Economic Stories of Relevance in Today's World -- January 6, 2013

Workers making $30,000 will take a bigger hit on their pay than those earning $500,000 under new fiscal deal - UK Mail Online - Hayley Peterson - January 4, 2013 - Middle-class workers will take a bigger hit to their income proportionately than those earning between $200,000 and $500,000 under the new fiscal cliff deal, according to the nonpartisan Tax Policy Center...                Earners in the latter group will pay an average 1.3 percent more - or an additional $2,711 - in taxes this year, while workers making between $30,000 and $200,000 will see their paychecks shrink by as much as 1.7 percent - or up to $1,784 - the D.C.-based think tank reported...            Overall, nearly 80 percent of households will pay more money to the federal government as a result of the fiscal cliff deal.


FOMC Minutes: Some Fed Members Argue to End Bond Buying This Year - AP through NewsMax - January 3, 2013 - Federal Reserve policymakers expressed broad support last month for the Fed's plan to buy bonds to support the U.S. economy. But they differed over how long to keep buying bonds to drive down long-term interest rates.                    Minutes of the Fed's December policy meeting show that some of the 12 voting members thought the bond purchases would be warranted through the end of this year.                    Others felt the purchases should be slowed or stopped altogether before the end of 2013. This group was concerned that too much bond buying by the Fed might destabilize the economy.                        The Fed ended up approving open-ended purchases of $85 billion a month in Treasury securities and mortgage backed bonds to maintain its level of bond purchases.                          The minutes covered the Fed's Dec. 11-12 meeting. In a statement after the meeting, the Fed said it planned to keep a key interest rate at a record low even after unemployment falls close to a normal level — which it said might take three more years.                    As long as the outlook for inflation is mild, the Fed said it could keep short-term rates near zero at least until unemployment drops below 6.5 percent. The unemployment rate in November was 7.7 percent. On Friday, the government will release the rate for December.                      The statement was approved 11-1. Jeffrey Lacker, president of Federal Reserve Bank of Richmond, objected for the eighth straight time this year. Lacker has said he thinks the job market is being slowed by factors beyond the Fed's control. And he says further bond purchases risk worsening future inflation.


65 Percent Of Americans Believe That 2013 Will Be A Year Of Economic Difficulty - Michael Snyder - January 3rd, 2013 -  Do you believe that economic trouble is coming in 2013?  If so, you have a lot of company.  According to a brand new Gallup poll that was just released, 65 percent of Americans believe that 2013 will be a year of "economic difficulty" while only 33 percent of Americans believe that 2013 will be a year of "economic prosperity".  Gallup has been asking this question for a lot of years, and the percentage of Americans that are anticipating economic difficulty in the year ahead has not been this high since the early 1980s.  And without a doubt, there are a whole lot of reasons to be deeply concerned about the economy as we head into the new year.  But it isn't just 2013 that Americans are pessimistic about.  According to the new Gallup poll, 50 percent of all Americans believe that the best days of America are behind us, and only 47 percent of all Americans believe that the best days of America are ahead of us.  Those are very sobering numbers.  Half the country believes that it is only downhill from here for the United States.  Unfortunately, they are exactly right.  Things are rapidly going to get worse for our economy and for our nation as a whole.  We are going to start reaping the consequences of decades of very foolish decisions, and the pain is going to be immense.                          Gallup asked some other very interesting questions as well.  The following are some of the other results from the poll...                      -68 percent of Americans believe that 2013 will be a year of rising crime rates.                         -57 percent of Americans believe that 2013 will be a year in which American power will decline in the world.                        -82 percent of Americans believe that 2013 will be a year in which taxes in the United States will rise.
So why are so many people so pessimistic as we enter 2013?                           That is a good question.  I think that a lot of people are starting to wake up and are realizing the gigantic problems that are staring the U.S. right in the face.                         Even our friends over in Europe can see what is happening to us.  We are like a former athletic champion that is now clearly on the wrong side of "middle age" and is exhibiting obvious signs of decline.  We still like to think of ourselves as "the champ", but the truth is that we are fat, lazy, broken down and bankrupt.  The following is a brief excerpt from an article that appeared in a major UK news source the other day...

