Automatic spending cuts a new threat to US economy

WASHINGTON (AP) -- Just as the U.S. economy is making progress despite Europe's turmoil, here come two new threats.

Deep spending cuts are set to kick in if a congressional panel can't agree by Thanksgiving on how to shrink the budget deficit. And Congress may let emergency unemployment aid and a Social Security tax cut expire at year's end. Either outcome could slow growth and spook markets.

Analysts are concerned. Yet most aren't panicking.

Many say the economy and markets can withstand the blows. That's because Congress or the Federal Reserve could take other steps next year to blunt the automatic cuts and lift the economy. And investors expect so little from the congressional panel that they're unlikely to overreact if no deal is reached.

"There's no doomsday scenario in reducing government spending," said David Kelly of JP Morgan Funds.

The 12-member bipartisan panel, or supercommittee, was created in August to defuse a political standoff over raising the federal borrowing limit. It's supposed to find at least $1.2 trillion in deficit cuts by Nov. 23. If it fails, federal spending would automatically be cut by that amount over nine years, starting in 2013.

The law triggers cuts in programs prized by both parties: social services such as Medicare for Democrats, defense spending for Republicans.

The panel appears to be deadlocked.

Economists say a stalemate makes it harder for Congress to extend the Social Security tax cut and unemployment benefits. On the other hand, if the supercommittee does forge a deal, it might include an extension of those benefits. Or it could at least clear the way for an extension later.

The Social Security tax cut gave most Americans an extra $1,000 to $2,000 this year. Unemployment benefits provide about $300 a week. Most of that money quickly and directly boosts consumer spending, which drives the economy.

By contrast, an expiration of those benefits could cut growth by about three-quarters of a percentage point, economists say. Throw in other cuts, like those passed in the August debt deal, and all told, federal budget policies could subtract 1.7 percentage points from growth in 2012, according to JPMorgan Chase and Moody's Analytics.

Given the tepid economy, such a hit could be damaging.

"It would be very difficult for an economy that's doing well to digest, let alone one that's barely growing at potential," said Ryan Sweet, an economist at Moody's. "That could unwind a lot of the improvement we've seen so far."

The economy grew at an annual rate of 2.5 percent in the July-September quarter. Some analysts fear it could fall below 2 percent next year, especially if the emergency unemployment benefits and Social Security tax cuts aren't renewed.

The U.S. economy faces other threats, too — from persistently high unemployment to Europe's spreading debt crisis, which could hasten a recession.

If the automatic spending cuts take effect, the defense budget could be cut by nearly $500 billion over nine years. Some contractors are nervous.

Wes Bush, CEO of Northrop Grumman, has told analysts that the company is bracing for spending cuts.

"It's certainly going to be a more challenging environment" next year, he said.

Another wild card: Some investors fear that the supercommittee's failure would spark fresh downgrades of U.S. debt. Standard & Poor's downgraded the government's long-term debt in August. That contributed to a stock market plunge. It's possible that a deadlocked supercommittee would lead the two other major rating agencies — Fitch and Moody's — to follow suit.

Yet S&P's downgrade did little to tarnish U.S. debt. Treasury prices rose, and yields fell. Bond investors still saw Treasurys as a super-safe investment. Federal borrowing costs actually declined.

"S&P showed that when a rating agency downgrades the best-known security in the world, it has little impact," Kelly said. The market for U.S. Treasurys is so broad, accessible and transparent that ratings downgrades don't pose much threat, he noted.

Kelly said Wall Street is unlikely to panic given that expectations for the supercommittee "are so low as to be subterranean."

Even so, some traders appear to be positioning for a shock. So-called "defensive" sectors of the stock market, like healthcare companies and utilities, which tend to retain their value in a weak economy, have been outpacing the S&P 500 index as a whole.

In the past month, the economy has shown surprising strength. Reports this week showed that manufacturers are producing more goods and consumers are spending more. The number of people seeking unemployment benefits for the first time is at a seven-month low.

Still, more than once since the recession officially ended more than two years ago, the economy has displayed vigor only to stumble again. High gas and food prices and Japan's earthquake sharply slowed growth in the first half of the year. Congress' debt-ceiling fight sent consumer confidence to recession levels.

Sweet thinks there's a good chance Congress will end up extending the Social Security tax cut. Partly on that assumption, Moody's foresees 2.6 percent growth next year. For this year, analysts generally estimate less than 2 percent growth.

