Some items I found interesting:
- Tyler Cowen outlines what I see as the responsible approach to the U.S. federal fiscal challenges: slow the growth of government spending.
- Some undergraduates at Rutgers University have developed a nice site to track economic indicators. And Bill McBride has an invaluable summary of which ones really matter.
- From the Federal Reserve Bank of Boston: Oil and the Macroeconomy in a Changing World: A Conference Summary.
- The Office of Personnel Management on shifting costs of Postal Service retirement funding to U.S. taxpayers.
- And Glenn Reynolds warns beware of bimbots.
I realize that this comment is not related to the immediate post, but you have commented on the Cushing-Brent oil price spread in the past. My question is, why isn’t the large gap between Cushing-Brent being reduced by arbitrage?
The latest WEO has a pretty good chapter on oil prices and growth: http://www.imf.org/external/pubs/ft/weo/2011/01/
Professor Hamilton: do you think the ECB might be over-reacting to oil price changes by tightening now?
I wonder how long the USPS can continue. It’s a basket case and its future doesn’t look bright.
It’s interesting that Tyler Cowen’s suggestions are supported by most Democrats (and Keynesians) and universally opposed by Republicans. For example, the PPACA is the biggest cost reduction legislation for Medicare in history and every Republican candidate in the debate last night swore to repeal it.
Because Republicans rule the House and effectively the Senate, none of Cowen’s suggestions have any chance of enactment. Why are “sensible” Republicans so reluctant to point out the insanity of their fellow Republicans?
“the PPACA is the biggest cost reduction legislation for Medicare in history..”
Here’s some information for those who are buying that line.
Joseph,
a number of Republicans such as Rand & Ron Paul would support cutting farm subsidies & defense.
Virtually no one believes that Obamacare will reduce the costs of medical care. There are a plethora of obvious ways in which it will increase costs significantly.
a number of Republicans such as Rand & Ron Paul would support cutting farm subsidies & defense.
Technically your are correct. It is true that two is a number. Rand and Ron, father and son — pariahs in their own party — that’s about it.
Some of Tyler Cowen’s ideas are okay. For example, I agree that some defense cuts would not be a “Keynesian disaster.” A few days after Obama was inaugurated Secy Gates’ staff invited me to participate in a 2-week brainstorming session to come up with ideas for making defense spending part of the stimulus plan. Some of this was a spin-off from something that Martin Feldstein had been pushing in a few op-ed pieces. And I think one could have made a good case for defense spending as fiscal stimulus if the spending had been concentrated on O&M budget lines…stuff like advancing repair and remanufacturing programs for shot-up vehicles and weapon systems. And that kind of spending would have held down outyear spending to replace those systems outright rather than repairing them. But that’s not where the admirals & generals wanted to go. They wanted procurement appropriation dollars for brand new shiny toys with bells & whistles that would have become a permanent burden long after the recession was over. I’m glad I found an excuse to be too busy those weeks. So I agree with Cowen’s point about the goodness of cutting some kinds of defense spending.
But some of Cowen’s other points just seem bizarre. For example, cutting Medicare spending to push doctors into accepting Medicaid seems ill-advised. Medicaid is largely a state run program, and states are likely to offset any increases in Medicaid spending with reductions in other things, like infrastructure spending. And Medicare is what’s actually holding down healthcare cost growth in general. Cutting Medicare only increases the burden on private sector insurance, which is growing at 2% more per year than is Medicare. So this just seems off-the-wall dumb.
Bryce If you mean that no one believes Obamacare will reduce healthcare costs in terms of absolute dollars, then yes, I agree. But no one is arguing that Obamacare would do that, so I don’t see your point. What Obamacare will do is to reduce the growth rate of healthcare spending relative to what it would have been had Obamacare not been passed. Yes, you can point to some crazy Heritage Foundation “analysis,” but that Heritage paper was soundly beaten to a pulp long ago by actual economists, unlike the clowns at Heritage that pretend to be economists.