Opaqueness has advantages. Explained in everyday English, one consequence of recent Fed policy would be embarrassing. “We are giving banks $12.25 billion a year in free profits for doing absolutely nothing.
The point of the rate hike was not to slow down business lending; rather, it was to signal that the Federal Funds Rate will not be zero forever.
Any self-respecting intermediate microeconomics student should know that, if the cost of burning Christmas lights goes down, folks will indulge in consuming more Christmas lighting.
If we’re going to tax income, is there a better alternative? Indiana’s adjusted gross income tax wouldn’t be a bad choice.
One of the nastier quirks of U.S. corporate taxation lies in where income is taxed. Just about everyone else follows a simple rule: You pay taxes to the country where the income is earned. But that’s not good enough for Uncle Sam.
Tax rates affect the tax base in two ways: Higher rates decrease incentives to generate income and also divert income and investment to less productive tax shelters. With higher rates, the tax base is smaller than it would otherwise be.
The average U.S. real GDP growth rate from 1987-2000 was 3.65 percent. From 2001-2014, it was 1.64 percent. What event divides these two equal time periods? The 9/11 terrorist attacks.
Want to get a group of retirees riled up? Tell them their Social Security benefits are welfare benefits.
Public finance economists go crazy thinking about federal entitlements. Medicare, Medicaid and Social Security account for most of the entitlement spending, although Obamacare looms as a future contender.
Let domestic oil producers sell at the best price they can.
When everybody “just knows” something is true, it’s time to get a little nervous. That’s when we suspend skepticism and uncritically accept the assertion.
if Congress refuses to raise the debt limit, the executive branch always wins the PR war.
When conspicuous consumption ceases to amuse, what do the rich do? They build monuments to themselves. The very rich want to see their names on activities that promote, or at least appear to promote, the well-being of others.
Does Indiana face a shortage of schoolteachers? You’d certainly think so from news stories showing an 18-percent decline in new teacher licenses issued over the past five years.
Near-zero interest rates were supposed to pep up the economy. Six years and 10 months later, economic growth has been positive, but anemic. The unemployment rate has fallen to 5.1 percent, but labor force participation rates are at record lows and full-time jobs are hard to find.
Prices set below what a free-exchange market would determine result in shortages. Above-market prices produce unsold piles of surpluses.
A much more plausible explanation is, there was a mechanical breakdown at BP’s Whiting refinery.
Labor costs fell at a 1.4-percent rate in the second quarter, indicating that wages are not rising even as unemployment declines.
Americans are understandably upset with years of sluggish U.S. economic performance. We don’t blame the political class for trying to blame it on someone else, preferably a foreign someone else. Don’t fall for it.
We offer one simple economic observation: Reductions in CO2 emissions come at an economic cost today, while the benefits accrue in the future.
