Beware: New Medicare Plan Finder Tool Misadvises

The new Medicare Plan Finder Tool has been found to have glitches which could result in consumers choosing more expensive plans by mistake.

It ranks plans by lowest premium without consideration to out of pocket copay expenses. 

In the past the Tool calculated total cost making the new Tool even more misleading if you have relied upon it in the past.

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Italian Mini-BOTs Would Be Liability Swaps

In the last two weeks there has been a flurry of economic/financial writing about the Italian proposal for a parallel currency in the form of mini-BOTs by an Italian Lega politician, Claudio Borghi, who, as a former Deutsche Bank person, should understand the implications of a parallel currency deployment and who has been quite vocal in his desire to exit the euro.  Since Italy is the third largest economy in the eurozone, the impact would be significant unlike Greece.

Most of the writing has been monetarily critical --- concentrating on perceived debt increase to unsustainable levels and legality.  Papadia and Roth have tried to review the competing viewpoints through existing literature, but they omit the earlier 2015 Andresen and Parenteau electronic TAN proposal, which was the basis of the Varoufakis plan via Galbraith.  Papadia and Roth would have us believe the paper form would be better than the electronic form, because it would be less likely to be used criminally.  In fact, the electronic form is even less like currency, less expensive and simpler to implement, and not subject to counterfeiting.  Papadia and Roth make a good listing of what makes currency and what makes a security.  In their conclusions, they worry about the mini-Bot enabling an

New W-4 Tax Withholding Form Is Not Simple

 The draft of the proposed, new W-4 tax withholding form has been released for comment until July 1.  In many ways it is like filling out a  supplemental 1040 and people will have to look at their last year tax form to fill it out. 

If you have a second job, summer job, both spouses work, own a small business and work another

Some Links from Week of 2/25 -- 3/3/2019

I do weekly research in economics and finance with the links available by subscription (contact me).  Here are a few of the approximately twelve pages for the past week.  The links are of interest and worthy of thought.  They do not reflect whether I agree with them or not.

Prospects for inflation in a high pressure economy -- Hooper, Mishkin, Sufi

Inflation Risks and Expectations

Fed Balance Sheet News

Future of Fed Balance Sheet - Quarles

What can we learn from the NY Fed's inflation gauge -- Tim Duy

 U.S. Economic Outlook and Fed Monetary Policy -- Clarida

Did the yield curve flip? -- SF Fed

Are Normal Yield Curves actually Normal?

20 Years of the eurozone

Public Debt through the years -- Eichengreen

Kraft Heinz exposes the corporate debt problem

Italy's Debt and the Spread

Italy's Carige bank faces 630 million euro capital gap 

What if the problem of the EU turns out to be Germany and its banks

Risky Retirement Business -- Carmen Reinhart

How imperfect knowledge shapes financial markets

Temporary price level targeting -- Bernanke

News and Central Bank Growth Forecasts

Bank of England reads the Guardian

Governments bears responsibility for income inequality and the tools to reduce it

Conversation with Emmanuel Saez


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Suffering from Tax Refund Surprise?

If you found you have no or much smaller tax refund this year, you did not pay attention to withholding amounts and the loss of itemized deductions.  I warned my readers of this on January
 15, 1918.

 Prior to that

Michael Pettis on "Why US Debt Must Continue"

Each week I do economic and financial research that results in over ten pages of links, which is available to those who contact me and subscribe.

One notable link from this past week is a new post by Michael Pettis entitled "Why U.S. Debt Must Continue" in which he tackles the issue of rapidly rising household, government, and business debt in the United States and many other countries around the world including China and some European countries.

In the first part, he discusses debt and some of the conditions under which it effects economic growth

Federal Reserve & Data Dependency

The Federal reserve will raise rates by 25 bps this Wednesday at the December FOMC meeting.  This is the expected economic consensus, although market participants want rates to be lowered to boost market valuations.  While fears of slower global growth are driving volatility, the markets are noisy data in the basket of data the Fed tracks and reviews, because the Fed makes its decisions not on fears or exuberance but on the data and the documented trend of the data.

