2012 November FIRE Policy News

Issue Date: 
November, 2012
Newspaper PDF: 

The November issue of FIRE Policy News reports on the Federal Reserve’s decision to buy $40 billion of mortgage debt per month for an unlimited amount of time. “QE3 is more of the same, and it will fail just like QE1 and QE2,” warned Larry Kaufmann, an economic consultant and senior advisor at Pacific Economics Group.

Also in this issue:

  • U.S. Rep Keith Ellison has introduced the Inclusive Prosperity Act, which would tax the sale of stocks, bonds, and derivatives in order to pay for government infrastructure and jobs programs.
  • The government’s costs to borrow could rise if Moody’s Investors Service follows through on its warning that it might follow Standard & Poor’s and downgrade U.S. government debt. Moody’s expressed concern about Congressional budget negotiations ahead of the “fiscal cliff” at the end of this year, when big tax increases and spending cuts would happen without Congressional action.
  • Small business owners create most new jobs in the United States, but they’re struggling to hire more people, in part because of a lack of access to credit. Proposed legislation to expand credit unions’ ability to lend to their members could help, according to a report by the R Street Institute and Small Business Majority.
  • “Social Security’s future, at least in the form it has existed dating back to FDR, is now greatly imperiled,” writes Social Security Trustee Charles Blahous. “The last few years of legislative neglect--due to a failure of national policy leadership coming just as the Baby Boomers have begun to retire--have drastically harmed the program’s future financial prospects.”
  • States have shrunk their budget deficits by half compared to one year ago, yet their debt levels remain nearly unchanged, mainly because they’ve continued to pour money they don’t have into pensions and health insurance for government workers and retirees, according to the nonpartisan State Budget Solutions organization.
  • Even as regulators work to finish writing regulations for the Dodd-Frank financial regulation law, the American Bankers Association estimates the law will cause 1,000 banks to close their doors by 2020.

Newspaper Articles in this Issue