Economics

Center on Wealth & Poverty

How to Control the Habit

Did you know that between fiscal years 2001 and 2004 federal spending will rise by about 24 percent, and nondefense, discretionary outlays will increase about 31 percent? In 2000, federal government outlays were 18.4 percent of GDP, but in 2004 they will be approximately 20.5 percent of GDP. By any measure, both defense and nondefense federal government spending is rising Read More ›

Fox in the Henhouse

“I am from the government and I am here to help you,” is a well-known oxymoron again proving to be true. A decade ago, we had a mean Internal Revenue Service that did all sorts of terrible and unjustified things to innocent taxpayers. The people got mad, and the people’s representatives — the House and the Senate — held hearings Read More ›

Trading Up With Neighborhoods

Most people prefer to live in rich neighborhoods rather than poor ones — why is that? Perhaps they notice rich neighbors tend to keep the environment cleaner, respect property rights of others and do not engage in criminal activities threatening lives of their neighbors. The same is true of countries. We don’t fear rich countries — such as Japan, Germany, Read More ›

Beware of Economic Hubris

President Bush’s economic team can rightfully be proud of their policies that produced the sizzling 8.2 percent real economic growth in the last quarter. But before they get too high on their own accomplishments, they need to look at the history of those who began to feel infallible in their economic policymaking. The Nixon economic team produced strong growth numbers Read More ›

Is the Deficit Too Small?

The conventional wisdom is our federal government deficit is too large. However, the empirical evidence suggests the deficit might be too small. When people worry about the size of the deficit, they are not worried about the deficit in a particular year; what they are worried about is the accumulation of debt that needs to be serviced. Some years, most Read More ›

Betting on Bulgaria

Fifteen years ago, how many Americans or Bulgarians would have imagined that in 2003 Bulgaria would be one of America’s closest allies in Europe, that Bulgarian and American troops would be serving together in Iraq and that Bulgaria would have a smartly growing market economy? How did this change from Cold War enemies to new NATO allies come about, and Read More ›

When Uncle Sam Owns the Land

What would you do if a neighbor’s tree falls on your house and causes a thousand dollars of damage? You would ask your neighbor to pay for the damage, and the law would require that he or his insurance pay the cost of the damage. Likewise, if your neighbor keeps hazardous materials on the edge of his property, such as Read More ›

Socialism in Every City

THE “LIVING WAGE” movement has become the latest effort to impose socialism on the United States, one city at a time. After a slow beginning in the 1990s, living wage ordinances — which impose minimum wages much higher than the federal one — have now been adopted in over 100 municipalities, from Somerville, Mass., to Portland, Oregon, from Minneapolis to Read More ›

Self-Inflicted Wounds

The tax cuts were the appropriate medicine for the economy and are already having the desired effect, yet the president’s approval rating for economic management continues to fall. In part, this is due to a series of politically motivated economic mistakes that have slowed the recovery. Not everyone in the administration has learned that good economics is good politics and Read More ›

Saving Iraq… from the U.N.

Last Saturday, French Foreign Minister Dominique de Villepin “proposed a radically new approach” that would take control of Iraq from the U.S. (surprise) and give it to the U.N. He demanded that an Iraqi provisional government be established within a month, a constitution written by the end of the year, and elections held by the spring of 2004. Iraq does Read More ›