"Corporate debt is at its highest level relative to U.S. GDP since the financial crisis , and while not now a concern, that mountain of corporate IOUs could quickly turn into a heap of worry under the right circumstances."
"Fueled by low interest rates and strong investor appetite, debt of nonfinancial companies has increased at a rapid clip, to $8.7 trillion, and is equal to more than 45 percent of GDP, according to David Ader, chief macro strategist at Informa Financial Intelligence."
"According to the Federal Reserve, nonfinancial corporate debt outstanding has grown by $1 trillion in two years."
"Everything is fine until it isn't," Ader said. "We don't need to worry about that until we're in a slowdown and profit declines."
"Low rates have encouraged companies to borrow, but instead of using the money to expand, they have used it to boost their share prices, he said."
"Traditionally, conservatives favor a government of limited size and advocate for reductions in taxes and government spending, while liberals favor a larger, more active government. A larger government requires a higher level of public spending, which necessitates higher revenue to avoid increasing the deficit. Hence, it is reasonable to expect that largely conservative states collect less revenue and spend less than largely liberal states. Could a long-standing conservative (liberal) state effectively implement its political agenda and reduce (increase) the size of the government? We examine whether the political leaning in each state influences its state and local government revenues and expenditures."
The federal reserve is a private association of banks and financial institutions. As it's actions have significant economic implications, the federal reserve does have an appointed head by the president but all other bank governors are selected by the banks who are members of the federal reserve.
It exists primarily to prevent bank panics by requiring banks hold a percentage of their reserves in cash and be a lender of last resort to banks who face demands for cash that they don't have in their own vaults and other banks are unwilling to lend to them.
The federal reserve occasionally changes the reserve rate for banks and often changes the discount rate, the rate they charge to banks at last resort that need a loan that no private bank will give them. Changing the discount rate influences the rate banks charge on loans. In times of extreme recession, the fed will do quanative easing aka open market operations which means that they either force banks to buy government bonds so that they have more cash to loan out or force them to pay back the bonds to take money out of the market.
The rational for doing this is publicly stated by the fed. The reserve rate, discount rate, and total open market amounts are released. Internal deliberations and individual transactions with banks are kept private to avoid market speculation. While the federal reserve sounds scary and has a massive impact on the economy, it generally does a good job at moderating inflation and recessions. Obviously people can and do disagree whether more or less unemployment or inflation is better.
"When Republicans began assembling their tax overhaul proposals they were aiming to make them revenue neutral; the tax cuts could not lead to increased deficits. Holding the line on deficits has long been the goal of Republican deficit hawks."
"But that goal is now just a memory. Both the House and Senate proposals provide overall tax cuts in the $1.5 trillion range over the next decade. But there's no plan to offset them with cuts in government spending or new revenues. So over the next 10 years, the tax cuts are likely to add about $1.5 trillion to the national debt, according to the nonpartisan Congressional Budget Office."
"Put simply: Money laundering turns "dirty" money "clean" — making proceeds from criminal activity usable without drawing the attention of law enforcement. John Cassara, a money laundering expert who worked for the State Department and the Department of Treasury for more than 25 years, says money launderers work through a three-step system."
"The establishment is trying to pull a big one over on the public yet again. One of the designated topics for the last presidential debate goes under the heading, "debt and entitlements." This should have people upset for several reasons.
The first is simply the use of the term "entitlements." While this has a clear meaning to policy wonks, it is likely that most viewers won't immediately know that "entitlements" means the Social Security and Medicare their parents receive. It's a lot easier for politicians to talk about cutting wasteful "entitlements" than taking away seniors' Social Security and Medicare.
The ostensible purpose of the debate is to allow voters to be better informed about the candidates' views. So if the purpose is conveying information, why not use terms that most voters will understand?"
"For decades, economists have puzzled over the reduction in macroeconomic volatility in the U.S. and world economies after the mid-1980s: In the last 25 years or so of the 20th century (highlighted by the blue bar in the graph), domestic output, employment, and inflation all fluctuated far less than they had in prior years. The data make the stabilization of the economy clear, yet economists haven’t reached consensus over the causes or duration of the Great Moderation."
"The Federal Reserve points to monetary policy as a primary cause of the moderation, through orderly responses to inflation and GDP changes after the Great Inflation of the 1980s. Instead of waiting for the signs of economic recession or rising inflation to appear before acting, as was common in the “go-stop” practices of the 1960s and 1970s, the Federal Reserve began following a more systematic, rules-based approach. Another proposed cause is the structural change of the economy and the labor market. In the 1980s, labor patterns shifted away from manufacturing and toward less-volatile sectors. Also, new technology sped up communication and allowed producers to track inventory and demand more easily, leading to more stable output over time."
"It’s easy to look to clear economic and policy changes as contributors to the Great Moderation, but there may be another factor at play: luck. Statistical models such as those proposed by Stock and Watson or Galí and Gambetti assert that, although some economic shocks did occur during the early part of the Great Moderation, they were less severe and better handled than those of the 1970s. While others dispute this claim, it still brings to mind the question: If luck is responsible, how long will it last?"