South By North Strategies, Ltd.

North Carolina Budget Shortfall

A new report from the N.C Budget and Tax Center projects that state legislators will confront a $1.6 billion shortfall when they convene to prepare the state budget for fiscal year 2010-2011. From the Center’s report:

Unfortunately for state leaders, budget projections for this year and the next indicate their work is far from over. The state will face a budget shortfall of approximately $1.6 billion in FY 2010-11 and an estimated
$3.3 billion to $4.4 billion in FY 2011-12.
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State leaders must continue to take a balanced approach to managing this ongoing challenge by finding efficiencies, tapping all available resources, eliminating ineffective tax expenditures, improving tax collections, rethinking the distribution of state and local responsibilities, making spending reduction decisions based on well-grounded priorities, and, if necessary, raising additional revenue.

February Balance of Trade

From the federal government’s latest trade report …

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total February exports of $143.2 billion and imports of $182.9 billion resulted in a goods and services deficit of $39.7 billion, up from $37.0 billion in January, revised. February exports were $0.3 billion more than January exports of $142.9 billion. February imports were $3.0 billion more than January imports of $179.8 billion.
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In February, the goods deficit increased $1.9 billion from January to $51.3 billion, and the services surplus decreased $0.8 billion to $11.6 billion. Exports of goods increased $0.1 billion to $98.5 billion, and imports of goods increased $2.0 billion to $149.8 billion. Exports of services increased $0.2 billion to $44.7 billion, and imports of services increased $1.0 billion to $33.1 billion.
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In February, the goods and services deficit increased $13.2 billion from February 2009. Exports were up $17.9 billion, or 14.3 percent, and imports were up $31.1 billion, or 20.5 percent.

Around the Dial – April 13

Economic policy reports, blog postings, and media stories of interest:

• Paul Krugman has Georgia on his mind.
• Dani Rodrik asks about the return of industrial policy.
• TaxVox suggests improvements to the advanced EITC.
• Marshall Auerback considers “Maginot Line” economics.

South by North Strategies in the News

A number of media outlets recently have featured the research and perspective of South by North Strategies, Ltd.

• Triangle Business Journal: “Federal Program Making Small Dent in Foreclosure Woes”
• Winston-Salem Journal: “Jobless Rate Up to Record 12.3 Percent”
• Greensboro News & Record: “Local Jobless Picture Gets Worse”
• Yes! Weekly: “Nation Added Jobs Last Month”

Stuck in the Middle?

Fed Watch looks at recent economic indicators and finds that neither optimists nor pessimists are completely right.

In short, yes, given that the US economy has been growing now for three quarters, and is most likely to grow for the next three quarters, room for optimism is surely growing as well, something the pessimists need to accept, lest they fall into the trap of incoherent mumbling for the five years until the next recession provides them with an “I told you so” opportunity.
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Where the pessimists have room to complain, as I am wont to do, is on the employment issue.Even the most more optimistic forecast of former IMF Chief Economist Michael Mussa is not sufficient to drive rapid improvement in the labor market.Again, think of a real V-shaped recovery like the mid-80’s. Hence the widespread disappointment with the March labor report. On the surface, the numbers were not terrible. Subtract out, however, the private and Census temporary workers, adjust for the fact that this supposedly represented a “bounce” from the weather impacted February report, and then recognize that the US economy has been growing for three quarters.Then you start to think that this is a better report, but not good enough to alleviate the pain in the labor market anytime soon. But it is not bad enough that anyone is eager to commit to additional stimulus, almost guaranteeing a continuation of the status quo, a job market that will not recoup lost jobs for years, leaving perhaps an indelible mark on a generation of workers.