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Fiscal Policy
A Category Archive (66 entries)
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November 8, 2008
Fiscal Policy
Arnold Kling
Tyler Cowen writes, If our next president seems flip or overconfident, observers will be skeptical above all else. Tyler mostly talks about idea traps, a notion that I think of as Bryan's. Let me make some remarks that are sufficiently... MORE
Fiscal Policy
Arnold Kling
President-elect Obama held a press conference yesterday. He said, in part, The auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce our dependence on foreign oil. I would like to see the... MORE
November 5, 2008
Fiscal Policy
Arnold Kling
Sovereign debt crises happen suddenly. One day, a country is paying normal interest rates and has full control over its fiscal and monetary policy. Then, investors lose confidence. Within days, the country has collapsed, and within weeks the savings of... MORE
Finance: stocks, options, etc.
Arnold Kling
A banana republic is a country where government obligations swamp total wealth. In a typical banana republic, wealthy individuals race to move their savings overseas to safe havens. Those who fail to do so will suffer from taxation, inflation, and... MORE
November 1, 2008
Fiscal Policy
David Henderson
One factor in the poor reporting of economics is the innumeracy of many reporters. Most people have trouble getting big numbers straight--distinguishing millions from billions, for example. Unfortunately, so do many reporters, even those who report economic news. Today's New... MORE
October 29, 2008
Fiscal Policy
Arnold Kling
John Baden writes, there is diminishing support for institutions that generate wealth rather than redistribute it...both positive and negative values increasingly converge and agglutinate. This promotes substantial class differences. If one is blessed with responsible parents, intelligence, favorable genetics, health,... MORE
October 28, 2008
Fiscal Policy
David Henderson
Forbes.com published an article by me today comparing some of the economic policies of McCain and Obama. Note my criticism of both of them for voting to move toward central government planning of financial markets.... MORE
July 3, 2008
Fiscal Policy
Arnold Kling
From the Congressional Budget Office: How would the economy be affected if the projected rise in primary spending under CBO’s alternative fiscal scenario (from about 18 percent of GDP in 2007 to about 35 percent in 2082) was financed entirely... MORE
June 20, 2008
Fiscal Policy
Bryan Caplan
Despite some skeptical colleagues (not mentioning any names, Alex!), I've never doubted the wisdom of "starving the beast" - opportunistically cutting taxes whenever possible in order to reduce spending eventually. Now Mankiw presents some new evidence in favor of the... MORE
May 29, 2008
Fiscal Policy
Arnold Kling
From a web site put together by Congressman Paul Ryan, It is a real plan, with real proposals, real numbers to back them, and real legislation to implement it. Based on the analysis of government actuaries, this plan is projected... MORE
May 22, 2008
Fiscal Policy
Arnold Kling
USA Today reports, Taxpayers are on the hook for a record $57.3 trillion in federal liabilities to cover the lifetime benefits of everyone eligible for Medicare, Social Security and other government programs, a USA TODAY analysis found. That's nearly $500,000... MORE
May 21, 2008
Economics of Health Care
Arnold Kling
Congressman Paul Ryan is the first politician I have seen with a plan that makes Medicare sustainable. The bill secures the existing Medicare program for those over 55 - so Americans can receive the benefits they planned for throughout most... MORE
May 19, 2008
Fiscal Policy
Arnold Kling
Peter Orszag writes, tax rates would have to be raised by substantial amounts to finance the level of spending projected for 2082 under CBO’s alternative fiscal scenario. Before any economic feedbacks are taken into account, and assuming that raising marginal... MORE
February 15, 2008
Fiscal Policy
Arnold Kling
Megan McArdle notices a story that Virginia has a voluntary taxation program with little uptake. She writes, This is what economists call "revealed preference". What most of us are really in favor of is higher taxes on other people. If... MORE
October 1, 2007
Fiscal Policy
Arnold Kling
According to the Washington Post (editorial page), this is future President Hillary Clinton on Social Security: "I'm not putting anything on the proverbial table until we move toward fiscal responsibility," she said during Wednesday's debate I really have not been... MORE
