Robert Samuelson explains what the experts are thinking about the ability of the American economy to generate jobs in the next four years. I am, at best, a political economist with a couple predictions. First, there are already more than 3 million American jobs available and no qualified American applicants. We are most likely in a new economy, as yet undefined, which is more dependent on educating a new workforce and building new trust in … Continue reading »
President Obama is disadvantaged in seeking re-election next year by the public concern for the U.S. economy and our pessimism about the future of national leaders to have figured out what to do about it.
83% of us are worried about the future of the country. Only 21% of us believe our children will be better off 20 years from now and 57% believe they’ll be worse off. Obama is betting these people don’t see policies working that appear … Continue reading »
The ACA’s Individual Health Insurance Mandate . . . The national government has constitutional authority over national security and, over 220 years of expanding from 1 million to 306 million Americans, authority to provide for the economic security of citizens. You may not like the Social Security program, or Unemployment Comp, or Workers Comp, or Medicare, or Medicaid, or tax-free employer-paid health insurance policy.
But the U.S. Supreme Court (and Mitt Romney) says it’s constitutional economic security … Continue reading »
At long last the nation is taking seriously the consequences of government spending decisions. Especially the so-called “entitlement” spending on programs like Social Security and Medicare and the exemptions from income taxed by the national and state governments. The Minnesota Journal of the Citizens Leagueinforms us that Minnesota government spent $57.9 billion in the 2010-11 biennium’s. 58 percent of that was appropriations for specific public purposes like education, healthcare, transportation and public safety. 42 percent, or $24.3 billion, was tax spending … Continue reading »
What to Make of the “Week From Hell”
We were enjoying life at the foothills of the Teton Mountains of Wyoming while the stock market reacted to S&P’s reaction to our national political leader’s reaction to the Tea Party demands we lower federal spending in exchange for increasing our borrowing. Or maybe it reacted to the decision to delegate the future of federal spending/taxing policy to 12 members of the Congress.
In any event, no one in … Continue reading »
If that happens, then America’s politicians will bear much of the blame (see article). Their prescription for a weak economy is a large slug of austerity. Thanks to the expiry of a payroll-tax credit and extended jobless benefits in December, the United States is on course for a fiscal contraction of some 2% of GDP next year, the biggest of any large economy—and enough to drag a weak economy into recession.
The debt deal, which implies … Continue reading »
J.P. Morgan Chase CEO Jamie Dimon has challenged Federal Reserve chair Ben Bernanke to a duel. Dimon asserts that the Fed’s support of government’s “over zealous bank regulation” is preventing an economic recovery, from a near disastrous recession caused by financial industry lending practices. Or so former Goldman Sachs CEO Hank Paulson claims in his 2008 capacity as Secretary of the Treasury. So did Paulson’s then boss, President George W. Bush. As they pushed a couple big … Continue reading »
State and local governments are required to balance their spending and taxing budgets each year. But there are few/no limits on debt financing. Normally bonded debt is for infrastructure investments which pass the costs of re-payment to those who will benefit. Over time, state and local governments have a tendency to redefine deficit appending. They redefine future investment to include current spending. The national government goes into debt for everything. Pre-funded entitlement programs, education, public … Continue reading »
My suggestion: Most Americans are aware that something has happened in this country as a result of the near collapse of our economy in 2008. I choose to call it the end of the Old Economy of “nothing down, forever to pay, and unrealistic expectations that someone else will.” Assuming that’s what happened, then what’s the New Economy look like? There is nothing in the rich/poor chasm or in jobs-jobs-jobs or in cutting spending and taxes that informs our decisions. None … Continue reading »
Congress will find a way to raise the statutory limit of $14.2 trillion on the national government’s borrowing, just as it found a way to avoid shutting down the government over FY 2011 spending: By “cutting spending” without tackling the cost drivers (wars, the economy, entitlements and the tax code) that drive it.
Conservative legislators come to Washington to change the role of government by forcing “it” to “live within its means” as though “it” is the … Continue reading »