President Barack Obama on Monday condemned such actions, announcing that the IRS must be “held fully accountable” if the agency did indeed screen conservatives intentionally — particularly before the November elections. Non-profit groups that requested tax-exempt status were more frequently flagged for audits if they criticized “how the country is being run” or if they contained key words such as “Tea Party”, according to an investigative report from the Treasury Inspector General for Tax Administration (TIGTA).Seeking to “make America a better place to live” and criticizing government spending were also red flags for IRS workers deciding which groups to audit. Key words that generated closer scrutiny also included “Patriot” and “9/12”.The IRS began to illegally target “Tea Party or similar organizations” in March 2010, and by June 2011, more than 100 Tea Party-related tax-exempt applications had been flagged for review by the Cincinnati-based IRS unit responsible for overseeing them, according to a draft IRS inspector general report.By July 2011, the IRS had gone from targeting groups with key words to targeting “organizations involved with political, lobbying or advocacy” – and by January 2012, the restrictions were changed to go after “political action type organizations involved in limiting/expanding government, educating on the Constitution and Bill of Rights, [and] social economic reform/movement,” the TIGTA report states.Facing allegations that the IRS was engaged in these practices, former Commissioner Doug Shulman testified before a congressional committee in March 2012, claiming that the agency does not target tax-exempt organizations based on their political affiliations or ideologies.But during the month Schulman was testifying, the IRS changed its criteria for closer examination to include tax-exempt groups “with indicators of significant amounts of campaign intervention (raising questions as to exempt purpose and/or excess private benefit),” the investigative report states.After news about the IRS scheme was reported on Friday, lawmakers have condemned the agency for what Sen. Susan Collins described as a “truly outrageous” breach of public trust.“It contributes to the profound distrust that the American people have in government,” she told CNN, adding that President Barack Obama should publicly condemn the agency.Although the IRS practices targeted conservative groups, the agency established a distrust that could run deep among Americans of every political party.“I don’t care if you’re a conservative, a liberal, a Democrat or a Republican, this should send a chill up your spine,” Rep. Mike Rogers, chairman of the House Intelligence Committee, said while he was calling for a full investigation of IRS practices.Rep. Darrell Issa told CNNon Sunday that this “kind of thing scares the American people to their core”.The IRS has long denied targeting conservative groups for audits, but last week admitted its illegal missteps. Louis Lerner, director of exempt organizations for the IRS,on Friday apologized for the “inappropriate” targeting of conservative organizations.Facing pressure from lawmakers urging the IRS’ public condemnation, the president on Monday denounced the targeting of conservative groups, but failed to directly accuse the IRS of its engagement in such actions.“If in fact IRS personnel engaged in the kind of practices that have been reported on and were intentionally targeting conservative groups, then that’s outrageous and there’s no place for it – and they have to be held fully accountable,” President Obama said Monday after learning of the allegations against the IRS through news reports.The president said he does not want to judge the findings “prematurely”. Both Democratic and Republican lawmakers have called for an extensive investigation into what Senate Finance Committee Chairman Max Baucus called an “outrageous abuse of power”. … Read More
Pollin Responds to Reinhart and Rogoff; Cuts Deepen and Stock Market Soars
Bob Pollin: NYT Op-ed defending study repeats errors; theoretical basis for austerity has been exposed yet massive cuts in public spending continue … Read More
The Price Of Copper And 11 Other Recession Indicators That Are Flashing Red
There are a dozen significant economic indicators that are warning that the U.S. economy is heading into a recession. … Read More
Jobs report: Unemployment rate falls to 7.5 percent
WASHINGTON (AP) — U.S. employers added 165,000 jobs in April, and hiring was much stronger in the previous two months than first thought. The gains trimmed the unemployment rate to a four-year low of 7.5 percent.The Labor Department report showed the job market is improving despite higher taxes and government spending cuts.In addition to the April gains, the government said employers added 138,000 jobs in March and 332,000 in February. That’s 114,000 more over the two months.The economy has created an average of 208,000 jobs a month from November through April. That’s above the 138,000 added in the previous six months.A fire overnight at the Labor Department’s headquarters shut down the building for most employees. Members of the media were allowed in for the release of the report.Continue Reading… … Read More
Repeal the sequester!
