Issue Brief posted June 12, 2013
Did Tax Increases or Spending Cuts Preface the 1990s Boom?
Following Senate Budget Committee testimony, Senator Sheldon Whitehouse (D–RI) asked me seven “questions for the record.” The entire exchange will be publicly available, but a question about the U.S. economic boom of the 1990s deserves more attention.
Senator Whitehouse asked, “Are you familiar with the U.S. experience in the 1990s, during which tax rate increases in…
Testimony posted June 12, 2013
Questions for the Record Submitted by Senator Sheldon Whitehouse
I am pleased to have the opportunity to respond to Senator Whitehouse’s extensive written and oral questions. In order to provide an overall summary of the data used and choices made in my testimony, I explain my sources, calculations, and choices in Appendix B.
Regarding tax increases and…
Issue Brief posted June 7, 2013
Heritage Employment Report: Economy Runs in Place in May
The May employment report from the Bureau of Labor Statistics shows an economy running in place. Over the past year, employers have created an average of 172,000 net jobs a month. In May, they added 175,000 jobs, and the unemployment rate slightly increased by one-tenth of a percentage point to 7.6 percent. Other measures of labor market strength, such as the…
Issue Brief posted June 6, 2013
Will FHA Require the Next Round of Housing Bailouts from the Taxpayer?
The conventional mortgage market has tightened lending standards in the past few years and, consequently, witnessed a decline in delinquency rates with fairly clear lines in credit quality of borrowers and reasonable requirements on borrower collateral (generally a 20 percent down payment to avoid private mortgage insurance) for loan approval.
The Federal Housing…
Issue Brief posted June 4, 2013
Social Security Analysis of Immigration Bill Opaque and Too Narrow
Proponents of the Senate immigration bill have been touting a recent analysis by the Social Security Chief Actuary which alleges a $4.6 trillion immigration boon for Social Security’s 75-year financial outlook. Despite a total lack of transparency in the actuarial analysis, a number of problems are quite clear—the largest being a failure to account for all future…
Issue Brief posted May 31, 2013
Social Security Trust Fund Reports Massive Deficits, Benefit Cuts by 2033
Social Security ran a $55 billion deficit in 2012, closing out three years of consecutive cash-flow deficits as the program’s unfunded obligations continue to grow.
The combined 75-year unfunded obligation of the Social Security and Disability trust funds (referred to as the OASDI trust fund) is $12.3 trillion. This is a $1 trillion increase from last year’s unfunded…
Backgrounder posted May 28, 2013
A Cure Worse Than the Disease: Global Economic Impact of Global Warming Policy
How would adopting a global-warming policy affect world income?
Adopting carbon restrictions of the magnitude found in the Lieberman–Warner cap-and-trade bill would actually reduce worldwide income, even after accounting for the economic benefits of moderated warming. The costs would exceed the benefits by more than $100 trillion over the remainder of the 21st century.…
Backgrounder posted May 21, 2013
Social Security Benefits and the Impact of the Chained CPI
More than 57 million Americans draw on Social Security benefits for retirement, disability, or survivors’ benefits. Social Security benefits are indexed for inflation to protect beneficiaries against the loss of purchasing power as the prices of goods and services rise over time. However, the index used to calculate Social Security’s cost-of-living adjustment (COLA) each…
Issue Brief posted May 8, 2013
Research Review: Zero Lower Bound Interest Rates
In monetary policy, zero is an important number. Nominal interbank interest rates cannot normally sink below zero—that would mean one bank was paying the other to borrow its money. This is known as “the zero lower bound.” For central banks such as the Fed, the zero lower bound is a constraint on their ability to affect markets by moving key interest rates. In addition,…
Issue Brief posted May 3, 2013
Heritage Employment Report: Sequester Does Not Shower on Economy in April
The Bureau of Labor Statistics’ April employment report found healthy growth in the labor market in April. Employers added 165,000 net jobs, and the unemployment rate fell slightly to 7.5 percent. While falling short of expectations for a recovery from a deep recession, this would be considered decent growth in normal economic times. However, the improvement in…