Worst Income Drop In 20 Years Shows Austerity Arrived Long Before The SequesterSubmitted by Bob-45 on Mon, 03/04/2013 - 22:23
Posted: 03/01/2013 12:53 pm EST
As you have probably heard, today is Sequester Day, when the Austerity Badger sneaks into America and sets our money on fire. In truth, austerity is here already. Exhibit A: the dismal personal-income report released Friday morning.
Personal income plunged 3.6 percent in January, the Bureau of Economic Analysis reported, the biggest drop in 20 years. The decline was driven by a couple of unusual one-time effects, according to the BEA. Both are direct results of Washington's suicidal obsession with budget deficits at a time of persistent economic weakness.
The biggest of these was a reversal of a surge in dividend income in December, as companies rushed to pay stock holders dividends before the "fiscal cliff" hiked dividend tax rates in the New Year. That amounted to about 2.6 percentage points of the total income drop, according to Capital Economics.