Lawmakers could make other policy changes next year to energize the economy. The tax cuts enacted during the Bush administration, and extended in 2010, are set to expire after 2012. Republicans will push to renew them.

Some of the automatic cuts set to kick in in 2013 could be delayed or altered. That's particularly true if the White House or either chamber of Congress changes sides in 2012.

And some economists say the automatic spending cuts could actually boost confidence a bit: They would reassure the world that the U.S. government can make progress in shrinking its deficit.

Even so, the supercommittee seems likely to fall short of its goal to help reduce the federal debt load.

And there's more pressure to come.

Priya Misra, an analyst at Bank of America Merrill Lynch, estimates that Congress will need to find $2 trillion more in cuts by August 2013 to prevent another credit downgrade.

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Convert your Arts and Crafts Hobby into a Business

Hobbies like arts and crafts offer a good business opportunity for those who really like spending their time creating artwork or unique craft items. With a little investment and some information on how to start an arts and crafts business, you will soon be ready to start selling your products successfully...

Each of us has a hobby, engaging in which gives us a feeling of satisfaction. Arts and crafts are a favorite hobby of many people, which also offers a lot to explore. This hobby can be and is often converted into a business that has low risk, low investment and can give a good amount of profit. Many experts recommend this idea to beginners and those looking for small business opportunities to increase their total monthly income. So, if you are starting an arts and crafts business, then here are some things to consider before you start it, and ways to work it out well.

Things to Consider Before Start-Up

If you have never been part of a business, the points given below will tell you how to start an arts and crafts business successfully.

* You need to plan the business well to avoid any situations where the investment cost is more than the profit earned, the order is delayed, or the customer is not satisfied.
* Start reading about the basics of small business management, to convert your arts and crafts hobby into a successful business.
* From the wide range of arts and crafts, you need to decide which type of products you will be selling.
* Make a list of easy crafts to make and sell and find out which items have the maximum demand among your target customers.
* In order to make your business score more among your competitors, try to have a set of products not sold by others.
* When you start planning when and how to start an arts and crafts business, you need to have a certain amount of money for the initial expenses, which mainly includes the cost of raw material.
* Open a separate bank account for your business. This will separate the entire cost and profit details from your personal account and let you know the exact numbers.

Starting Your Arts and Crafts Business

You can have the business setup right in your house or backyard. This is one of the advantages of turning your arts and crafts hobby into a business. When you start your business, the first step is letting people know about the same. Start with your friends and neighbors. Moreover, you can look for simple and low-cost ideas to advertise your business. This includes paper posters and small pamphlets. Photographs of ready artwork and craft items work best in this case. You can e-mail these to your friends, add them to your social networking profiles and post them on free classified advertisement websites.

Finding a market to buy the raw material is a very important part of this business. You need to browse through online websites, nearby stores and wholesale dealers to find good shops selling the basic material required for making arts and crafts at the cheapest rates.

Remember that you might not achieve sales that will level your investment cost, for a few months at least. Hence, you must expect 'no profit' for the first few months, until your business is set-up well, marketed properly, and gains popularity.

Dedicating enough time for your business is very essential, at least in the initial stage. Even if you are a working individual, make a time-table to distribute your tasks properly through the day, week and month, hence, avoiding any problems and meeting deadlines.

Taking Your Business to The Next Level

Once people are aware of your business and you have started getting enough orders to meet the production cost, it is time to take your business to the next level. Well, that is not as difficult as you might think! Promoting your products and increasing the variety of products you sell, is a good way to attract more consumers. You can contact shops which sell artwork and craft items and sell your products to them instead of finding direct customers.

You can also have an exhibition-cum-sale of your products, say once in 3 or 6 months. Put up your items for sale on online shopping websites to attract more customers with minimum efforts. Taking good photographs of your work is very essential for this step.

Well, there are no really any strict rules to be followed while turning your hobby into a business. All you need is planning, dedication towards your work, good communication skills, and ideas to grow your consumer base. Explore areas that are not common and give importance to each part and step while you set-up your arts and crafts business.
By Mamta Mule
Published: 11/16/2011

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Careers in Interior Design

Interior designing as a career option is a very interesting field for people with an artistic bent of mind. Their work ranges from selecting the color of the walls to deciding the furniture, furnishings, lighting fixtures, and artwork. To develop a design style, they need to work in close contact with the architects of the building space as well as the occupants. In case the building is under construction or renovation, designers can be called upon to decide the placement of windows, doors, keeping in mind accessibility for the handicapped. They may have to work with the plumbers and electricians, and even the building contractor to ascertain that the design meets safety standards. Depending upon their choice and style of work, interior designers can make a career by working in various sectors, as mentioned below.

