U.S. Economic/Financial News
Laura Tyson Calls for Infrastructure Investment and Job Creation
Aug. 29 (EIRNS)Laura Tyson, former chair of the Council of Economic Advisors under President Bill Clinton, and a member of President Obama's Economic Recovery Advisory Board (the Volcker board), has called for a $1 trillion investment by the Federal government in job-creating infrastructure projects, in an op-ed in the Aug. 29 Sunday New York Times. Warning that the debate over fiscal policy "has become skewed, with far too much focus on the deficit and far too little on unemployment," she called for measures to address the economic disaster. 'Two forms of spending with the biggest and quickest bang for the buck," she wrote, "are unemployment benefits and aid to state governments. The federal government should pledge generous financing increases for both programs through 2011."
Citing the American Society of Engineers' study identifying $2.2 trillion in urgent infrastructure needs, she emphasized: "An increase in government investment in roads, airports and other kinds of public infrastructure would be cost-effective, too, as measured by the number of jobs created per dollar of spending.... Over the next five years, the federal government should work with state and local governments and the private sector to finance $1 trillion worth of additional investment in infrastructure." She cited the Build America Bonds program which, last year, funded $120 billion in infrastructure improvement projects by the states. She wrote, "The federal government should also create and capitalize a National Infrastructure Bank that would provide greater certainty about the level of infrastructure financing over several years." She cited interstate high-speed rail as one priority project for such a bank. It would be capitalized by the Federal government, not by private capital on a for-profit basis.
Tyson argued against those who demand deficit reduction before any investment in job creation or real economic activity. "For now," she concluded, "the priorities of fiscal policy should be jobs and investment."
Record Numbers Depend on Federal Anti-Poverty Programs
Aug. 30 (EIRNS)U.S. government anti-poverty programs are now servicing a record one in six Americans, and these programs are still expanding under economic collapse conditions, reports USA Today. Here are details:
* Medicaid: More than 50 million Americans are now on Medicaid, up 17% since 2007. The cost is up 36% in two years, to $273 billion. And this is before the Obamacare law adds another 16 million, starting in 2014.
* Food stamps: More than 40 million people, up almost 50% since 2007.
* Unemployment insurance: Close to 10 million people, despite the 99-week limit which has cut off benefits for many. This is four times the number of recipients in 2007. Caseloads peaked at 12 million in January, the highest number on record. Payments are up from $43 billion to $160 billion.
* Welfare: More than 4.4 million people, despite the massive cutbacks of the 1990s; an 18% increase since 2007. This has grown slower than other programs, but payments are still up 24%, to $22 billion.
Numbers of New York City's Unsheltered Homeless Spike Upward
Aug. 31 (EIRNS)New York City's official count of homeless people living on the streets and in the subways spiked up from 2009 to 2010, according to the New York City Department of Homeless Services. In 2009, the annual January NYC Street Survey found 2,328 individuals. In 2010, the same count found 3,1111,077 of whom were living in the subways. The 34% increase represents a major change in direction, as the count had been declining every year since 2005.
Health-Care Infrastructure Crumbling
Aug. 31 (EIRNS)Americans' "usage of health care" has been steadily declining since the beginning of the year. Families lucky enough to be working, if they can still afford their own insurance, have chosen policies with higher deductibles, in order to save money. Either way, they are now "thinking twice" before going to the doctor.
As reported in a Wall Street Journal article last month, doctor visits have declined each month this year, averaging about 4.5% each month, but with a 7.8% drop during May. Hospital admissions dropped during three of the first four months this year, with a 2.3% decline in April (compared to a year ago). Adding to the picture of the "collapse within the collapse," CVS pharmacies' financial statements for the second quarter noted a "drop-off" in new prescriptions, which they also tied to a decline in physician visits.
Medical services are also being affected. Quest Diagnostics (a leading diagnostic test firm), for example, reported that its volume fell 2.6% in the first quarter, and 1.3% in the second; outpatient-surgery provider AmSurg reported that "same-store" procedures had dropped 2.6% since January. Even office-support company AthenaHealth noted that both claims filed per physician, and the average dollar value for each visit, had shown declines, compared with last year.