Unsustainable Assumptions
Why I’m Not Worried About China
There are a lot of folks out there that seriously believe that China is not only a rising superpower, but that they will dethrone the U.S. as the global leader. While there are many home-grown reasons for why the U.S. may tumble from the throne, I’m pretty sure it won’t be because of China’s ascendance. [...]
New Estimate Shows Public Pension Shortfall Ballooning to $4.4 Trillion
photo credit: emsphotonut41 Joshua Rauh just blogged on “Everything Finance” a new estimate of the current unfunded public pension liability for both state and local governments: Using June 2009 data, Robert Novy-Marx and I measured a $3.1 trillion gap in state and local pension systems, arising from $2.3 trillion in assets and $5.4 trillion in [...]
Capital Gains Roller-Coaster and the Size of Government
New 2009 data from the IRS shows how foolish it is for government to tax capital gains income. As shown in the chart below, capital gains income for 2009 is now back to 2002 levels ($224 billion). Of course, thanks to the housing bubble, this is after a massive run-up in capital gains income to [...]
Disturbing Facts on Social Security
Below is an infographic from the Congressional Budget Office on the current and future state of Social Security . . . not a pretty picture.
The Real Federal Debt
photo credit: TimothyJ I’m so sick of this debt ceiling debate because it is all a ruse. The federal debt, as defined by the debt sold by the U.S. Treasury, is only a small fraction of all the obligations that the federal government owes. Thankfully, I just found this nifty debt clock (in the sidebar) [...]
Taxpayers on the Hook for Unfunded Public Pensions Liabilities
Joshua D. Rauh just announced on his blog about a new study that he just released, with Robert Novy-Marx, that estimates state and local pension contributions need to increase by a factor of 2.5 to reach solvency in 30 years. That amounts to a tax increase of $1,398 per household, per year! The study is [...]
Social Security and Medicare Go in the Red
From my previous blog post–The State of America’s Private Sector XX: April 2011–I noticed a disturbing trend in some of the underlying data. But first I had to hit the personal income methodology books at the Bureau of Economic Analysis to make sure I understood all the definitional issues involved. Now I’m satisfied that what [...]
Was Quantitative Easing A Plot to Save the Federal Budget?
I’ve never been satisfied with Ben Bernanke’s rationale for Quantitative Easing as a way to save the economy. Did he totally forget the 1970′s where economists had to invent a new term for recessionary inflation now known as stagflation. To me, Quantitative Easing is a recipe for stagflation. Drawing from my GMU/public choice roots, I’ve [...]
How Much Interest Does Uncle Sam Pay?
I’ve just become aware of this website called Government Gone Wild. Below is one of their videos which puts into perspective exactly how much in interest Uncle Sam pays each year. Hat tip to Mish.
Taxes Matter VIII: Will Higher Taxes Put Brake on Health Care Spending?
An intriguing and distressing paper by Jonathan S. Skinner (Dartmouth) and Katherine Baicker (Harvard) titled “Health Care Spending Growth and the Future of U.S. Tax Rates” (NBER Working Paper 16772) finds that growing federal health care costs will drive up future income tax rates to as high as 70 percent. However, before that nose-bleed level [...]
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