Author Archive

Facts and Figures

The debt-clock number you see in the upper-right-hand corner of this page is the federal debt, according to conventional accounting.  You can make it look smaller by counting only the debt that the government owes to the public, and not the debt (held by the Federal Reserve and the "trust...
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Welfare for The Middle Class

  “The U.S. program that pays elderly Americans’ hospital bills will exhaust reserves in 2028, two years sooner than last year’s estimate, trustees of the program said on Wednesday.” -- Reuters. In 2015 the federal government collected an all-time record of $3.25 trillion in taxes.  According to the White House Budget Office (see table...
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The War On Poverty

“The official poverty rate in the United States, defined as lacking resources for life's basic needs, was 19% in 1964. It had fallen to 12.1% by 1969, the year Johnson left office. Last year, it stood at 15%.” -- USA Today. ... What would a victory in the War on Poverty look like? ...
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Upward Mobility

“Switzerland will decide on June 5 whether to pay its citizens a basic income to replace welfare benefits … Economists like it because unlike welfare benefits, basic income does not phase out if people work. As a result, there is no abrupt disincentive at various income levels the way there...
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The Empire Strikes Back

By John Lumbard, CFA. We've just been reading comments by Establishment journalists---the LA Times, Slate, Paul Krugman of the NY Times---who raged against Time Magazine's excellent and well-researched cover story about the federal debt .  The truth is that the dangers described by Time were minimized;  author James Grant used the $13.9...
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The Rest of the Story

By John Lumbard, CFA. Miley Cyrus was scratched by a cat. A man tickled two girls on a playground slide, and he didn’t even know the girls.  TV newsrooms judged that these recent stories were more important than world crises, voter anxiety and rebellion, student debt, or the federal debt. Ah yes,...
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A Balanced-Budget Amendment to the Constitution

Opponents of a Balanced-Budget Amendment to the Constitution usually complain that it would not pass muster at the Supreme Court, because most proposals would have the President or the courts step in to balance the budget if the Congress failed---and only Congress has the power of the purse.  However, there...
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A Limitation On Federal Spending, to 20% of GDP

The federal government should be limited to 20% of the national economy every year. From the Wall Street Journal, "Time for a Spending Cap With Teeth"   by Congressmen Jeb Hensarling and Mike Pence "Fiscal storm clouds are upon us. In five years, federal spending has skyrocketed to 24.7% from 19.9% of our...
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A Pledge of Fiscal Responsibility

For candidates for federal office: I pledge that, if elected, I will introduce legislation to establish: A balanced budget amendment to the Constitution, with appropriate exceptions for times of war and recession. A line-item veto, to give the President a fighting chance to eliminate pork and earmarks. Term Limits, of any durations...
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Constituents Calling

"If interest rates are at 10% when the net federal debt hits $10 trillion (roughly two years from now), we will find ourselves paying $1 trillion per year in interest.” "Interest would vault over medical care to become the largest item in the federal budget.  $1 trillion is $8,547 per household,...
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