Schiff added. ”We owe trillions. Look at our budget deficit; look at the debt to GDP ratio, the unfunded liabilities. If we were in the Eurozone, they would kick us out.”

Schiff points out that the market gains experienced recently, with the Dow first topping 14,000 on its way to setting record highs, are giving investors a false sense of security.

“It’s not that the stock market is gaining value… it’s that our money is losing value. And so if you have a debased currency… a devalued currency, the price of everything goes up. Stocks are no exception,” he said.

“The Fed knows that the U.S. economy is not recovering,” he noted. “It simply is being kept from collapse by artificially low interest rates and quantitative easing. As that support goes, the economy will implode.”

noted economist, Schiff has been a fierce critic of the Fed and its policies for years. And his warnings have proven to be prophetic.

In August 2006, when the Dow was hitting new highs nearly every day, Schiff said in an interview: “The United States is like the Titanic, and I’m here with the lifeboat trying to get people to leave the ship… I see a real financial crisis coming for the United States.”

Just over a year later, the meltdown that became the Great Recession began, just as Schiff predicted.

He also predicted the subprime mortgage bubble burst, nearly a year before the real estate market fully crashed.

His recent warnings, however, have been even more alarming. Will they also prove to be true?

In his most recent book, “The Real Crash” How to Save Yourself and Your Country“, Schiff writes that
when the “real crash” comes,” it will be worse than the Great Depression.

Unemployment will skyrocket, credit will dry up, and worse, the dollar will collapse completely, “wiping out all savings and sending consumer prices into the stratosphere.”

http://moneymorning.com/ob-article/schiff-us-will-win-currency-war.php?code=3243#.UW3kh6OPBBk

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Bill Bonner and Addison Wiggin — A Financial Reckoning Day Fallout: Surviving Today’s Global Depression — Videos

Posted on April 15, 2013. Filed under: American History, Babies, Banking, Blogroll, Books, Business, College, Communications, Demographics, Diasters, Economics, Education, Employment, Federal Government, Federal Government Budget, Fiscal Policy, Foreign Policy, government, government spending, history, History of Economic Thought, Investments, Law, liberty, Life, Links, Literacy, Macroeconomics, Math, media, Microeconomics, Monetary Policy, Money, People, Philosophy, Politics, Private Sector, Psychology, Public Sector, Raves, Security, Tax Policy, Taxes, Unemployment, Unions, Video, War, Wealth, Wisdom | Tags: Addison Wiggin, Bill Bonner, Economics, Financial Reckoning Day Fallout, GDP, Global Depression, national debt, Politics |

An Empire of Debt Leading to a “Crack-up” in the Global Monetary System w/Bill Bonner!

Bill Bonner ZURICH.MINDS INTERVIEW

Bill Bonner: Uncharted Territory -

Emerging Market Real Estate, The Most Promising Asset Class: An Interview with Bill Bonner

Bill Bonner at The Equitymaster Investment Summit 2010

Bill Bonner: Enterprise Under Attack Part 1 – July 24

Bill Bonner: Enterprise Under Attack Part 2 – July 24

Bill Bonner: Enterprise Under Attack Part 3 – July 24

Addison Wiggin / Financial Reckoning Day Fallout on FOX Business News

Addison Wiggin on an Empire of Debt and the Mother of all Bubbles (Part 1)

Addison Wiggin on an Empire of Debt and the Mother of all Bubbles (Part 2)

Background Articles and Videos

Making the Federal Budget

How do you spend four trillion dollars? Turns out, you don’t; it takes the President and the Congress to allocate, authorize, appropriate, resolve, outlay, sequester, impound, and just plain spend that much in 2011. Such a process is baffling at times. It’s so complex that you may marvel that Washington can get any action accomplished and paid for at all. So how does the federal budget happen?

Join the Mercatus Center’s Capitol Hill Campus and Senior Research Fellow Jason J. Fichtner for a walk through the process of making the federal budget. He explains the process from its beginnings in the halls of the White House, highlight the many roles Congress takes to authorize and enforce the budget, and navigate the twisting, puzzling conglomeration of bureaucratic steps, political goals, and accountancy rules that go into making our government function.

Changing the Budget Process to Promote Fiscal Responsibility

A Sustainable Approach to Entitlement Reform

Foundation for Growth: Restoring the Promise of American Opportunity

The Fiscal Year 2014 Senate Budget builds on the work done over the last two years to create jobs, invest in broad-based economic growth, and tackle our deficit and debt responsibly.

This budget takes the balanced and responsible approach to our fiscal challenges that every bipartisan group has endorsed and that the American people support. It includes responsible spending cuts made across the federal budget, as well as significant new savings achieved by eliminating loopholes and cutting wasteful spending in the tax code that benefits the wealthiest Americans and biggest corporations.

The Senate Budget is grounded in the understanding that our country’s long-term fiscal and economic goals will only be met with policies that support a strong and growing middle class. And it keeps the promises we have made to our seniors, our families, and our communities.

The American people are sick and tired of watching their government lurch from crisis to crisis. The Senate Budget offers a serious and credible path away from this gridlock and dysfunction and toward a long-term plan to create jobs, lay down a strong foundation for broad-based economic growth, replace sequestration, and tackle our deficit and debt responsibly and credibly.

This budget reflects the values of a diverse Senate serving a diverse nation, and it is guided by the principles and priorities that are strongly supported by the constituents we were elected to represent

http://www.budget.senate.gov/democratic/index.cfm/senatebudget

Foundation for Growth: Restoring the Promise of American Opportunity

The Fiscal Year 2014 Senate Budget builds on the work done over the last two years to create jobs, invest in broad-based economic growth, and tackle our deficit and debt responsibly.

The highest priority of the Senate Budget is to create the conditions for job creation, economic growth, and prosperity built from the middle out, not the top down.

The Senate Budget takes the position that trickle-down economics has failed as an economic policy and that true national prosperity comes from the middle out, not the top down. We believe that deficit reduction at the expense of economic growth is doomed to failure, and policies that promote a strong middle class are essential to tackling our long-term deficit and debt challenges.

The policies President Barack Obama and Congress put in place in response to the Great Recession pulled our economy back from the brink and helped to add back jobs. But with an unemployment rate that remains stubbornly high, and a middle class that has seen their wages stagnate for far too long, we simply cannot afford any threats to our fragile recovery. Therefore, the Senate Budget:

• Fully replaces the harmful cuts from sequestration with smart, balanced, and responsible deficit reduction, which would save hundreds of thousands of jobs while protecting families, communities, and the fragile economic recovery.

• Invests in long-term economic growth and national competitiveness by tackling our serious deficits in infrastructure, education, job training, and innovation to create jobs now and lay down a strong foundation for broad-based growth.

• Includes a $100 billion targeted jobs and infrastructure package that would start creating new jobs quickly, begin repairing the worst of our crumbling roads and bridges, and help train our workers to fill 21

st century jobs. This jobs investment package is fully paid for by eliminating loopholes and cutting wasteful spending in the tax code that benefits the wealthiest Americans and biggest corporations.

• Protects and continues tax cuts for the middle class and low-income working families.

The Senate Budget builds on the work we have done over the last two years to tackle our deficit and debt responsibly.

At the end of 2010, the bipartisan Simpson-Bowles Commission report laid out a responsible goal of reducing our deficit by $4 trillion over ten years. Since that time, Congress and the administration have implemented $2.4 trillion in deficit reduction, with $1.8 trillion coming from spending cuts and $600 billion coming from new revenue from the wealthiest Americans. The Senate Budget:

• Surpasses the bipartisan goal of $4 trillion in 10-year deficit reduction and puts our deficit and debt on a downward, sustainable, and responsible path.

• Builds on the $2.4 trillion in deficit reduction already done with an additional $1.85 trillion in new deficit reduction for a total of $4.25 trillion in deficit reduction since the Simpson-Bowles report.

• Includes an equal mix of responsible spending cuts and new revenue raised by closing loopholes and ending wasteful spending in the tax code.

• Achieves $975 billion in deficit reduction through responsible spending cuts made across the federal budget:

$493 billion saved on the domestic spending side, including $275 billion in health care savings made in a way that does not harm seniors or families.

$240 billion saved by carefully and responsibly cutting defense spending to align with the drawdown of troops in our overseas operations.

$242 billion saved in reduced interest payments.

• Achieves $975 billion in deficit reduction by closing loopholes and eliminating wasteful spending in the tax code that benefits the wealthiest Americans and biggest corporations.

• Includes reconciliation instructions, a fast-track process that makes sure that the new revenue from the wealthiest Americans and biggest corporations cannot be filibustered in the Senate.

The Senate Budget keeps the promises we have made to our seniors, families, veterans, and communities.

The Senate Budget takes the position that the promises we made to our seniors, families, veterans, and communities ought to be fulfilled. This budget:

• Preserves and protects Medicare so that it is strong for seniors today and will be there for our children and grandchildren.

• Rejects calls to dismantle, privatize, or voucherize Medicare.

• Builds on the responsible changes made in the Affordable Care Act to continue reducing health care costs while protecting patients.

• Protects the expansion of health insurance to nearly 30 million Americans and ensures the federal-state partnership on Medicaid is preserved.

• Rejects efforts to simply shift health care costs to states or make cuts that harm seniors and the most vulnerable families.

• Maintains the key principle that deficit reduction should not be done on the backs of the most vulnerable families and communities.

• Continues to make the investments we need in national defense, homeland security, and law enforcement to keep our country and our communities strong and secure.

• Keeps the promise we have made to our veterans that their country will be there for them and provide the resources and support they need when they come home.

The House Republican approach would hurt middle class families and the economy and break the promises we have made to our seniors.

The Senate Budget offers a very different vision than the approach taken by House Republicans.

Their proposals would cut the legs out from under our fragile economic recovery and threaten millions of jobs. They would slash the investments in infrastructure, education, and innovation that we need to lay down a strong foundation for broad-based growth and that would position us to compete and win in the 21

st century global economy.

House Republicans would dismantle Medicare and cut off programs that support the middle class and most vulnerable families. And they would do all that while refusing to ask the wealthiest Americans and biggest corporations to contribute their fair share.

We believe that the American people strongly support the pro-growth, pro-middle class approach taken in the Senate Budget. And we look forward to engaging with families and seniors across the country as we work to pass the responsible, fair, and bipartisan budget deal the American people expect and deserve.

April 2013

March 2013

The following timetable is used to guide the federal budget process each year (see 2. U.S.C. 631)

