Quivering financial markets in a post-taper economy remind me once again to always follow the money when trying to predict where this world is headed. New Fed chair Janet Yellen spoke truth to power when she testified in February that the Fed had stopped watering the money tree and that US labor markets were a long way from normal.
The primer begins with a short discussion of criteria for evaluating tax revenue options (i.e., economic efficiency, equity, transparency, collectability, and revenue production). It proceeds to an overview of the different types of taxes employed at various levels of government and an evaluation of each tax
against these criteria. The tax categories included here are individual income taxes, consumption taxes, real property taxes, and corporate income taxes.
We argue that in order to answer the challenges that James Buchanan put to contemporary political economists, a reconstruction of public choice theory building on the work of Buchanan, F.A. Hayek and Vincent Ostrom must take place. Absent such a reconstruction, and the significant challenges that Buchanan raised will continue to go unmet.
Income inequality is often attributed to declines in income mobility following the Great Gatsby curve, but this relationship is of secondary importance in determining the factors of income mobility if one considers that changing rules is more important than changing outcomes under defined rules.
We present a short history of the Virginia School of Political Economy in its institutional settings of University of Virginia (UVA), Virginia Polytechnic Institute and State University, or Virginia Tech (VPI), and George Mason University (GMU). We discuss the original research and educational project as envisioned by Buchanan at UVA, its maturity into a normal science at VPI, and its continuation at GMU.
The United States faces severe fiscal challenges—most notably, the unsustainable growth of entitlement spending and a mounting debt burden that raises concerns about the government’s ability to pay it back without strangling economic growth. These threats reflect the inability of Congress and presidents to make the hard choices necessary to restore fiscal responsibility to the federal budget.
According to a new paper published by the Mercatus Center at George Mason University, the slowdown in health care cost growth is extremely unlikely to solve Medicare’s financing problems. Indeed, such a suggestion primarily reflects an incomplete understanding of how current Medicare cost projections are done.
Tuition and fees for higher education have increased at a rate much higher than inflation over the past 40 years. Although the amount students pay has risen much less than listed tuition, net price also continues to increase faster than inflation. Taxpayer funded subsidies to higher education have also increased substantially during this period. The Bennett hypothesis states that tuition will increase in response to subsidies. We review the variety of government programs subsidizing higher education
and summarize the existing evidence on the Bennett hypothesis. The evidence on the Bennett hypothesis remains mixed, providing some evidence that the effectiveness of the subsidies in increasing college enrollment is diminished to the degree that taxpayer moneys are diverted to the institutions of higher education.
Every country faces an intertemporal budget constraint, which requires that its government’s future expenditures, including servicing its outstanding official debt, be covered by its government’s future receipts when measured in present value. The present value difference between a country’s future expenditures and its future receipts is its fiscal gap. The US fiscal gap now stands at $205 trillion. This is 10.3 percent of the estimated present value of all future US GDP. The United States needs to raise taxes, cut spending, or engage in a combination of these policies by an amount equal to 10.3 percent of annual GDP to close its fiscal gap. Closing the gap via raising taxes would require an immediate and permanent 57 percent increase in all federal taxes. Closing the gap via spending cuts (apart from servicing official (debt) would require an immediate and permanent 37 percent reduction in spending. This grave picture of America’s fiscal position effectively constitutes a declaration of bankruptcy.
This paper provides an overview of the intent of the Medicaid program and its budgetary implications. In 1965, when Medicaid was created under Title XIX of the Social Security Act to provide health insurance for low-income individuals, the program was considered an afterthought to Medicare. Today, however, more Americans receive coverage from Medicaid than any other health insurance program, including Medicare. Today Medicaid costs nearly $500 billion annually, funded by taxpayer dollars at the state and federal levels. This paper explains the budgetary implications of Medicaid for federal and state budgets and how these obligations will grow under the Patient Protection and Affordable Care Act.
The F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics at the Mercatus Center hosted a panel discussion featuring Benjamin Powell and his new book, Out of Poverty: Sweatshops in the Global Economy.
The Mercatus Center at George Mason University invites you to join Todd Zywicki, Senior Scholar and Senior Fellow with the F.A. Hayek Program at the Mercatus Center and Ted Gayer, Vice President and Director of the Economic Studies program at the Brookings Institution for a Regulation University program that examines the mistakes agencies make in developing “nudge” regulations and the unintended, but foreseeable, consequences of those mistakes.
Please join us for a casual reception where you can take a break from March Madness and meet some of our scholars who can provide the kind of practical information you need to be most effective in your work.
This book provides a comprehensive defense of third-world sweatshops. It explains how these sweatshops provide the best available opportunity to workers and how they play an important role in the process of development that eventually leads to better wages and working conditions.