“My fellow Americans, I come to you today with a heavy heart. We have a crisis on our hands. It is one of our own making. And it is one that leaves us with no good choices. For many years, our nation’s government has lived beyond its means…We have not faced the hard reality…
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If you want to quickly see how President Barack Obama and the Congressional Democrats’ federal government spending proposal for 2011 stacks up against what Congressional Republicans have in mind, shown against a background illustrating the trend in U.S. federal government spending since 1967, here you go! References 1 Obama, Barack. The State of the…
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Governor Jerry Brown is proposing measures to balance the California state budget, including cutting $12.5 billion in spending and extending $12 billion in expiring taxes. The politically ambitious move from the new governor involves a sequencing of three legislative parts. The legislature would pass spending cuts, voters would then be able to vote in…
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Over at Economix, Casey Mulligan has a nice illustration of Austan Goolsbee’s approach to economic planning. In essence, targeted means of stimulating investment (say, with New Homebuyer tax credits) don’t work to increase investment, and thereby employment, in the short-run. Rather these types of subsidies have drive up prices for current asset owners—constituting windfall…
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According to Michael Munger, the recent proposals by the deficit commission are DAFT. DAFT is short for “deficits are future taxes” and is a useful analogy to counter the political myths about debt and taxation. “With a total debt of more than $13 trillion, our government is in the midst of forcing the largest…
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As the government of Ireland undergoes scrutiny and criticism for its poorly mismanaged fiscal house, the media risks missing the primary lesson. Poor public sector incentives drive politicians to enact policies that defy the laws of economics. There is no such thing as a free lunch—not even a Keynesian lunch of government issued corn…
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The New York Times on Monday, columnist Peter Orszag addresses the important issue of the the unsustainable budget deficit problem and the current high unemployment. What Orszag suggests as a “compromise” neglects the heart of both problems. Orszag suggests that “ideally only the middle-class tax cuts would be continued for now” but that doing…
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