National News

A setback for Japan's 'Abenomics'

Marketplace - American Public Media - Mon, 2014-11-17 11:00

On Monday, Japan released gross domestic product numbers that signaled the country has officially slipped into recession. Instead of the modest economic growth that had been forecast, the economy shrank by 1.6 percent — the second consecutive quarter of contraction.

It was seen as a setback for Prime Minister Shinzo Abe's "Abenomics" program. Abe's government has sought to revive the long-stagnant Japanese economy primarily through stimulus, but officials recently raised a red flag on the country's ballooning debt load. They said they needed to deal with the debt issue at the same time as the growth issue, and decided raising money by increasing the sales tax was the best approach.

It was, in a sense, the result of a treatment for one ailment (ballooning debt) exacerbating a second malaise (low growth).

"Sometimes in medical treatments there are certain kinds of medicines that are lethal in large doses but beneficial in small doses," says David Stockton, senior fellow at the Peterson Institute for International Economics. "Maybe in this case the dosage was just too hard for the patient, and the patient has relapsed now."

 The “dosage” in this case was a 5 to 8 percent increase in the sales tax, beginning in April of this year.

"Sales taxes are typically on goods," says Liz Malm, economist at the Tax Foundation research group. "You’ve got the classic law of demand kicking in here where if the price of a good goes up, you tend to get less consumption of a good."

 In Japan’s case, those goods included  durable, big-ticket items like homes.

"If you’re buying eggs every week, you’re not going to stockpile eggs, because they’re gonna go bad," says  Josh Hausman, an assistant professor of public policy at the University of Michigan.

Japanese consumption increased prior to the April tax hike, but then decreased afterward. Many economists expected this to result in contraction in the second quarter, but most expected the economy to revert to growth in the third quarter. 

"I think this sort of adds to a growing body of evidence that contractionary fiscal policy – so raising taxes or cutting spending –can be quite damaging," says Hausman. "More damaging than many economists might have expected."

 Abe is now widely expected to delay a second dose of sales tax increases scheduled for October, 2015.

How a sales tax pushed Japan into recession

Marketplace - American Public Media - Mon, 2014-11-17 11:00

On Monday, Japan released GDP numbers that signaled the country has officially slipped into recession. Instead of the modest economic growth that had been forecast, the economy shrank by 1.6 percent—the second consecutive quarter of contraction.

It was taken as a set-back for Prime Minister Shinzo Abe's "Abenomics" program. Abe's government has sought to revive the long-stagnant Japanese economy primarily through stimulus, but officials recently raised a red flag on the country's ballooning debt load. They said they needed to deal with the debt issue at the same time as the growth issue, and decided raising money by increasing the sales tax was the best approach.

It was, in a sense, the result of a treatment for one ailment—ballooning debt—exacerbating a second malaise—low growth.

"Sometimes in medical treatments there are certain kinds of medicines that are lethal in large doses but beneficial in small doses," says David Stockton, senior fellow at the Peterson Institute for International Economics. "Maybe in this case the dosage was just too hard for the patient and the patient has relapsed now."

 The “dosage” in this case was a 5 to 8 percent increase in the sales tax, beginning in April of this year.

"Sales taxes are typically on goods," says Liz Malm, economist at the Tax Foundation. "You’ve got the classic law of demand kicking in here where if the price of a good goes up, you tend to get less consumption of a good."

 In Japan’s case, those goods included  durable, big-ticket items like homes.

"If you’re buying eggs every week, you’re not going to stockpile eggs, because they’re gonna go bad," says  Josh Hausman, Assistant Professor of Public Policy at the University of Michigan.

Japanese consumption increased prior to the April tax hike, but then decreased afterwards. Many economists expected this to result in contraction in the second quarter, but most expected the economy to revert to growth in the third quarter. 

"I think this sort of adds to a growing body of evidence that contractionary fiscal policy, so raising taxes or cutting spending, can be quite damaging," says Hausman. "More damaging than many economists might have expected."

 Abe is now widely expected to delay a second dose of sales tax increases scheduled for October, 2015.

