Sunday, February 28, 2010

A Common Misunderstanding of Free Markets

It is not the FREEDOM of markets that is beneficial to an economy, but rather the existence of sufficient COMPETITION to ensure that market outcomes are a reasonable balance of efficiency and fairness. Markets sometimes need to be regulated to prevent the concentration of market power.

Much of the recent struggles in financial markets could have been prevented by not allowing banks and similar institutions to become “too big to fail.”

Ideological devotion to free markets, such as seems to be currently popular in the guise of patriotism, illustrates a fundamental lack of understanding of most great economic thinkers since the 18th century.

Wednesday, February 24, 2010

Address Jobs Now and Deficits Later

In the February 24, 2010 Politico article "Address jobs now and deficits later," Lawrence Mishel and David M. Walker explain the role of economic growth in increasing government revenues and argue the U.S. may need to increase short-term deficits to promote long-term prosperity.
President Barack Obama is in a difficult position when it comes to deficits. Today's high deficits will have to go even higher to help address unemployment. At the same time, many Americans are increasingly concerned about escalating deficits and debt. What's a president to do?

The answer, from a policy perspective, is not that hard: A focus on jobs now is consistent with addressing our deficit problems ahead.

The difficulty is that many politicians and news organizations often cast deficit debates as a dichotomy: You either care about them or you don’t.

But this is rarely accurate. The fact that the two of us, who have philosophical differences on the proper role of government, find much to agree on about deficits is a testament to the importance of dropping this useless dichotomy and finally talking about deficits in a reasonable way.

As in every economic downturn, federal revenues have fallen steeply because individuals and corporations earn less in a recession. High unemployment also results in higher expenditures for safety net programs, like Medicaid, unemployment benefits and food stamps.

Not surprisingly then, a huge recession can yield a huge deficit. Efforts to put people back to work and help restore the economy, like the recovery package passed last February, can also increase short-term deficits.

Though a concern, most of the recent short-term rise in the deficit is understandable. Furthermore, public spending can help compensate for the fall in private spending, and help stem the pain of substantial job losses.

With more than a fifth of the work force expected to be unemployed or underemployed in 2010, there is an economic and a moral imperative to take action. Persistently high unemployment drives poverty up, makes it harder for families to find decent housing, increases family stress and, ultimately, harms children’s educational achievement. For young workers entering the workforce, the current jobs crisis reduces the amount they will earn over their lifetime.

In deep recessions, businesses tend to make fewer critical investments in research and development that can improve our economy’s productive capacity over the long term. Entrepreneurs usually find credit hard to obtain if they want to start a new business. These factors hurt U.S. global competitiveness and growth potential.

That’s why we agree that job creation must be a short-term priority. Job creation plans must be targeted so we can get the greatest return on investment. They must be timely, creating jobs this year and next. And they must be big enough to substantially fill the enormous jobs hole we’re in. They must also be temporary — affecting the deficit only in the next couple of years, without exacerbating our large and growing structural deficits in later years.

Funding key investment and infrastructure projects to promote economic growth and offering a job creation tax credit are among the policy ideas that meet all these standards. In addition, temporarily renewing extended unemployment benefits can lead to more jobs throughout the economy.

But these problems, and the resulting short-term deficits they cause, should not be confused with the primary deficit challenge facing our nation: structural deficits. These deficits are projected to exist in coming years — even when the country is at peace, even when the economy is growing, even when unemployment falls.

Specifically, the deficit could approach an already unsustainable 6 percent of gross domestic product 10 years from now, and will continue to rise thereafter.

While we address our short-term unemployment challenges, we must also immediately establish a path to address our large, and growing, structural deficits.

The Congressional Budget Office projects that after the economy has returned to full employment, spending will still substantially outstrip revenues. Over time, Medicare and Medicaid will be the key drivers of these structural deficits. This is primarily because these programs’ costs tend to mirror overall cost increases for health care, which have risen much faster than overall economic growth for decades, but also because of demographic changes.

Our nation's fiscal picture will darken further with the passage of time, especially if interest rates increase.

These structural deficits are too substantial to close the gap without addressing both sides of the ledger: spending and revenues.

In doing so, it is important to distinguish critical and effective programs and tax policies from outdated and ineffective ones.

