The U.S. Postal Service (USPS) recently defaulted on a $5.6 billion mandate to pre-fund retiree health benefits, the second time in two months the federal government postal “service,” has failed to deliver. In August it failed to make a $5.5 billion retirement prepayment slated for last September, which Congress conveniently deferred. So the USPS…
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Discussions of a Treasury default all share one common feature—no one is certain as to what a default would actually entail. A recent article in The Economist highlights a study by Terry Zivney (Ball State University) and Richard Marcus (University of Wisconsin-Milwaukee) that looked at the last instance of U.S. default in 1979. The…
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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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