Quick links to a few items I found interesting.
CBO’s Budget and Economic Outlook: Tax Expenditures
The CBO has just released the Budget and Economic Outlook. The document is full of extremely useful information, and provides a useful anodyne for some of the reality-free analyses floating around (examples here). For now, I’ll just highlight two interesting graphs regarding tax expenditures:
Inflation expectations and the Fed
The Fed has begun implementing its new communication strategy. Here’s what the message seems to be.
Wisconsin Governor Walker: “We are heading in the right direction.”
That statement is from Wisconsin Governor Scott Walker’s State of the State address. Here are some additional remarks:
U.S. GDP: not a recession, but still not very encouraging
The Bureau of Economic Analysis reported today that U.S. real GDP grew at an annual rate of 2.8% during the fourth quarter of 2011. That’s better than any of the previous 5 quarters, which tells you more about how disappointing the previous year and a half has been than it does about how great the fourth quarter was. The average historical growth rate for the U.S. economy over the last 60 years has been about 3.2%.
UK: Into Recession
So much for expansionary fiscal contraction in the UK. Not that that’s a surprise.
In Search Of: Fiscal Responsibility
Given all the talk about taxes, I wondered how the Republican candidates plans stack up on the fiscal responsibility dimension, which Jeffry Frieden and I define thus:
[T]rue fiscal responsibility involves a willingness to raise sufficient tax revenue, over the longer term, to pay for the programs the government implements. Fiscal responsibility should not be equated with a small government, but rather with a commitment to pay for the government services provided. …
Wealth creation
Here’s my suggestion for how to become rich: buy low and sell high.
Dispatches (XIX): Wisconsin Employment Hemorrhaging Continues
Wisconsin’s Department of Workforce Development yesterday released preliminary employment figures for December, and revised figures for November. Both nonfarm payroll employment and private nonfarm payroll employment continue to decline (Figures 1 and 2). Total nonfarm payroll employment is now below levels recorded in January 2011, when Governor Walker took office. The divergence between the national employment trend and Wisconsin’s over the past six months is highlighted in Figure 3.
Miscellanea: America’s Lost Decades, Wisconsin’s Lost Year, Hi Frequency Measures, Europe, and Conditional Inflation Targeting
Lost Decades
Here’s my 25 minute presentation of Lost Decades at the Rotary Club of Madison, on January 4th (as recorded by Wisconsin Eye) Powerpoint. One point I made was that the global financial crisis and ensuing recession have exacted a tremendous cost on the US economy. In the absence of more aggressive action, another 2.4 trillion Ch.2005$ loss will be incurred through 2013Q4. The blithe indifference with which opponents of extended payroll tax reductions, extended unemployment benefits, food stamp expenditures and infrastructure investment contemplate the damage continues to astound me.