Tag Archives: Featured Stories

Why “Entitlement” Cuts and Not Tax Increases Again? John Cochrane has to remind us that he co-authored a really bizarre oped: Unless Congress acts to reduce federal budget deficits, the outstanding public debt will reach $20 trillion a scant five years from now, up from its current level of $15 trillion. That amounts to almost a quarter of million dollars for a family of four, more than twice the median household wealth. This string of perpetually rising...

This Is Tax Simplification? I happen to support tax simplification that does not increase regressivity of the tax system, and I recognize that there are a few parts of the Trump tax change that do that.  But mostly it massively increases regressivity, along with massively increasing the budget deficit at a time when we are not too far from full employment.  As it is, however, the new tax law turns out to be riddled with all kinds of ridiculous...

 I pour some cold water on 2018 midterm overoptimism In the wake of Conor Lamb’s election victory in Pennsylvania last Tuesday night, some Democratic partisans are suggesting that every GOP-held seat from a district that is less than trump +20% is in play. Hold your horses. The results of last June’s special election in Georgia, in which GOPer Karen Handel defeated Democrat Jon Ossoff show that there is a roadmap to the GOP minimizing their losses in...

The Grand Illusion 2.0 Introductory note: this is a very long epistle. But I think my point needs to be made fully and at length. Before you go further, in fairness here is the TL:DR version: Advocates of free trade and globalization were taken aback a week ago by the assumption by China’s President Xi Jinping of rule for life. This was because it runs completely contrary to their theory that free trade leads to economic liberalization, which in turn...

by Steve Roth    (via Asymptosis) Wealth and the National Accounts: Response to Matthew Klein I’m both abashed and delighted that the truly stand-out econ writer Matthew Klein has offered wonderfully fulsome praise of one of my pieces, Why Economists Don’t Know How to Think about Wealth, and some very interesting discussion as well. Some responses here. Please excuse me if I repeat some of the points from the first article. >His key point is that...

Kudlow Menzie Chinn notes: Mr. Kudlow is apparently on the short list for new National Economic Committee chair. Maybe a good time to review some of his macro predictions. Yours truly goes back memory lane: But let’s turn back the clock to the first term of the Bush43 Administration when Kudlow writing for the National Review was all in defending Bush’s fiscal stimulus and arguing at several points how the labor market was booming even when it was not....

No, Matt Yglesias, Trump is *not* “probably gonna be re-elected” While I generally agree with the political and social observations of Matt Yglesias and Ezra Klein, their takes that involve the economy frequently drive me crazy. So it was this morning when I encountered these two tweets from Yglesias: This is just incredibly shallow analysis and, well, wrong! Presidential and midterm elections are completely different beasts. Midterms are decided...

Why I’m worried about the decline in real wages This is a follow-up to my post yesterday concerning the decline in real average and aggregate wages. Why should the data from just one month cause me to warn that “This is Bad?” To show you, let’s decompose the data into CPI and nominal aggregate wages, shown in the below two graphs, the first of which covers the inflationary era of the 1960s and 1970s, and the second covers the disinflationary era since:...

Baumol Cost Disease and Relative Prices – Part 2 Many thanks to the Angrybear for reposting this as well as some excellent comments (save that absurd contention I’m a Luddite). If you check the comments over at Mark Perry’s place you will see that Paul Wynn made the same point I made and even linked to Timothy Lee: This became known as Baumol’s cost disease, and Baumol realized that it had implications far beyond the arts. It implies that in a world of...

National Health Spending at $3.5 Trillion in 2017, CMS Says: CMS is reporting healthcare spending was $3.5 trillion in 2017. National healthcare spending grew by 4.6%, up 3 tenths of 1% from 2016. The increase was blamed on increased spending for Medicare and higher premiums for healthcare insurance. The increase in healthcare premiums can be partially attributed to Republicans blocking the Risk Corridor – Reissuances Programs which eliminated competition...