“When it comes to immigration (legal or illegal), I still take cues from that radical social-justice warrior Ronald Reagan. “(I)t makes one wonder about the illegal alien fuss,” the Gipper said in a 1977 radio address after a New England town restricted apple pickers to U.S. citizens and then couldn’t find enough people to do the work.
“One thing is certain in this hungry world; no regulation or law should be allowed if it results in crops rotting in the field for lack of harvesters,” he added. Reagan didn’t even shy away from the A-word. “I believe in the idea of amnesty for those who have put down roots and who have lived here even though sometime back they may have entered illegally,” Reagan said in his 1984 presidential debate.”
“Last year saw 44,834 Americans kill themselves, according to provisional data from the National Center for Health Statistics (NCHS) and the National Vital Statistics System (NVSS). That’s down from 47,511 in 2019, 48,344 in 2018, 47,173 in 2017, and 44,965 in 2016.
We do not know from the data in question whether the number of attempted suicides changed at all last year.”
“The leading U.S. cause of death last year remained heart disease, with 690,882 heart disease deaths last year. This number has been slowly but steadily ticking up over the past five years, from 633,842 heart disease deaths in 2015.
The second leading cause of death remained cancer, with slightly fewer cancer deaths last year than in 2017–2019. The provisional data list 598,932 cancer deaths last year.”
“In other news related to COVID-19 and mortality: New estimates from the Centers for Disease Control and Prevention (CDC) suggest the virus is deadlier than previous estimates let on.
“According to the ‘best estimate’ in the most recent version of the CDC’s COVID-19 Pandemic Planning Scenarios, 9 percent of people 65 or older who are infected by the COVID-19 virus die from the disease,” notes Reason’s Jacob Sullum.”
“On the current path, the CBO predicted in March that the debt would grow to 102 percent of GDP by the end of 2021, to 107 percent by 2031, and 202 percent by 2051. It also predicted that by 2051, the federal government will be spending more than a quarter of its annual budget just to pay interest on the principal. But those estimates came before President Joe Biden signed the $1.9 trillion COVID-19 relief bill, which made the long-term budget outlook even worse.
What is the risk to the U.S. economy? Fiscal hawks have been sounding the alarm about rising debt levels for decades, but their nightmare scenario of runaway inflation hasn’t come to pass.”
“As the industrialized world racked up debt through the 2010s, inflation and interest rates stayed low—contrary to the warnings of the doomsayers.
This situation, Furman and Summers say, implies that the U.S. government has much more leeway to borrow money, spend it on government projects, and grow its way out of the debt than fiscal hawks have led us to believe. Furman argues that the story is much the same regarding the pandemic-era economy.”
“John Cochrane, an economist at Stanford University’s Hoover Institution, disagrees. “If you wait until the crisis comes, everything is much much worse,” he says.
As a fiscal hawk, Cochrane acknowledges that his doomsaying has been wrong for the past decade, but he says that doesn’t mean he’s wrong now.
“I live in California. We live on earthquake faults.” Cochrane says. “We haven’t had a major earthquake, a magnitude nine, for about a hundred years.” It would be foolish to consider someone a doomsayer for preparing for an earthquake in California, he says, despite the fact that major earthquakes aren’t a common occurrence.
“That’s the nature of the danger that faces us. It’s not a slow predictable thing,” says Cochrane. “It is the danger of a crisis breaking out. So I’m happy to be wrong for a while, but that doesn’t mean that the earthquake fault is not under us and growing bigger as we speak.””
“”If it costs you…zero to borrow and something does more than zero, it’s worth doing,” says Furman. “It then needs to do a decent amount more than zero such that when you tax it…it pays itself back.” Furman claims that the expenditures that do this are limited, but says that the evidence points to the value of investing in children in areas like preschool and child health care.
Cochrane agrees that government spending on certain projects theoretically can boost growth, but he is skeptical of the government’s ability to spend the money wisely.”
