News
Recent posts and articles from IGEG fellows, advisers, experts and scholars.
Tale Of Two Economic Styles Degree of spending restraint determines growth rate
Will 2013 be a better year? A number of economic commentators have been saying the worst is behind us. I think they are wrong, and here is why. In most major countries, including the United States, government is growing faster than the private sector. As Mitchell's...
Uncle Sam Won’t Stop Overspending Government should be provider of last resort, not first
Tax revenue in 2013 will be lower (despite the just passed tax increase), and government spending will be higher than forecast. It's an easy prediction -- and this is why. The capital gains tax rate and the tax on dividends is being raised to 23.5 percent from 15...
One Piece of the Coming Disaster Fed is feeding Fannie and Freddie’s inflation vortex
You may have been reading how the Federal Reserve has been buying huge quantities -- almost a trillion dollars' worth -- of "mortgage-backed securities" (MBS). There is a relatively high probability that this program is going to end in disaster -- and here is why. The...
Good News for the New Year Of course, better than 2011 doesn’t mean much
Even though some are predicting the end of the world in 2012, there is a possibility it could turn out better than 2011 (a low bar). Many people who are not part of the political class continue to advance civilization and make things better for us - like the late...
Obama’s Hidden-Tax Heist Fed policy erodes productivity gains
How is it possible that the government can spend almost twice as much as it takes in without having high inflation? The fact is that over a long period of time, it can't. In the short run, which can be a few years, the government can paper over its fiscal...
Obama’s Money Misunderstanding Raising revenue by raising taxes doesn’t work
In times past, political leaders would lay out their domestic and foreign policies in clear, coherent terms. President Obama talks about getting our fiscal house in order but fails to propose any meaningful spending cuts. His proposals to increase the tax rate on the...
Penalized for Success Regulatory growth means business death
Last week, Christine Jacobs, the CEO of Theragenics Corp., a public company listed on the New York Stock Exchange that makes medical devices and is involved in cutting-edge cancer cures, wrote a letter to President Obama explaining why it was necessary to "begin...
Vote Higher Taxes Now, Regret It Later GOP should think before erring
If you are a member of Congress and you wish to be re-elected, do you increase your chances of winning by voting for or against raising taxes on the "rich"? In decision theory, "regret" is defined as the difference between the actual payoff and the payoff that would...
In Defense of “Vulture Funds” Risk-takers force corrupt nations to pay their debts
If you lend money at 5 percent interest for 10 years and then suddenly the borrower announces that he is only going to repay you at 30 cents on the dollar, would you think you have been cheated? The Argentine government defaulted on its debt a little more than a...
Liberal Leaders Flunk Math Fail to grasp human response to heavy taxes
Dennis Van Roekel, president of the largest teachers union, the National Education Association, failed fifth-grade math last week. The question he failed is: If X (government spending) is growing faster than A (government tax revenue) plus B (new revenue from higher...
Misdiagnosing the Stagnation Using government to jump-start economy never works
Last Friday, President Obama said, "We can't just cut our way to prosperity. If we are serious about reducing the deficit, we have to combine spending cuts with revenue -- and that means asking the wealthiest Americans to pay a little more in taxes." Mr. President,...
Congressional Control as Important as White House Deficit decisions come from Capitol Hill
The media focus has been on the presidential campaign, but the makeup of the U.S. Congress is likely to have an equal or perhaps even greater impact on your future economic well-being. The president often is blamed for the deficit by folks on both the right and the...
The Coming Regulatory Tsunami Feds withholding required reports
Knowledgeable officials are expecting a regulatory tsunami after the election. By law, the Office of Management and Budget (OMB) is required to publish a report each April and October about new regulations that government agencies are considering. OMB failed to...
Political Bullies and Faith Whittlesey provides Swiss antidote to big government
One of the most delicious moments in last week's presidential debates was when President Obama attacked Mitt Romney for having some of his money invested in Chinese and Cayman Islands companies. Mr. Romney replied by noting that the president has some of his...
Tax-Raisers Lack Compassion Larger government means earlier deaths for the jobless
If you were unemployed, would you prefer a job or a handout? Most people would say a job because of the self-respect that comes with being productively employed. What is not widely recognized is both the emotional and physical damage long-term unemployment does to...
A World without Income Taxes It’s possible with more modest fed monetary policy
Why should the federal government bother to impose taxes when it can use the Federal Reserve to "print" all the money it needs to pay its bills? Last year, the Fed bought 77 percent of all of the government's new debt, which is the equivalent of printing money. The...
A Vote for Obama Is a Vote for Recession Bigger government weights economy
Many in the mainstream media appear to be in the bag for the re-election of President Obama. They also appear to not have thought through the consequences of their wishes, both to the nation and their own careers. The Congressional Budget Office (CBO) and many leading...
U.S. Should Ax Destructive Tax Corporate levy trashing returns
It's difficult to say definitively which tax is the most destructive. The corporate income tax is a leading candidate for causing higher prices to consumers, lower wages to workers and lower returns to investors. It misallocates capital, resulting in higher levels of...