Date	Action
1st Monday in February	President’s budget submission (includes OMB sequester preview report and adjustments to spending caps).
February 15	CBO budget and economic outlook report
Within 6 weeks of President’s budget	Committees submit views and estimates to the Budget Committees
April 1	Senate Budget Committee reports resolution
April 15	Congress completes budget resolution. If not, Chairman of House Budget Committee files 302(a) allocations; Ways and Means is free to proceed with pay-as-you-go measures
May 15	Appropriations bills may be considered in the House
June 10	House Appropriations reports last bill
June 15	Congress completes action on reconciliation reconciliation (if applicable)
June 30	House completes action on annual appropriation bills
July 15	President submits mid-session review
October 1	Fiscal year begins Home / Committee Resources / Glossary A B C D E F I J M N O P R S T U Appropriations Act: A statute, under the jurisdiction of the House and Senate Appropriations Committees, that generally provides authority for Federal agencies to incur obligations and to make payments out of the Treasury for specified purposes. An appropriation act is the most common means of providing budget authority. Currently, there are 13 regular appropriations acts for each fiscal year. From time to time, Congress also enacts supplemental appropriations acts. (See Appropriations under Budget Authority; Continuing Resolution; Supplemental Appropriation.) Authorizing Committee: A committee of the House or Senate with legislative jurisdiction over laws that set up or continue the operations of Federal programs and provide the legal basis for making appropriations for those programs. Authorizing committees also have direct control over spending for mandatory programs since the Government’s obligation to make payments for such program is contained in the authorizing legislation (See Entitlement.) Authorizing Legislation: Legislation enacted by Congress that sets up or continues the operation of a Federal program or agency indefinitely or for a specific period of time. Authorizing legislation may limit the amount of budget authority which can be appropriated for a program or may authorize the appropriation of “such sums as are necessary.” (See Budget Authority; Entitlement.) return to top B Backdoor Spending: (See Direct Spending or Mandatory Spending.) Budget Authority: The authority Congress gives to Government agencies, permitting them to enter into obligations which will result in immediate or future outlays. Budget authority may be classified in several ways. It may be classified by the form it takes: appropriations, borrowing authority, or contract authority. Budget authority may also be classified by the determination of amount: definite authority or indefinite authority. Finally budget authority may be classified by the period of availability: 1-year authority, multi-year authority, or no-year authority (available until used). Forms of Budget Authority Appropriations.–An act of Congress that permits Federal agencies to incur obligations and to make payments out of the Treasury for specified purposes. An appropriations act is the most common means of providing budget authority. Borrowing Authority.–Statutory authority that permits a Federal agency to incur obligations and to make payments for specified purposes out of money borrowed from the Treasury, the Federal Financing Bank, or the public. The Budget Act in most cases requires that new authority to borrow must be approved in advance in an appropriation act. Contract Authority.–Statutory authority that permits a Federal agency to enter into contracts in advance of appropriations. Under the Budget Act, most new authority to contract must be approved in advance in an appropriation act. Offsetting collections and receipts.–Income from the public which is displayed in the budget as negative budget authority. (See Offsetting Collections and Offsetting Receipts. Budget Baseline: Projected Federal spending, revenue and deficit levels based on the assumption that current policies will continue unchanged for the upcoming fiscal year. In determining the budget baseline under Gramm-Rudman-Hollings, the Directors of OMB and CBO estimate revenue levels and spending levels for entitlement programs based on continuation of current laws. For estimating discretionary spending amounts (both defense and non- defense), the Directors assume an adjustment for inflation (GNP deflator) added to the previous year’s discretionary spending levels. The baseline also includes sufficient appropriations to cover a Federal pay comparability raise (without absorption). Budget Deficit: The amount by which the Government’s total outlays exceed its total revenues for a given fiscal year. (See Outlays; Revenues.) Budget Resolution: A concurrent resolution passed by both Houses of Congress setting forth, reaffirming, or revising the congressional budget for the U.S. Government for a fiscal year. A budget resolution is a concurrent resolution of Congress. Concurrent resolutions do not require a presidential signature because they are not laws. Budget resolutions do not need to be laws because they are a legislative device for the Congress to regulate itself as it works on spending and revenue bills. (Unified) Budget Surplus: The amount by which the Government’s revenues exceed its outlays for a given fiscal year. The “on-budget surplus” excludes spending and revenues of the Social Security Trust Fund, and the Postal Service. (See Outlays; Revenues.) return to top C Capital Budget: A budget that segregates capital spending from all other spending, what is usually considered the “operating budget.” In a capital budget, spending and receipts in the capital budget are excluded from the operating budget and are not included in the operating budget’s deficit or surplus calculations. A capital budget would include spending only for capital assets. Capital assets are usually defined to be limited to land, structures, equipment, and intellectual property that are owned and used by the Federal government and have a useful life of more than 2 years. However, some proponents of capital budgeting have suggested that capital should be defined to include Federal “investment” spending that yields long-term benefits. President Clinton established a Commission to Study Capital Budgeting by issuing Executive Order 13037 on March 3, 1997. The Commission is required to issue its report by December 17, 1998. Congressional Budget: (See Budget Resolution.) Continuing Resolution: Appropriations legislation enacted by Congress to provide temporary budget authority for Federal agencies to keep them in operation when their regular appropriation bill has not been enacted by the start of the fiscal year. A continuing resolution is a joint resolution, which has the same legal status as a bill. A continuing resolution frequently specifies a maximum rate at which obligations may be incurred, based on the rate of the prior year, the President’s budget request, or an appropriation bill passed by either or both chambers of Congress. However, there have been instances when Congress has used a continuing resolution as an omnibus measure to enact a number of appropriation bills. A continuing resolution is a form of appropriation act and should not be confused with the budget resolution. Credit Authority: Authority to incur direct loan obligations or to incur primary loan guarantee commitments. Under the Budget Act, new credit authority must be approved in advance in an appropriation act. Crosswalk: Also known as “committee allocation” or “section 302 allocation.” The means by which budget resolution spending totals are translated into binding guidelines with respect to budget authority and outlays for committee action on spending bills. The Budget Committees allocate the budget resolution totals among the committees by jurisdiction, Crosswalk allocations of budget authority and outlays to the committee appear in the joint explanatory statement accompanying a conference report on the budget resolution. Current Services Budget: A section of the President’s budget, required by the Budget Act, that sets forth the level of spending or taxes that would occur if existing programs and policies were continued unchanged through the fiscal year and beyond, with all programs adjusted for inflation so that existing levels of activity are maintained. (See Baseline.) return to top D Deferral of Budget Authority: An action by the executive branch that delays the obligation of budget authority beyond the point it would normally occur. Pursuant to the Congressional Budget and Impoundment Control Act of 1974, the President must provide advanced notice to the Congress of any proposed deferrals. A deferral may not extend beyond the end of the fiscal year in which the President’s message proposing the deferral is made. Congress may overturn a deferral by passing a law disapproving the deferral. Deficit: The amount by which the government’s total budget outlays exceeds its total receipts for a fiscal year. Direct Spending: A term defined in the Budget Enforcement Act of 1990 to include entitlement authority, the food stamp program, and budget authority provided in law other than appropriations acts. From the perspective of the appropriations process, all direct spending is classified as mandatory as opposed to discretionary spending. New direct spending is subject to pay-as-you-go requirements. Direct spending is synonymous with mandatory spending. (See Mandatory Spending and Entitlement.) Discretionary Spending: A category of spending (budget authority and outlays) subject to the annual appropriations process. (See Appropriations Acts.) return to top E Entitlement: Programs that are governed by legislation in a way that legally obligates the Federal government to make specific payments to qualified recipients. Payments to persons under the Social Security, Medicare, and veterans’ pensions programs are considered to be entitlements. (See Direct Spending and Mandatory Spending.) Emergency Spending: As provided in the Budget Enforcement Act, a provision of legislation designated as an emergency by both the President and the Congress. As a result, this additional spending is not subject to the discretionary caps or the pay go requirements and thus will not cause a sequester. In addition, emergency legislation is effectively exempt from Budget Act points of order. There is no specific criteria in the law for emergency spending. However, the following criteria were contained in a June 1991 report prepared by the Office of Management and Budget–as required by Pub. L. No. 102-55 for the determination of whether to designate spending as an emergency spending: Necessary expenditure.–an essential or vital expenditure, not one that is merely useful or beneficial; Sudden.–quickly coming into being, not building up over time; Urgent.–pressing and compelling need requiring immediate action; Unforseen.–not predictable or seen beforehand as a coming need (an emergency that is part of an aggregate level of anticipated emergencies, particularly when normally estimated in advance, would not be “unforseen”); and Not permanent.–the need is temporary in nature. Expenditures: (See Outlays.) return to top F Federal Debt: Consists of all Treasury and agency debt issues outstanding. Current law places a limit or ceiling on the amount of debt. Debt subject to limit has two components: debt held by the government and debt held by the public. Debt held by the government.–Represents the holdings of debt by federal trust funds and other special government funds. For example, when a trust fund is in surplus as is presently the case with Social Security, the law requires that this surplus be invested in government securities. Debt held by the public.–Represents the holdings of debt by individuals, institutions, other buyers outside the federal government, and the Federal Reserve System. The change in debt held by the public in any given year closely tracks the unified budget deficit for that year. Fiscal Policy: Federal government policies with respect to taxes, spending, and debt management intended to promote the nations’ macroeconomic goals, particularly with respect to employment, gross national product, price level stability, and equilibrium in balance of payments. The budget process is a major vehicle for determining and implementing Federal fiscal policy. The other major component of Federal macroeconomic policy is monetary policy. (See Monetary Policy.) Fiscal Year: A fiscal year is a 12-month accounting period. The fiscal for the Federal Government begins October 1 and ends September 30. The fiscal year is designated by the calendar year in which it ends; for example fiscal year 1997 is the year beginning October 1, 1996, and ending September 30, 1997. Functional Classification: A system of classifying budget resources by major purpose so that budget authority, outlays, and credit activities can be related in terms of the national needs being addressed (for example, national defense, health) regardless of the agency administrating the program. There are currently 20 functions. A function may be divided into two or more subfunctions depending upon the complexity of the national need addressed by that function. (See Budget Authority; Outlays.) return to top IImpoundment: A generic term referring to any action or inaction by an officer or employee of the U.S. Government that precludes the obligation or expenditure of budget authority in the manner intended by Congress. (See Deferral of Budget Authority; Rescission of Budget Authority.) return to top JJoint Committee on Taxation (JCT): Section 8001 of the Internal Revenue Code authorized the creation of the Joint Committee on Taxation. By statute, it is composed of five members from the Committee on Finance (three majority, two minority) chosen by such Committee and five members from the Committee on Ways and Means (three majority, two minority) chosen by such Committee. In practice, the Chairmanship and Vice Chairmanship of the Joint Committee on Taxation has rotated between the Chairman of the Committee on Finance and the Chairman of the Committee on Ways and Means with each new Congress. Among other things, the JCT’s duties are to investigate the operation and effects of the federal tax system. return to top M Mandatory Spending: Refers to spending for programs the level of which is governed by formulas or criteria set forth in authorizing legislation rather than by appropriations. Examples of mandatory spending include: Social Security, Medicare, veterans’ pensions, rehabilitation services, Members’ pay, judges pay and the payment of interest of the public debt. Many of these programs are considered entitlement. (See Direct Spending.) Mark-Up: Meetings where congressional committees work on language of bills or resolutions. At Budget Committee mark-ups, the House and Senate Budget Committees work on the language and numbers contained in budget resolutions and legislation affecting the congressional budget process. Monetary Policy: Management of the money supply, under the direction of the Board of Governors of the Federal Reserve system, with the aim of achieving price stability and full employment. Government actions in guiding monetary policy, include currency revaluation, credit contradiction or expansion, rediscount policy, regulation of bank reserves and the purchase and sale of Government securities. (See Fiscal Policy.) return to top NNet Deficit Reduction: Savings below the defined budget baseline achieved for the upcoming fiscal year because of laws enacted or final regulations promulgated since January 1. CBO and OMB independently estimate these savings in their initial and final sequester reports. return to top O Offsetting Collections: Income from the public that results from the government engaging in “business-like” activities with the public, such as the sale of products or the rendering of a service. Examples include proceeds funds derived from the sale of postage stamps. Offsetting collections are credited against the level of budget authority or outlays associated with a specific program or account. (See Offsetting receipts.) Offsetting Receipts: Income from the public that results from the government engaging in “business-like” activities with the public such as the sale of products or the rendering of services. Examples include proceeds from the sale of timber from Federal lands or entrance fees paid at national parks. Rather than being credited against the spending of a particular program or account, (as in the case with offsetting collections) offsetting receipts are deducted from total budget authority and outlays rather than added to Federal revenues even though they are deposited in the Treasury as miscellaneous receipts. Generally offsetting receipts are associated with mandatory spending. (See Offsetting collections.) Off-budget Federal Entity: Any Federal fund or trust fund whose transactions are required by law to be excluded from the totals of President’s budget submission and Congress’ budget resolution, despite the fact that these are part of the government’s total transactions. Current law requires that the Social Security trust funds (the Federal Old Age, Survivors, and Disability trust fund) and the Postal Service be off-budget. However, these entities are reflected in the budget in that they are included in calculating the deficit in order to derive the total government deficit that must be financed by borrowing from the public or by other means. All other federal funds and trust funds are on budget. (See Unified Budget.) Outlays: Outlays are disbursements by the Federal Treasury in the form of checks or cash. Outlays flow in part from budget authority granted in prior years and in part from budget authority provided for the year in which the disbursements occur. Outlay Rates: The ratio of outlays (actual government disbursements) in a fiscal year relative to new budgetary resources in that fiscal year. In estimating the budget baseline and baseline deficit for their sequestration reports, CBO and OMB use outlay rates for projecting levels of spending resulting from available budget authority. return to top P Pay-as-you-go: Arises in two separate contexts: a point of order in the Senate and a sequester order from OMB. Pay-as-you-go in the Senate.–Since fiscal year 1994, the budget resolution has included a pay-as-you-go rule in the Senate. The rule provides a 3/5ths vote point of order in the Senate against consideration of legislation that would cause a net increase in the deficit over a ten year period. It applies to all legislation except appropriations legislation. To determine a violation, CBO measures the budget impact of a direct spending or revenue bill combined with the budget impact of all direct spending and revenue legislation enacted since the latest budget resolution’s adoption to see if the legislation would result in a net deficit increase for any one of three time periods (the first year, the sum of years 1 through 5, and the sum of years 6 through 10.) The pay-go rule sunsets at the end of fiscal year 2002. Pay-as-you-go and sequestration under the BEA.–The Budget Enforcement Act requires OMB to also enforce a “pay-as-you-go” requirement which has a similar effect as the Senate’s point of order: Congress is required to “pay for” any changes to programs which result in an increase in direct spending, or in this case risk a sequester. If OMB estimates that the sum of all direct spending and revenue legislation enacted since 1990 will result in a net increase in the deficit for the fiscal year, then the President is required to issue a sequester order reducing all non-exempt direct spending accounts by a uniform percentage in order to eliminate the net deficit increase. Most direct spending is either exempt from a sequester order or operates under special rules that minimize the reduction that can be made in direct spending. Social Security is exempt from a pay-as-you-go sequester and Medicare cannot be reduced by more than 4 percent. President’s Budget: The document sent to Congress by the President in January or February of each year, requesting new budget authority for Federal programs and estimating Federal revenues and outlays for the upcoming fiscal year. return to top R Revenues: Collections from the public arising from the Government’s sovereign power to tax. Revenues include individual and corporate income taxes, social insurance taxes (such as social security payroll taxes), excise taxes, estate and gift taxes, customs duties and the like. Reconciliation Process: A process by which Congress includes in a budget resolution “reconciliation instructions” to specific committees, directing them to report legislation which changes existing laws, usually for the purpose of decreasing spending or increasing revenues by a specified amount by a certain date. The legislation may also contain an increase in the debt limit. The reported legislation is then considered as a single “reconciliation bill under expedited procedures.” Reserve Fund: A provision in a budget resolution that grants the Chairman of the Budget Committee the authority to make changes in budget aggregates and committee allocations once some condition or conditions have been met. Since a budget resolution establishes a binding ceiling on aggregate budget authority and outlay levels and a binding floor on revenues, budget resolutions frequently include reserve funds for deficit-neutral legislation that would otherwise violate the budget resolution and be subject to a point of order under the Budget Act. For example, the FY 1997 budget resolution included a tax reduction reserve fund that allowed the Chairman to reduce the revenue floor and the relevant spending allocations to accommodate legislation that reduced taxes if that legislation also contained offsetting spending reductions. Rescission of Budget Authority: Cancellation of budget authority before the time when the authority would otherwise cease to be available for obligation. The rescission process begins when the President proposes a rescission to the Congress for fiscal or policy reasons. Unlike the deferral of budget authority which occurs unless Congress acts to disapprove the deferral, rescission off budget authority occurs only if Congress enacts the rescission. (See Deferral of Budget Authority; Impoundment.) return to top S Scoring or Scorekeeping: The process for estimating budget authority, outlay, revenue and deficit levels which result from congressional budgetary actions. Scorekeeping data prepared by the Congressional Budget Office include status reports on the effect of congressional actions and comparisons of these actions to targets and ceilings set by Congress in budget resolutions. These reports are published in the Congressional Record on a regular basis. OMB is responsible for scoring legislation to determine if a sequester is necessary. Sequester: Pursuant to Gramm-Rudman-Hollings, a presidential spending reduction order that occurs by reducing spending by uniform percentages. Sequestrable Resource: Pursuant to Gramm-Rudman-Hollings federal funding authority (budgetary resources) subject to reductions under a presidential sequester order for achieving required outlay reductions (in non-exempt programs). Supplemental Appropriation: An act appropriating funds in addition to those in the 13 regular annual appropriations acts. Supplemental appropriations provide additional budget authority beyond the original estimates for programs or activities (including new programs authorized after the date of the original appropriation act) in cases where the need for funds is too urgent to be postponed until enactment of the next regular appropriation bill. (See Appropriations Act.) return to top TTax Expenditures: Revenue losses attributable to a special exclusion, exemption, or deduction from gross income or to a special credit, preferential rate of tax, or deferral of tax liability. return to top U Unfunded Mandates: A Federal Intergovernmental Mandate is any provision in legislation, statute, or regulation that would impose an enforceable duty upon State, local or tribal government, except as conditions of assistance or duties arising from participation in a voluntary federal program. Exceptions to this rule are: enforcing constitutional rights; statutory prohibitions against discrimination; emergency assistance requested by states; accounting/auditing for federal assistance; national security; Presidential designated emergencies; and Social Security. Provisions that increase stringency of conditions of assistance or decrease federal funding for large state entitlement programs (greater than $500 million) if states lack authority to decrease their responsibilities are considered mandates as well. A Federal Private Sector Mandate is any provision in legislation, statute, or regulation that would impose an enforceable duty upon the private sector. The exceptions are a condition of Federal assistance or a duty arising from participation in a voluntary Federal program. Unified Budget: A comprehensive display of the Federal budget. This display includes all revenues and all spending for all regular Federal programs and trust funds. The 1967 President’s Commission on Budget Concepts recommended the unified budget and it has been the basis for budgeting since 1968. The unified budget replaced a system of the budgets that existed before 1968 (an administrative budget, a consolidated cash budget, and a national income accounts budget). http://www.budget.senate.gov/democratic/index.cfm/glossary

Budget Control Act

The Budget Control Act Serves as the Budget for 2012 and 2013

The Budget Control Act states: “For the purpose of enforcing the Congressional Budget Act of 1974 through April 15, 2012 … the allocations, aggregates, and levels set in subsection (b)(1) shall apply in the Senate in the same manner as for a concurrent resolution on the budget for fiscal year 2012.” In many ways, the Budget Control Act is even more extensive than a traditional budget resolution. Number one, it has the force of law, unlike a budget resolution that never goes to the President. A budget resolution is purely a Congressional document; the Budget Control Act is a law. Number two, it sets discretionary caps for 10 years, instead of the one year normally set in a budget resolution. Number three, it provides enforcement mechanisms, including two years of “deeming resolutions,” which allow budget points of order to be enforced. And fourth, it creates a reconciliation-like “Super Committee” process to address both entitlements and tax reform. And it backs that process up with a $1.2 trillion sequester.

