iStockphotoCBO Deficit Forecast Breathes New Life into Deficit Debate
Did you notice how the U.S. economy was suddenly thrown into recession this year when tax increases and spending cuts took effect? If you didn’t, that’s no surprise because the economy actually accelerated to 2.5% growth in the first quarter of 2013 from just 0.6% growth in the fourth quarter of 2012. Preliminary estimates for growth in the second quarter suggest that growth will remain close to 2%, about the same trend rate achieved since the recovery began in 2009. Read more...
Brand X PicturesPrinciples For Regulatory Rationality
Each new exposé on bad behavior by some business produces a rash of new enforcement procedures against all, including those entities that operate with the highest standards. For every aspiring entrepreneur hoping to capture an opportunity in a regulated trade the enforcement procedures can translate into another obstacle. As time goes on new regulation often ceases to serve its original purpose and suffocates citizens and law-abiding businesses without producing the intended benefits.
iStockphotoGovernment Spending Enthusiasts’ Three Sleights of Hand
Those who believe more government spending is the antidote to the current economic malaise generally rely on one or more assumptions to defend their nonsensical position: (1) the future costs of servicing debt issued to finance larger deficits don’t matter or are trivially small; (2) the central bank can control future interest rates, so we need not worry about a spike in future borrowing costs; and (3) the only channel through which government borrowing can negatively impact economic activity is through higher interest rates at full employment. Let us take each in turn.
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iStockphotoThe Role Of Leaders in Improving Bureaucratic Efficiency
Dramatic improvements in service delivery within a bureaucratic monopoly simply will not occur without serious and intentional leadership. The leadership that produces more effective government combines a broad array of management tools with the political and communications skill of the elected leader. It requires both a motivating articulation of a goal and the deft use of symbolism. Read more...
iStockphotoThe Hysteric Response to the Reinhart-Rogoff Row
Last week, careful research by UMass-Amherst professors found that the seminal paper by Ken Rogoff and Carmen Reinhart contained a data error that biased their conclusion that debt-to-GDP ratios in excess of 90% lead to dramatically slower economic growth. The 90% of GDP figure was arbitrary with no theoretical basis. As a result, it’s not terribly surprising to find that its significance was oversold. Yet, the basic content Read more...
iStockphotoHow Government Can Effectively Produce Better, Faster Cheaper Results
Regardless of tax and spending levels, government as currently organized is too cumbersome to be effective. And though it might sound like a bad joke, government could in fact be better, faster and cheaper. The assumptions of the last 100 years of progressive governance and the production model on which they are based no longer apply. Today’s technological advancements can power a digital government revolution and offer the opportunity for truly transformative changes. Read more...
The Obama Budget’s Long-Run Savings Delusion
Among the spurious contentions made by President Obama’s FY 2014 Budget submission, none is bigger that the claim that enactment of its policy proposals in full would completely erase the long-run U.S. budget imbalance and pay-off the U.S. Read more...
iStockphotoIs it Fannie and Freddie’s Turn to Bailout the U.S. Treasury?
As e21 first pointed out last October, Fannie Mae and Freddie Mac are extremely profitable. The cash flow relationship between the government-sponsored enterprises (GSEs) and the Federal Government has now reversed: instead of receiving bailout funds from the Treasury in the form of senior preferred stock purchases, the GSEs now send billions of dollars in dividend payments to Treasury to fund unrelated government spending. Read more...
e21 StaffThe Rationale for the 'Flimflam' Offensive Against Chairman Ryan
There is nothing more frustrating to progressive commentators than seeing Chairman Paul Ryan’s 2014 Budget Proposalafforded the respect it is due by nonpartisan observers. That’s why New York Times columnist Paul Krugman has worked feverishly for the past several years to discredit Chairman Ryan and his budget. Read more...
Understanding the Ryan and Murray Budgets
Last week House Republicans, under the leadership of Budget Committee Chairman Paul Ryan, unveiled their draft budget for the coming fiscal year. Senate Budget Committee Democrats also released their budget blueprint assembled by Chairman Patty Murray. Read more...
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