We must be careful to maintain the type of public investments that can help fuel broad-based economic growth while strengthening the safety net for our most vulnerable populations. And we should take into account growing retirement insecurity as employer pension systems erode and personal savings falter.

People should be able to count on government benefits they are promised. It is, therefore, critical that federal benefit and funding levels be reconciled.

None of this will be easy — not the policy or the politics. It will require hard choices, and an extraordinary process to engage the American people and to make recommendations to the Congress on budget controls, spending cuts and revenue increases.

Getting the deficit under control cannot be accomplished by simply ending “waste, fraud and abuse,” stopping all foreign aid or exiting Iraq and Afghanistan. Substantial progress could be made though by ending the tax cuts of 2001 and 2003, or paying for their extension through spending reductions. In the end, Congress must step up to the plate, not just with hearings, but with votes.

For all the disagreement in Washington, we both know that, like us, there are many who see the critical importance of addressing these challenges. We must accept higher deficits in the short-term in order to put people back to work.

At the same time, we must take immediate steps to agree on a path and a process for reducing the structural deficits that lie ahead.

In a town of division, this is one area where we need a real consensus now.

Lawrence Mishel is president of the Economic Policy Institute. David Walker is president and CEO of the Peter G. Peterson Foundation.

Tuesday, February 23, 2010

Tax Fraud: Debunking the claim that higher income-tax rates reduce GDP.

In the February 23, 2010 Slate article "Tax Fraud: Debunking the claim that higher income-tax rates reduce GDP," Eliot Spitzer explains that the rich and powerful have a long history of saying that paying taxes has a devastating effect on economic output, but it is untrue.

Friday, February 19, 2010

True Unemployment Figure Reveals Recession Far From Over

In the February 19, 2010 article "True Unemployment Figure Reveals Recession Far From Over," Simon Maierhofer reports one of the lesser-used measures of labor market activity suggests conditions are worse that the more popular metrics suggest.
Surprising as it is, for nearly a year, investors have shrugged off mounting jobless claims and rising unemployment as an ingredient that is not really required for an economic recovery. They have begun to believe in a non-existent phenomenon; a 'jobless recovery.'

The Dow Jones, S&P 500, and Nasdaq after losing about 3% each, are now in a state of flux marking the first time in months that concerns over unemployment were raising suspicions.

Does that mean that the trend of the 'new bull market' in stocks has changed? Or are we in for further declines?

The real numbers

Today's headline reports reveal that the unemployment numbers, surprisingly, seem to be improving.

In reality, unemployment spiked to an all-time high of 18%. Yes, 18%! This is the official number reported by the Bureau of Labor Statistics (BLS).

The BLS publishes different sets of data on a regular basis. The main focus tends to be on the U-3 unemployment rate (currently 9.7%, seasonally adjusted).

U-3 is the 'official' unemployment rate and illustrates total unemployed persons as a percentage of the civilian labor force. U-4 is another category that includes unemployed workers plus discouraged workers. A discouraged worker is someone who's available to work but has stopped actively seeking for work.

U-5 unemployment includes the number of unemployed workers, plus discouraged workers, plus marginally attached workers. A marginally attached worker is someone who is able and willing to work but is not actively seeking work.

U-6 is as close to the real unemployment figure as government reporting gets. This number includes unemployed workers, plus discouraged workers, plus marginally attached workers, plus workers that are forced to work part-time because they are not able to find a full-time job. Put another way, it's the most realistic picture of today's job market as any.

According to the Bureau of Labor Statistics, the number of U-6 unemployed workers is 18% (not seasonally adjusted - 16.5%). This is the highest number of record.

Keep in mind that neither of the above categories encompasses another important element of the labor force; 'unemployed self-employed' workers. If you're a handyman or contractor next door, or a small business owner who can't secure work, you are not included! Adding these folks to the mix would put the real unemployment number above 20%!

No one is spared

Unfortunately, job cuts have affected every industry sector. Job cuts in the technology sector (NYSEArca: XLK - News) have reached the highest level in four years.

Even WalMart, a low-price leader and a virtually recession proof outfit, continues to cut jobs. This trend has spilled over and continues in the entire consumer staples (NYSEArca: XLP - News) and consumer discretionary sector (NYSEArca: XLY - News). Ericsson and Pfizer are just a few companies eliminating employees at a record pace.