“Furman and Summers’ paper also expresses concerns about debt projections beyond 2030 absent Social Security and Medicare reform as baby boomers retire en masse. Simpson and Bowles recognized that the bill on eldercare would eventually be the item to bust the budget.
“All else equal, addressing entitlements sooner is better than addressing entitlements later,” Furman says. “If you want to address it more on benefit reduction, then you probably do want an earlier start, I’m comfortable doing it on the tax side. I understand others probably want to do it on the benefits side. And if I were them, I’d want to get started sooner too.””
“”The question is where do you want to stabilize the debt,” says Furman. “People used to think it should be 30 percent of GDP. Is that what we need to do in order to be safe? I think if you’re asking that question without looking at interest rates, then you’re in danger of a very incomplete answer.”
“Most people acknowledge that there are limits but they envision slow, steady warnings. That you’ll see the problem coming and you’ll have plenty of time to fix things,” says Cochrane. “And I looked through history and I noticed that when things go wrong, they go wrong in a big crisis.””
“”Things always go boom all of a sudden, and so the key to fiscal management is to keep some dry powder around to have some ability to be able to borrow more,” Cochrane says. “Imagine if world war breaks out, and we’ve already borrowed the 100 percent debt-to-GDP ratio that we ended World War II with. Well, once we’re at a 100, 150, 200, our ability to meet that next crisis with borrowing is gone and then that next crisis is a catastrophe.””
“A corporation’s book profits are actually an unhelpful metric when it comes to assessing what its tax liability should be. While the tax code is far from perfect, many deductions and credits that reduce liabilities serve an important purpose and help make the tax code fairer. Calculating a corporation’s income before factoring these in makes as much sense as complaining that a kid with a summer job gets to avoid paying regular income taxes because of the “standard deduction loophole.”
For example, consider net operating loss (NOL) carryforwards and carrybacks, one of the most common culprits behind these sensational headlines. These are normal features of a smart policy that allows corporations to pay taxes based on a realistic view of their cash flow over time.
Imagine a start-up business that spends two years developing its feature product, only to release it in the next year. If that business ran a deficit of $2 million the previous two years, then made a $1 million profit the third year, it has not actually made a profit in the long term. Disallowing NOL deductions from being carried forward would mean that the business would face corporate income tax liability despite having, thus far, lost money.”
“NOL carryforwards were one reason Amazon had no federal tax liability when those articles appeared a couple years back. Another was the research and development (R&D) tax credit, long a bipartisan favorite. The Obama administration in 2012 identified the R&D credit as a crucial element of business tax reform, claiming that businesses undervalue R&D in the absence of the credit as the social benefit is far greater. It’s deeply disingenuous to incentivize R&D, then wag your finger when businesses respond to the incentives the R&D credit provides.
Then there’s accelerated depreciation. One of the most positive changes in the 2017 tax reform law was the introduction of full expensing of capital investments, which allowed businesses to bypass the complicated system of asset depreciation that requires them to recoup the value of capital investments over timelines as long as decades. Huffing and puffing that businesses use full expensing to zero out their tax liabilities is absurd, because it merely accelerates tax deductions businesses would receive anyway. In other words, the long-term “cost” of accelerated depreciation in terms of revenue reduction is zero. The difference is that businesses, which prefer cash on hand to cash down the line, are then able to reinvest the value of the deduction immediately rather than waiting years to receive the tax benefit.”
“Most presidents in recent decades have given 30 percent of ambassadorships to political appointees, including major campaign donors. Trump increased that number to roughly 44 percent, which included posts in some countries that usually went to career diplomats, such as Thailand and Kenya. That’s why the pressure is on Biden to revert to a smaller number.
A White House official said Thursday the administration expects the percentage of political ambassadors to be lower than that of the previous administration and closer to the traditional amount.”
“the economic rebound has been so fast that many businesses, particularly in the hard-hit hospitality sector — which includes restaurants, bars and hotels — have been caught flat-footed and unable to fill all their job openings. Some unemployed people have also been reluctant to look for work because they fear catching the virus.