Budget Control Act Legislative Text

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Tory! Tory! Tory! — Videos

Posted on April 12, 2013. Filed under: American History, Banking, Blogroll, Communications, Computers, Economics, Education, Employment, Energy, European History, Fiscal Policy, Foreign Policy, government, government spending, Health Care, history, History of Economic Thought, Inflation, Investments, Law, liberty, Life, Links, Macroeconomics, media, Microeconomics, Monetary Policy, Money, People, Philosophy, Politics, Private Sector, Public Sector, Raves, Security, Talk Radio, Tax Policy, Taxes, Technology, Transportation, Unemployment, Unions, Video, War, Water, Wealth, Wisdom | Tags: BBC, Economics, Margaret Thatcher, Pollitics, Thatcher, Tory! Tory! Tory!, Videos |

Tory! Tory! Tory! – Ep 1: Outsiders – BBC 2007

Series exploring the history of the people and ideas behind what became known as Thatcherism. When Thatcher became Prime Minister, the monetarist policies used to combat inflation created large-scale unemployment and weakened the unions. As riots broke out across Britain, there was growing dissent even inside the government. How would Mrs Thatcher survive her plummeting popularity?

Tory! Tory! Tory! – Ep 2: The Road to Power – BBC 2007

Tory! Tory! Tory! – Ep 3: The Exercise of Power – BBC 2007

Speech to Conservative Party Conference

Document type:	speeches
Document kind:	Speech
Venue:	Winter Gardens, Blackpool
Source:	Thatcher Archive: speaking text
Journalist:	-
Editorial comments:	1045. MT spoke for 41 minute 16 seconds; the BBC Sound Archive has a complete recording. Evening Standard (10 October 1975) noted that the audience applauded every passage of the speech – not one was delivered without interruption. Parts of the text have been checked against material broadcast on ITN during the day.
Importance ranking:	Key
Word count:	3722
Themes:	Conservative Party (organisation), Autobiographical comments, Conservative Party (history), Economy (general discussions), Labour Party and Socialism, Economy (general discussions), Employment, Public spending and borrowing, Economy (general discussions), Labour Party and Socialism, Foreign policy (USSR and successor states), Foreign policy (Central and Eastern Europe), Economy (general discussions), Labour Party and Socialism, Higher and further education, Industry, Science and technology, Conservatism, Social security and welfare, Labour Party and Socialism, Industry, Conservatism, Labour Party and Socialism, Agriculture, Employment, Labour Party and Socialism, Conservatism, Secondary education, Health policy, Private health care, Labour Party and Socialism, Trade unions, British constitution (general discussions), Law and order, Labour Party and Socialism, Northern Ireland

Note by MT: “Relax. Low Speaking Voice. Not too slow”.

The first Conservative Party Conference I attended was in 1946.

I came to it as an undergraduate representing Oxford University Conservative Association (I know our Cambridge supporters will not mind.) That Conference was held in this very hall and the platform then seemed a long way away, and I had no thought of joining the lofty and distinguished people sitting up there.

But our Party is the Party of equality of opportunity—as you can see. (Laughter).[fo 1]

You will understand, I know, the humility I feel at following in the footsteps of great men like our Leader that year, Winston Churchill a man called by destiny who raised the name of Britain to supreme heights in the history of the free world. (Applause).

In the footsteps of Anthony Eden , who set us the goal of a property-owning democracy—a goal we still pursue today.(Applause).

Of Harold Macmillan whose leadership brought so many ambitions within the grasp of every citizen. (Applause).[fo 2]

Of Alec Douglas-Home whose career of selfless public service earned the affection and admiration of us all. (Applause).

And of Edward Heath who successfully led the Party to victory in 1970 and brilliantly led the nation into Europe in 1973. (Applause).

During my lifetime, all the leaders of the Conservative Party have served as Prime Minister. I hope the habit will continue. (Laughter)

Our leaders have been different men with different qualities and different styles. But they have one thing in common. Each met the challenge-of-his-time.[fo 3]

What is the challenge of our time?

I believe there are two—to overcome the country’s economic and financial problems, and to regain our confidence in Britain and ourselves.

The Economic Challenge

The economic challenge has been debated at length in this hall.

Last week it gave rise to the usual scenes of cordial brotherly strife.[fo 4]

Day after day the comrades called one another far from comradely names, and occasionally, when they remembered, they called us names too.

Some of them, for example, suggested that I criticised Britain when I was overseas. They are wrong.

It wasn’t Britain I was criticising. It was-Socialism. (Applause).

And I will go on criticising Socialism, and opposing Socialism because it is bad for Britain—and Britain and Socialism are not the same thing.[fo 5]

As long as I have health and strength, they never will be. (Applause).

But whatever could I say about Britain that is half as damaging as what this Labour Government have done to our country?

Let’s look at the record.

It is the Labour Government that have caused prices to rise at a record rate of 26 per cent a year.[fo 6]

They told us that the Social Contract would solve everything. But now everyone can see that the so-called contract was a fraud—a fraud for which the people of this country have had to pay a very high price.

It is the Labour Government whose policies are forcing unemployment higher than it need have been—thousands more men and women lose their jobs every day.

There are going to be men and women many of them youngsters straight out of school—who will be without a job this winter because Socialist Ministers spent last year attacking us, instead of attacking inflation.[fo 7]Beginning of section checked against ITN News at Ten, 10 October 1975:

And it’s the Labour Government that have brought the level of production below that of the 3-day week in 1974. W’ve really got a 3-day week now,—only it takes five days to do it. (Applause).

It’s the Labour Government that have brought us record peace-time taxation. They’ve got the usual Socialist disease—they’ve run out of other people’s money. (Laughter).

And it’s the Labour Government that have pushed public spending to record levels.

And how’ve they done it? By borrowing, and borrowing and borrowing.

Never in the field of human credit has so much been owed. (Laughter).End of section checked against ITN News at Ten, 10 October 1975.[fo 8]

But serious as the economic challenge is, the political and moral challenge is just as grave, perhaps more so.

POLITICAL AND MORAL CHALLENGE

Economic problems never start with economics. They have deeper roots—in human nature and in politics.

They don’t finish at economics either.

Labour’s failure to cope, to look at the nation’s problems from the point of view of the whole nation, not just one section of it, has led to loss of confidence and a sense of helplessness.[fo 9]

With it goes a feeling that Parliament, which ought to be in charge, is not in charge—that the actions and the decisions are taken elsewhere.

And it goes deeper than that. There are voices that seem anxious not to overcome our economic difficulties, but to exploit them, to destroy the free enterprise society and put a Marxist system in its place.

Today those voices form a sizeable chorus in the Parliamentary Labour Party. A chorus which, aided and abetted by many Constituency Labour Parties, seems to be growing in numbers.[fo 10]

Anyone who says this openly is promptly accused of seeing Reds Under the Bed.

But look who’s seeing them now!

On his own admission, Mr Wilson has at last discovered that his own Party is infiltrated by extreme left-wingers—or to use his own words it is infested with them.

When even Mr Wilson gets scared about their success in capturing key positions in the Labour Party, shouldn’t the rest of us be?[fo 11]

And shouldn’t the rest of us ask him “Where have you been while all this has been going on, and what are you doing about it?” (Applause). The answer is nothing.

I sometimes think the Labour Party is like a pub where the mild is running out. If someone doesn’t do something soon, all that’s left will be bitter. (Laughter). And all that’s bitter will be Left. (Laughter).

Whenever I visit Communist countries, their politicians never hesitate to boast about their achievements.[fo 12]

They know them all by heart and reel off the facts and figures, claiming that this is the rich harvest of the Communist system.

Yet they are not prosperous as we in the West are prosperous, and they are not free as we in the West are free.

Our capitalist system produces a far higher standard of prosperity and happiness because it believes in incentive and opportunity, and because it is founded on human dignity and freedom. (Applause).[fo 13]

Even the Russians have to go to a capitalist country, America to buy enough wheat to feed their people. And that aftermore than 50 years of a State controlled economy.

Yet they boast incessantly while we, who have so much more to boast about, forever criticise and decry.

Isn’t it time we spoke up for our way of life? (Applause) After all, no Western nation has to build a wall round itself to keep its people in. (Applause).[fo 14]

So let us have no truck with those who say the free enterprise system has failed. What we face today is not a crisis of capital ism, but of Socialism. No country can flourish if its economic and social life is dominated by nationalisation and state control.

The cause of our shortcomings does not therefore lie in private enterprise. Our problem is not that we have too little socialism. It is that we have too much.

If only the Labour Party in this country would act like Social Democrats in West Germany. If only they would stop trying to prove their Socialist virility by relentlessly nationalising one industry after another.[fo 15]

Of course, a halt to further State control will not on its own restore our belief in ourselves, because something else is happening to this country. We are witnessing a deliberate attack on our values, a deliberate attack on those who wish to promote merit and excellence, a deliberate attack on our heritage and great past. (Applause).Beginning of section checked against ITN News at Ten, 10 October 1975:

And there are those who gnaw away at our national self-respect, rewriting British history as centuries of unrelieved gloom, oppression and failure.

As days of hopelessness—not Days of Hope.[fo 16]

And others, under the shelter of our education system, are ruthlessly attacking the minds of the young. Everyone who believes in freedom must be appalled at the tactics employed by the far Left in the systematic destruction of the North London Polytechnic. (Applause).

Blatant tactics of intimidation, designed to undermine the fundamental beliefs and values of every student.

Tactics pursued by people who are the first to insist on their own civil rights while seeking to deny them to the rest of us. We must not be bullied and brainwashed out of our beliefs. (Applause).[fo 17]

No wonder so many of our people—some of the best and brightest—are depressed and talk of emigrating.

Even so, I think they are wrong at giving up too soon. Many of the things we hold dear are threatened as never before, but none has yet been lost.

So stay here. (Applause). Stay and help us defeat Socialism, so that the Britain you have known may be the Britain your children will know. (Applause).End of section checked against ITN News at Ten, 10 October 1975.[fo 18]

Those are the two great challenges of our time.

The moral and political challenge, and the economic challenge.

They have to be faced together—and we have to master them both.

POTENTIAL

What are our chances of success? It depends what kind of people we are. Well, what kind of people are we?[fo 19]

We are the people that in the past made Great Britain the Workshop of the World. The people who persuaded others to buy British not by begging them to do so, but because it was best.

We are a people who have received more Nobel prizes than any other nation except America, and head for head we have done better than America. Twice as well, in fact.

We are the people who, among other things, invented the computer, refrigerator, electric motor, stethoscope, rayon, steam turbine, stainless steel, the tank, television, penicillin, radar, jet engine, hovercraft, float glass and carbonfibres. Oh, and the best half of Concorde. (Laughter).[fo 20]

We export more of what we produce than either West Germany, France, Japan or the United States.

And well over 90%; of these exports come from private enterprise. It’s a triumph for the private sector and all who work in it. Let us say so, loud and clear. (Applause).

With achievements like that who can doubt that Britain can have a great future? What our friends abroad want to know is whether that future is going to happen.

Well, how can we Conservatives make it happen?[fo 21]

Many of the details have already been dealt with in the various debates. But policies and programmes should not be just a list of unrelated items. They are part of a total vision of the kind of life we want for our country and our children. [Beginning of section checked against ITN Early Evening News, 10 October 1975] Let me give you my vision.

THE FREE SOCIETY AND THE ECONOMY

A man’s right to work as he will to spend what he earns to own property to have the State as servant and not as master these are the British inheritance.

They are the essence of a free economy. And on that freedom all our other freedoms depend. (Applause).End of section checked against ITN Early Evening News, 10 October 1975.[fo 22]

But we want a free economy, not only because it guarantees our liberties, but also because it is the best way of creating wealth and prosperity for the whole country.

It is this prosperity alone which can give us the resources for better services for the community, better services for those in need. (Applause).

By their attack on private enterprise, this Labour Government have made certain that there will be next to nothing available for improvements in our social services over the next few years.[fo 23]

We must get private enterprise back on the road to recovery, not merely to give people more of their own money to spend as they choose, but to have more money to help the old and the sick and the handicapped.

The way to recovery is through profits. Good profits today, leading to high investment, well-paid jobs and a better standard of living tomorrow. (Applause).

No profits mean no investment, and a dying industry geared to yesterday’s world.

Other nations have recognised that for years now. They are going ahead faster than we are; and the gap between us will continue to increase unless we change our ways.[fo 24]

The trouble here is that for years the Labour Party have made people feel that profits are guilty-unless proved innocent.

But when I visit factories and businesses I do not find that those who actually work in them are against profits. On the contrary, they want to work for a prosperous concern. With a future—their future. (Applause).

Governments must learn to leave these companies with enough of their own profits to produce the goods and jobs for tomorrow.

If the Socialists won’t or can’t there will be no profit making industry left to support the losses caused by fresh bouts of nationalisation.[fo 25]

And if anyone says I am preaching laissez-faire, let me say this.

I am not arguing, and never have argued, that all we have to do is to let the economy run by itself.

I believe that, just as each of us has an obligation to make the best of his talents so governments have an obligation to create the framework within which we can do so. Not only individual people, but individual firms and particularly small firms. (Applause).

Some of these will stay small but others will expand and become the great companies of the future.[fo 26]

The Labour Government have pursued a disastrous vendetta against small businesses and the self-employed. We will reverse their damaging policies. (Applause).

Nowhere is this more important than in Agriculture—one of our most successful industries made up entirely of small businesses. We live in a world in which food is no longer cheap or plentiful. Everything we cannot produce here must be imported at a high price.

Yet the Government could not have destroyed the confidence of the industry more effectively if they had tried deliberately to do so, with their formula of empty promises and penal taxation.[fo 27]

So today what is the picture? Depressed profits, low investment, no incentive, and overshadowing everything government spending, spending far beyond the taxpayers means. (Applause).

To recover, to get from where we are to where we want to be, will take time.

“Economic policy” wrote Maynard Keynes “should not be a matter of tearing up by the roots but of slowly training a plant to grow in a different direction.”[fo 28]

It will take time to reduce public spending, rebuild profits and incentives, to benefit from the investments which must be made. The sooner that time starts, the better for Britain’s unemployed.

One of the reasons why this Labour Government has incurred more unemployment than any Conservative Government since the War is because they have concentrated too much on distributing what we have, and too little on seeing that we have more. (Applause).[fo 29]

We Conservatives hate unemployment.

We hate the idea of men and women not being able to use their abilities. We deplore the waste of national resources, and the deep affront to peoples’ dignity from being out of work through no fault of their own. (Applause).

It is ironic that we should be accused of wanting unemployment to solve our economic problems by the very Government which has produced a record post-War unemployment, and is expecting more.[fo 30]

The record of Mr Wilson and his colleagues on this is unparallelled in the history of political hypocricy.

We are now seeing the full consequences of nearly twenty months of Labour Government.

They have done the wrong things at the wrong time in the wrong way.

