The Angry Bear

I will ease the pain from this early morning (when GOP senate slashed corporate taxes) by escaping into fantasy, I mean theory, but I repeat myself. A key theoretical argument about taxing profits (due to Diamond and Mirrlees I think) is that the tax can be very very high if firms maximize profits, because maximizing 0.5X is just the same problem as maximizing X. This is a tax on pure profits (profits minus capital times the cost of capital) . The...

Is Bitcoin A Speculative Bubble?  There are at least two definitions of a speculative bubble.  The first, and most widely accepted, is that it involves a price of an asset that rises substantially above its fundamental and then falls back towards that fundamental.  The other, not necessarily all that clearly distinguishable from the former, involves an asset price that rises due to people buying due to an expectation that they will get a capital gain from...

by Hale Stewart (originally published at Bonddad blog) Where’s Waldo, er, I Mean Inflation? Just a quick note: according to the 3, 6 and 12 month moving average of Y/Y percentage change in total and core PCE price indexes, there is little to no inflation to worry about.

(Dan here…reposted from an earlier analysis,) by Linda Beale Treasury Secretary Mnuchin’s Forked Tongue on Tax Cuts for the Wealthy Shortly before the inauguration, Steve Mnuchin discussed the incoming administration’s tax plans and announced the Mnuchin Rule–that “[a]ny reductions we have in upper-income taxes will be offset by less deductions so that there will be no absolute tax cut for the upper class.”   EXCLUSIVE: Steve Mnuchin says there will be...

Bruce Bartlett: “Prediction–EVERY Republican senator will whore himself or herself to pass this tax monstrosity. They should all go to Hell.” Bruce Bartlett: “Prediction–Democrats will stay home on Election Day 2018 because that’s what they always do best(last word is mine)” Predictions

AARP notes a planned reduction in Medicare funding.  I have not hear much from them as in times past. If you read through the umpteen pages of the Senate tax bill, you won’t find a clause that says it dramatically cuts Medicare spending. But the effect of the legislation being debated this week would be to slash up to $25 billion from the health program in 2018 and possibly more in the future. That’s because the tax measure would prompt the...

Brian Down from Focus Economics was looking for a response on cryptocurrencies…could make an interesting thread! I’m emailing you today because I am putting together a piece on cryptocurrencies and it would be great to get a comment from you on the subject. While some believe that cryptocurrencies are the future, the prevailing view appears to be that cryptos are nothing more than the 21st century version of Tulip Mania. Despite this prevailing view,...

Must read A modest proposal: time to rethink the impact of US tax reform Jason Furman &Lawrence Summers

Propublica has a story on waste in the medical industry: Experts estimate the U.S. health care system wastes $765 billion annually — about a quarter of all the money that’s spent. Of that, an estimated $210 billion goes to unnecessary or needlessly expensive care, according to a 2012 report by the National Academy of Medicine Having visited doctors in the past decade or two a few times, I can believe the 25% figure.  The billing structure alone creates...