Robert Pollin: Public debt, GDP growth, and austerity:: “In 2010… Carmen Reinhart and Kenneth Rogoff published… “Growth in a Time of Debt”… [which] has been frequently cited by major economic policymakers… Paul Ryan… George Osborne… Olli Rehn…. Herndon… Ash and I showed… that several of the critical findings advanced in the Reinhart-Rogoff paper were wrong….
Continue reading “Morning Must-Read: Robert Pollin: Public Debt, GDP Growth, and Austerity”
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— Mike Wilson (@mWilstory) March 8, 2014
Dylan Scott: It Looks Like Obamacare Is Finally Making Progress With The Uninsured: “A new survey has found that 27 percent of people who signed up for coverage in February were previously uninsured…. ‘There’s every reason to believe that early enrollment skewed towards the already insured and that the uninsured will sign up later’, Larry Levitt [said]…. ‘People who were insured and had their old non-compliant policies cancelled were no doubt first in line in the new marketplaces, along with some people with pre-existing conditions who were locked out of the market before’. Another finding from the survey also suggests there could be a March surge in uninsured people enrolling in coverage: 65 percent of respondents who said they hadn’t enrolled yet but planned to before March 31 were uninsured…. The survey doesn’t account for Medicaid enrollees…. 31 percent of uninsured Americans have an income below 138 percent of the federal poverty level — the threshold for expanded Medicaid under the law in states that chose to participate…. Between 1.1 million and 1.8 million new enrollees could be attributed to the law through January…”
Jason Furman: Poverty and the Tax Code: “The creation and expansion of these tax credits have served as a powerful demonstration that the old adage ‘a program for the poor is a poor program’ need not always be true…. There has been a long-standing torrent of fierce criticism of the EITC and the partially refundable child tax credit, including claims of fraud, criticism of beneficiaries who end up not paying any federal taxes (going so far as to call them “lucky duckies”), and strong resistance to extending or expanding the benefits…. But… the political success of these credits over the years is also likely a function both of the inherent work requirement and the fact that they are administered through the tax code, which is a universal system… not just tax credits for one section of the population, but… provide broader insurance to a much wider set of beneficiaries over time…. Over an 18-year period, because of fluctuations in income, more than half of taxpayers benefitted from the EITC. (As an aside, a similar point applies to other programs like nutrition assistance or unemployment insurance)…. The relative size and scope of the tax credits compared to traditional means-tested programs underscores the extent to which poverty-alleviation programs now emphasize employment…”
Continue reading “Things to Read on the Morning of March 9, 2014”
Dylan Scott: It Looks Like Obamacare Is Finally Making Progress With The Uninsured: “A new survey has found that 27 percent of people who signed up for coverage in February were previously uninsured….
“There’s every reason to believe that early enrollment skewed towards the already insured and that the uninsured will sign up later,” Larry Levitt [said]…. “People who were insured and had their old non-compliant policies cancelled were no doubt first in line in the new marketplaces, along with some people with pre-existing conditions who were locked out of the market before.” Another finding from the survey also suggests there could be a March surge in uninsured people enrolling in coverage: 65 percent of respondents who said they hadn’t enrolled yet but planned to before March 31 were uninsured….
The survey doesn’t account for Medicaid enrollees…. 31 percent of uninsured Americans have an income below 138 percent of the federal poverty level — the threshold for expanded Medicaid under the law in states that chose to participate…. Between 1.1 million and 1.8 million new enrollees could be attributed to the law through January.
Tim Duy: Unemployment, Wages, Inflation, and Fed Policy: “Historically, the Fed tightens before wages growth accelerates much beyond 2%….
Wage growth tends to accelerate as unemployment approaches 6 percent…. That 6.5% [unemployment] threshold was not pulled out of thin air…. The tightening cycle is usually topping out when wage growth is in the 4.0-4.5% range. One interpretation is that the Fed continues to tighten policy to prevent workers from gaining too much of an upper-hand…. They see it as tightening monetary conditions to hold inflation in check. Either way, the end is the same. It would represent a very significant departure from past policy if the Fed waited until wage growth was at pre-recession rates before they tightened policy or if they allow conditions to remains sufficiently loose for wage growth to eventually rise above pre-recession rates. If you want the Fed to make such a departure, start laying the groundwork soon….
Jason Furman: Poverty and the Tax Code: “The creation and expansion of these tax credits have served as a powerful demonstration that the old adage ‘a program for the poor is a poor program’ need not always be true….