July 15, 2007
Fiscal Policy
Arnold Kling
An Editorial in the Washington Post tells the story. Gov. Martin O'Malley (D) has begun chipping away at the problem, starting with the outlays. Predictably, he is under attack -- from liberals and unions who say the cuts are pitiless... MORE
February 24, 2007
Fiscal Policy
Bryan Caplan
Don Boudreaux's latest observations on "spending addiction" remind me of a line from Phil Gramm that I annually present to my IO class: [I]n the darkest hour of the health care debate, when it looked like Bill Clinton was about... MORE
December 25, 2006
Fiscal Policy
Bryan Caplan
Krugman no longer seems very worried about the deficit, but why? Inquiring minds want to know...... MORE
September 18, 2006
Fiscal Policy
Arnold Kling
According to the General Accounting Office, the category “all other spending” includes much of what many think of as “government”—“discretionary” spending on such activities as national defense, homeland security, veterans health benefits, our national parks, highways and mass transit, foreign... MORE
July 26, 2006
Fiscal Policy
Arnold Kling
Robert Carroll and Greg Mankiw discuss the Treasury department's analysis of the long-run (supply-side) effects of the Bush tax cuts. The Treasury's main analysis assumes that lower tax revenue will over time be accompanied by reduced spending on government consumption.... MORE
July 15, 2006
Fiscal Policy
Arnold Kling
Laurence J. Kotlikoff writes, the U.S. government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments... MORE
June 13, 2006
Fiscal Policy
Arnold Kling
Jeff Miron proposes spending cuts, The grand total from this list is $300 billion annually, roughly the deficit projected for 2006. Normal economic growth would therefore mean surpluses in the near future, should these cuts occur. To deal fully with... MORE
April 17, 2006
Fiscal Policy
Arnold Kling
Greg Mankiw writes, Economist Glenn Hubbard...reminds us that unless we see significant entitlement reform, taxes are heading higher... There is nothing very new here, but it is good to have Glenn saying it anyway. The history here is that Democrats... MORE
November 11, 2005
Fiscal Policy
Arnold Kling
Steve ("the skeptical optimist") Conover writes The two trend lines, receipts and outlays, confirm what I thought I had seen two months ago. Federal tax receipts are growing much faster than federal spending outlays: 15.2% versus 8.5%, respectively. As a... MORE
October 25, 2005
Fiscal Policy
Arnold Kling
From my latest essay: The two viewpoints might be summarized as follows: --Conservatives: Cutting taxes will help reduce the size of government. --Liberals: Big government is not really so bad. In the face of overwhelming evidence over the past five... MORE
October 22, 2005
Fiscal Policy
Arnold Kling
I attended an economics conference held in honor of Bernard Saffran, the Swarthmore economics professor who died last November. I took away observations in three categories: 1. current research: although Steve Levitt was not there, his style of economics permeated... MORE
September 28, 2005
Fiscal Policy
Arnold Kling
Why does National Review Online embarrass itself with this sort of economic commentary? Budget deficits are only too large if they usurp the private economy’s need for physical capital and labor, thereby precipitating an inflationary surge. So, as long as... MORE
September 25, 2005
Fiscal Policy
Arnold Kling
I'll bet Ken at ChicagoBoyz had fun putting this together: As one who thinks that taxes are plenty high enough, on the rich as well as on everyone else, and that budgetary problems should be solved by budget cutting, it's... MORE
September 14, 2005
Fiscal Policy
Arnold Kling
From the Washington Times: House Majority Leader Tom DeLay said yesterday that Republicans have done so well in cutting spending that he declared an "ongoing victory," and said there is simply no fat left to cut in the federal budget.... MORE
June 6, 2005
Fiscal Policy
Bryan Caplan
Americans have severe misconceptions about what the welfare state does. They believe that it cares for the poor. But in fact, it primarily cares for the old. I shared this misconception before I studied economics. My undergraduates have it before... MORE
March 16, 2005
Fiscal Policy
Arnold Kling
