Posts filed under “Taxes and Policy”

Changes in US Withholding Taxes

Matt Trivisonno, a software developer in Miami Beach who follows the market, has come up with a neat way to track changes in the Federal Government’s witholding tax receipts.

After being rangebound for the prior 4 years, the year-over-year growth in withholding began rolling over in Q4 of 2007 — a possible date marking the beginning of the current recession:


click thru for larger graphTax_reciepts

Source: Matt Trivisonno’s Blog

Note that withholding comes directly from Wages and Income, and would
likely precede major shifts in consumer spending or credit. 


See also:
In Debt Crisis, Uncle Sam Is Piling It On
Mark Gongloff
WSJ, March 24, 2008; Page C1



Category: Consumer Spending, Credit, Economy, Taxes and Policy, Wages & Income

Housing Bust Blame Game

Back in August of 2007, we looked at the The Ongoing Impact of the Housing Sector.   

At the time, I had assigned blame for all of the problems in the credit
market to a variety of institutions and people. The blame went as follows:

    * Federal Reserve (FOMC)
    * Borrowers
    * Mortgage brokers
    * Appraisers
    * Federal Government
    * Fannie Mae
    * Lending banks
    * Wall Street firms
    * CDO Managers
    * Credit agencies
    * Hedge funds
    * Institutional Investors (pensions, insurance firms, banks, etc.)
    * And back to regulatory role of the Federal Reserve

Today’s WSJ has a front page article looking at the same issue: Housing Bust Fuels Blame Game. However, they assess blame somewhat differently, with a bit of a political slant:

Democrats are quick to blame Republicans, who were in
power during the housing bubble and subprime lending frenzy. For years,
America’s leaders failed to restrain the markets, companies, investors
and consumers from the missteps that led to the most pervasive
financial crisis in decades.

But in hindsight, the failure stretches across
government and across party lines. At bottom are two strong currents.
From the Republican president to urban Democratic congressmen,
homeownership was pushed as an overriding and unquestioned goal. And
many significant attempts at regulation were obstructed by the
prevailing belief that the economy did best when financial markets
operated as freely as possible.

While the headline writer tries to call this a "Bipartisan Failure," the bulk of the actual article is find less kind to the GOP. The Journal blamed:

* The Bush administration for cheerleading homeownership and pressuring government-sponsored mortgage lenders
Fannie Mae and Freddie Mac to provide funding for riskier mortgages.

* Congress for allowing Fannie and Freddie to invest
heavily in securities backed by subprime loans.

* While Democratic congressmen
pushed federal law to restrain sub-prime lending practices Republicans (with some Democratic allies) blocked or countered with
weaker versions;

* Federal Reserve, Chairman Alan Greenspan,
revered for not using the
Fed’s authority to more aggressively regulate lender behavior.

* California — where the country’s subprime lenders where — saw Democratic state lawmakers
refusing to impose tougher regulations on a
prized local industry.

Perhaps its bias on my part, but that list looks a little one sided to me . . .


graphic courtesy of the WSJ



Housing Bust Fuels Blame Game
Democrats Seize On Opponents’ Role;
Bipartisan Failures
WSJ, February 27, 2008; Page A1

Free version


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