Several states administer grant programs that provide funding to businesses that relocate to the state or expand existing operations within the state. This study analyzes one such program administered by Pennsylvania, the Redevelopment Assistance Capital Program (RACP). Over the life of the program nearly half the grants awarded have gone to the two most populous counties in Pennsylvania, Allegheny and Philadelphia. Using grant data from 2010, I find that RACP grants do have a small effect on subsequent employment growth at the county level.
The 2015 annual report from the Social Security Board of Trustees shows that the program’s disability component is in immediate trouble. Data from the latest report show that the disability fund will be depleted as soon as next year and unable to pay full benefits to beneficiaries. This week’s first chart uses that data to show total income, expenditures, and assets in the Social Security Disability Insurance (DI) trust fund going back to 1980.
Taxes and the costs of complying with regulation are two of the larger and more noticeable ways that private individuals pay for government services. Yet it may surprise most people to learn that a significant portion of the federal government’s expenditures and indirect costs to the US economy occur each year on “autopilot” without any action by the current Congress. These autopilot costs are annual expenditures from past legislation, interest payments, and regulations created by government agencies.
June’s Economic Situation began with Dorothy, Tin Man, Scarecrow, and Lion searching for the Yellow Brick Road and wondering if it had disappeared. Since then, there’s been a whole lot of shaking going on. In this report, I first take a look back to June and come forward. Then, in the section to follow, I will deal with China, devaluation, and financial market reactions. After that, I cover some specialized topics. Let’s hit the road!
A new study for the Mercatus Center at George Mason University shows that the sunset review process can also be seen as an effective bargaining tool for the legislature to minimize the executive branch’s influence on a wide variety of state boards and agencies. It is a way for the legislature to make its veto power credible and to have influence over an agency’s agenda, which is also influenced by special interests and the executive branch.
Authorization for the Export-Import Bank of the United States recently lapsed for the first time in more than 80 years, though it may be reestablished at any time. We present an economic efficiency analysis of bank’s activities in a simple open-economy model. This analysis brings clarity to the ongoing political debate regarding this institution. We discuss key arguments in support of and against the bank’s continued activities. We highlight the special privileges that the bank offers to a few domestic businesses, negatively distorting the private market opportunities in the markets in which these favored businesses operate and widely distributing the economic costs across nonfavored constituencies.
The following chart gives a timeline of regulatory accumulation associated with the FDCA and its major amendments, from 1980 (the first year RegData can associate restrictions with laws, because RegData relies on digitized text) through 2014. One notable feature of the graph is the decline in restrictions starting in 1996 through 1999. That period, which included the passage of the FDA Modernization Act of 1997, saw a 12 percent decrease in restrictions.
Defenders of the US Export-Import Bank (Ex-Im Bank) cite its working capital programs as evidence that the agency plays a critical role in supporting small businesses. As one of four main components of Ex-Im’s export subsidies, the working capital programs represent a relatively small component of the agency’s overall portfolio. The agency as a whole mainly benefits large, politically connected firms, as I have previously demonstrated.
We analyze the spread of use-value assessment (UVA) programs applied to agricultural and rural land for property tax purposes across the 50 states. Taxing such land on the basis of its current use in agriculture rather than its full market value can confer significant property tax reductions on owners of the land. Effects are often substantial for land near large urban areas. Using a time-to-event model, we find, as others have posited, that a driving force behind the spread of UVA has been the secular trend toward urbanization across all 50 states.
The Commonwealth of Pennsylvania has weathered several years of budgetary stress and continues to face near-term difficulty balancing the yearly budget. Pressures in the form of lower-than-projected revenues, increasing programmatic costs, and demographic changes have been building for many years. Pennsylvania’s financials are weak on a short-term and on a long-term basis, partially owing to policy and fiscal choices over the years, and partially because of the wider economy.
Luigi Zingales, one of the world’s foremost thinkers on financial development and capitalism, will join Tyler Cowen for a wide-ranging, intellectual dialogue as part of the "Conversations with Tyler" series.
This book presents 17 oral histories of Hurricane Katrina survivors from four diverse New Orleans communities. The oral histories explore how these individuals, families, and communities began to rebuild after the devastation.