According to a report by global outplacement firm Challenger, Gray & Christmas, U.S. employers began the year 2010 by announcing 71,482 planned job cuts, the highest tally in five months. The report, however, said that the increase in layoffs should not be seen as a sign of 'recession relapse.'

Recession relapse?

How do you define a recession relapse? How do you even figure a recession is over?

There has been a huge disconnect between what's happening on Wall Street and on Main Street. Since March 2009, the U.S. stock market (NYSEArca: TMW - News) has been steadily rising, as has unemployment. You'd expect stock prices to go up and unemployment claims to go down, but that hasn't been the case.

When putting the pieces together, it helps to understand why stocks have been able to stage a relentless ten-month rally.

From October 2007 to March 2009, the Dow Jones (NYSEArca: DIA - News), S&P 500 (NYSEArca: SPY - News) and secondary indexes like the MidCap SPDRs (NYSEArca: MDY - News) and small caps (NYSEArca: IWM - News) have lost more than half their value. Financials (NYSEArca: XLF - News) lost over three quarters of the market capitalization.

In March, investor pessimism has reached an extreme of historic proportions. In fact, on March 9th, the Wall Street Journal made a case for Dow 5,000 and Goldman Sachs slashed earnings growth by over 37%.

Exactly at that time, the ETF Profit Strategy Newsletter send out a Trend Change Alert (on March 2, 2009) predicting the biggest rally since the October 2007 all-time highs with a upper target range of Dow 10,000. For 18 months (10-2007 - 3-2009) investors had resisted their urge to buy. This was about to change.

I want it now

It was this pent-up urge to buy that sent stocks higher. No bad news could prevent the market from rising. Investors simply wanted to own stocks again and recapture some of their hefty losses.

Just as extreme pessimism marked the bottom of the down-turn, the ETF Profit Strategy Newsletter predicted that extreme optimism would make a top. In fact, the late stages of this rally could be identified by a 'the worst is over' sentiment.

No progress but much change
Throughout the fourth quarter of 2009 stocks moved higher. Even though the major indexes gained only a few percentage points from October - January, the resilience against any bad news had transformed a record number of investors into long-term bulls.

By early January, investor optimism had reached extremes not seen since 1987, 2000 and 2007 (depending on the data used). For the first time investors had more money invested in stocks than at the height of the technology boom in early 2000.

For contrarian investors, this was a huge red flag. On January 15, 2010, the ETF Profit Strategy Newsletter's Market Meter stated the following: 'Dow 10,710 and S&P 1,148 might very well mark the high water mark for 2010. A major trend reversal at current prices would be consistent with all our indicators.'

The market staged one more minor high two trading days later and has fallen precipitously since. Recommended ETFs like the Direxion Daily Financial Bear 3x Shares (NYSEArca: FAZ - News), UltraShort QQQ ProShares (NYSEArca: QID - News), and UltraShort Financial ProShares (NYSEArca: SKF - News) have gained 10%, 15% and more.

The one constant

On a daily basis, economic news comes and goes. Some will influence the market, others won't. If you've been following news reports and corresponding stock prices, you will have noticed that the correlation between good news and higher prices or bad news and lower prices is less than obvious.

What remains constant, however, is the pattern of behavior investors have established for hundreds of years. Extremes in sentiment which invariably result in extreme reactions. This is called the herding effect and is rather predictable.

Crowd behavior of investors is largely driven by perception. The perception that stocks will continue to rise is starting to change, if it hasn't already. Soon investors will refocus on valuations to see if a stock is worth its price tag. It was the return to due diligence that pummeled stock prices throughout 2008.

Interestingly, the 2008 declines were also preceded by extreme optimism and a feeling that stocks have nowhere to go but up.

Historically, stocks are grossly overvalued and due for another major correction. How major?

The ETF Profit Strategy Newsletter includes a detailed short, mid and long-term forecast along with a target-range for the ultimate market bottom based on historically indisputable evidence.

Tuesday, February 16, 2010

Why Politicians Can't Create Real Jobs

In the February 16, 2010 U.S. News & World Report article "Why Politicians Can't Create Real Jobs," Rick Newman says "The history of recessions offers some unwelcome news for all those in Washington who think they have the power to boost hiring."
Jobs used to return quickly after recessions. After the downturn that ended in 1975, it took only two months for the unemployment rate to peak and then start falling. In 1982, unemployment peaked the very same month that the recession ended and then dropped as sharply as it had risen. That was when the U.S. economy was less globalized and more self-contained. Foreign companies found it difficult to compete with American ones. When recessions ended, things went back to normal and many employers simply rehired the people they had laid off.

