I’ve taken the liberty of composing a picture that addresses the implausible notion that the Federal government’s budget deficits are the result of “ungoverned forces”. The graph below shows the on-budget federal budget balance – that is, the budget balance excluding the Social Security Trust Fund surplus – and the ways in which various deliberate […]
While Mark Thoma has a few words about the partisan garbage Karl Rove delivered to the American Enterprise Institute, let me start here: The economy itself began slowing in the third quarter of 2000 as GDP declined by an annual rate of 0.5 percent. And all of this took place before George W. Bush set […]
The latest op-ed from David Brooks is entitled From Freedom to Authority and includes this spin: In the 1970’s and 80’s, conservatives felt the primary threat was the overweening nanny state. Ronald Reagan tried to loosen the structures that restricted individual initiative and led to national sclerosis. He and Margaret Thatcher deregulated, privatized, cut tax […]
Last Thursday, we suggested that Greg Kaza more carefully read the paper by Greg Mankiw and Matthew Weinzierl that Kaza used as evidence for supply-side economics. We are happy to report that Brad DeLong has read this paper and notes: The abstract is misleading. It should read, “The feedback is surprisingly large: in the long […]
Reading the news this morning I feel like we’re reliving the Carter years. The drop in consumer sentiment reported today by the University of Michigan, as well as Bush’s dismal approval ratings, both seem like echoes from the late 1970s. From Marketwatch: Consumer sentiment plunges to 7-month low WASHINGTON (MarketWatch) – U.S. consumers’ attitudes about […]
Greg Kaza is elated that the politicians will start (ab)using dynamic scoring: Dynamic scoring, however, attempts to measure the feedback-effects ignored in these models – those feedback-effects potentially becoming excellent ammunition for supply-side policymakers and tax-cut advocates. There’s no doubt that dynamic scoring is today being taken seriously within the budgeting community … More importantly, […]
The FOMC (the interest rate-setting committee at the Fed) raised the Federal Funds rate to 5.0% today. Here’s the important bit of the accompanying statement: Economic growth has been quite strong so far this year. The Committee sees growth as likely to moderate to a more sustainable pace, partly reflecting a gradual cooling of the […]
The Employment Situation Summary for April 2006 reports that employment per the payroll survey rose by 138,000. The household survey shows an increase of only 47,000. I wish I had better new for this Cinco de Mayo. I also want to know what the heck CNN means by this: But the report had one reading […]
Via Mark Thoma comes a debate between David Frum and Bruce Bartlett as to the prospects of achieving fiscal responsibility through cuts in government spending. The short answer is that we cannot. Let’s have Mr. Frum up first: In the 1990s, the newly elected Republican congressional majority enjoyed what we can now see was the […]
As a supplement to the GDP report, the Bureau of Economic Analysis provides an estimate of aggregate mortgage interest and the effective rate of interest on mortgage debt outstanding. It should come as no surprise that the effective interest rate is increasing. Click on graph for larger image. After twenty years of declining rates, the […]