unsustainable fiscal policy Archive

On Savings and Debt

By James Schaefer. Some years back, at an annual company off-site retreat, a presenter was elaborating on money.  He gave many definitions, then asked us to think of money in a slightly different way.  Rather than thinking of it as a medium of exchange, he asked us to think of money as...
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Another Path To Solvency

By John Lumbard. The legislatures of seventeen states have recently passed a bill calling for a constitutional convention that would be focused solely on the drafting of a balanced budget amendment to the Constitution.  Each of these bills explicitly states that it will be declared null and void if the Supreme...
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Contagion and Eurosclerosis

By John Lumbard. The debt of Portugal has fallen in value so much that a buyer can now get a yield of 16% on long term, ten year bonds.  Portugal won't have to actually pay 16% until it has to borrow again (most likely when an old bond issue matures and...
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So. There Really Was Enough Money After All . . .

By James Schaefer.   The existence of the Alternate Plan, which substitutes for Social Security in three Texas counties, is proof that Social Security has collected sufficient FICA revenue over the decades to keep the system solvent (Perry Is Right; There Is a Texas Model for Fixing Social Security, Wall Street Journal, September...
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The Most Predictable Economic Crisis In History

That's what Erskine Bowles, co-chair of the president's National Commission on Fiscal Responsibility, said about our government's ever-so-slowly-developing fiscal calamity in this Senate Budget Committee testimony. The President disavowed the findings of his commission, but it continued on in a scaled-down group of six members (all Senators) called the Gang of...
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The Milton Friedman Moment

By James Schaefer "There's no such thing as a free lunch."   Fifty years ago most Americans believed those words, and they were used by Milton Friedman in a 1975 book of that title. Jenny Fisher-Sullivan elaborated in the Wall Street Journal (March 3, 2011): The Fed works for our bankrupt federal government and...
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Postponing the Pain

Economist Charles Wheelan writes occasionally for Yahoo Finance, and he's always terrific.  In a recent article he suggests that the President extend the current graduated tax structure, with a plan to balance the budget in 3 or 4 years (when the economy is stronger) by cutting spending and adding consumption taxes...
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The Cookie Jar

By James Schaefer.   A headline in today's Wall Street Journal (September 16, 2010) reads, "California: Schwarzenegger in Talks to Borrow From CalPERS".  CalPERS, a quarter-trillion dollars large, is the California Public Employees Retirement fund.  The Governator wants a loan of "just" $2 billion from this vast fund to shore up part of...
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Join Americans for a Balanced Budget Amendment

By John Lumbard.   As the months have rolled by we've worked to simplify our message, because nobody wants to stop partying long enough to think about bipartisan fiscal responsibility.  Most Americans are for it---probably by a massive majority---but most haven't even thought about practical ways to ensure that the Congress does...
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Taking the Long View

By James Schaefer. In America nearly everyone has the opportunity to acquire substantial retirement savings; it's simply a matter of applying self discipline (and some common sense) consistently over a very long period of time.  Starting at age 22, saving a million dollars -- or more -- in retirement accounts is fairly...
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