That's not how it works anymore. After the 1991 recession, it took 15 months for the unemployment rate to peak and net job growth to resume. After the 2001 recession, it took 19 months. Technology is one reason; it allows firms to be more productive with fewer workers and put off hiring once a recovery begins. Globalization also allows firms to replace expensive American workers with cheaper ones overseas, and there's no better pretext for paring labor costs than a grueling recession.

Jobless recoveries are now the norm. And that's what we're in right now. The official arbiters haven't yet declared when (or if) the recession has technically ended, but many economists date the end of the recession to around August 2009. The economy is growing again, following the steepest decline since the Depression—but it's not adding new jobs. And the recent recession was obviously far worse than the fairly mild ones in 1991 and 2001. So the politicians are on the case, with plans to spend billions more to encourage firms to start hiring.

The general idea is that business-tax breaks specifically linked to new hires will lower the cost of adding employees, so more firms will boost their payrolls. To be fair, it might have some effect. Moody's estimates that an aggressive jobs program could help create a maximum of 727,000 jobs, while a more modest effort could create up to 250,000 jobs. But even the most optimistic outcome would be a drop in an ocean of unemployed, amounting to less than 10 percent of the 8.4 million jobs lost since the recession began. And it could be much less effective than that, since job-based tax credits are uncommon and unproven.

One approach is to forgive $5,000 worth of payroll taxes for every new hire, which doesn't add up to much for a typical company. Think of it this way: If the average worker costs about $50,000 per year in pay and those ever costlier benefits, the tax credit would (temporarily) lower the payroll cost of a new employee by 10 percent. When was the last time a 10 percent discount persuaded you to buy something you wouldn't have purchased otherwise?

It's also worth reviewing the trillions that have already been spent to aid the economy—leaving unemployment close to 10 percent. The first stimulus package, now forgotten, was a $168 billion tax rebate President Bush signed in 2008. That was supposed to boost consumer spending, and thus jobs, by putting some extra cash into consumers' pockets. It ended up being as effective as an umbrella in a hurricane.

The following year came the $787 billion Obama stimulus plan, which aimed to create or save 3.5 million jobs through a combination of tax cuts and government spending. The White House says it has nearly accomplished that, though others think the claim is wildly inflated. Whatever the number of jobs, they may disappear anyway once the stimulus money runs out. Many are teaching, public-service, or construction jobs funded by state governments, and states are in desperate shape; as federal aid recedes, they'll be forced to cut.

Then there were the bank bailouts and other measures meant to stabilize the financial markets, stimulate lending, and … create jobs. They did help stabilize the markets, but the buck stopped there. Lending remains far from normal—one of the biggest drags on economic growth—and firms that can't get loans aren't likely to hire.

There's also a misperception that Washington can somehow control the overall direction of the economy through a few tweaks in the tax code. Not even close. For the economy to get back on track, hiring needs to resume in the industries with the most jobs, and many of them—such as housing, construction, real estate, retail, and even financial services—seem to be in the midst of long-term contraction. No business is going to ramp up hiring if revenue is falling and there's no pickup in sight, regardless of the tax savings.

Other industries are subject to transformative forces far stronger than any counterforces the government can mount. The manufacturing sector has lost 2.2 million jobs since 2007, for example, and many of those are probably gone for good, outsourced to cheaper countries or replaced by technology, producing corporate savings that far outstrip any tax credit.

Obama also wants to keep investing government money in futuristic fields like clean energy and green technology, which is probably smart, but the payoff will be relatively modest. "These industries are too small to create the millions of jobs that are needed right away," write James Manyika and Byron Auguste of the McKinsey Global Institute. They point out that the clean-tech industry—things like wind turbines and solar panels—accounts for just 0.6 percent of the U.S. workforce. Two other high-wage industries targeted for growth—semiconductors and biotech—add up to less than 1 percent of the workforce. Growth in those industries does generate a collateral gain elsewhere in the economy but not nearly enough to correct a massive unemployment problem.