They have been a disaster for this country.[fo 31]

EQUALITY

Now let me turn to something I spoke about in America.

Some Socialists seem to believe that people should be numbers in a State computer. We believe they should be individuals.

We are all unequal. No one, thank heavens, is like anyone else, however much the Socialists may pretend otherwise.

We believe that everyone has the right to be unequal but to us every human being is equally important.[fo 32]

Engineers, miners, manual workers, shop assistants, farm workers, postmen, housewives—these are the essential foundations of our society. Without them there would be no nation. (Applause).

But their are others with special gifts who should also have their chance, because if the adventurers who strike out in new directions in science, technology, medicine, commerce and industry the arts are hobbled, there can be no advance.

The spirit of envy can destroy. It can never build.[fo 33]

Everyone must be allowed to develop the abilities he knows he has within him, and she knows she has within her, in the way they choose.

CHOICE

Freedom to choose is something we take for granted—until it is in danger of being taken away.

Socialist governments set out perpetually to restrict the area of choice, Conservative governments to increase it.

We believe that you become a responsible citizen by making decisions yourself, not by having them made for you.[fo 34]

But they are made for you under Labour all right.

Take education.

Beginning of section checked against ITN News at Ten, 10 October 1975:

Our education system used to serve us well. A child from an ordinary family, as I was, could use it as a ladder as an advancement.

But the Socialists are better at demolition than reconstruction, are destroying many good grammar schools.

Now this is nothing to do with private education. It’s opportunity and excellence in our State schools that are being diminished under Socialism.

And naturally enough, parents don’t like this. But in a Socialist society parents should be seen and not heard. (Laughter).[fo 35]

And another denial of choice is being applied to health.

The private sector helps to keep some of our best doctors here, and so are available part time to the National Health Service. It also helps to bring in more money for the general health of the nation.

But under Labour, private medicine is being squeezed out, and the result will be to add to the burden on the National Health Service without adding one penny to its income.[fo 36]

Let me make this absolutely clear.

When we return to power we shall reverse Mrs Castle ‘s stupid and spiteful attack on hospital pay beds. (Applause).

We Conservatives do not accept that because some people have no choice, no one should have it.

Every family should have the right to spend their money, after tax, as they wish, not as the Government dictates.End of section checked against ITN News at Ten, 10 October 1975.

Let us extend choice, the will to choose and the chance to choose.[fo 37]

TRADE UNIONS

I want to come now to the argument which Mr Wilson is trying to put across the country: namely that the Labour Party is the natural party of Government because it is the only one that the Trade Unions will accept.

From what I saw on television last week, the Labour Party did not look like a party of Government at all, let alone a natural one.

But let’s examine the argument.Beginning of section checked against ITN First Report, 10 October 1975

If we are to be told that a Conservative Government could not govern because certain extreme leaders would not let it, then General Elections are a mockery we’ve arrived at[fo 38] the one party state, and parliamentary democracy in this country will have perished. (Applause).

The democracy for which our fathers fought and died is not to be laid to rest as lightly as that.

When the next Conservative Government comes to power many Trade Unionists will have put it there. Millions of them vote for us at every Election.

I want to say this to them, and to every one of our supporters in industry.[fo 39]

Go out and join in the work of your Union.

Go to its meetings—and stay to the end.

Learn the Union rules as well as the Far Left know them, and remember this. If Parliamentary democracy dies, free Trade Unions die with it. (Applause).End of section checked against ITN First Report, 10 October 1975.[fo 40]

RULE OF LAW

I come last to what many would put first. The Rule of Law.

The first people to uphold the law should be governments. It is tragic that the Socialist Government, to its lasting shame, should have lost its nerve and shed its principles over the People’s Republic of Clay Cross. And that a group of the Labour Party should have tried to turn the Shrewsbury pickets into martyrs.

On both occasions the law was broken. On one, violence was done.[fo 41]No decent society can live like that. No responsible party should condone it. (Applause).

The first duty of Government is to uphold the law. If it tries to bob and weave and duck around that duty when its inconvenient, if government does that, then so will the governed, and then nothing is safe—not home, not liberty, not life itself.

There is one part of this country where tragically defiance of the law is costing life day after day.[fo 42]

In Northern Ireland our troops have the dangerous and thankless task of trying to keep the peace and hold the balance. We are proud of the way they have discharged their duty.

This Party is pledged to support the unity of the United Kingdom. To preserve that unity and to protect the people, Catholic and Protestant alike, we believe that our armed forces must remain until a genuine peace is made.

Our thoughts are with them, and our pride is with them too. (Applause).[fo 43]

I have spoken of the challenges that face us here in Britain. The challenge to recover economically. The challenge to recover our belief in ourselves.

I have shown our potential for recovery.

I have dealt with some aspects of our strength and approach.

And I have tried to tell you something of my personal vision, my belief in the standards on which this nation was greatly built, on which it greatly thrived, and from which in recent years it has greatly fallen away.[fo 44]

We are coming, I think, to yet another turning point in our long history.

We can go on as we have been going and continue down.

Or we can stop—and with a decisive act of will we can say “Enough”.

Let us, all of us, here today and others, far beyond this hall who believe in our cause make that act of will.

Let us proclaim our faith in a new and better future for our Party and our people.[fo 45]

Let us resolve to heal the wounds of a divided nation.

And let that act of healing be the prelude to a lasting victory. (Prolonged applause).

http://www.margaretthatcher.org/document/102777

Note by MT: “It’s over!”

**HOUSEHOLD DATA Table A-15. Alternative measures of labor underutilization**

[Percent]
Measure	Not seasonally adjusted	Seasonally adjusted
U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force	4.9	4.3	4.3	4.6	4.3	4.3	4.2	4.2	4.1
U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force	4.8	4.6	4.3	4.5	4.1	4.1	4.3	4.2	4.1
U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate)	8.4	8.1	7.6	8.2	7.8	7.8	7.9	7.7	7.6
U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers	8.9	8.6	8.1	8.7	8.3	8.5	8.4	8.3	8.1
U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force	9.7	9.6	9.0	9.6	9.2	9.4	9.3	9.2	8.9
U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force	14.8	14.9	13.9	14.5	14.4	14.4	14.4	14.3	13.8
NOTE: Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule. Updated population controls are introduced annually with the release of January data.http://www.bls.gov/news.release/empsit.t15.htm

Employment-population Ratio

16 years and over

Series Id:           LNS12300000
Seasonally Adjusted
Series title:        (Seas) Employment-Population Ratio
Labor force status: Employment-population ratio
Type of data:        Percent or rate

Age: 16 years and over

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2000	64.6	64.6	64.6	64.7	64.4	64.5	64.2	64.2	64.2	64.2	64.3	64.4
2001	64.4	64.3	64.3	64.0	63.8	63.7	63.7	63.2	63.5	63.2	63.0	62.9
2002	62.7	63.0	62.8	62.7	62.9	62.7	62.7	62.7	63.0	62.7	62.5	62.4
2003	62.5	62.5	62.4	62.4	62.3	62.3	62.1	62.1	62.0	62.1	62.3	62.2
2004	62.3	62.3	62.2	62.3	62.3	62.4	62.5	62.4	62.3	62.3	62.5	62.4
2005	62.4	62.4	62.4	62.7	62.8	62.7	62.8	62.9	62.8	62.8	62.7	62.8
2006	62.9	63.0	63.1	63.0	63.1	63.1	63.0	63.1	63.1	63.3	63.3	63.4
2007	63.3	63.3	63.3	63.0	63.0	63.0	62.9	62.7	62.9	62.7	62.9	62.7
2008	62.9	62.8	62.7	62.7	62.5	62.4	62.2	62.0	61.9	61.7	61.4	61.0
2009	60.6	60.3	59.9	59.8	59.6	59.4	59.3	59.1	58.7	58.5	58.6	58.3
2010	58.5	58.5	58.5	58.7	58.6	58.5	58.5	58.5	58.5	58.3	58.2	58.3
2011	58.3	58.4	58.4	58.4	58.4	58.2	58.2	58.3	58.4	58.4	58.5	58.6
2012	58.5	58.6	58.5	58.5	58.6	58.6	58.5	58.4	58.7	58.7	58.7	58.6
2013	58.6	58.6	58.5

http://www.bls.gov/news.release/pdf/empsit.pdf

Labor Force Statistics from the Current Population Survey

Employment Level

143,286,000 March 2013

146,595,000 Nov. 2007 Peak of Boom

Series Id:           LNS12000000
Seasonally Adjusted
Series title:        (Seas) Employment Level
Labor force status:  Employed
Type of data:        Number in thousands
Age:                 16 years and over

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2000	136559(1)	136598	136701	137270	136630	136940	136531	136662	136893	137088	137322	137614
2001	137778	137612	137783	137299	137092	136873	137071	136241	136846	136392	136238	136047
2002	135701	136438	136177	136126	136539	136415	136413	136705	137302	137008	136521	136426
2003	137417(1)	137482	137434	137633	137544	137790	137474	137549	137609	137984	138424	138411
2004	138472(1)	138542	138453	138680	138852	139174	139556	139573	139487	139732	140231	140125
2005	140245(1)	140385	140654	141254	141609	141714	142026	142434	142401	142548	142499	142752
2006	143150(1)	143457	143741	143761	144089	144353	144202	144625	144815	145314	145534	145970
2007	146028(1)	146057	146320	145586	145903	146063	145905	145682	146244	145946	146595	146273
2008	146378(1)	146156	146086	146132	145908	145737	145532	145203	145076	144802	144100	143369
2009	142153(1)	141644	140721	140652	140250	140005	139898	139481	138810	138421	138665	138025
2010	138439(1)	138624	138767	139296	139255	139148	139167	139405	139388	139097	139046	139295
2011	139253(1)	139471	139643	139606	139681	139405	139509	139870	140164	140314	140771	140896
2012	141608(1)	142019	142020	141934	142302	142448	142250	142164	142974	143328	143277	143305
2013	143322(1)	143492	143286
1 : Data affected by changes in population controls.

Civilian Labor Force

155,028,000 March 2013

153,845,000 Nov. 2008

Series Id:           LNS11000000
Seasonally Adjusted
Series title:        (Seas) Civilian Labor Force Level
Labor force status:  Civilian labor force
Type of data:        Number in thousands
Age:                 16 years and over

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2000	142267(1)	142456	142434	142751	142388	142591	142278	142514	142518	142622	142962	143248
2001	143800	143701	143924	143569	143318	143357	143654	143284	143989	144086	144240	144305
2002	143883	144653	144481	144725	144938	144808	144803	145009	145552	145314	145041	145066
2003	145937(1)	146100	146022	146474	146500	147056	146485	146445	146530	146716	147000	146729
2004	146842(1)	146709	146944	146850	147065	147460	147692	147564	147415	147793	148162	148059
2005	148029(1)	148364	148391	148926	149261	149238	149432	149779	149954	150001	150065	150030
2006	150214(1)	150641	150813	150881	151069	151354	151377	151716	151662	152041	152406	152732
2007	153144(1)	152983	153051	152435	152670	153041	153054	152749	153414	153183	153835	153918
2008	154063(1)	153653	153908	153769	154303	154313	154469	154641	154570	154876	154639	154655
2009	154232(1)	154526	154142	154479	154742	154710	154505	154300	153815	153804	153887	153120
2010	153455(1)	153702	153960	154577	154110	153623	153709	154078	153966	153681	154140	153649
2011	153244(1)	153269	153358	153478	153552	153369	153325	153707	154074	154010	154096	153945
2012	154356(1)	154825	154707	154451	154998	155149	154995	154647	155056	155576	155319	155511
2013	155654(1)	155524	155028
1 : Data affected by changes in population controls.

Civilian Labor Force Participation Rate

63.3% March 2013

66.0% Nov. 2007

63.3% May 1979

Series Id:           LNS11300000
Seasonally Adjusted
Series title:        (Seas) Labor Force Participation Rate
Labor force status:  Civilian labor force participation rate
Type of data:        Percent or rate
Age:                 16 years and over

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2000	67.3	67.3	67.3	67.3	67.1	67.1	66.9	66.9	66.9	66.8	66.9	67.0
2001	67.2	67.1	67.2	66.9	66.7	66.7	66.8	66.5	66.8	66.7	66.7	66.7
2002	66.5	66.8	66.6	66.7	66.7	66.6	66.5	66.6	66.7	66.6	66.4	66.3
2003	66.4	66.4	66.3	66.4	66.4	66.5	66.2	66.1	66.1	66.1	66.1	65.9
2004	66.1	66.0	66.0	65.9	66.0	66.1	66.1	66.0	65.8	65.9	66.0	65.9
2005	65.8	65.9	65.9	66.1	66.1	66.1	66.1	66.2	66.1	66.1	66.0	66.0
2006	66.0	66.1	66.2	66.1	66.1	66.2	66.1	66.2	66.1	66.2	66.3	66.4
2007	66.4	66.3	66.2	65.9	66.0	66.0	66.0	65.8	66.0	65.8	66.0	66.0
2008	66.2	66.0	66.1	65.9	66.1	66.1	66.1	66.1	66.0	66.0	65.9	65.8
2009	65.7	65.8	65.6	65.7	65.7	65.7	65.5	65.4	65.1	65.0	65.0	64.6
2010	64.8	64.9	64.9	65.1	64.9	64.6	64.6	64.7	64.6	64.4	64.6	64.3
2011	64.2	64.2	64.2	64.2	64.2	64.0	64.0	64.1	64.2	64.1	64.1	64.0
2012	63.7	63.9	63.8	63.6	63.8	63.8	63.7	63.5	63.6	63.8	63.6	63.6
2013	63.6	63.5	63.3

