Tag: economics

The U.S. Credit Rating Just Dropped. It’s Time for Radical Budget Reform.

Posted on by Lone Candle

“Fitch Ratings..downgraded the U.S. government’s credit rating due in part to Congress’ erosion in governance. Indeed, year after year, we see the same political theater unfold: last-minute deals, deficits, and, all too often, the passage of gigantic omnibus spending bills without proper scrutiny, along with repeated debt ceiling fights and threats of shutdown.
But these are just symptoms of a budget-making process that remains in desperate need of reform. With legislators chronically delinquent about following their own rules, the change may need to be as much cultural as procedural. No matter how good the rules are, they’re useless if politicians ignore them. And in a world where politicians are rarely told no when it comes to creating or expanding programs, most simply refuse to have their hands tied or behave as responsible stewards of your dollars.”

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“What we need is a comprehensive budget process under which programs like Social Security, Medicare, and Medicaid are no longer permitted to grow without meaningful oversight. Combined with other mandatory, more-or-less automatic spending items, they make up more than 70 percent of the budget. Thus, they must be included in the regular budget process and subjected to regular review. Only then will our elected representatives be forced to stop ignoring the side of the budget that requires their attention the most.”

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“Enter a “Base Closure and Realignment Commission (BRAC)”-style fiscal commission, an idea promoted by the Cato Institute’s Romina Boccia. This commission would be staffed with independent experts appointed by the president. It would be “tasked with a clear and attainable objective, such as stabilizing the growth in the debt at no more than the GDP of the country, and empowered with fast-track authority, such that its recommendations become self-executing upon presidential approval, without Congress having to affirmatively vote on their enactment,” Boccia explains.

I’m uneasy about delegating the president power to appoint “experts.” Unfortunately, Congress has proven they will never seriously address the problem unless forced to. The idea is not unprecedented. Congress has already delegated a lot of its legislative power to administrative agencies and the executive branch. It’s also how the political class dealt with the closures of military facilities after the Cold War—another set of hard choices they refused to make on their own.

What’s more, Congress would retain some veto power. If they disapprove of the proposal, the House and Senate can reject it through a joint resolution within a specified period. Whether it’s the best solution to address our fiscal problems remains to be seen, but it’s worth considering.”

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“Making continuing appropriations automatic in case of a lapse could remove the threat of shutdowns.”

Telephone operation was a good career for women. Then it got automated.

Posted on by Lone Candle

“For existing operators, they find that automation had real costs. Operators in a city that transitioned to mechanical switching were substantially less likely to have any job 10 years later than operators in cities that were slower to automate; those that did find work tended to find worse, lower-paying jobs.
But Feigenbaum and Gross also examine the results for young white women coming of age during automation, who just a few years earlier would’ve been ideal candidates for telephone operator jobs. Remarkably, they find little or no negative effects at all: they were just as likely to find work as they would have been before, and job openings in fields like secretarial work and restaurants increased even as telephone operation was automated away. Some of those jobs (like restaurant work) paid less, but others were competitive with telephone operation.

This is just one case, and economists have a long way to go in understanding how automation affects workers — a question that is more important than ever with the rapid progress in AI. But telephone operation appears like a mostly heartening example. Even though a job that once employed 2 percent of all working women was automated away, new workers entering the labor market were not significantly worse off.”

Canada Is Poaching America’s High-Skilled Foreign Workers

Posted on by Lone Candle

“The United States doesn’t make it easy for talented foreigners to permanently settle in the country, even if they work in critical fields and stay in legal status. For workers on H-1B visas, a nonimmigrant classification reserved for highly skilled, highly specialized laborers, it can take years to adjust to a green card. For Indian nationals, it can take decades.”

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“”America hasn’t streamlined its immigration system in over two decades,” says Sam Peak, a senior policy analyst at Americans for Prosperity. “Canadian policy makers continue to find new ways to take advantage of that.””