In yesterday’s Washington Post, Ruth Marcus uses “quack medicine” to describe conservatives’ support for extending the 2001 and 2003 tax cuts. Yet she commits her own economic malpractice. Ms. Marcus asserts that the tax cuts devastated tax revenues by pointing out that “tax revenue fell from 21 percent of GDP …
Obamacare has been rightly blasted as fiscally irresponsible, yet few have noticed what may be Obamacare’s largest ticking entitlement time-bomb: the CLASS Act. My new op-ed on the subject is here, and my new report, co-written with Jim Capretta, is here. CLASS is a new long-term-care insurance program that was …
The White House today released its updated federal budget projections. By releasing the report late on a Friday afternoon—a longtime Washington tradition for stories that politicians want to bury—the Obama Administration is effectively admitting that its budget numbers will not be well-received. The “Mid-Session Budget Review” projects that this year’s …
Over the past decade, federal spending has leaped 62 percent faster than inflation, to more than $30,000 per household. Not content with this expansion of government, President Obama’s budget would push inflation-adjusted spending to nearly $37,000 per household by the end of this decade. This would create sustained trillion-dollar budget …
This week, the House of Representatives will vote on the $86 billion “America Competes Act.” Just a few years ago, an $86 billion authorization would have been considered real money, even by Washington standards. But in this new era of trillion-dollar spending bills (and, not coincidentally, trillion-dollar budget deficits), an …
A few weeks ago, I posted that CBO’s estimate that the stimulus created saved 1.5 million jobs was not based on any actual examination of the post-stimulus economy. Instead, CBO essentially re-released their initial prediction that the stimulus would work, and presented that as proof that it did work. This …
After enacting 93,000 earmarks at a cost of $200 billion over the past decade, lawmakers are finally taking the first steps to rein them in. First, House Democrats hinted they may announce a moratorium on earmarks to for-profit companies (while retaining them for non-profit organizations and state and local governments). …
The Congressional Budget Office (CBO) has produced a new report estimating that the $862 billion stimulus has thus far saved or created 1.5 million jobs. Yet the CBO’s calculations are not based on actually observing the economy’s recent performance. Rather, they used an economic model that was programmed to assume …
My Corner post from last Wednesday — pointing out that government “stimulus” spending does not add new purchasing power to the economy because the government must first borrow that purchasing power out of the economy — caused a stir among liberal bloggers Brad DeLong, Matt Yglesias and Stan Collender. Their posts …
For most of a century, macroeconomists have debated the pros and cons of government “stimulus” policies. Because there is no way to determine how the economy would have performed without a stimulus, the debate comes down to dueling economic models, assumptions, and theories. With Nobel Prize-winning economists lining up on …
