The Federal Reserve is buying Treasury bills and mortgage-backed securities at a rate of $120 billion a month. This is apparently being done to support large borrowing by the federal government. At the same time, the Fed has pulled almost a trillion dollars of liquidity out of the financial system by “reverse-repo borrowing.” This has reduced bank reserves and private sector lending. Not surprisingly, the growth of the M2 money stock fell from around 25% in 2020 to around 10% on an annualized basis in the first six months of 2021.
At the very time leftist politicians are proposing to finance their programs with mammoth deficit spending, leftist economists are giving them cover with the argument the country may never have to pay off the debt.
But Goodman Institute Senior Fellow and Boston University Economist, Professor Laurence Kotlikoff and his colleagues challenge this conclusion in two papers posted at the highly prestigious National Bureau of Economic Research Working Paper site. Deficits used to finance current consumption “are like Ponzi schemes,” they say.”
Lifetime spending inequity is one-third of wealth inequality. The main reason: government taxes and transfers, which make the system far more “progressive than we are led to believe. In 2018, for example, the top 1 percent of taxpayers paid 40.1 percent of all federal income taxes. The top 10 percent paid 71.4 percent. The bottom half of the country paid less than 3 percent of all federal income taxes.
Dallas Mavericks owner Mark Cuban has done some innovative thinking on how to reform the health care system. The Cuban plan is similar to an idea once proposed by Milton Friedman and also by Harvard economist Martin Feldstein. In a nutshell, people would be responsible for medical bills up to a certain percent of their income, and government would pay everything above that. In other words, people would pay ordinary bills out-of-pocket, and government would provide catastrophic coverage for the large bills.
William F. Buckley is best known for promoting a fusionist approach on the right – uniting traditionalists and classical liberals in a common cause — especially in National Review. Yet in the latest post at National Review, Buckley’s former debating partner, John C. Goodman says this approach is not working. Those who believe “We should stand athwart history yelling stop” have no appeal for the young, he says. “They generate none of the energy and enthusiasm needed for a successful political movement.”
Goodman says conservatives should focus instead on reforming institutions, liberating people and making the world a better place. “The classical liberals were reformers,” he says.” To be successful, modern conservatives must follow in their footsteps.”
More than 80 million people have some kind of savings account targeted for health care. But the system needs reform:
· By law, seniors cannot make deposits to an HSA
· Almost no one with Obamacare insurance has an HSA
· Among those who have an account, money cannot be used to pay the fees of “direct primary care” doctors – who are available by phone, email and Skype and as an alternative to emergency room care at nights and on weekends.
· It is impossible to structure HSAs for diabetes and other chronic conditions
Because of lower taxes and higher wages, the average Georgia household will enjoy more than $39,000 in economic benefits over their lifetime thanks to the 2017 federal tax cuts. That’s the conclusion of a Goodman Institute study by Boston University professor Laurence Kotlikoff. An earlier study by Kotlikoff and economists at the Federal Reserve Bank of Atlanta, also partly funded by the Goodman Institute, estimated the gain at $22,676 because of personal income tax cuts. The new study adds the impact of lower corporate taxes.
The COVID-19 pandemic. The Great Recession. The dot-com bust. The early ’90s recession. Every decade or so a disaster hits the United States and reminds us that many American families live one calamity away from financial ruin.
One of the intellectual architects of the 2017 tax cut legislation says the Joe Biden proposal to reimpose higher tax rates will be harmful to the economy and to working families. Earlier studies by Boston University professor Lawrence Kotlikoff and his colleagues found that “the United states had one for the highest corporate tax rates in the world.” As a result of lowering the top corporate rate from 35% to 21%, the US became competitive and more than $1 trillion has been repatriated by US firms. In a new study, Kotlikoff finds that the Biden proposal to undo half the cut in the corporate income tax rate will lower wages and cost jobs.
Writing at National Review, Marie Fishpaw (Heritage Foundation) and John Goodman say that little noticed health policy changes are revolutionizing the health care system. These are changes that are almost never mentioned in the mainstream media, are largely ignored by the heath care media and are rarely mentioned by the candidates themselves – including the President and the Vice President. They include virtual medicine, allowing employees to have around the clock primary care from a doctor of their choice and allowing employees to obtain individually owned health insurance with employer money. MORE