Puerto Rico is facing a severe fiscal crisis, and new crises will be almost inevitable in the absence of major institutional changes in the commonwealth. History has bequeathed the island inefficient state-run enterprises and a government unable to balance its budget, but Puerto Rico could have a bright future if it undertakes the right reforms.
Alabama currently lags behind its regional neighbors and the nation in economic growth and performance. This study undertakes a comprehensive analysis of Alabama's current fiscal situation as well as the reforms necessary to put Alabama on the road to economic prosperity.
The system for international corporate income taxation is at risk of losing its most valuable feature—diversity and competition. The Base Erosion and Profit Shifting Project of the Organisation for Economic Co-operation and Development attempts to change the international tax system by transferring control of corporate taxation from individual nations to an international body. This shift favors consolidated and uniform tax rules but sacrifices compliance efficiency, taxpayer rights, and nations’ ability to set the tax policies best suited to their populations.
With falling exports induced by a strong dollar, declining investment in the energy sector driven by falling oil prices, and a Chinese economy that continues to weaken, the US economy seems to be locked in low gear. GDP growth for 4Q2015 came in at a snail-paced 0.7 percent, giving 2.4 percent growth for the year, the same as for 2014. Pass the word. The world is flat!
Medicaid’s complex federal-state financing structure has long created perverse incentives that discourage efficient care. Key to the problem is the federal government’s uncapped reimbursement of state Medicaid expenditures, which encourages states to artificially inflate their Medicaid spending. Such schemes have significantly increased over the past several years and they likely add tens of billions in generally low-value Medicaid spending each year.
Despite rapidly advancing technology and patients’ increasing desire to try new drugs and devices, the FDA has strayed significantly from the statutorily defined safety and effectiveness standards for drug approvals. The FDA now very often demands proof of clinical utility, including survival and disease outcomes, as a requirement for premarket approval.
A new study written for the Mercatus Center at George Mason University analyzes North Carolina’s performance on key issues, the way in which the state government manages itself, and opportunities for improvement. North Carolina has recently implemented proactive reforms to its tax system, indicating that state lawmakers are capable of executing the other positive policy changes outlined in this study.
A new study for the Mercatus Center at George Mason University examines both the overall financial condition of state and local pension plans and the legal impediments to pension reform. It argues that reform proposals that assume the federal government will bail out state and local pen- sions are politically and economically unworkable and unfair. Instead, it presents a two-pronged reform proposal: (1) require state and local authorities to disclose the financial condition of their pension plans to beneficiaries in plain language and using standardized conservative accounting assumptions, and (2) allow state and local governments to offer beneficiaries a choice between accepting the uncertain and risky future benefits originally promised or receiving a discounted lump-sum benefit right away.
Rainy day funds are one tool that most US states use to help mitigate the fiscal stress caused by economic slowdowns that reduce state government revenue. Past research I did with Gary Wagner uses a switching regression to estimate parameters in order to form a distribution of potential budget shortfalls for each state. This paper updates those results to include post–Great Recession data. A comparison of this distribution to the actual amount of savings that states have accumulated allows an assessment of how prepared each state is for an economic downturn and the resulting decline in tax revenues. What ability do states have to weather economic downturns without raising taxes or reducing spending? States are ranked based on their current ability to weather future economic downturns.
Fed uncertainty, the levitated dollar, China’s continuing weak economy, Europe’s mixed bag, and US political crazy season combine to yield a slow but somehow sound winter economy. Let’s take it from the top. The most recent third quarter 2015 GDP growth estimate arrived to the tune of 1.5 percent.
Camille Paglia joins Tyler Cowen for a conversation on the brilliance of Bowie, lamb vindaloo, her lifestyle of observation, why writers need real jobs, Star Wars, Harold Bloom, Amelia Earhart, Edmund Spenser, Brazil, and why she is most definitely not a cultural conservative.
In this book, Adam Thierer argues that if the former disposition, “the precautionary principle,” trumps the latter, “permissionless innovation,” the result will be fewer services, lower-quality goods, higher prices, diminished economic growth, and a decline in the overall standard of living.