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
1948	58.6	58.9	58.5	59.0	58.3	59.2	59.3	58.9	58.9	58.7	58.7	59.1
1949	58.7	59.0	58.9	58.8	59.0	58.6	58.9	59.2	59.1	59.6	59.4	59.2
1950	58.9	58.9	58.8	59.2	59.1	59.4	59.1	59.5	59.2	59.4	59.3	59.2
1951	59.1	59.1	59.8	59.1	59.4	59.0	59.4	59.2	59.1	59.4	59.2	59.6
1952	59.5	59.5	58.9	58.8	59.1	59.1	58.9	58.7	59.2	58.7	59.1	59.2
1953	59.5	59.5	59.6	59.1	58.6	58.9	58.9	58.6	58.5	58.5	58.6	58.3
1954	58.6	59.3	59.1	59.2	58.9	58.5	58.4	58.7	59.2	58.8	58.6	58.1
1955	58.6	58.4	58.5	59.0	58.8	58.8	59.3	59.7	59.7	59.8	59.9	60.2
1956	60.2	59.9	59.8	59.9	60.2	60.1	60.1	60.0	60.0	59.8	59.8	59.8
1957	59.5	59.9	59.8	59.5	59.5	59.8	60.0	59.3	59.6	59.5	59.5	59.6
1958	59.3	59.3	59.3	59.6	59.8	59.5	59.6	59.8	59.7	59.6	59.2	59.2
1959	59.3	59.0	59.3	59.4	59.2	59.2	59.4	59.2	59.3	59.4	59.1	59.5
1960	59.1	59.1	58.5	59.5	59.5	59.7	59.5	59.5	59.7	59.4	59.8	59.7
1961	59.6	59.6	59.7	59.3	59.4	59.7	59.3	59.3	59.0	59.1	59.1	58.8
1962	58.8	59.0	58.9	58.7	58.9	58.8	58.5	59.0	59.0	58.7	58.5	58.4
1963	58.6	58.6	58.6	58.8	58.8	58.5	58.7	58.5	58.7	58.8	58.8	58.5
1964	58.6	58.8	58.7	59.1	59.1	58.7	58.6	58.6	58.7	58.6	58.5	58.6
1965	58.6	58.7	58.7	58.8	59.0	58.8	59.1	58.9	58.7	58.9	58.8	59.0
1966	59.0	58.8	58.8	59.0	59.0	59.1	59.1	59.3	59.3	59.3	59.6	59.5
1967	59.5	59.3	59.1	59.4	59.3	59.6	59.6	59.7	59.7	59.9	59.8	59.9
1968	59.2	59.6	59.6	59.5	59.9	60.0	59.8	59.6	59.5	59.5	59.6	59.7
1969	59.6	60.0	59.9	60.0	59.8	60.1	60.1	60.3	60.3	60.4	60.2	60.2
1970	60.4	60.4	60.6	60.6	60.3	60.2	60.4	60.3	60.2	60.4	60.4	60.4
1971	60.4	60.1	60.0	60.1	60.2	59.8	60.1	60.2	60.1	60.1	60.4	60.4
1972	60.2	60.2	60.5	60.4	60.4	60.4	60.4	60.6	60.4	60.3	60.3	60.5
1973	60.0	60.5	60.8	60.8	60.6	60.9	60.9	60.7	60.8	60.9	61.2	61.2
1974	61.3	61.4	61.3	61.1	61.2	61.2	61.4	61.2	61.4	61.3	61.3	61.2
1975	61.4	61.0	61.2	61.3	61.5	61.2	61.3	61.3	61.2	61.2	61.1	61.1
1976	61.3	61.3	61.3	61.6	61.5	61.5	61.8	61.8	61.6	61.6	61.9	61.8
1977	61.6	61.9	62.0	62.1	62.2	62.4	62.1	62.3	62.3	62.4	62.8	62.7
1978	62.8	62.7	62.8	63.0	63.1	63.3	63.2	63.2	63.3	63.3	63.5	63.6
1979	63.6	63.8	63.8	63.5	63.3	63.5	63.6	63.6	63.8	63.7	63.7	63.9
1980	64.0	64.0	63.7	63.8	63.9	63.7	63.8	63.7	63.6	63.7	63.8	63.6
1981	63.9	63.9	64.1	64.2	64.3	63.7	63.8	63.8	63.5	63.8	63.9	63.6
1982	63.7	63.8	63.8	63.9	64.2	63.9	64.0	64.1	64.1	64.1	64.2	64.1
1983	63.9	63.8	63.7	63.8	63.7	64.3	64.1	64.3	64.3	64.0	64.1	64.1
1984	63.9	64.1	64.1	64.3	64.5	64.6	64.6	64.4	64.4	64.4	64.5	64.6
1985	64.7	64.7	64.9	64.9	64.8	64.6	64.7	64.6	64.9	65.0	64.9	65.0
1986	64.9	65.0	65.1	65.1	65.2	65.4	65.4	65.3	65.4	65.4	65.4	65.3
1987	65.4	65.5	65.5	65.4	65.7	65.5	65.6	65.7	65.5	65.7	65.7	65.7
1988	65.8	65.9	65.7	65.8	65.7	65.8	65.9	66.1	65.9	66.0	66.2	66.1
1989	66.5	66.3	66.3	66.4	66.3	66.5	66.5	66.5	66.4	66.5	66.6	66.5
1990	66.8	66.7	66.7	66.6	66.6	66.4	66.5	66.5	66.4	66.4	66.4	66.4
1991	66.2	66.2	66.3	66.4	66.2	66.2	66.1	66.0	66.2	66.1	66.1	66.0
1992	66.3	66.2	66.4	66.5	66.6	66.7	66.7	66.6	66.5	66.2	66.3	66.3
1993	66.2	66.2	66.2	66.1	66.4	66.5	66.4	66.4	66.2	66.3	66.3	66.4
1994	66.6	66.6	66.5	66.5	66.6	66.4	66.4	66.6	66.6	66.7	66.7	66.7
1995	66.8	66.8	66.7	66.9	66.5	66.5	66.6	66.6	66.6	66.6	66.5	66.4
1996	66.4	66.6	66.6	66.7	66.7	66.7	66.9	66.7	66.9	67.0	67.0	67.0
1997	67.0	66.9	67.1	67.1	67.1	67.1	67.2	67.2	67.1	67.1	67.2	67.2
1998	67.1	67.1	67.1	67.0	67.0	67.0	67.0	67.0	67.2	67.2	67.1	67.2
1999	67.2	67.2	67.0	67.1	67.1	67.1	67.1	67.0	67.0	67.0	67.1	67.1
2000	67.3	67.3	67.3	67.3	67.1	67.1	66.9	66.9	66.9	66.8	66.9	67.0
2001	67.2	67.1	67.2	66.9	66.7	66.7	66.8	66.5	66.8	66.7	66.7	66.7
2002	66.5	66.8	66.6	66.7	66.7	66.6	66.5	66.6	66.7	66.6	66.4	66.3
2003	66.4	66.4	66.3	66.4	66.4	66.5	66.2	66.1	66.1	66.1	66.1	65.9
2004	66.1	66.0	66.0	65.9	66.0	66.1	66.1	66.0	65.8	65.9	66.0	65.9
2005	65.8	65.9	65.9	66.1	66.1	66.1	66.1	66.2	66.1	66.1	66.0	66.0
2006	66.0	66.1	66.2	66.1	66.1	66.2	66.1	66.2	66.1	66.2	66.3	66.4
2007	66.4	66.3	66.2	65.9	66.0	66.0	66.0	65.8	66.0	65.8	66.0	66.0
2008	66.2	66.0	66.1	65.9	66.1	66.1	66.1	66.1	66.0	66.0	65.9	65.8
2009	65.7	65.8	65.6	65.7	65.7	65.7	65.5	65.4	65.1	65.0	65.0	64.6
2010	64.8	64.9	64.9	65.1	64.9	64.6	64.6	64.7	64.6	64.4	64.6	64.3
2011	64.2	64.2	64.2	64.2	64.2	64.0	64.0	64.1	64.2	64.1	64.1	64.0
2012	63.7	63.9	63.8	63.6	63.8	63.8	63.7	63.5	63.6	63.8	63.6	63.6
2013	63.6	63.5	63.3

Unemployment Level

11,742,000 March 2013

7,240,000 Nov. 2007

Series Id:           LNS13000000
Seasonally Adjusted
Series title:        (Seas) Unemployment Level
Labor force status:  Unemployed
Type of data:        Number in thousands
Age:                 16 years and over

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2000	5708	5858	5733	5481	5758	5651	5747	5853	5625	5534	5639	5634
2001	6023	6089	6141	6271	6226	6484	6583	7042	7142	7694	8003	8258
2002	8182	8215	8304	8599	8399	8393	8390	8304	8251	8307	8520	8640
2003	8520	8618	8588	8842	8957	9266	9011	8896	8921	8732	8576	8317
2004	8370	8167	8491	8170	8212	8286	8136	7990	7927	8061	7932	7934
2005	7784	7980	7737	7672	7651	7524	7406	7345	7553	7453	7566	7279
2006	7064	7184	7072	7120	6980	7001	7175	7091	6847	6727	6872	6762
2007	7116	6927	6731	6850	6766	6979	7149	7067	7170	7237	7240	7645
2008	7685	7497	7822	7637	8395	8575	8937	9438	9494	10074	10538	11286
2009	12079	12881	13421	13826	14492	14705	14607	14819	15005	15382	15223	15095
2010	15016	15078	15192	15281	14856	14475	14542	14673	14577	14584	15094	14354
2011	13992	13798	13716	13872	13871	13964	13817	13837	13910	13696	13325	13049
2012	12748	12806	12686	12518	12695	12701	12745	12483	12082	12248	12042	12206
2013	12332	12032	11742

U-3 Unemployment Rate

7.6% March 2013

4.7% Nov. 2007

Series Id:           LNS14000000
Seasonally Adjusted
Series title:        (Seas) Unemployment Rate
Labor force status:  Unemployment rate
Type of data:        Percent or rate
Age:                 16 years and over

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2000	4.0	4.1	4.0	3.8	4.0	4.0	4.0	4.1	3.9	3.9	3.9	3.9
2001	4.2	4.2	4.3	4.4	4.3	4.5	4.6	4.9	5.0	5.3	5.5	5.7
2002	5.7	5.7	5.7	5.9	5.8	5.8	5.8	5.7	5.7	5.7	5.9	6.0
2003	5.8	5.9	5.9	6.0	6.1	6.3	6.2	6.1	6.1	6.0	5.8	5.7
2004	5.7	5.6	5.8	5.6	5.6	5.6	5.5	5.4	5.4	5.5	5.4	5.4
2005	5.3	5.4	5.2	5.2	5.1	5.0	5.0	4.9	5.0	5.0	5.0	4.9
2006	4.7	4.8	4.7	4.7	4.6	4.6	4.7	4.7	4.5	4.4	4.5	4.4
2007	4.6	4.5	4.4	4.5	4.4	4.6	4.7	4.6	4.7	4.7	4.7	5.0
2008	5.0	4.9	5.1	5.0	5.4	5.6	5.8	6.1	6.1	6.5	6.8	7.3
2009	7.8	8.3	8.7	9.0	9.4	9.5	9.5	9.6	9.8	10.0	9.9	9.9
2010	9.8	9.8	9.9	9.9	9.6	9.4	9.5	9.5	9.5	9.5	9.8	9.3
2011	9.1	9.0	8.9	9.0	9.0	9.1	9.0	9.0	9.0	8.9	8.6	8.5
2012	8.3	8.3	8.2	8.1	8.2	8.2	8.2	8.1	7.8	7.9	7.8	7.8
2013	7.9	7.7	7.6

U-6 Total Unemployment Rate

13.8% March 2013

88.4% Nov. 2007

Series Id:           LNS13327709
Seasonally Adjusted
Series title:        (seas) Total unemployed, plus all marginally attached workers plus total employed 
part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers
Labor force status:  Aggregated totals unemployed
Type of data:        Percent or rate
Age:                 16 years and over
Percent/rates:       Unemployed and mrg attached and pt for econ reas as percent of labor force plus marg attached

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2000	7.1	7.2	7.1	6.9	7.1	7.0	7.0	7.1	7.0	6.8	7.1	6.9
2001	7.3	7.4	7.3	7.4	7.5	7.9	7.8	8.1	8.7	9.3	9.4	9.6
2002	9.5	9.5	9.4	9.7	9.5	9.5	9.6	9.6	9.6	9.6	9.7	9.8
2003	10.0	10.2	10.0	10.2	10.1	10.3	10.3	10.1	10.4	10.2	10.0	9.8
2004	9.9	9.7	10.0	9.6	9.6	9.5	9.5	9.4	9.4	9.7	9.4	9.2
2005	9.3	9.3	9.1	8.9	8.9	9.0	8.8	8.9	9.0	8.7	8.7	8.6
2006	8.4	8.4	8.2	8.1	8.2	8.4	8.5	8.4	8.0	8.2	8.1	7.9
2007	8.4	8.2	8.0	8.2	8.2	8.3	8.4	8.4	8.4	8.4	8.4	8.8
2008	9.2	9.0	9.1	9.2	9.7	10.1	10.5	10.8	11.0	11.8	12.6	13.6
2009	14.2	15.1	15.7	15.9	16.4	16.5	16.5	16.7	16.7	17.1	17.1	17.1
2010	16.7	17.0	17.0	17.1	16.6	16.5	16.5	16.5	16.8	16.7	16.9	16.6
2011	16.2	16.0	15.8	16.0	15.8	16.1	16.0	16.1	16.3	16.0	15.5	15.2
2012	15.1	15.0	14.5	14.5	14.8	14.8	14.9	14.7	14.7	14.5	14.4	14.4
2013	14.4	14.3	13.8

Employment Situation Summary

Transmission of material in this release is embargoed USDL-13-0581
until 8:30 a.m. (EDT) Friday, April 5, 2013

Technical information:
Household data: (202) 691-6378 * cpsinfo@bls.gov * www.bls.gov/cps
Establishment data: (202) 691-6555 * cesinfo@bls.gov * www.bls.gov/ces

Media contact: (202) 691-5902 * PressOffice@bls.gov

THE EMPLOYMENT SITUATION -- MARCH 2013

Nonfarm payroll employment edged up in March (+88,000), and the unemployment rate was
little changed at 7.6 percent, the U.S. Bureau of Labor Statistics reported today.
Employment grew in professional and business services and in health care but declined
in retail trade.

Household Survey Data

Both the number of unemployed persons, at 11.7 million, and the unemployment rate, at
7.6 percent, were little changed in March. (See table A-1.)

Among the major worker groups, the unemployment rates for adult men (6.9 percent),
adult women (7.0 percent), teenagers (24.2 percent), whites (6.7 percent), blacks
(13.3 percent), and Hispanics (9.2 percent) showed little or no change in March. The
jobless rate for Asians was 5.0 percent (not seasonally adjusted), little changed from
a year earlier. (See tables A-1, A-2, and A-3.)

In March, the number of long-term unemployed (those jobless for 27 weeks or more) was
little changed at 4.6 million. These individuals accounted for 39.6 percent of the
unemployed. (See table A-12.)

The civilian labor force declined by 496,000 over the month, and the labor force
participation rate decreased by 0.2 percentage point to 63.3 percent. The employment-
population ratio, at 58.5 percent, changed little. (See table A-1.)

The number of persons employed part time for economic reasons (sometimes referred to
as involuntary part-time workers) fell by 350,000 over the month to 7.6 million. These
individuals were working part time because their hours had been cut back or because
they were unable to find a full-time job. (See table A-8.)

In March, 2.3 million persons were marginally attached to the labor force, essentially
unchanged from a year earlier. (The data are not seasonally adjusted.) These individuals
were not in the labor force, wanted and were available for work, and had looked for a job
sometime in the prior 12 months. They were not counted as unemployed because they had not
searched for work in the 4 weeks preceding the survey. (See table A-16.)

Among the marginally attached, there were 803,000 discouraged workers in March, little
changed from a year earlier. (These data are not seasonally adjusted.) Discouraged workers
are persons not currently looking for work because they believe no jobs are available for
them. The remaining 1.5 million persons marginally attached to the labor force in March
had not searched for work for reasons such as school attendance or family responsibilities.
(See table A-16.)

Establishment Survey Data

Total nonfarm payroll employment edged up in March (+88,000). Over the prior 12 months,
employment growth had averaged 169,000 per month. In March, employment increased in
professional and business services and in health care, while retail trade employment
declined. (See table B-1.)

Professional and business services added 51,000 jobs in March. Over the past 12 months,
employment in this industry has grown by 533,000. Within professional and business
services, accounting and bookkeeping services added 11,000 jobs over the month, and
employment continued to trend up in temporary help services and in several other
component industries.