Health Insurers Raise Some Rates by Double Digits - New York Times - By REED ABELSON - January 5, 2013 - Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers...                  Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own.                         In California, Aetna is proposing rate increases of as much as 22 percent, Anthem Blue Cross 26 percent and Blue Shield of California 20 percent for some of those policy holders, according to the insurers’ filings with the state for 2013. These rate requests are all the more striking after a 39 percent rise sought by Anthem Blue Cross in 2010 helped give impetus to the law, known as the Affordable Care Act, which was passed the same year and will not be fully in effect until 2014.                     In other states, like Florida and Ohio, insurers have been able to raise rates by at least 20 percent for some policy holders. The rate increases can amount to several hundred dollars a month.                          The proposed increases compare with about 4 percent for families with employer-based policies.                         Under the health care law, regulators are now required to review any request for a rate increase of 10 percent or more; the requests are posted on a federal Web site, healthcare.gov, along with regulators’ evaluations.                       The review process not only reveals the sharp disparity in the rates themselves, it also demonstrates the striking difference between places like New York, one of the 37 states where legislatures have given regulators some authority to deny or roll back rates deemed excessive, and California, which is among the states that do not have that ability.

Happy New Year Middle Class: The Fiscal Cliff Is Going To Rip You To Shreds - The Economic Collapse Blog - Michael Snyder - December 30th, 2012 - The middle class has quite a gift welcoming them as the calendar flips over to 2013.  Their payroll taxes are going to go up, their income taxes are going to go up, and approximately 28 million households are going to be hit with a huge, unexpected AMT tax bill on their 2012 earnings.  So happy New Year middle class!  You are about to be ripped to shreds.  In addition to the tax increases that I just mentioned, approximately two million unemployed Americans will instantly lose their extended unemployment benefits when 2013 begins, and new Obamacare tax hikes which will cost American taxpayers about a trillion dollars over the next decade will start to go into effect.  If Congress is not able to come to some sort of a deal, all middle class families in America will be sending thousands more dollars to Uncle Sam next year than they were previously.  And considering the fact that the middle class is already steadily shrinking and that the U.S. economy is already in an advanced state of decline, that is not good news.  You would think that both major political parties would want to do something to keep the middle class from being hit with this kind of tax sledgehammer.  Unfortunately, at this point it appears that our "leaders" in Washington D.C. are incapable of getting anything done.  So get ready for much smaller paychecks and much larger tax bills.  What is coming is not going to be pleasant.
So what happened?                          Weren't the tax increases only supposed to be for the wealthy?
Well, that is what the politicians always promise, but it is always the middle class that ends up getting hit the hardest.                     In this day and age, the big corporations and the ultra-wealthy are absolute masters at avoiding taxes.                         For example, Facebook paid approximately $4.64 million in taxes on their entire foreign profits of $1.344 billion for 2011.                         That comes out to a tax rate of about 0.3 percent.                             Overall, the global elite have approximately 18 trillion dollars parked in offshore tax havens such as the Cayman Islands.                       Keep in mind that U.S. GDP for 2011 was only slightly above 15 trillion dollars.


10 things you'll pay more for in 2013 - From satellite TV to baseball tickets, here's what you'll be shelling out more cash for this year. - CNN Money - Melanie Hicken - January 4, 2013


Lincolnton Furniture Company, praised for bringing jobs back to US, closes - Charlotte Observer through the Miami Herald - Cameron Steele - January 4, 2013 -  Lincolnton Furniture Company closed abruptly Thursday just one year after it was hailed by President Barack Obama as an example of the recovering U.S. economy.                       Furniture-making operations stopped indefinitely and only a few people will remain employed moving forward, company financial officer Ben Causey said.                     “I don’t know where it’s going to go exactly; we’re still evaluating our situation,” Causey said. “We just didn’t have any choice at this point.”                The company was not receiving the orders it needed to sustain its operations, Causey said.                     “We needed more orders is really what it boiled down to,” he said. “We thought they would materialize.”                  Owner Bruce Cochrane, a fifth generation furniture-manufacturer, formed the company in 2011 with a $5 million investment and the hope he could make a profit off people who wanted to buy furniture made in America.                         It was a move that caught the attention of North Carolina officials and those in the White House. Last year, Cochrane sat with the first lady during Obama’s 2012 State of the Union Address. He also joined the president and other business leaders in a discussion about how to create more jobs at home.                  Attempts late Thursday to reach Cochrane were unsuccessful. Causey said company officials were thankful for the support they received from the community over the past year-and-a-half.
U.S. case goods maker Lincolnton Furniture closing - Thomas Russell -- Furniture Today, January 4, 2013


Henredon to close upholstered furniture plant in Mount Airy, N.C. - Furniture Today Staff -- Furniture Today - January 4, 2013 - MOUNT AIRY, N.C. — Henredon Furniture is closing an upholstered furniture plant here, according to a report in the Mount Airy News. More than 100 people will be laid off as a result of the closing, which will take place over several months.                  The 102,500-square-foot facility is owned by Furniture Brands International, Henredon's parent company.                     The Mount Airy plant's operations will be moved to a 334,000-square-foot facility near Hickory, N.C., leased by the company, the report said.


The Giant Currency Superstorm That Is Coming To The USA.