There has been a long-standing torrent of fierce criticism of the EITC and the partially refundable child tax credit, including claims of fraud, criticism of beneficiaries who end up not paying any federal taxes (going so far as to call them “lucky duckies”), and strong resistance to extending or expanding the benefits…. But… the political success of these credits over the years is also likely a function both of the inherent work requirement and the fact that they are administered through the tax code, which is a universal system… not just tax credits for one section of the population, but… provide broader insurance to a much wider set of beneficiaries over time…. Over an 18-year period, because of fluctuations in income, more than half of taxpayers benefitted from the EITC. (As an aside, a similar point applies to other programs like nutrition assistance or unemployment insurance)…. The relative size and scope of the tax credits compared to traditional means-tested programs underscores the extent to which poverty-alleviation programs now emphasize employment…
Joseph E. Stiglitz: Stagnation by Design: “Markets are not self-correcting. The underlying fundamental problems that I outlined earlier could get worse–and many are. Inequality leads to weak demand; widening inequality weakens demand even more; and, in most countries, including the US, the crisis has only worsened inequality…. Markets have never been very good at achieving structural transformations quickly on their own…. The sectors that should be growing, reflecting the needs and desires of citizens, are services like education and health, which traditionally have been publicly financed, and for good reason. But, rather than government facilitating the transition, austerity is inhibiting it…”
Tim Worstall: Ritchie on redistributionl: “There’s another very interesting bit to add to this as well. Which is that other work tells us that how you do the redistribution does indeed matter. Transactions taxes are worst (they have the highest deadweight costs), then capital and corporation taxes, then income taxes, then consumption and finally repeated taxes upon real property. And it’s notable that the countries that do the most redistribution (the Nordics, they have the biggest gaps between market and post tax post benefit gini) do it by having heavier than we do consumption taxes and lighter than we do capital and corporate ones (note that that last is influenced not so much by the rate but by the base).”
Tim Duy: A Lackluster Start to the Year: “Incoming data… disappoint[s]…. Part of the blame should fall on overly optimistic interpretations of data patterns at the end of 2013. In particular, the recently downwardly revised GDP numbers were less than spectacular abstracting away from inventory effects. Looking at real final sales, I see slow and steady, or even a modest softening, not magic acceleration…. The latest data disappointments were the weak ADP report suggesting a just 139k private sector NFP gain in March and a similarly weak reading on the service side of the economy from ISM…. My baseline expectation for monetary policy is that recent softer data makes little difference in the tapering plans…. My suspicion is that [Yellen] will need to see real evidence that labor market slack has evaporated in the form of faster wage growth before she begins to worry of overshooting.”
Dylan Scott: New Hampshire Advances Medicaid Expansion Under Obamacare: “The GOP-controlled New Hampshire Senate approved a privatized plan for expanding Medicaid under Obamacare…. The bill passed 18 to 5. Five of the 13 Republicans opposed the plan…. The proposal would use Medicaid dollars to help low-income residents purchase private health coverage, as Arkansas has done. The Democratic-controlled House is expected to approve the plan, and Democratic Gov. Maggie Hassan has expressed her support. About 58,000 New Hampshirites are expected to gain coverage under the expansion.”
Continue reading “Things to Read on the Morning of March 7, 2014”
Keith Humphreys: Dear Bill Keller, Please Start Taking Drug Addiction Treatment Seriously: “In his closing contribution to the New York Times, Bill Keller laments President Obama’s unwillingness to invest in drug addiction treatment….
It is also embarrassingly, verifiably, wrong. I am sure Mr. Keller and all the other journalistic critics of Obama’s drug treatment record have heard of The Affordable Care Act… [that] expands access to care for over 60 million Americans by mandating that drug treatment coverage be included in every plan and be at parity with that for other disorders… [the] regulations for the Mental Health Parity and Addiction Equity Act provide benefit parity to more than 100 million Americans with employer-provided health insurance… independent analysts at CMS consider the current public policy environment the most dramatic improvement in the quantity and quality of addiction treatment in U.S. history… Rather than use his platform to make assertions that are demonstrably inaccurate, I hope he will in the future engage in… due diligence…
Over the past year, in the CPS Household Survey:
The proportion of the adult population in the civilian labor force has fallen from 63.5% to 63.0%
The proportion of the adult population employed has risen very slightly from 58.6% to 58.8%
The unemployment rate has fallen from 7.7% to 6.7%.
As far as the long-run prosperity of America is concerned, this past year has been yet another disaster for the labor market. Demography would lead one to expect a decline in the labor force of 0.1% or 0.2% points–not 0.5%.