Job growth in health care continued in March, with a gain of 23,000, similar to the prior
12-month average. Within health care, employment increased by 15,000 in ambulatory health
care services, such as home health care, and by 8,000 in hospitals.

Construction employment continued to trend up in March (+18,000). Job growth in this
industry picked up this past fall; since September, the industry has added 169,000
jobs. In March, employment continued to expand among specialty trade contractors
(+23,000). Employment in specialty trade contractors has increased by 128,000 since
September, with the gain about equally split between the residential and nonresidential
components.

Within leisure and hospitality, employment in food services and drinking places continued
to trend up in March (+13,000). Over the past year, the industry added 262,000 jobs.

In March, retail trade employment declined by 24,000. The industry had added an average
of 32,000 jobs per month over the prior 6 months. In March, job declines occurred in
clothing and clothing accessories stores (-15,000), building material and garden supply
stores (-10,000), and electronics and appliance stores (-6,000).

Within government, U.S. Postal Service employment fell by 12,000 in March. Employment in
other major industries, including mining, manufacturing, wholesale trade, transportation
and warehousing, information, financial activities, state government, and local government,
showed little change over the month.

The average workweek for all employees on private nonfarm payrolls increased by 0.1
hour to 34.6 hours. The manufacturing workweek decreased by 0.1 hour to 40.8 hours, and
factory overtime rose by 0.1 hour to 3.4 hours. The average workweek for production and
nonsupervisory employees on private nonfarm payrolls was unchanged at 33.8 hours. (See
tables B-2 and B-7.)

In March, average hourly earnings for all employees on private nonfarm payrolls, at $23.82,
changed little (+1 cent). Over the year, average hourly earnings have risen by 42 cents,
or 1.8 percent. Average hourly earnings of private-sector production and nonsupervisory
employees, at $20.03, changed little (-1 cent) in March. (See tables B-3 and B-8.)

The change in total nonfarm payroll employment for January was revised from +119,000 to
+148,000, and the change for February was revised from +236,000 to +268,000.

____________
The Employment Situation for April is scheduled to be released on Friday, May 3, 2013, at
8:30 a.m. (EDT).

Employment Situation Summary Table A. Household data, seasonally adjusted

[Numbers in thousands]

CategoryMar.
2012Jan.
2013Feb.
2013Mar.
2013Change from:
Feb.
2013-
Mar.
2013Employment status Civilian noninstitutional population242,604244,663244,828244,995167Civilian labor force154,707155,654155,524155,028-496Participation rate63.863.663.563.3-0.2Employed142,020143,322143,492143,286-206Employment-population ratio58.558.658.658.5-0.1Unemployed12,68612,33212,03211,742-290Unemployment rate8.27.97.77.6-0.1Not in labor force87,89889,00889,30489,967663 Unemployment rates Total, 16 years and over8.27.97.77.6-0.1Adult men (20 years and over)7.77.37.16.9-0.2Adult women (20 years and over)7.47.37.07.00.0Teenagers (16 to 19 years)25.023.425.124.2-0.9White7.37.06.86.7-0.1Black or African American14.013.813.813.3-0.5Asian (not seasonally adjusted)6.26.56.15.0-Hispanic or Latino ethnicity10.39.79.69.2-0.4 Total, 25 years and over6.86.56.36.2-0.1Less than a high school diploma12.612.011.211.1-0.1High school graduates, no college8.08.17.97.6-0.3Some college or associate degree7.57.06.76.4-0.3Bachelor’s degree and higher4.23.73.83.80.0 Reason for unemployment Job losers and persons who completed temporary jobs7,0216,6376,5226,329-193Job leavers1,11198195698630Reentrants3,2643,5153,3403,176-164New entrants1,4211,2871,2791,31637 Duration of unemployment Less than 5 weeks2,5962,7662,6672,464-2035 to 14 weeks2,7843,0282,7822,8385615 to 26 weeks1,8771,8581,6951,7374227 weeks and over5,3024,7084,7974,611-186 Employed persons at work part time Part time for economic reasons7,6647,9737,9887,638-350Slack work or business conditions5,0605,1265,1364,906-230Could only find part-time work2,3602,6302,5782,576-2Part time for noneconomic reasons18,53018,46418,90818,745-163 Persons not in the labor force (not seasonally adjusted) Marginally attached to the labor force2,3522,4432,5882,326-Discouraged workers865804885803– Over-the-month changes are not displayed for not seasonally adjusted data.
NOTE: Persons whose ethnicity is identified as Hispanic or Latino may be of any race. Detail for the seasonally adjusted data shown in this table will not necessarily add to totals because of the independent seasonal adjustment of the various series. Updated population controls are introduced annually with the release of January data.

Employment Situation Summary Table B. Establishment data, seasonally adjusted

ESTABLISHMENT DATA
Summary table B. Establishment data, seasonally adjusted
Category	Mar. 2012	Jan. 2013	Feb. 2013(p)	Mar. 2013(p)
EMPLOYMENT BY SELECTED INDUSTRY (Over-the-month change, in thousands)
Total nonfarm	205	148	268	88
Total private	208	164	254	95
Goods-producing	37	41	73	16
Mining and logging	1	3	5	1
Construction	-4	24	49	18
Manufacturing	40	14	19	-3
Durable goods(1)	26	5	9	4
Motor vehicles and parts	10.7	1.7	1.3	0.8
Nondurable goods	14	9	10	-7
Private service-providing(1)	171	123	181	79
Wholesale trade	5.9	13.7	4.7	-1.0
Retail trade	-5.6	22.4	14.6	-24.1
Transportation and warehousing	3.1	-22.2	-1.7	-2.8
Information	-2	4	19	5
Financial activities	23	7	8	-2
Professional and business services(1)	43	46	80	51
Temporary help services	-7.1	11.6	23.4	20.3
Education and health services(1)	46	15	31	44
Health care and social assistance	28.7	16.5	36.9	27.9
Leisure and hospitality	52	31	26	17
Other services	5	6	-2	-9
Government	-3	-16	14	-7

WOMEN AND PRODUCTION AND NONSUPERVISORY EMPLOYEES(2) AS A PERCENT OF ALL EMPLOYEES
Total nonfarm women employees	49.3	49.4	49.3	49.3
Total private women employees	47.8	47.9	47.8	47.8
Total private production and nonsupervisory employees	82.6	82.6	82.6	82.6

HOURS AND EARNINGS ALL EMPLOYEES
Total private
Average weekly hours	34.5	34.4	34.5	34.6
Average hourly earnings	$23.40	$23.78	$23.81	$23.82
Average weekly earnings	$807.30	$818.03	$821.45	$824.17
Index of aggregate weekly hours (2007=100)(3)	96.2	97.4	97.9	98.2
Over-the-month percent change	-0.1	-0.1	0.5	0.3
Index of aggregate weekly payrolls (2007=100)(4)	107.4	110.4	111.1	111.6
Over-the-month percent change	0.2	0.0	0.6	0.5

HOURS AND EARNINGS PRODUCTION AND NONSUPERVISORY EMPLOYEES
Total private
Average weekly hours	33.7	33.6	33.8	33.8
Average hourly earnings	$19.68	$19.98	$20.04	$20.03
Average weekly earnings	$663.22	$671.33	$677.35	$677.01
Index of aggregate weekly hours (2002=100)(3)	103.5	104.7	105.5	105.6
Over-the-month percent change	-0.1	-0.2	0.8	0.1
Index of aggregate weekly payrolls (2002=100)(4)	136.0	139.7	141.2	141.3
Over-the-month percent change	0.1	0.1	1.1	0.1

DIFFUSION INDEX(5) (Over 1-month span)
Total private (266 industries)	68.8	63.0	59.6	54.3
Manufacturing (81 industries)	74.1	55.6	54.3	46.3
Footnotes (1) Includes other industries, not shown separately. (2) Data relate to production employees in mining and logging and manufacturing, construction employees in construction, and nonsupervisory employees in the service-providing industries. (3) The indexes of aggregate weekly hours are calculated by dividing the current month’s estimates of aggregate hours by the corresponding annual average aggregate hours. (4) The indexes of aggregate weekly payrolls are calculated by dividing the current month’s estimates of aggregate weekly payrolls by the corresponding annual average aggregate weekly payrolls. (5) Figures are the percent of industries with employment increasing plus one-half of the industries with unchanged employment, where 50 percent indicates an equal balance between industries with increasing and decreasing employment. (p) Preliminary

Discouraged Worker

In economics, a discouraged worker is a person of legal employment age who is not actively seeking employment or who does not find employment after long-term unemployment. This is usually because an individual has given up looking or has had no success in finding a job, hence the term “discouraged”.

In other words, even if a person is still looking actively for a job, that person may have fallen out of the core statistics of unemployment rate after long-term unemployment and is therefore by default classified as “discouraged” (since the person does not appear in the core statistics of unemployment rate). In some cases, their belief may derive from a variety of factors including a shortage of jobs in their locality or line of work; discrimination for reasons such as age, race, sex, religion, sexual orientation, and disability; a lack of necessary skills, training, or experience; or, a chronic illness or disability.^[1]

As a general practice, discouraged workers, who are often classified as “marginally attached to the labor force”, “on the margins” of the labor force, or as part of “hidden unemployment”, are not considered to be part of the labor force and are thus not counted in most official unemployment rates, which influences the appearance and interpretation of unemployment statistics. Although some countries offer alternative measures of unemployment rate, the existence of discouraged workers can be inferred from a low employment-to-population ratio.

United States

Discouraged Workers (US, 2004-09)

In the United States, a discouraged worker is defined as a person not in the labor force who wants and is available for a job and who has looked for work sometime in the past 12 months (or since the end of his or her last job if a job was held within the past 12 months), but who is not currently looking because of real or perceived poor employment prospects.^[2]^[3]^[4]

The Bureau of Labor Statistics does not count discouraged workers as unemployed but rather refers to them as only “marginally attached to the labor force”.^[5]^[6]^[7] This means that the officially measured unemployment captures so-called “frictional unemployment” and not much else.^[8] This has led some economists to believe that the actual unemployment rate in the United States is higher than what is officially reported while others suggest that discouraged workers voluntarily choose not to work.^[9] Nonetheless, the U.S. Bureau of Labor Statistics has published the discouraged worker rate in alternative measures of labor underutilization under U-4 since 1994 when the most recent redesign of the CPS was implemented.^[10]^[11]

The United States Department of Labor first began tracking discouraged workers in 1967 and found 500,000 at the time.^[12] Today, In the United States, according to the U.S. Bureau of Labor Statistics as of April 2009, there are 740,000 discouraged workers.^[13]^[14] There is an ongoing debate as to whether discouraged workers should be included in the official unemployment rate.^[12] Over time, it has been shown that a disproportionate number of young people, blacks, Hispanics and men, make up discouraged workers.^[15]^[16] Nonetheless, it is generally believed that the discouraged worker is underestimated because it does not include homeless people or those who have not looked for or held a job during the past twelve months and is often poorly tracked.^[12]^[17]

According to the U.S. Bureau of Labor Statistics, the top five reasons for discouragement are the following:^[18]

The worker thinks no work is available.
The worker could not find work.
The worker lacks schooling or training.
The worker is viewed as too young or too old by the prospective employer.
The worker is the target of various types of discrimination. …

References

^ ^a ^b ^c Akyeampong, Ernest B. “Discouraged workers – where have they gone?” (PDF). Perspectives on Labour and Income. 3 (Canada: Statistics Canada) 4 (Article 5). Catalogue=75- 001E. Retrieved 2009-05-12.
^ O’Sullivan, Arthur; Sheffrin, Steven M. (2003) [January 2002]. Economics: Principles in Action. The Wall Street Journal: Classroom Edition (2nd ed.). Upper Saddle River, New Jersey 07458: Pearson Prentice Hall: Addison Wesley Longman. p. 336. ISBN 0-13-063085-3.
^ “BLS Information”. Glossary. U.S. Bureau of Labor Statistics Division of Information Services. February 28, 2008. Retrieved 2009-05-05.
^ “Glossary”. Congressional Budget Office. Retrieved 2009-05-10. ^{[dead link]}
^ Castillo, Monica D. (July 1998). “Persons outside the labor force who want a job”. Monthly Labor Review. LABSTAT Bureau of Labor Statistics. Retrieved 2009-05-12.
^ Hederman Jr., Rea S. (January 9, 2004). “Tracking the Long-Term Unemployed and Discouraged Workers”. WebMemo #389. The heritage foundation. Retrieved 2009-05-10.
^ Rampell, Catherine (April 30, 2009). “Job Market Pie”. Business: Economicx. The New York Times. Retrieved 2009-05-10.
^ Garrison, Roger (July 12, 2004). “The Sin of Wages?”. Archives. Ludwig von Mises Institute. Retrieved 2009-05-12.
^ Zuckerman, Sam (Sunday, November 17, 2002). “Jobless statistics overlook many Official numbers omit discouraged seekers, part-time workers”. Business. San Francisco Chronicle. Retrieved 2009-05-12.
^ “Alternative measures of labor underutilization”. Economic News Release. U.S. Bureau of Labor Statistics Division of Current Employment Statistics. May 8, 2009. Retrieved 2009-05-12.
^ “The Unemployment Rate and Beyond: Alternative Measures of Labor Underutilization (Issues in Labor Statistics, Summary 08-06, June 2008)”. Issues in labor statistics. U.S. Bureau of Labor Statistics. June 2008. Retrieved 2009-05-12.
^ ^a ^b ^c McCARROLL, THOMAS (Monday, Sep. 09, 1991). “Down And Out: “Discouraged” Workers”. magazine. Time magazine. Retrieved 2009-05-10.
^ “Black Male Unemployment Jumps to 17.2%”. Dollars & Sense. Friday, May 08, 2009. Retrieved 2009-05-10. ^{[dead link]}
^ “Employment Situation Summary”. Economic News Release. U.S. Bureau of Labor Statistics Division of Labor Force Statistics. May 8, 2009. Retrieved 2009-05-10.
^ “Issues in Labor Statistics: Ranks of Discouraged Workers and Others Marginally Attached to the Labor Force Rise During Recession”. Issues in Labor Statistics. U.S. Bureau of Labor Statistics Division of Information Services. May 1, 2009. p. 2. Retrieved 2009-05-10.
^ Ahrens, Frank (May 8, 2009; 3:25 PM ET). “Actual U.S. Unemployment: 15.8%”. Economy Watch. The Washington Post. Retrieved 2009-05-10.
^ PODSADA, JANICE (April 19, 2009). “‘Hidden Unemployment’ Inflates State’s Real Jobless Figures”. Business. The Hartford Courant. Retrieved 2009-05-10.
^ “Ranks of Discouraged Workers and Others Marginally Attached to the Labor Force Rise During Recession”. Issues in Labor Statistics. U.S. Bureau of Labor Statistics. April 2009. Retrieved 2009-05-12.
^ ^a ^b ^c ^d Akyeampong, Ernest B. (Autumn 1989). “Discouraged Workers” (PDF). Perspectives on Labour and Income. 2 (Canada: Statistics Canada) 1. Retrieved 2009-05-12.