Others have entered new occupations rather than return to their old jobs. And many women, especially working mothers, have had to leave the workforce to care for children.
Most of the hiring so far represents a bounce-back after tens of millions of positions were lost when the pandemic flattened the economy 14 months ago. The economy remains more than 8 million jobs short of its pre-pandemic level.
The Biden administration’s $1.9 trillion rescue package, approved in early March, has helped maintain Americans’ incomes and purchasing power, much more so than in previous recessions. The economy expanded at a vigorous 6.4% annual rate in the first three months of the year. That pace could accelerate to as high as 13% in the April-June quarter, according to the Federal Reserve Bank of Atlanta.
One government report last week showed that wages and benefits rose at a solid pace in the first quarter, suggesting that some companies are having to pay more to attract and keep employees. In fact, the number of open jobs is now significantly above pre-pandemic levels, though the size of the labor force — the number of Americans either working or looking for work — is still smaller by about 4 million people.
In addition, the recovery remains sharply uneven: Most college-educated and white collar employees have been able to work from home over the past year. Many have not only built up savings but have also expanded their wealth as a result of rising home values and a record-setting stock market.
By contrast, job cuts have fallen heavily on low-wage workers, racial minorities and people without college educations. In addition, many women, especially working mothers, have had to leave the workforce to care for children.”
“Whether it’s the Cheneys, the Bushes or the lesser bloodlines — such as the Romneys or the Murkowskis — Trump has been relentless in his efforts to force them to bend the knee. Even Cindy McCain, the widow of the late Sen. John McCain — who herself has never run for office — has been knocked down, censured by Trump allies who run the state Republican Party in Arizona.”
“The modern GOP, George W. Bush told NBC’s “Today” show earlier this month, is “isolationist, protectionist, and to a certain extent, nativist.”
“It’s not exactly my vision,” Bush said. “But, you know, I’m just an old guy they put out to pasture.””
“The vaccines that millions of Americans receive every day are the result of a global system of research, development, manufacturing, and trade. Forcing those networks to be concentrated within the United States wouldn’t make those supply chains more robust, but would leave Americans vulnerable to the accountability problems that seem endemic to federal government contracting.”
” It’s true, of course, that the federal government paid billions of dollars to Pfizer and other vaccine manufacturers in the form of advance-purchase agreements last year. But that’s a different situation—one that effectively promised prize money but still put the onus on private companies to deliver vaccines that worked. While certainly not an ideal arrangement from a libertarian point of view, it’s far better than an industrial policy that directs public funds to companies that hire the best lobbyists.”
“Cowen argued 10 years ago that the previous set of general purpose technologies—machines and factories powered by fossil fuels and electricity—had run their courses, at least in the United States and other developed economies. When eventually nearly everyone had a car, electric appliances, and indoor plumbing, technological improvements were being made just at the margins. The result was a significant slowdown in the rates of productivity growth and incomes.
The online crew assembled by AEI expressed some optimism that a whole bunch of new technologies were on the verge of jumpstarting our sluggish economy. Strain declared himself very confident that the Great Stagnation is not permanent. He suggested that entrepreneurs were even now exploring how to adapt a whole suite of new technologies—batteries, vaccines, artificial intelligence, driverless trucks—to their best economic uses and whose benefits will become increasingly evident over the coming decade.
Tucker chimed in that it takes a while for entrepreneurs and innovators to figure out how to profitably apply ideas and new technologies. She noted that her fellow economists have been offering two excuses for why advances in digital technologies were not showing up in productivity figures. The first is that the enhancements were not being measured properly. The second is that the elaboration of general purpose technologies, e.g., steam and electricity in the 20th century, needs 20 to 30 years of experimentation before businesses can figure out how to really rev them up to boost productivity. She pointed out that people initially thought electricity was about the light bulb, but what really promoted economic growth was powering machinery in factories and electric appliances at home.
Cowen cautioned that many technological advances would doubtlessly improve human welfare but still might not show up in U.S. gross domestic product (GDP) and productivity statistics.”