That is, alas, typical. Proponents of closer European integration seldom acknowledge criticism of their project, let alone address its problems. Take, for example, waste and corruption in Brussels. The European Court of Auditors has refused to certify the EU budget for 14 years in a row. Yet no (...)
The bill includes fees on certain segments of the health care industry as well as an increase in the Medicaid drug rebate amount for both brand name and generic drugs. The primary purpose of this Outlook is to examine the economic incidence—that is, the distribution of the true economic (...)
The $827 billion stimulus legislation under debate in Congress includes provisions aimed at ensuring oversight of the massive infusion of contracts, state grants and other measures. At the urging of the administration, those provisions call for transparency, bid competition, and new auditing (...)
We start with a report from Jan Schnellenbach who severely criticized the proposed reforms of German inheritance tax law. More generally, even if the desire to increase tax revenues in order to get out of the public finance crisis was understandable, he points to the “recent symptoms of (...)
By emphasizing incentives to produce, rather than incentives to consume, the early Keynes was evoking classical, supply-side analytics. Whenever profit margins are tightly squeezed—whether by costs of labor, energy, taxes and/or debt service—the result is a periodic episode of cost-cutting called (...)
Most economists, particularly those in public finance, find it preferable to raise revenue by taxing a broad base at a low rate in order to maximize the amount of revenue while reducing the distortions to the economy. The opposite of a broad-based tax is an excise tax, a tax levied on (...)
That was January 5, 1987. Ronald Reagan was president, and the deficit had reached almost 5.4 percent of gross domestic product (GDP). Now, three decades later, Democrats have changed their minds about the dangers of deficit spending. In February 2009, the nonpartisan Congressional Budget (...)
Economic forecast
The economic outlook is extraordinarily uncertain as no-one knows how long the credit crisis will last or how much damage it will do. Blaming the credit crisis, which he referred to on 14 occasions during his speech, the Chancellor downgraded his growth forecast but stuck to (...)
Tyrannosaurus debt
In The Gathering Storm, Winston Churchill wrote of his initial thoughts after his election as Prime Minister in May 1940 :
As I went to bed at about 3 a.m., I was conscious of a profound sense of relief. At last I had the authority to give directions over the whole scene. I felt as if I were (...)
1. Introduction
Let us welcome tax competition ! - by Pierre Garello
Let us welcome tax competition ! - by Pierre Garello
The US debt bomb poses a growing risk to China and other countries that hold large amounts of their foreign- exchange reserves in dollar denominated assets, primarily US government securities. If foreign central banks are less willing to hold US debt, the Federal Reserve may be the buyer of (...)
The Fed had already cut its benchmark interest-rate target to near zero. Unable to go lower, the central bank now is essentially printing money to raise the supply of credit and thus push down the longer-term rates paid by families and companies on mortgages and other key loans. The impact was (...)
President Barack Obama and congressional Democrats (very few of whom likely have read Keynes’s 1936 book "The General Theory of Employment, Interest and Money") have dug up the dead economist’s convenient justification for deficit spending in defense of their bloated stimulus legislation. But (...)
One problem with this blame-game is that last year’s recession was much deeper in many European and Asian countries than it was in the United States.
By the fourth quarter of 2008, as the nearby table shows, real US gross domestic product was just 0.8 percent smaller than it had been a year (...)
"We want to accelerate the pace of change on the reform agenda," Treasury Secretary Timothy Geithner said in an interview after a meeting of the Group of 20 finance ministers and central bankers over the weekend. Mr. Geithner was pressed for action on the regulatory front at the meeting, held (...)
Several serious proposals are being floated in the nation’s capital that would penalize Americans for investing in low-tax rather than high-tax jurisdictions. Proponents say the measures are needed to catch tax cheats — but ignore the fact that most of the low-tax jurisdictions such as the Cayman (...)
The commitment to buy Treasury securities and additional mortgage-related debt will almost certainly cheer Wall Street, since the combination should mean lower rates for a variety of business and consumer loans.
The Federal Open Market Committee voted 10-0 to hold the target federal-funds rate (...)
Looking, without success, for
a good reason not to worry about Public Debt
By Pierre Garello and Vesselina Spassova
Download Bertrand Lemennicier’s study
Download the summary of the study made by Pierre Garello
An increase in government spending must be financed by increasing taxation, or increasing government borrowing, or creating more money by the central bank (the Federal Reserve), or all of the above. Increasing taxation or government borrowing does not directly increase inflation, but if the (...)
When will President Barack Obama own the economy ?
Bad economic news does not faze the president. He’s not gleeful about job loss reports and anemic growth numbers, but he does not shy away from them. He confidently announces the latest sign of bad times and clearly assigns blame to our past (...)
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