Obama tacitly acknowledges that there's not much more the government can do about jobs. The president's 2010 economic report contains dreadful projections about the labor market, predicting that the unemployment rate will average 10 percent this year, 9.2 percent in 2011, and 8.2 percent in 2012. That portends a stark, sustained drop in living standards for many Americans. And, hope being audacious, every White House leans toward rosy economic projections. Moody's predicts that unemployment will peak at close to 11 percent this year, and some economists see it going higher than that. The politicians might get credit for trying, if they're lucky, but they're just about out of tricks.

Wednesday, February 10, 2010

Citi Field bonds cut to 'junk' status

Bonds are classified as "junk" when they are perceived as having excessive risk of default. But because they are riskier, they frequently offer a higher rate of return than bonds with a better credit rating. The February 10, 2009 article "Citi Field bonds cut to 'junk' status" provides an example of junk bonds:
NEW YORK – Citi Field's bonds have been lowered to junk status by Standard & Poors and Moody's Investors Service because the company that insures the reserve fund for many of them is having financial troubles.

The bonds' underlying rating was dropped from Baa3, an investment grade, to Ba1, a speculative grade, by Moody's last Thursday.

Standard and Poors cut the bonds from BBB to BB+ on Tuesday while still giving them a "stable outlook."

The Mets sold $613.1 million of three types of bonds in 2006 and an additional $82.28 million of bonds last year. Ambac Assurance Corp., the company having financial difficulty, insured $547.6 million of the 2006 PILOT bonds (payment in lieu of taxes).

"We lowered all the bonds ratings because the 2006 PILOT bonds do not have a reserve fund with adequate liquidity to support any disruption in project cash flow," Standard & Poors said. "Because Ambac is currently rated speculative grade, the creditworthiness of the debt service reserve fund supported by the surety policy is below the creditworthiness of the bonds."

S&P said the stable outlook "reflects the expectation that the project will perform in line with expectations."

The $800 million ballpark opened last year, and the Mets went a dismal 72-90.

"This is related specifically to Ambac, which insures the 2006 bonds, and is not based on our operations or the strength of the underlying credit," the Mets said in a statement.