While slower growth would normally be accompanied by lower inflation, trade wars and tariffs can yield slower growth and rising prices (inflation).  Political uncertainty domestically and internationally can cause endogenous and exogenous volatility and economic instability, but economic data reflects what has happened and reacts to what will happen.  The Fed is concerned about financial stability --- not politics --- not market fears; it is data dependent while recognizing

Capital Township's Inconvenient Financial Numbers

Prologue

This post contains information (administrative expenditures to actual services ratio) I was not allowed to include in a Springfield Journal-Register (SJ-R) letter to the Editor published (after 26 days of publication delay because someone did not like the publicly documented information on file at the Illinois Comptroller’s Office, particularly the administrative costs to services ratio of which I was only allowed to include a conservative calculation which did not include the 20% Township error omitting $374,925 in General Assistance administrative cost despite my documenting the error amount as an administrative expense from FY 2016 and FY2017 reports on file) on September 1, 2018, and two letters submitted on October 16, 2018, which where rejected for publication within two minutes of sending. A requested hyperlink documenting the information source (see the link below) to be published with the letter, which I immediately sent when the published letter was first submitted in early August, was never used on the SJ-R website. 

Two letters, containing much of the information below, submitted on October 16, 2018, were rejected for publication within two minutes of sending.

It is as if someone high up (not the Letters editor) does not want the public information on file at the Illinois Comptroller’s Office discussed publicly in the media.

 

Whatever the motives and reasons, the bottom line is the public discussion of this proposed merger of Capital Township with Sangamon County has been inadequate, truncated, and seemingly suppressed.

I have since learned that the Con op-ed was written as an unpublished letter to the editor a month prior as a protest of the City Council vote to table a City petition to merge Capital Township with the City and later pushed by the SJ-R as the op-ed piece with imposed significant data changes and denied the author a review of the Pro op-ed and the ability to respond to the actual Pro op-ed. This speaks directly to the intentional informational manipulation and suppression of informed public discussion on this issue by the SJ-R.

CAPITAL TOWNSHIP’S INCONVENIENT FINANCIAL NUMBERS

The Pro and Con Op-Ed articles on the proposed absorption of Capital Township, which is entirely within the City of Springfield, by the Sangamon County Board were very disappointing with the “pro’s” self-serving twists and blarney and the “con’s” overly conservative and way too politely constrained attempt. The people of Capital Township (the City of Springfield) deserve a more rigorous discussion than has appeared in local media.

While townships can provide a variety of services, such as roads, cemetery, parks, and general assistance, Capital Township provides only one service (General Assistance) in the FY2017 amount of $755,533 at a direct program administrative cost of $374,925 (just salaries?) while the total Township salaries are $906,779, central Township administrative costs are $851,449 for total Township FY2017 expenditure of $1,981,907.

It is misleadingly convenient to characterize Capital Township efficiency as a single service program (General Assistance) within Capital Township rather than the operation of the whole Township. Because a government exists solely to serve the needs of the people, the ratio of total administrative expenditures to total actual services is how a governmental unit is efficiency evaluated and Capital Township at $162.32 for each $100 of services is excessively higher and more grossly inefficient than any other Sangamon County Township government. Chatham Township, which provides road, cemetery, recreation/parks, General Assistance, and community building services has an expenditure to services ratio of $44.49 for every $100 of services. It is purposefully misleading to try to pose Capital Township solely on its welfare expenses to welfare services ratio. Capital

Tariffs, Uncertainty, Investment, and U.S. Trade Deficit

Tariffs increase uncertainty domestically and internationally. decrease corporate investment, and will not decrease the U. S. trade deficit.

From Marc to Market "Tariffs will not Reduce the U.S. Trade Deficit"

"The US trade deficit is likely to widen due to growth differentials and the impact of taxes on imports." 

 From the New York Fed --- "Do Import Tariffs Help Reduce Trade Deficits?"
"... what seems clear from our analysis is that import tariffs will reduce both imports and exports."

Turkey is Harvesting the Risks of Its Foreign Denominated Debt

Noah Smith has hit the nail on the head when he writes that Turkey's currency crisis is the direct result, as many emerging nations have experienced, of issuing debt denominated in foreign currencies rather than its own currency.

It is just bad economics for any nation to issue debt in a foreign currency.  I wrote about this in relation to Argentina in 2010 and Argentina still, today, has the problems associated with foreign