In the latest WSJ blogger celebrity death match, Max Sawicki says Social Security and Medicare spending will increase faster than GDP, requiring increases in taxes, and there is not a damn thing anyone can do about it Tyler Cowen responds,... MORE
February 9, 2005
Fiscal Policy
Arnold Kling
David Corn writes, What I wonder about is the absence of conservative outrage over Bush's budget numbers. Alex Tabarrok wrote, My prediction is that it will be easier to add $540 billion in Medicare spending than it will be to... MORE
November 10, 2004
Fiscal Policy
Arnold Kling
Laurence J. Kotlikoff proposes to replace the payroll tax with a sales tax. replacing the payroll tax with a sales tax is the same as (a) eliminating the payroll tax ceiling, (b) taxing wealth at the payroll tax rate, and... MORE
October 27, 2004
Fiscal Policy
Arnold Kling
The second issue of The Economist's Voice has appeared, and it looks more interesting than the first. Several articles discuss fiscal policy. William G. Gale and Peter R. Orszag write, Looking beyond the next decade, the budget outlook grows steadily... MORE
August 25, 2004
Fiscal Policy
Arnold Kling
How does John Kerry reconcile his spending and tax proposals with his promise to balance the Budget? The Washington Post reports, Kerry says he would offset the cost of those programs with cuts in federal contracting, some agriculture subsidies and... MORE
August 16, 2004
Growth: Causal Factors
Arnold Kling
Whoever is writing the lead editorials for the Washington Post (I suspect Sebastian Mallaby) on economic policy issues in this year's election is providing pieces that are highly educational. Today's editorial is called The Growth Mystery. we don't know how... MORE
June 9, 2004
Supply-side Economics
Arnold Kling
I decided to put my thoughts into a longer essay. When Ronald Reagan defeated Carter's re-election bid, "incomes policies" were a proven failure. Notwithstanding Milton Friedman's comments quoted above, by 1980 it took a lot less courage to stand by... MORE
June 7, 2004
Supply-side Economics
Arnold Kling
Jane Galt writes, High inflation was the result of a dozen years of bad fiscal and monetary policy under two Republicans -- Nixon and Ford -- and two Democrats -- Johnson and Carter -- that was brought under control only... MORE
May 21, 2004
Fiscal Policy
Arnold Kling
Jeff Frankel speaks for the prosecution. they will do anything for a few votes, even if their behavior is against the national economic and security interests and blatantly inconsistent with things they claim to stand for: small government, free trade,... MORE
April 19, 2004
Fiscal Policy
Arnold Kling
In his New York Times column last week, Jeffrey Madrick referred to the work of Peter Lindert on the ability of countries to grow in spite of welfare state distortions. Lindert's argument can be found in Why the Welfare State... MORE
March 25, 2004
Fiscal Policy
Arnold Kling
Wayne Angell argues that the Clinton Administration paid down the Federal debt too quickly. The recent peak in federal debt as a percentage of GDP averaging 49% from 1993 to 1996, compared with the all-time peak in 1946 of 109%,... MORE
March 11, 2004
Fiscal Policy
Arnold Kling
In the essay I referred to in my previous post, I also write A President who has only added to future entitlement obligations ought to be judged as having acted to increase taxes. To call this Administration a tax cutter... MORE
March 7, 2004
Fiscal Policy
Arnold Kling
Noam Scheiber argues that the Bush tax cuts in fact were stimulative. Liberals in Congress and at places like the Economic Policy Institute complain that the Bushies should have targeted the bulk of their tax cuts toward the working poor... MORE
February 27, 2004
Fiscal Policy
Arnold Kling
Niall Ferguson and Laurence Kotlikoff paint a dire picture of the fiscal outlook in the U.S. Much of the material is a recital of the prospects for Social Security and Medicare, with which readers of this blog are familiar. One... MORE
February 13, 2004
Fiscal Policy
Arnold Kling
Jeff Faux and Brad DeLong revisit fiscal history. In particular, they ask whether Democratic President Clinton sold his soul for deficit reduction. Faux writes, Hopes that the peace dividend from the end of the Cold War would finance major new... MORE
February 9, 2004
Fiscal Policy
Arnold Kling
The 2004 Economic Report of the President contains a chapter on tax incidence. the person who is legally responsible for paying the tax may not be the one who actually bears the burden of the tax...the incidence of a tax... MORE
January 17, 2004
Finance: stocks, options, etc.