Economic forecasters exist to make astrologers look good. Most had forecast growth of at least 3 percent (on an annualized basis) in the first quarter. But we learned this morning (in the Commerce Department’s report) it grew only 2.5 percent.That’s better than the 2 percent growth last year and the slowdown at the end of the year. But it’s still cause for serious concern.First, consumers won’t keep up the spending.Their savings rate fell sharply — from 4.7% in the last quarter of 2012 to 2.6% from January through March.Add in March’s dismal employment report, the lowest percentage of working-age adults in jobs since 1979, and January’s hike in payroll taxes, and consumer spending will almost certainly drop.Median household incomes continues to decline, adjusted for inflation. Another report out today showed consumer confidence fell in April.Second, the recovery continues to be wildly lopsided. The only thing really keeping it going is the rip-roaring stock market. But the stock market only boosts the wealth of the richest 10 percent of Americans, who own 90 percent of stocks (including 401-K retirement accounts).Continue Reading… … Read More
The More Illegal Immigrants That Go On Food Stamps The More Money JP Morgan Makes
Poverty is big business for JP Morgan. The company has made over $560 million processing EBT cards. … Read More
Japan attempts to slay deflation dragon
Japan’s monetary base will increase at an annual rate of about 60-70 trillion yen, the Policy Board of the BOJ announced on Friday.Earlier this month, the central bank said it would start buying 60 to 70 trillion yen of longer-term debt and securities annually. The more assets BOJ buys, the more hard cash it is able to circulate in the country. The final goal is to drive up annual inflation to 2 percent. Consumer prices are expected to rise 1.9 percent in the fiscal year starting April 2015, according to BOJ Governor Haruhiko Kuroda.The move is part of an initiative put forward by Prime Minister Shinzo Abe, dubbed “Abenomics,” which calls for robust government spending and drastic monetary easing designed to end 15 years of deflation.However, the depth of the deflationary problem was highlighted in a separate report that showed consumer prices tumbling 0.5 percent in March, the steepest plunge in two years. The BOJ said that it expects prices to keep falling for “the time being” until its measures take hold.Tokyo-based Barclays analyst Kyohei Morita said last week in a research report that the price of TVs had dropped 19 percent from a year earlier, and air-conditioners by 18 percent, and that consumer prices will start to increase sometime around July. Deflation, or falling prices, can have a disastrous impact on economic growth. In Japan, where the amount of personal savings is one of the highest in the world, consumers have a greater tendency to delay spending, perhaps in the hope that prices will drop even more. BoJ Governor Koroda believes all the necessary steps have been taken to assure success of his plan. “Our belief is that we took all necessary steps to achieve the 2 percent inflation target basically in two years,” Kuroda said earlier this month. “We’ll examine the effect each month but that doesn’t mean we will adjust policy every month.” Critics respondKuroda’s plan to spark inflation has run up against predictions of failure. “It’s unrealistic, they won’t be able to reach their target in two years, or even in five,” Masaaki Kanno, chief Japan economist at JPMorgan Chase & Co. in Tokyo and a former BOJ official said, as quoted by Bloomberg. Additional easing may be required as early as October, when the BOJ releases new price forecasts, he said. BOJ board members themselves are split over the prospects for inflation, with some predicting that consumer prices won’t increase at half the rate set as a target this month. Eisuke Sakakibara, an ex-Finance Ministry colleague, believes Kuroda will fall short of achieving the 2 percent inflation goal, and former BOJ board member Atsushi Mizuno sees the central bank running into a “wall of reality” as bond purchases increase risks of a market bubble, Bloomberg reported. However, there were reassurances that BOJ will intervene further if its actions do not trigger the desired result.“We can expect more easing later this year if prices refuse to edge up,” Junko Nishioka, chief economist at Royal Bank of Scotland in Tokyo and a former BOJ official, said prior to the bank releasing its projections. “It’s imperative for the BOJ to clearly communicate its objectives to maintain expectations that prices will rise.” Meanwhile, some of the biggest critics of Japan’s move are its neighbors. South Korea, for example, has emphasized the risks to their economy from a weakening yen.However, finance chiefs from the Group of 20 last week, as well as other financial institutions, including the IMF, have refrained from criticizing Japan over its inflationary measures.Don’t forget the debt dragon Thus far, Prime Minister Abe seems to be smooth sailing: Japan stocks are at multi-year highs, his plan has been endorsed by the international financial bodies and Japan has been able to steer clear of charges of manipulating its currency.Some economists, however, say Japan must do something about its gross public debt, which is projected to hit 230 percent of GDP by 2014.The Organization for Economic Cooperation and Development, which largely approved of Abenomics in a report on Tuesday, cautioned against runaway debt.”Stopping and reversing the rise in the debt-to-GDP ratio is crucial,” the OECD report said.The IMF had similar advice: “Japan needs more ambitious plans to bring down debt, plus structural reforms to shift the economy into higher gear,” IMF Managing Director Christine Lagarde said last week.For many years, Japan enjoyed rock-bottom interest rates. Thus, most sovereign debt is held by the Japanese themselves, a lesson that Greece or even the United States could learn something from.But the country is exposed to risk, especially if interest rates peak.Japanese policymakers, including Finance Minister Taro Aso, say they are aware of the dangers.”We are paying attention to that issue, but [Japan] is different than Greece,” Aso told CNN last week.”Given the unprecedented size of its debt ratio and the risk of higher interest rates, Japan needs a detailed and credible medium-term plan of spending cuts and tax increases, accompanied by improvements in the fiscal policy framework,” the OECD said.Some measures suggested by the OECD to tame the debt is bringing social security payments under control, especially with the number of elderly people on the rise in the country; an increase in value-added tax; widen its tax base and eliminate loopholes.However, given the popularity of ‘Abenomics,’ which opens the door to government spending, it seems that Japan is prepared to forget about the debt dragon and concentrate its efforts in defeating the deflation dragon, which seems to be the graver of the two threats. … Read More
