“Leeper highlights three fiscal norms. One, established in one of Hamilton’s 1790 reports, is that budget deficits should be followed by budget surpluses (i.e., the government pays off its debts). The second is that ordinary spending should be paid for with taxes while emergency spending can be paid with borrowed funds to be repaid later. The third is that austerity becomes necessary when interest payments on outstanding debt become a sufficiently large fraction of federal expenditures.
Despite their informal nature, these fiscal norms have historically constrained U.S. fiscal policy in a meaningful way, even without a gold standard or other formal devices often found in history. They’re also important because they determine long-term expectations for fiscal policy. These expectations, in turn, influence bond prices, inflation, and the real economy, keeping things relatively stable.
So far, adherence to these informal fiscal norms has paid off. U.S. Treasuries are a cornerstone of the global financial system, serving functions akin to money worldwide. However, the norms are weakening.”
https://reason.com/2024/04/11/say-no-to-this-americas-fiscal-norms-are-in-decline/
“Medicare’s board of trustees produced their annual report on the program’s fiscal health. That report contained some expected yet nonetheless alarming news: Medicare’s hospital insurance (HI) trust fund, itself a kind of accounting fiction, will be insolvent in just five years. Starting in 2026, the HI fund, which covers inpatient hospital services, will be depleted.
The program will have to rely on the HI fund’s incoming revenues, essentially operating on a cash flow basis—and there won’t be enough cash. In 2026, the HI fund will only cover about 91 percent of its bills. In the years that follow, that gap will only grow larger. So without changes to the program’s financing, doctors, hospitals, and other medical providers will face rapidly reduced payments from the program, with ensuing ripple effects on both the wider economy, roughly a sixth of which revolves around health care services, and on the provision and availability of health care.
If anything, the program’s fiscal problems may be even worse than that: The new report assumes that an array of cost-reduction measures, including a series of technical tweaks the physician payments and bonuses, will persist. But they also note that Medicare’s “long-range costs could be substantially higher than shown throughout much of the report if the cost-reduction measures prove problematic and new legislation scales them back.
As anyone who has even a passing familiarity with attempts to control the cost of federal health care programs through doctor payment tweaks knows, those sorts of measures often prove problematic—which is to say, doctors don’t like them, and thus, for political reasons, Congress overrides those payment changes.”
The New Americans: Economic, Demographic, and Fiscal Effects of Immigration National Research Council. 1997. The National Academies Press. https://www.nap.edu/read/5779/chapter/6#138 Yes, Immigration Hurts American Workers George J. Borjas. 9/10 2016. Politico. The Impact of IllegalImmigrationon the Wagesand EmploymentOpportunitiesof Black Workers The United States
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