Monday, February 1, 2010

Obama's budget deficits to rise from wars, recession

Obama's budget deficits to rise from wars, recession

y Steven Thomma, McClatchy Newspapers
Mon Feb 1, 5:05 pm ET

WASHINGTON — Fighting wars and lingering effects from a deep recession, President Barack Obama will run up a record $1.56 trillion budget deficit this year and is proposing a 2011 federal budget that would spend $1.27 trillion more than the government takes in next year.
Even with plans to scale back after that, his budget proposal Monday calls for deficits of more than $700 billion a year for at least a decade and relies on outside help from an as-yet un-appointed commission to bring them down more.
"It's a budget that reflects the serious challenges facing the country," Obama said at the White House . "We're at war. Our economy has lost 7 million jobs over the last two years. And our government is deeply in debt after what can only be described as a decade of profligacy."
While he said that he wanted to bring the deficit down later, he warned that the government needs to keep spending at or near its current pace to help create jobs and guarantee that the economy fully recovers. Aides said the White House feared that any quicker cut in the deficit could risk another recession akin to the one in 1937, as the country was starting to recover from the Great Depression and the government cut spending to balance its budget.
"It's very important to understand," the president said. "We won't be able to bring down this deficit overnight, given that the recovery is still taking hold and families across the country still need help."
Obama also used the budget — as much a political document as a policy plan — to blame former President George W. Bush and the Republican-led Congress in Bush's first six years for much of the fiscal crisis that the country faces.
"Over the course of the past 10 years, the previous administration and previous Congresses created an expensive new drug program, passed massive tax cuts for the wealthy and funded two wars without paying for any of it, all of which was compounded by recession and by rising health care costs," Obama said.
"As a result, when I first walked through the door, the deficit stood at $1.3 trillion , with projected deficits of $8 trillion over the next decade."
He did not, however, mention that Bush also cut taxes for the working and middle classes, which Obama on Monday proposed extending permanently without any offsetting spending cuts or tax increases to pay for them. He also didn't propose ending the prescription drug benefit that the Republicans added to Medicare .
His budget plan would spawn deficits totaling $8.53 trillion over the next 10 years.
Democrats in Congress called the Obama budget the best that can be done given the high costs of war and recession.
"It will be impossible to bring the deficit down unless the economy is up. The budget the president is sending Congress today puts a priority on those objectives. It keeps one eye on the economy and the other on the deficit," said Rep. John Spratt , D- S.C. , the chairman of the House of Representatives Budget Committee .
Budget watchdog groups gave Obama credit for some parts of his proposal, but warned that more is needed to keep spiraling deficits and debts from damaging the economy permanently.
"A small spending freeze, some minor tax reforms to raise revenues and a budget commission are all excellent ideas," said Maya MacGuineas , the president of the Committee for a Responsible Federal Budget, a nonprofit fiscal-policy group.
"But this budget doesn't go nearly far enough, and it will require presidential leadership to develop a responsible fiscal plan."
Republicans, who last week helped shoot down a Senate proposal to create an independent deficit-cutting commission that they once supported, called instead for a plan of spending cuts and caps, including scaling back spending increases on entitlements such as Medicare and Social Security .
"President Obama is submitting another budget that spends too much, taxes too much and borrows too much," said House Minority Leader John Boehner , R- Ohio . "Serious fiscal responsibility requires more than a few cuts here and there at the margins. Republicans have proposed adopting strict budget caps that limit federal spending on an annual basis and are enforceable by the president."
The president's proposed budget would spend $3.83 trillion in the federal fiscal year beginning Oct. 1 , a 3 percent increase over the current year.
The budget foresees the government taking in $2.57 trillion in taxes and other revenue, an 18.6 percent jump as the deep recession ends and a growing economy boosts income. He proposed making Bush-era tax cuts permanent for those who earn less than $250,000 annually, and ending the tax reductions for those who make more than that.
Two key factors would help drive up spending or increase the deficit: war and government programs to create jobs.
First, Obama is spending more for war than he expected.
A year ago, he estimated that spending on war and intelligence operations in Afghanistan , Iraq and Pakistan would drop from the $145 billion he inherited to $129 billion in the current fiscal year. Instead, he's sending another 30,000 to 35,000 troops to Afghanistan and is asking for another $33 billion for the current year, boosting the total to $162 billion , and for $159 billion next year.
The United States is committed to withdrawing all its combat troops from Iraq by the end of 2011, and Obama has pledged to start drawing down troops from Afghanistan next year as well.
Still, his budget asks to set aside an additional $50 billion for the fiscal year that starts Oct. 1, 2011 , and again every year after that, just in case it's needed.
"These estimates do not reflect any policy decisions about specific military or intelligence operations," the president's budget says, "but are only intended to indicate that some as-yet-unknown costs are anticipated."
Second, Obama continues to propose new spending and tax cuts to help spark the economy and create jobs, atop the $787 billion stimulus package enacted last year.
Among his new proposals: $100 billion in tax cuts and credits for small businesses and spending on infrastructure to create jobs and increase wages.
Even with the added boost, the White House forecasts slow progress from the current unemployment rate of 10 percent. Christina Romer , the chair of the Council of Economic Advisers , forecasts that the jobless rate would drop to 9.8 percent this year, 8.9 percent in 2011 and 7.9 percent in 2012.
The president also proposed other spending increases for the next fiscal year, including:
— $48 billion for veterans' medical care, an 8 percent increase.
— $53 billion for homeland security, a nearly 4 percent increase, including money for 1,000 advanced imaging technology machines for airport passengers, new explosives detection equipment for baggage and more federal marshals aboard international flights.
— $310 million to close the prison at Guantanamo Bay, Cuba , including $273 million to buy a state prison at Thomson, Ill. , for those detainees who won't be released or transferred to other countries.
Obama also urged Congress to take steps that he said would shave $1.2 trillion off the deficit over the next 10 years:
— Freezing overall spending for three years for some federal departments and programs outside of national security, Medicare and Social Security .
— Slapping a fee on big banks.
— Ending subsidies for oil, gas and coal production.
— Cutting or eliminating 120 programs.
Obama projected that the deficit, while staggering in dollar terms, would drop as a share of the economy. By 2014, he said, a $706 billion budget deficit would be 3.9 percent of the economy, nearing the 3 percent level that he and his aides said would be manageable.
He proposed that a bipartisan fiscal commission find the rest of the spending cuts or tax increases that are needed.
( David Lightman and Kevin G. Hall contributed to this report.)

Extending tax cuts or letting them expire could cost Obama
U.S. economy grew 5.7% in 4th quarter, capping dismal year
Senate approves tough new spending curbs without GOP
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