The 17th Annual California State Fullerton Economic Forecast did not paint a pretty picture of the national of state economy for the next few years.
Economists Anil Puri and Mira Farka took the stage at the Hyatt Regency in Irvine this afternoon to deliver the 17th annual California State Fullerton Economic Forecast. At this point, given the state of the economy, no one expected the outlook to be good. The news that U.S. GDP growth picked up somewhat in the third quarter, to 2.5 percent, took some of the edge off. The theme of last year's presentation was "Recovery," so it made sense that the question asked this time around was "Where's my boom?"
Yeah, about that boom...
Much like the UCLA Anderson forecast, released in September, the Fullerton forecast — which provides a comprehensive picture of the national and Southern California regional economy — tackled the sluggish nature of the recovery from the 2008 Financial Crisis and subsequent Great Recession. What are economists at UCLA and Fullerton worried about? Well, not about finding a boom. More like avoiding a stall:
Pictured: the advanced technology used to calculate the nation's taxes.
Herman Cain has his 999 plan. It's so much simpler than the excessively complex system we have now. Rick Perry just unveiled his 20-20 plan, which is also so much simpler than the excessively complex system we have now. And just today, I heard California Senator Dianne Feinstein support a recommendation, from Erksine Bowles and Alan Simpson's Deficit Commission, to reduce out current six tax brackets to three: 12, 20, and 27 percent (the top rate is now 35 percent).
Simplicity, it seems, sells. But why?
If anything, federal taxes are far easier to file than ever. I used TurboTax for the first time this year and, once I had gathered all my documents, the process consumed about an hour. In 1979, however, long before TurboTax came along, people managed to deal with 17 tax brackets, using a Bic ballpoint and calculator. In 1945, they confronted 24 brackets with nothing more than a No. 2 pencil, a pad of paper, a pack of Lucky Strikes, and stiff drink.
Sen. Dianne Feinstein, at the Millennium Biltmore Hotel in Downtown Los Angeles, speaks at a Town Hall event.
Sen. Dianne Feinstein sat down with Mark Baldassare, CEO of the Public Policy Institute of California, in front of a packed lunchtime audience today at the Millennium Biltmore Hotel in Downtown Los Angeles. The two discussed economic challenges facing the U.S., the Occupy Wall Street movement, tax reform, and political gridlock in Washington, D.C.
"If you elect people who want to solve problems, you can get something done," Feinstein, who has been representing California for nearly 20 years in Congress, stated. "If you elect people who pound the table, you can't get anything done."
Feinstein, a Democrat, followed this indictment of Republican intractability by pointing out that she considers it unlikely that the remaining aspects of President Obama's jobs bill will pass, including a provision that would establish an national infrastructure bank, still to be voted on.
Many students who graduate from 4-year universities have student loan debt
President Obama, to his credit, is doing what he can to address problems in two of the three big debt markets in the U.S. He's rolled out a plan to enable borrowers who are underwater on their mortgages to refinance, taking advantage of historically low interest rates. And now he's turned his attention to student loan debt, which has ballooned in recent years as the cost of higher education has risen beyond the rate of inflation.
That leaves credit card debt and to a lesser extent auto loan debt. We're unlikely to see anything on that front, however, because the government doesn't backstop that kind of lending.
The student loan initiative is being driven by the crappy economy. Students have borrowed very large sums to fund their educations, but in many cases they can't get jobs in the face of 9 percent national unemployment. If they can find work, the pay isn't enough to service the debt. And overall student loan debt is now massive, at more than a trillion bucks.
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A foreclosure sign sits in front of a home for sale.
Another month, another Case-Shiller index on housing prices — and more bad news for the housing economy. This is from the Wall Street Journal:
The Case-Shiller data come on the heels of the White House's revamp of a mortgage-refinance program for "underwater" borrowers—those who owe more than their homes are worth. But economists say there are few quick fixes for the housing crisis, and easier refinancing rules will do little to address weak demand for homes.
"It was a very bad spring-to-summer-market season," said Nancy Wallace, a finance professor at the University of California at Berkeley. She said a turnaround in the housing market remains largely dependent on loosening credit and a surge in hiring. "People are almost afraid to apply for mortgages and lots of people have little scratches and dents on their credit right now."