Falling oil prices hurt state budgets

Marketplace - American Public Media - Mon, 2014-11-17 11:00

Oil prices are falling. Good news, right? 

It all depends on where you sit. If you’re trying to balance a state budget that relies heavily on oil taxes, it’s crunch time.

Louisiana, which has relied on oil and gas tax revenue for 12 to 15 percent of its budget in recent years, is adjusting its revenue forecasts. They now expect $90 million less from fossil fuel taxes than planned. Greg Albrecht, chief economist at the Louisiana Legislative Fiscal Office, says this past spring they expected oil prices to stay around $95 a barrel well into 2015.

“In fact, for a couple months into this fiscal year, we had hundred-dollar-plus a barrel of oil prices,” says Albrecht. 

Oil has been trading for under $80 a barrel recently. Political observers in Louisiana expect some cuts in healthcare and higher education as a result of the revenue shortfall.

In North Dakota last year oil and gas taxes made up over half of all state revenue. But Pam Sharp, director of the state’s Office of Management and Budget, isn’t predicting a disaster. State law requires most of that money go into various reserve funds, not the general fund. 

“The way the oil taxes are structured in North Dakota … I think it puts us in really good shape to weather that kind of storm,” Sharp says. 

Falling oil prices do mean less money for North Dakota's reserve funds, including the Strategic Investment and Improvements Fund. That pot of money goes to much-needed infrastructure in the oil boom state, including roads and school construction loans. Sharp does expect, however, that in this two-year budget cycle alone, North Dakota will collect $6 billion dollars in oil and gas taxes.

Lower oil prices hurt state budgets

Marketplace - American Public Media - Mon, 2014-11-17 11:00

Oil prices are falling. Good news, right? 

It all depends on where you sit. If you’re trying to balance a state budget that relies heavily on oil taxes, it’s crunch time.

Louisiana, which has relied on oil and gas tax revenue for 12 to 15 percent of its budget in recent years, is adjusting its revenue forecasts. They now expect $90 million less from fossil fuel taxes than planned. Greg Albrecht, chief economist at the Louisiana Legislative Fiscal Office, says this past spring they expected oil prices to stay around $95 a barrel well into 2015.

“In fact, for a couple months into this fiscal year, we had $100 dollar-plus a barrel of oil prices,” says Albrecht. 

Oil has been trading for under $80 a barrel recently. Political observers in Louisiana expect some cuts in healthcare and higher education as a result of the revenue shortfall.

In North Dakota last year oil and gas taxes made up over half of all state revenue. But Pam Sharp, director of the state’s Office of Management and Budget, isn’t predicting a disaster. State law requires most of that money go into various reserve funds, not the general fund. 

“The way the oil taxes are structured in North Dakota… I think it puts us in really good shape to weather that kind of storm,” Sharp says. 

Falling oil prices do mean less money for North Dakota's reserve funds, including the Strategic Investment and Improvements Fund. That pot of money goes to much-needed infrastructure in the oil boom state, including roads and school construction loans. Sharp does expect, however, that in this two-year budget cycle alone, North Dakota will collect $6 billion dollars in oil and gas taxes.

Snapchat partners with Square to present ... Snapcash

Marketplace - American Public Media - Mon, 2014-11-17 11:00

Snapchat, the app that lets you send pictures or videos that disappear after a couple of seconds, is getting into the mobile payment business.

It's a peer-to-peer payment system called Snapcash. You can use it to send money to your friends.

All you have to do is enter your bank account information, type in a dollar amount and hit the green button.

What could possibly go wrong?

To announce its new partnership with mobile payment service Square, Snapchat rolled out a promotional video. It imagines what is going on inside your phone while you are using Snapcash as a Monopoly-meets-Emerald-City, Broadway-style crossover universe.

See for yourself:

 

Snapchat partnered with Square to present: Snapcash

Marketplace - American Public Media - Mon, 2014-11-17 11:00

Snapchat, the app that lets you send pictures or videos that disappear after a couple of seconds, is getting into the mobile payment business.