Akyeampong, Ernest B. “Persons on the Margins of the Labour Force,” The Labour Force (71-001). Statistics Canada, April 1987.
Akyeampong, Ernest B. “Women Wanting Work But Not Looking Due to Child Care Demands,” The Labour Force. April 1988.
Australian Bureau of Statistics. Persons in the Labour Force, Australia (Including Persons who Wanted Work but who were not Defined as Unemployed) (6219.0). July 1985.
Jackson, George. “Alternative Concepts and Measures of Unemployment,” The Labour Force. February 1987.
Macredie, Ian. “Persons Not in the Labour Force: Job Search Activities and the Desire for Employment, September 1984,” The Labour Force. October 1984.
Organization for Economic Co-operation and Development. OECD Employment Outlook. September 1987. Akyeampong, E.B. “Discouraged workers.” Perspectives on labour and income, Quarterly, Catalogue 75-001E, Autumn 1989. Ottawa: Statistics Canada, pp. 64–69.
“Women wanting work, but not looking due to child care demands.” The labour force, Monthly, Catalogue 71-001, April 1988. Ottawa: Statistics Canada, pp. 123–131.
“Persons on the margins of the labour force.” The labour force, Monthly, Catalogue 71-001, April 1987. Ottawa: Statistics Canada, pp. 85–131.
Frenken, H. “The pension carrot: incentives to early retirement.” Perspectives on labour and income, Quarterly, Catalogue 75-001E, Autumn 1991. Ottawa: Statistics Canada, pp. 18–27.
Jackson, G. “Alternative concepts and measures of unemployment.” The labour force, Monthly, Catalogue 71-001, February 1987. Ottawa: Statistics Canada, pp. 85–120.
Macredie, I. “Persons not in the labour force – job search activities and the desire for employment, September 1984.” The labour force, Monthly, Catalogue 71-001, October 1984. Ottawa: Statistics Canada, pp. 91–104.

External links

Discouraged workers, OECD Stats extract
Incidence of discouraged workers, OECD

United States

Discouraged workers in glossary, U.S. Bureau of Labor Statistics Division of Information Services
Employment Situation Summary, U.S. Bureau of Labor Statistics Division of Information Services
Alternative measures of labor underutilization, U.S. Bureau of Labor Statistics Division of Information Services
Discouraged Worker, Investopedia
Down And Out: “Discouraged” Workers, Time magazine
Actual U.S. Unemployment: 15.8%, The Washington Post
‘Hidden Unemployment’ Inflates State’s Real Jobless Figures, The Hartford Courant
Tracking the Long-Term Unemployed and Discouraged Workers, The Heritage Foundation
Ranks of Discouraged Workers and Others Marginally Attached to the Labor Force Rise During Recession Issues in Labor Statistics, U.S. Bureau of Labor Statistics Division of Information Services
Discouraged Workers, Drexel
Jobless statistics overlook many, San Francisco Chronicle
PROMOTING ECONOMIC OPPORTUNITY AND OWNERSHIP
Labor force characteristics, Labor Force Statistics from the Current Population Survey

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Steve Coll — Private Empire — ExxonMobil and American Power — Videos

Posted on April 4, 2013. Filed under: Babies, Blogroll, Books, Business, Communications, Demographics, Economics, Energy, government, government spending, Inflation, Law, liberty, Life, Links, Macroeconomics, media, Natural Gas, Oil, People, Politics, Raves, Video, War, Wealth, Wisdom | Tags: Books, Economics, ExxonMobil, Oil, Politics, Private Empire: ExxonMobil and American Power, Steve Coll, Videos |

Steve Coll on the “Private Empire” of ExxonMobil

Steve Coll Discusses His Book “Private Empire”

GWorks Interviews: Steve Coll (Complete) Private Empire: ExxonMobil & American Power

Independent Sovereign

2012 Gaithersburg Book Festival – Steve Coll

Steve Coll: Investigating Big Oil: Spin, Ethics & Corporate Responsibility

Business Book Review: Private Empire: ExxonMobil and American Power by Steve Coll

Full Show 5/18/12: Conversations with Great Minds: Steve Coll

Conversations w/Great Minds – Steve Coll – Private Empire P1

Conversations w/Great Minds – Steve Coll – Private Empire P2

In conversation with Steve Coll

Background Articles and Videos

Audio » Mark Levin – CPAC 2013 & William F. Buckley Jr. 1955 Conservatism

Charles Krauthammer Calls Chris Christie’s CPAC Snub A ‘Mistake’

Ron Meyer Analysis of CPAC Invites with Monica Mehta & Julie Roginsky on Neil Cavuto – 3-4-13

Christie Says He’s Not Bothered By Lack of Invite to Conservative Conference

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Republican Paul Ryan’s House Budget Committee Budget Balances in Ten Years — It Will Never Happen — End Baseline Budgeting and Balance The Budget In Fiscal Years 2013 and 2014 — Videos

Posted on March 12, 2013. Filed under: Agriculture, American History, Banking, Blogroll, Business, Communications, Economics, Education, Federal Government Budget, Fiscal Policy, government spending, history, Immigration, Inflation, Language, Law, liberty, Life, Links, Macroeconomics, media, Microeconomics, Monetary Policy, Tax Policy | Tags: Balance The Budget, Barack Obama, Baseline Budget, CATO Institute, Paul Ryan, Zero Base Budgeting |

Rep Ryan: Budget Plan Balances Budget Withing 10 Years

Paul Ryan Announces 2014 Budget Proposal and Calls for No New Taxes

Background Articles and Videos

[EXCLUSIVE] President Obama WON’T Balance Budget ‘Just for the Sake of Balance’

Obama Declares Plan to Cut Deficit in Half

Dan Mitchell Discussing Dishonest Budget Numbers with John Stossel

Dan Mitchell Exposing DC’s Fake Spending-Cut Scam with Judge Napolitano

Dr. Coburn on Charlie Rose on US Debt Crisis, Leadership Deficit in Washington

Baseline Budgeting

Paul Ryan: The GOP Plan to Balance the Budget by 2023

The goal can be reached, with no new taxes, while increasing spending 3.4% annually instead of the current 5%.

By PAUL RYAN

America’s national debt is over $16 trillion. Yet Washington can’t figure out how to cut $85 billion—or just 2% of the federal budget—without resorting to arbitrary, across-the-board cuts. Clearly, the budget process is broken. In four of the past five years, the president has missed his budget deadline. Senate Democrats haven’t passed a budget in over 1,400 days. By refusing to tackle the drivers of the nation’s debt—or simply to write a budget—Washington lurches from crisis to crisis.

House Republicans have a plan to change course. On Tuesday, we’re introducing a budget that balances in 10 years—without raising taxes. How do we do it? We stop spending money the government doesn’t have. Historically, Americans have paid a little less than one-fifth of their income in taxes to the federal government each year. But the government has spent more.

So our budget matches spending with income. Under our proposal, the government spends no more than it collects in revenue—or 19.1% of gross domestic product each year. As a result, we’ll spend $4.6 trillion less over the next decade.

Our opponents will shout austerity, but let’s put this in perspective. On the current path, we’ll spend $46 trillion over the next 10 years. Under our proposal, we’ll spend $41 trillion. On the current path, spending will increase by 5% each year. Under our proposal, it will increase by 3.4%. Because the U.S. economy will grow faster than spending, the budget will balance by 2023, and debt held by the public will drop to just over half the size of the economy.

Yet the most important question isn’t how we balance the budget. It’s why. A budget is a means to an end, and the end isn’t a neat and tidy spreadsheet. It’s the well-being of all Americans. By giving families stability and protecting them from tax hikes, our budget will promote a healthier economy and help create jobs. Most important, our budget will reignite the American Dream, the idea that anyone can make it in this country.

The truth is, the nation’s debt is a sign of overreach. Government is trying to do too much, and when government does too much, it doesn’t do anything well. So a balanced budget is a reasonable goal, because it returns government to its proper limits and focus. By curbing government’s overreach, our budget will give families the space they need to thrive.

The other side will warn of a relapse into recession—just as they predicted economic disaster when the budget sequester hit. But a balanced budget will help the economy. Smaller deficits will keep interest rates low, which will help small businesses to expand and hire. It’s no surprise, then, that the nonpartisan Congressional Budget Office believes that legislation reducing the deficit as much as our budget does would boost gross national product by 1.7% in 2023.

We must take action now. Our budget will expand opportunity in major areas like energy. It will protect and strengthen key priorities like Medicare. It will encourage social mobility by retooling welfare. It will fix the broken tax code to create jobs and increase wages.

First, energy. America has the world’s largest natural-gas, oil and coal reserves—enough natural gas to meet the country’s needs for 90 years. Yet the administration is buying up land to prevent further development. Our budget opens these lands to development, so families will have affordable energy. It approves the Keystone XL pipeline, which will create 20,000 direct jobs—and 118,000 indirect jobs. Our budget puts the country on the path to North American energy independence.

Second, health care. Our budget repeals the president’s health-care law and replaces it with patient-centered reforms. It also protects and strengthens Medicare. I want Medicare to be there for my kids—just as it’s there for my mom today. But Medicare is going broke. Under our proposal, those in or near retirement will see no changes, and future beneficiaries will inherit a program they can count on. Starting in 2024, we’ll offer eligible seniors a range of insurance plans from which they can choose—including traditional Medicare—and help them pay the premiums.

The other side will demagogue this issue. But remember: Anyone who attacks our Medicare proposal without offering a credible alternative is complicit in the program’s demise.

Third, welfare reform. After the welfare reforms of 1996, child poverty fell by double digits. This budget extends those reforms to other federal aid programs. It gives states flexibility so they can tailor programs like Medicaid and food stamps to their people’s needs. It encourages states to get people off the welfare rolls and onto payrolls. We shouldn’t measure success by how much we spend. We should measure it by how many people we help. Those who protect the status quo must answer to the 46 million Americans living in poverty.

Fourth, tax reform. The current tax code is a Rubik’s cube that Americans spend six billion hours—and $160 billion—each year trying to solve. The U.S. corporate tax is the highest in the industrialized world. So our budget paves the way for comprehensive tax reform. It calls for Congress to simplify the code by closing loopholes and consolidating tax rates. Our goal is to have just two brackets: 10% and 25%. House Ways and Means Chairman Dave Camp has committed to pass a specific bill this year.

If we take these steps, the United States will once again become a haven of opportunity. The economy will grow, and the country will regain its strength. All we need is leadership. Washington owes the American people a balanced budget. It isn’t fair to take more from families so government can spend more.

A balanced budget isn’t unprecedented. President Bill Clinton worked with a Republican Congress to get it done. House Republicans’ last two budgets balanced, too—albeit at a later date. But a balanced budget is still a noteworthy achievement, considering the competition.

The recent debt-ceiling agreement forced Senate Democrats to write a budget this year, and we expect to see it this week. I hate to break the suspense, but their budget won’t balance—ever. Instead, it will raise taxes to pay for more spending. The president, meanwhile, is standing on the sidelines. He is expected to submit his budget in April—two months past his deadline.

We House Republicans have done our part. We’re offering a credible plan for all the country to see. We’re outlining how to solve the greatest problems facing America today. Now we invite the president and Senate Democrats to join in the effort.

— Mr. Ryan, a Republican, represents Wisconsin’s first congressional district and is chairman of the House Budget Committee.

http://online.wsj.com/article/SB10001424127887323826704578353902612840488.html?mod=WSJ_Opinion_LEADTop

Morning Bell: First Look at the 2014 Ryan Budget

Alison Acosta Fraser

At first look, the budget unveiled today by House Budget Committee Chairman Paul D. Ryan (R-WI) advances much-needed reforms and importantly accomplishes the crucial goal of balancing the budget within the decade, though this is partially on the coattails of Obama’s tax increases. Not a silver bullet, it is more of a stasis budget, rather than a bolder plan that builds on the reforms of previous years.

There are six things that each budget from the House, Senate, and President should accomplish. These are laid out in the Heritage plan, Saving the American Dream, which:

Balances the budget in less than 10 years, without raising taxes, and keeps the budget in balance thereafter;
Swiftly overhauls entitlement programs, including Social Security, to guarantee economic security to seniors while making the programs affordable;
Repeals Obamacare in its entirety;
Fully funds defense;
Rolls back discretionary spending; and
Rolls back recent tax increases with a sweeping, growth-oriented tax reform plan and caps taxes at the historical average of 18.5 percent.

Here’s how, at first blush, the Ryan plan measures up:

Gets to Balance. The Ryan budget achieves an important improvement over last year by balancing the budget within 10 years. The President’s budgets have never even attempted this, and given the Senate’s rusty skills in budget writing, it’s unlikely they would choose this course, either. The Ryan budget slows the growth of spending to about 3.4 percent per year, compared to roughly 5 percent today, with about $5 trillion less spending.

But, regrettably, Ryan’s budget also relies on Obama’s $618 billion fiscal cliff tax increase and Obamacare’s $1 trillion in tax hikes (more on this next) to get to balance. This means that tax levels rise almost immediately to 19.1 percent of GDP, well over the 18.5 percent benchmark. Balance is important, but so is the size of government. Without the tax increase, this budget would have had to have been more assertive in attacking spending and reforming entitlements to achieve and sustain balance.

And while the intent, we are told, is to stay in balance in the coming years and decades, regrettably, as the Congressional Budget Office (CBO) has not updated its long-term model yet, there is no CBO scoring to say how or whether this happens.

Repeals Obamacare Spending, But Keeps the Taxes. The vital organs of Obamacare—the insurance exchange subsidies and Medicaid expansions—are scheduled to start next year. Ryan’s budget takes the correct and necessary step of repealing them. But, as noted above, perhaps the biggest shortcoming of this budget is that it keeps the tax increases associated with Obamacare. These tax hikes are the oxygen that fuels the fire of ever bigger spending. But the entire fire needs to be put out—all of Obamacare should be repealed, including its tax hikes.

Defense Funding Levels Mixed. Like last year, the Ryan budget protects defense from the eviscerating sequestration cuts. This is sound. As North Korea’s posturing shows, the world is not a safer place today. But the national defense budget has been squeezed by Obama’s reductions just when U.S. forces need replenishment and modernization. Ryan’s budget essentially adopts the defense spending caps in the Budget Control Act without sequestration. This is better than the President’s plainly inadequate funding for current and future needs, and certainly better than the sequester, but still less than what is required.

Entitlement Reforms; More Needed. Ryan continues to be a strong leader here, tackling Medicare’s abject failures head on. His signature solution of a premium support model for Medicare is the hallmark of his budget. Moving to a patient-centered model would free retirees from relying on the unstable and unsustainable government-run Medicare program and restrain costs through the competition rather than price-fixing. The sooner this transition is made, the better.

But the transition is too slow, as it once again exempts those over 55 from these changes to Medicare. Our spending problem is so severe that all Americans should be part of the solution. While this “grandfather” clause is understandable, most Americans this age will have more than a decade remaining in their working lives. We cannot continue to keep leaving one more year of the baby boomer generation out of the solution because Washington fails to act.

Though the budget takes the first step on by turning Medicaid into a block grant, more important is to move the mainstream Medicaid population into private insurance.

And discouragingly, like last year, there is no Social Security reform at all. This is especially disappointing, given the current discussions of commonsense, simple reforms like increasing the retirement age or moving to a more accurate measure of inflation like chained CPI.