Arnold Kling
Brad DeLong wonders why the bond market isn't punishing the Bush Administration harder for its fiscal sins. He lists a number of possible explanations, including 1. The people who matter in financial markets are expecting either (a) that there will... MORE
January 8, 2004
Fiscal Policy
Arnold Kling
Robert E. Rubin, Peter R. Orszag, and Allen Sinai make a case that our Budget deficits are not sustainable. If one includes the cost of the recently enacted prescription drug benefit, assumes that discretionary spending keeps pace with inflation and... MORE
November 18, 2003
International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
I argue that our trade deficit is really a savings deficit. Increasing exports relative to imports is not a matter of beating up on China to live up to its commitments in the World Trade Organization. It is not a... MORE
September 25, 2003
Energy, Environment, Resources
Arnold Kling
As a dean at Berkeley, Hal Varian has a personal interest in California. In his column today, he offers some plain-spoken economics lessons. Most California voters think the electricity crisis contributed to the state budget deficit. If only things were... MORE
September 13, 2003
Social Security
Arnold Kling
The Congressional Budget Office provides an analysis of the long-term Budget outlook. The projections also assume for analytical purposes that aggregate federal revenues will level out at 19 percent of GDP in 2020, reflecting the higher end of the range... MORE
September 7, 2003
Growth: Causal Factors
Arnold Kling
On one of the comment threads, a reader asked me if I disagreed with the economics of Lawrence Kudlow. "Honestly, I never thought he had any to disagree with," was how I began my reply. Let me revise and extend... MORE
August 29, 2003
Fiscal Policy
Arnold Kling
The Washington Post lead editorial for August 29 adjusts the baseline budget forecast for several factors. The largest is discretionary spending, which they argue will grow at the rate of the economy rather than at the rate of inflation. The... MORE
August 27, 2003
Macroeconomics
Arnold Kling
This group of economists with strong Democratic Party ties says that we needed fiscal policy that provided more stimulus in the short run and a lower deficit in the long run. Robert Solow says, There are three characteristics you want... MORE
August 25, 2003
Macroeconomics
Arnold Kling
Cato's Jim Powell makes the case against the New Deal. Among the material Powell cites: Richard K. Vedder and Lowell E. Gallaway, in their 1997 study Out of Work, estimated that by 1940 unemployment was eight points higher than it... MORE
June 4, 2003
Fiscal Policy
Arnold Kling
Recently, Kevin Drum issued this challenge to those who claim to prefer lower government spending. Let's hear what you want to cut. And remember, for bonus points you have to include some programs that you yourself benefit from. I was... MORE
June 2, 2003
Fiscal Policy
Arnold Kling
In this essay, I argue that the importance attached to the President or the Fed Chairman in determining economic outcomes may be an instance of what psychologists call the fundamental attribution error. During the Clinton administration, the projected Budget surplus... MORE
May 16, 2003
Fiscal Policy
Arnold Kling
Jacob Levy criticizes the Senate's proposed temporary tax cut on dividends. The arguments in favor of repealing the dividend tax have to do with removing distortions from the capital markets and from the incentives faced by corporations, and with improving... MORE
May 6, 2003
Macroeconomics
Arnold Kling
In Would Keynes Change His Mind?, I suggest that some key elasticities in the economy have changed since Keynes wrote. Today, the economy is more elastic than it was in the 1930's. Today's recession is a far cry from the... MORE
May 5, 2003
Fiscal Policy
Arnold Kling
A proposal from former Labor Secretary Robert Reich: The best and the fastest way to get more money into the pockets of people who are likely to spend it quickly is to cut the taxes of average working people. Most... MORE
April 30, 2003
Fiscal Policy
Arnold Kling
On the subject of job-creation arithmetic, Paul Zrimsek writes, It's a pity that the great divide-by-ten controversy has diverted everyone's attention from what ought to be the main point: that the comparison Krugman drew between tax losses to the government... MORE
April 29, 2003
Fiscal Policy
Arnold Kling
Jonathan Rauch has a nice summary of the issues in the Budget debate. The economists note that if tax cuts are paid for through higher deficits instead of lower spending, the government borrows back from the economy the capital that... MORE
Productivity, Baumol's cost disease
Arnold Kling
Sometimes, an economist argues against conventional wisdom, as in this essay, where I question the view that the government needs to increase its spending on education. If we combine the limited extent to which education is a public good with... MORE
April 28, 2003
Fiscal Policy
Arnold Kling
On his web site, Paul Krugman has posted the textbook macroeconomics of fiscal policy for stimulating employment. In a related post, Krugman explains how this basic macroeconomic model explains what some people (like me, for instance) found puzzling about a... MORE
April 22, 2003
Fiscal Policy
Arnold Kling
Paul Krugman writes, The average American worker earns only about $40,000 per year; why does the administration, even on its own estimates, need to offer $500,000 in tax cuts for each job created? Krugman's arithmetic is to take the ten-year... MORE
March 27, 2003
Fiscal Policy
Arnold Kling
We are starting to see articles on the economics of the Iraq war. Some are described in this article by Virginia Postrel and others are described in this post by 'Jane Galt.' Postrel correctly points out that old-fashioned Keynesian theory... MORE
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