It's a peer-to-peer payment system called Snapcash. You can use it to send money to your friends.

All you have to do is enter your bank account information, type in a dollar amount and hit the green button.

What could possibly go wrong?

To announce their new partnership with Square, Snapchat rolled out a promotional video. It imagines the inside of your phone while using Snapchat as a Monopoly-meets-Emerald-City, Broadway-style crossover universe.

See for yourself:

 

Halliburton To Buy Baker Hughes For $34.6 Billion

NPR News - Mon, 2014-11-17 10:56

The deal, which must be approved by regulators, would combine the world's No. 2- and No.3-biggest oilfield services provider. The new company would be a formidable rival to Schlumberger Ltd.

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Comet Lander's Big Bounce Caught On Camera

NPR News - Mon, 2014-11-17 10:46

An orbiting spacecraft caught the Philae lander bounding on the surface of Comet 67P/Churyumov–Gerasimenko. The lander sent home some scientific data before its batteries ran out.

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U.S. Tourists Accused Of Trying To Ship Preserved Human Parts Out Of Thailand

NPR News - Mon, 2014-11-17 10:23

The parts, including an infant's head, a baby's foot and an adult heart, were allegedly stolen from a medical museum. The Americans said they bought the parts at a Bangkok market, according to police.

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'Flying Doughnuts': Airbus Files Patent For A New Kind Of Plane

NPR News - Mon, 2014-11-17 10:23

The new design would seat passengers within a circular seating area rather than in short rows inside a tube.

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Quiz: Me and Gen Z

Marketplace - American Public Media - Mon, 2014-11-17 09:55

Northeastern University, in conjunction with Marketplace, surveyed American teens ages 16 to 19 to create a "Portrait of Generation Z."

Answer these 10 questions from the survey to find if you're in sync with Gen Z, and share your results.

Please upgrade your browser to use this content.

var pymParent = new pym.Parent('me-genz-container', 'http://danhillreports.com/news-quiz/index.html', {});

The Story Of A 4-Year-Old Boy Helps Explain An Ebola Surge

NPR News - Mon, 2014-11-17 09:53

Why is Sierra Leone reporting an uptick in Ebola cases while Liberia's outbreak is slowing? The chain of events in one village points up the obstacles that the country is facing.

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In Sierra Leone, Tears And Wails Mark The Death Of Dr. Martin Salia

NPR News - Mon, 2014-11-17 09:37

He was one of only 130-some doctors who served the country. When news came that he'd succumbed to Ebola, people went into shock, mourning the death of "a great hero."

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Controversial Cholesterol Drug Redeemed By Global Clinical Test

NPR News - Mon, 2014-11-17 09:34

Merck's Vytorin reduced the risk of heart attack and stroke more than a cholesterol-lowering statin alone. The findings come from an international study of more than 18,000 people in 39 countries.

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Colombia Calls Off Peace Talks With Rebels Over Captured General

NPR News - Mon, 2014-11-17 08:15

The talks were designed to end 50 years of fighting between the Colombian government and the Revolutionary Armed Forces of Colombia, or FARC.

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Law Student Found Guilty In Secret U.K. Terrorism Trial

NPR News - Mon, 2014-11-17 06:46

Last Tuesday's verdict against 26-year-old law student Erol Incedal was made public today after a U.K. judge lifted an order that forbade the media from reporting it.

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DEA Agents Conduct Surprise Inspections Of NFL Teams

NPR News - Mon, 2014-11-17 06:10

The inspections are related to a lawsuit that claimed NFL medical staff keep players on the field by handing out powerful and addictive narcotics without prescriptions.

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Ebola Patient Being Treated At Nebraska Hospital Has Died

NPR News - Mon, 2014-11-17 04:37

Dr. Martin Salia was flown into the United States over the weekend. He was working as a general surgeon at a hospital in Sierra Leone.

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Testing: How Much Is Too Much?

NPR News - Mon, 2014-11-17 04:03

Two new surveys try to quantify the number of standardized tests students take in school--an estimated 113 by graduation.

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