Reduces Non-Defense Discretionary Spending. By extending the Budget Control Act spending caps for two years and keeping sequestration levels, the Ryan budget makes strong reductions to this spending. It also assumes some worthy and long overdue reforms, such as consolidating the federal government’s 49 job training programs, many of which are ineffective, and first steps at reining in farm subsidies.

Growth-Oriented Tax Reform. The Ryan budget lays out important principles for tax reform and rightly rejects closing tax preferences (“loopholes”) just to raise revenue. True tax reform is revenue neutral: Any revenue raised by eliminating tax preferences should be offset by lowering tax rates. The budget sets the same, pro-growth goals for fewer, lower rates and territoriality as last year.

Bottom Line: The Ryan budget delivers on its new promise this year—to balance the budget within the decade. Unfortunately, it does use higher taxes to help achieve this. It maintains Ryan’s signature reform to Medicare, which will go far toward reining in unaffordable entitlement spending.

Though more could be done along the lines of Saving the American Dream to advance bolder entitlement reforms and to throw off the yoke of Obama’s tax hikes, this budget takes first steps toward reining in spending and reforming entitlements. And if preliminary news reports are to believed, this plan is sure to be far superior to the Senate’s version now awaiting its finishing touches replete with still more tax increases, spending and looming deficits.

http://blog.heritage.org/2013/03/12/first-look-at-ryan-budget-2014/

Saving the American Dream: The Fiscal Cliff and Beyond

By Alison Acosta Fraser, William W. Beach and Stuart M. Butler, Ph.D. December 11, 2012

Abstract: Unless Congress and the President act promptly and wisely, sequestration under the Budget Control Act (BCA) will undermine military readiness, and the nearly $500 billion tax increase starting on January 1, 2013, will greatly harm an already weak economy. However, this fiscal cliff can be avoided. The key to avoiding this and future fiscal calamities is reform of the mandatory spending programs, from welfare to Social Security, that currently drive federal deficits. The Heritage Foundation’s Saving the American Dream plan would rein in spending immediately, restructure the major entitlement programs to bring entitlement spending under control over the long term, and strengthen the core foundations of these programs.

Since the Heritage Foundation’s Saving the American Dream plan[1] was first published in April 2011, there has been almost no substantive progress on spending control. The only plausible exception was the flawed Budget Control Act (BCA), a product of a contentious debt limit debate. The complete failure of the resultant bipartisan “supercommittee” to reach agreement was a sad reflection on a Congress that is divided and unwilling to pass the legislation necessary to rein in spending.

As a result, the nation is facing the looming sequester, which will further undermine the defense budget, jeopardizing one of the federal government’s core constitutional responsibilities. Yet it would leave entitlement programs virtually untouched, even though they are the largest driver of spending today and in the future. Meanwhile, the prospect of a huge tax increase in January has had a deleterious effect on the economy for many months, although the effect is only a small portion of the harm the economy will incur if the tax increase ultimately takes effect. America seriously needs a true way forward.

The Heritage plan reflects the need to rein in spending immediately and to rethink major programs. Spending on the open-ended Social Security, Medicare, and Medicaid entitlements must be brought under control, and the core foundations of these programs should be strengthened.

The following principles guide the policy solutions in Saving the American Dream:

Total spending must be brought under control to balance the budget without raising taxes, ultimately holding revenues at their historical share of gross domestic product (GDP).
Entitlement programs should, unlike today, actually guarantee seniors economic security in retirement and be recast as real and sustainable insurance programs focused on those who truly need them.
Other spending must be curbed, and the federal government must be restricted to its proper functions.
Defense, as a core constitutional function of the federal government, should be fully funded and efficiently delivered.
The tax system should be structurally reformed to foster growth by eliminating tax distortions of private economic decisions, especially decisions on savings and investment, and to make the system simpler and more transparent.

Priorities for Congress and the President

Fiscal year (FY) 2012 closed on September 30 with the Congressional Budget Office (CBO) estimating spending of $3.5 trillion and a deficit of $1.1 trillion.[2] Debt held by the public was $11.3 trillion (73 percent of GDP). According to the CBO, debt will explode to 199 percent of GDP by 2037, driven by growth in spending that will reach 36 percent of GDP.[3]

The main drivers of spending and debt increases are incontrovertibly the major entitlement programs: Social Security, Medicare, and Medicaid. However, the slow economy with its high unemployment rate, which remains stuck at around 8 percent, also adds to deficits and debt through two channels: mandatory spending for those workers who are most affected by the slow economy (e.g., unemployment compensation) and below-average tax revenues.

It is clear that the top priorities for Congress and the President should be controlling spending, especially entitlement reform, and setting an economic growth agenda through tax reform. After averting the fiscal cliff, Congress and the President should immediately turn their attention to these pressing issues.

As noted, entitlements are the fastest-growing programs. Even if all other spending was eliminated, these programs would still cause large and unsustainable deficits in the future. Their growth is automatic, with autopilot spending increases built in and no serious budgetary constraints. The top priority must be to restructure entitlements and put a brake on their spending levels while strengthening and preserving them for future generations.

A number of robust proposals for health care reforms already exist, both in Congress and in the policy community.[4] Congress and the President should take advantage of this policy momentum and focus on reforming Medicaid and especially Medicare. However, changes in Social Security should follow quickly, and the rules that govern these programs in general should be more consistent. For example, increases in the normal eligibility age should proceed simultaneously for both Social Security and Medicare.

Specific steps for Congress and the President include the following:

The President should submit a budget by the 2013 tax deadline deadline that outlines strong, sweeping changes in entitlement programs that will reduce spending over the 10-year budget window and significantly improve the long-term trajectory of these programs.
The President’s budget should lay out specific goals for a pro-growth, revenue-neutral tax reform plan.
Congress and the President should include reforms in entitlement programs and further reductions in other spending areas, including the Patient Protection and Affordable Care Act (Obamacare), in exchange for any increases in the debt limit. These should reflect lessons learned from the 2011 Budget Control Act, such as avoiding high-stakes mechanisms like sequestration that are designed to fail.
Congress should pass a joint budget resolution by the April 15, 2013, deadline that includes reconciliation instructions for entitlement and tax reform.
The budget resolution should also require reforms of other spending programs to bring spending below the BCA levels for 2014 and beyond.

Health Care

If only one issue is thoroughly addressed in 2013, it should be the federal role in health care, the biggest driver of spending. The flawed Obamacare law only adds to the problem. Instead of expanding the government’s role, health care should follow a true patient-centered, market-based model, including reforms in Medicare, Medicaid, and the tax treatment of health insurance.

Medicare. Medicare’s finances must be brought under control. As a first step, the age of eligibility should be raised gradually from 65 to 68 and then indexed to life expectancy. Premiums for Parts B and D should also gradually increase, thus expanding the current policy for Medicare of adjusting the level of taxpayer subsidies to income, with the most affluent seniors receiving much smaller (or in some cases no) taxpayer subsidies for their health coverage. These steps, among others,[5] should occur immediately because they are easily achieved and less controversial and should be part of new debt-limit legislation.

Within five years of these initial changes, patients should also be transitioned to a defined-contribution or premium-support model that would be adjusted for income. Expanding competition in Medicare would restrain federal spending, slow health care costs, and promote greater innovation in the delivery of care.[6]

Medicaid. Federal spending on Medicaid should be put on a budget subject to regular congressional review to bring greater fiscal certainty and stability to the process. Federal Medicaid spending would follow antipoverty spending caps by reverting to the 2007 spending levels when the economy approaches full employment (e.g., the unemployment rate dips below 6 percent) and be adjusted for medical inflation thereafter.

In lieu of traditional Medicaid, able-bodied individuals and families should receive direct federal assistance in the form of tax credits or direct assistance to enable them to buy private insurance coverage of their choice. For the disabled and frail elderly, Medicaid would remain a joint federal–state safety net program, but states would have additional flexibility to adopt more patient-centered models.

Reform of the Tax Treatment of Health Insurance. As a part of tax reform (see below), the employee tax break for employer-sponsored coverage would be converted to a non-refundable tax credit that individuals and families could use to purchase the health plan of their choice.

These larger reforms are best achieved through normal legislative order. This could include the legitimate use of reconciliation as part of a comprehensive budget plan. In any case, Congress should pass a concurrent budget resolution for FY 2014.

Social Security

Social Security needs to be reformed. It is running permanent cash-flow deficits and has severe programmatic flaws.[7]

First, Social Security’s eligibility age should gradually be increased in tandem with Medicare’s eligibility age. For both, this change is straightforward and could be included in an initial, small reform package. Next, Social Security should return to its original purpose of guaranteeing that all Americans are protected from poverty in retirement. As part of this insurance protection, benefits would evolve to an understandable, predictable flat benefit that is well above the poverty level. With Social Security functioning as an insurance program, moderate-income retirees would receive a smaller check, while affluent seniors would receive no check unless their financial circumstances change.

To encourage people to stay in the workforce longer, those who work beyond full retirement age would receive a higher level of after-tax income until they do retire.

Tax reform would support Social Security reforms by significantly increasing personal savings that seniors can take into retirement, and there would be no limit on the amount of these tax-deferred savings. Thus, more retirement income would be possible than under the current system. Social Security would become a safety valve against economic reversals and a floor for income after the statutory retirement age.

Other Spending

Defense cuts are already reducing military readiness, thus endangering the security of the United States. The defense portion of the BCA cuts is dangerously flawed and must be reversed. In Saving the American Dream, the sequester for defense spending (including the 2013 cuts) is eliminated, and the higher spending is more than offset with reforms in other spending and entitlements. Defense spending is brought slowly up to and held at 4 percent of GDP. Non-defense discretionary spending is set for 2013 at the BCA sequester level and then reduced to 2 percent of GDP, after which it is indexed to inflation.

Spending in 2014 and beyond should include reforms in long-standing but growing and expensive programs such as farm subsidies and transportation. A program of privatization, including federal asset sales, could begin as early as 2015. Anti-poverty spending should be rolled back and capped when the economy approaches full employment and then consolidated into fewer programs that reflect strong incentives for work and marriage.

Revenue

Tax Reform. The economy remains plagued by the uncertainty of expiring tax policy and an unwieldy and inefficient tax code. Beyond preventing Taxmageddon by extending all current tax policy and delaying the Obamacare tax increases before January 1, 2013, Congress should pass broad substantive tax reform consistent with the New Flat Tax in Saving the American Dream. Tax reform should focus on promoting economic growth by reducing both tax rates and tax distortions while maintaining revenue and distributional neutrality. It should also simplify the tax system and improve its transparency so that taxpayers can better understand the influence of tax policy as well as the true cost of government.[8]

The broad direction for tax reform already in play, especially the bipartisan push for lower corporate income tax rates, is fully consistent with the New Flat Tax. Congress will likely find the goal of lower corporate tax rates quickly running up against the consequent need to lower tax rates for non-corporate businesses. This occurs naturally under the New Flat Tax, which taxes all businesses at a single rate on their domestic net cash flow at the entity level. Likewise, the growing support for a territorial tax system—under which U.S. businesses are taxed solely on their domestic income—is also fully consistent with the New Flat Tax, which levies tax solely on domestic income.

Under the New Flat Tax, the individual income tax and the payroll tax are rolled into one system with the same tax rate that is imposed on business income. Nearly all other federal levies are repealed, leaving a simple system for both individuals and businesses. Under the New Flat Tax as it applies to individuals, only income used for consumption is taxed, thus eliminating the existing tax bias against saving. In addition, all distorting credits, exemptions, and deductions are eliminated, leaving only two credits and three deductions.

The first credit is the above-mentioned tax credit for health insurance. This tax credit is less distortive of economic decisions than current law is, but it remains a clear subsidy for the purchase of health insurance. It is necessary because the current-law tax bias favoring health insurance is so powerful and so entrenched that simply eliminating the tax advantage is impracticable.

The second credit carried over from current law is the earned income credit (EIC). The EIC needs reform in its own right, but it is also the largest income-support component of the overall federal anti-poverty program and one of its most effective elements. Changes in the EIC should then be considered part of the proposed budget for anti-poverty programs.

The three deductions are as follows:

The deduction for charitable expense, which is retained because this tax system taxes the individual on what he or she spends. Charitable contributions benefit the receiving organization and thus should be deductible for the recipient.
A deduction for higher education, which recognizes that education expenses are a form of saving and investing simultaneously, which in every other instance is excluded from tax under the New Flat Tax.
An optional home mortgage deduction with the proviso that if the homeowner chooses a mortgage with deductible interest, then the lender must, as under current law, continue to pay tax on interest income earned. Alternatively, the home owner may choose to forgo the deduction, in which case the lender earns tax-free interest income and can thus charge a lower mortgage interest rate.

The New Flat Tax, the tax reform plan, is implemented effective January 1, 2014.

Addressing the Fiscal Cliff

Table 1 addresses each element of the fiscal cliff and the proposed steps that Congress should take on each of them.

—Alison Acosta Fraser is Director of the Thomas A. Roe Institute for Economic Policy Studies, William W. Beach is Director of the Center for Data Analysis and Lazof Family Fellow in Economics, and Stuart M. Butler, PhD, is Director of the Center for Policy Innovation at The Heritage Foundation.

The editors are grateful to the team leaders who worked with policy experts throughout The Heritage Foundation to develop this report: J. D. Foster, Ph.D., Norman B. Ture Senior Fellow in the Economics of Fiscal Policy; Rea S. Hederman, Jr., Assistant Director and Research Fellow in the Center for Data Analysis; David C. John, Senior Research Fellow in Retirement Security and Financial Institutions; Robert E. Moffit, Ph.D., Senior Fellow in the Center for Policy Innovation; Nina Owcharenko, Director of the Center for Health Policy Studies; and Drew Gonshorowski, Policy Analyst in the Center for Data Analysis.

This plan was developed as part of the Solutions Initiative and funded by the Peter G. Peterson Foundation. The Peterson Foundation convened organizations with a variety of perspectives to develop plans addressing our nation’s fiscal challenges. The American Action Forum, Bipartisan Policy Center, Center for American Progress, Economic Policy Institute, and The Heritage Foundation, each received grants. All organizations had discretion and independence to develop their own goals and propose comprehensive solutions. The Peterson Foundation’s involvement with this project does not represent endorsement of any plan.

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Measure	Not seasonally adjusted			Seasonally adjusted
Measure	Mar. 2012	Feb. 2013	Mar. 2013	Mar. 2012	Nov. 2012	Dec. 2012	Jan. 2013	Feb. 2013	Mar. 2013
U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force	4.9	4.3	4.3	4.6	4.3	4.3	4.2	4.2	4.1
U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force	4.8	4.6	4.3	4.5	4.1	4.1	4.3	4.2	4.1
U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate)	8.4	8.1	7.6	8.2	7.8	7.8	7.9	7.7	7.6
U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers	8.9	8.6	8.1	8.7	8.3	8.5	8.4	8.3	8.1
U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force	9.7	9.6	9.0	9.6	9.2	9.4	9.3	9.2	8.9
U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force	14.8	14.9	13.9	14.5	14.4	14.4	14.4	14.3	13.8
NOTE: Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule. Updated population controls are introduced annually with the release of January data.http://www.bls.gov/news.release/empsit.t15.htm