Interior Designing Careers

Residential Interior Designing
Home designing is a very popular career option for interior designers. Interior designers can be involved in designing an entire home or apartment to designing individual aspects like living room, master bedroom, children's bedroom, or the kitchen. They must take into account the residents' style, personal choices and space available, not to mention the budget restrictions.

Home Staging
An upcoming aspect of designing, home staging involves redesigning your current house in such a way that it looks presentable to a potential buyer. Many people take the help of professional designers to upgrade their homes, so that it fetches a higher price.

Interior Designing in the Corporate Sector
This involves jobs related to designing offices, banks, and business places. The real skill lies in the fact that professionals must design the space in such a way that a room with a formal feel to it should not look too drab and stern, but on the other hand, make employees feel comfortable and increase their social interaction to make the office a better place to work in, while adhering to the principles of ergonomics. It can also involve having a thorough knowledge of telecommunications and electronic appliances, since these two elements play a very important role while designing the office space.

Interior Designing in the Hospitality Sector
These professionals design the interiors of hotels, restaurants, cafés, convention centers, banquet halls, health clubs, etc. This field has a huge scope for creativity since it caters to a comparatively bigger audience. A lot of factors need to be carefully looked into, the most important being esthetics, comfort, and functionality, all within the budgetary limitations. It can involve purchasing furniture and decorative items on a big scale.

Interior Designing in the Healthcare Sector
This involves designing hospitals, nursing centers, doctors' offices, assisted living centers, and a host of other healthcare facilities. The interior designer must hold a specialization and possess excellent knowledge of the healthcare industry. Designing a hospital is by no means a small task. Inpatient facilities, outpatient departments, surgery rooms, clinical laboratories, housekeeping services, all these and much more go into making a hospital. Designing a hospital also involves taking into consideration factors like state-of-the-art medical equipment, telecommunications, and a complex system of electrical and electronic networks. The designer must work to make the best use of space available, leaving nothing redundant, while ensuring all facilities are easily accessible by patients, doctors, and hospital staff.

Interior Designing in the Retail Sector
Professionals specialized in this field have to design commercial spaces, shopping malls, arcades, art galleries, exhibition centers, etc. As with the healthcare and hospitality sectors, this is another field where designers can make full use of their creativity and imagination. Expert knowledge of the building's infrastructure is, without doubt, a must before designing and planning the interiors.

Other than these, interior designers may have to design school and educational facilities as well. Specialization can also include designing in the performing arts sector, like theaters, concert halls, and sets for television and movies. Other popular and upcoming niches are Green Interior Designing and Feng Shui Interior Designing. As the name suggests, green implies designing interiors in an environmentally-friendly and energy-efficient way, and feng shui means, designing a space using feng shui principles and components to create harmony and balance between its elements. There are also In-store Interior Designers that work in furniture, home decor and garden stores, selling design ideas and merchandise through catalogs, but never actually visiting a customer's home.

Educational Requirements for Interior Designing

* There are special programs accredited by the Council for Interior Design Accreditation, and students enrolling in these can get a bachelor's or master's degree.
* The National Council for Interior Design Qualifications conducts exams for potential students who can then receive the NCIDQ certificate, which states that the person is knowledgeable about those elements of interior designing that may affect the life, health, safety, and welfare of the public. To qualify for the examination, candidates must complete an interior designing course and gain supervised work experience.
* The National Association of Schools of Art and Design has college-level courses for students wishing to take up interior designing as a career option.
* Students can take up courses which teach subjects like space planning, lighting design, graphic designing, industrial and product design, photography, visual communications, CAD (computer-aided design), applied design, industrial arts, color schemes, safety laws, etc., as per their choice and intended field of specialization.

Interior designers can run their own design firms, work freelance, or work as an employee with a design firm. An innate talent to design, an eye for detail, and superb communication skills are a must for becoming an interior designer. An individual who runs his own firm should also possess basic business skills like financing, making decisions, management, and networking, especially if he has a team of junior designers working for him. Whatever type of space he is working on, whether it's commercial or residential, an interior designer must combine all his artistic and architectural capabilities to come up with the most innovative design ideas, within the allocated budget and also keep the client happy. Though it is a lot of hard work, interior designing is a job that can give you immense satisfaction at the end of the day.
By Sailee Kale

from:
http://www.buzzle.com/articles/careers-in-interior-design.html