PERC Blog


Authored by PERC staff, the PERC Blog focuses on policy issues including economic trends, fiscal policy, Social Security and Medicare entitlement programs, income inequality and Federal Reserve policy.

Is There a Limit to Government?

Posted: August 03, 2021 by Dennis W. Jansen, Andrew J. Rettenmaier
A central tenet of a free enterprise market economy is limited government. In this limited role, the government protects and ensures property rights, individual freedoms, economic opportunity, and competitive markets largely through an agreed-upon and enforceable set of rules. Government also has a limited role in addressing the provision of goo...
Tags: Fiscal Policy

Tariffs as Crony Capitalism

Posted: August 03, 2021 by Dennis W. Jansen, Liqun Liu, Andrew J. Rettenmaier
At a time when the lumber prices are skyrocketing, the Biden administration is considering increasing tariffs on Canadian lumber from the current 8.99% to 18.32%. The announcement was immediately cheered by the U.S. Lumber Coalition, but criticized by Canadian authorities, who called the increase a “tax on the American people,&rdq...
Tags: Fiscal Policy

U.S. Farm Subsidies: A Prime Example of Crony Capitalism

Posted: July 29, 2021 by Dennis W. Jansen, Liqun Liu, Andrew J. Rettenmaier
Nearly a century after the Great Depression, why are we still subsidizing farmers? U.S. farm subsidies are designated in the “Farm Bill” that is updated every five years. The latest version of the Farm Bill was signed into law in December 2018, and the federal government is currently paying about $25 billion annually to farmers prima...
Tags: Fiscal Policy

The Tale of Two Recessions

Posted: July 21, 2021 by Dennis W. Jansen, Andrew J. Rettenmaier
Its official; the Pandemic Recession lasted just two months! The previous cyclical peak was February 2020, and the trough occurred in April 2020.  March and April 2020 are in the books for the shortest recession on record. Since that time, we have been in an expansion.  This  news comes from the Business Cycle Dating Committee of ...
Tags: Economic Trends

Equal Opportunity Yes. Equal Talent No.

Posted: July 15, 2021 by Dennis W. Jansen
I wonder if anyone else is dismayed by that emotional and uplifting television advertisement from a certain university, the ‘Stand Up’ commercial. If you watch enough TV you have heard it. You know, “Stand up if you are a working mother” and “Stand up if you are a first-generation college student.” But my dism...
Tags: Economic Trends

Supply Chain Risk: Is Government the Solution?

Posted: July 09, 2021 by Dennis W. Jansen, Liqun Liu, and Andrew J. Rettenmaier
According to Kaygisiz (2019), active pharmaceutical ingredients (APIs) intended for the U.S. market are overwhelmingly manufactured outside the U.S. with India and China supplying 26% and 18%, respectively.  In addition, India is currently supplying 21% of prescription drugs in final dosage forms (FDFs) that the U.S. market consumes. This r...
Tags: Fiscal Policy

Not There Just Yet

Posted: July 06, 2021 by Dennis W. Jansen, Andrew J. Rettenmaier
With the summer travel season in full swing, airlines are seeing their passenger counts increase.  For two days last week, the number of travelers through Transportation Security Administration (TSA) checkpoints exceeded the number of travelers on the same days of the week in 2019.  This was the first time since the start of the pandem...
Tags: Economic Trends

Sacrificing Education to Covid-19: The Texas Story

Posted: July 06, 2021 by Dennis W. Jansen, Andrew J. Rettenmaier
The Covid-19 pandemic and our response to it has certainly generated much discussion and even controversy about the relative weights on public health and economic health.  Perhaps even more important to our nation’s long-term future is the pandemic’s impact on our system of public education.  In terms of how they would oper...
Tags: Education

This Time College Station-Bryan is not Different: the Current Recession

Posted: June 17, 2021 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
During a recession we expect to see employment decline, the jobless rate go up, the total wage bill shrink, and the overall consumption level contract. However, the impact of a recession varies across regions and metropolitan areas. Here we examine how employment, unemployment, and total wages changed during the last three recessions.  Thes...
Tags: Economic Trends, Labor

Federal Government ‘Debt’: Much Larger than You Have Been Told

Posted: June 14, 2021 by Dennis W. Jansen, Liqun Liu, Andrew J. Rettenmaier
When we think of the federal government’s liabilities, we primarily think of the debt held by the public, but its liabilities encompass much more. Each year, the Treasury publishes the Financial Report of the United States Government (FRUSG) which is intended to include the accounting of all liabilities. The liabilities reported in the FRU...
Tags: Fiscal Policy, Medicare

Texas has a Balanced Budget Requirement, Except When it Doesn't

Posted: June 11, 2021 by Dennis W. Jansen
As is widely known, Texas has a balanced budget amendment and our legislators are required to pass a balanced budget. Our legislators are even now writing budget bills that will apply to the coming biennium, the two fiscal years from September 2021 – August 2023. However, forecasting future tax collections and even spending for the next tw...
Tags: Fiscal Policy

Apology Forthcoming?

Posted: May 26, 2021 by Dennis W. Jansen
On March 2 Governor Abbott announced that businesses in Texas could reopen at 100% capacity, and he lifted the statewide mask mandate.  (Local businesses were of course allowed to require their customers to wear masks inside their shops.) The very next day, President Biden called this decision by Governor Abbott a “big ...
Tags: Economic Trends, Health care

Employment, Hours and Earnings

Posted: May 13, 2021 by Dennis W. Jansen, Andrew J. Rettenmaier
Between March and April, nonfarm employment rose by 266,000. April’s employment was down 5.4% from its pre-pandemic high in February of 2020. The figure below tracks nonfarm employment, total private sector employment and employment in the Leisure and Hospitality industry. Relative to their respective pre-pandemic highs, total private empl...
Tags: Economic Trends, Labor

The Pandemic Misery Index of North American States/Provinces

Posted: May 06, 2021 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
Over the past year, the Private Enterprise Research Center has presented its Pandemic Misery Index, or PMI, to assess how different states and metropolitan areas have fared over the course of the Coronavirus pandemic. PERC’s PMI adds together the COVID-19 death rate per 10,000 of population to the average unemployment rate over the period ...
Tags: Economic Trends, Interactive

U.S. GDP, Employment, and the State of the Economy in Late April 2021

Posted: April 30, 2021 by Dennis W. Jansen, Andrew J. Rettenmaier
The U.S. Bureau of Economic Analysis (BEA) just reported the advance estimate of U.S. Real GDP (or inflation-adjusted GDP) for the first quarter of 2021. Headlines report that Real GDP grew at an annual rate of 6.4% this quarter, which is what would happen if the actual quarterly growth rate of 1.6% continued for four consecutive quarters. ...
Tags: Economic Trends

Should the Corporate Income Tax Be Raised?

Posted: April 26, 2021 by Dennis W. Jansen, Liqun Liu, Andrew J. Rettenmaier
Negotiations among lawmakers of both parties over President Biden’s infrastructure plan have centered on two issues. First, the Biden administration sticks to a large $2.3 trillion spending program that includes not only many broadly-defined infrastructure spending items but also spending items that can hardly be regarded as spending on in...
Tags: Fiscal Policy

A Texas Puzzle: High Employment, High Unemployment Rate

Posted: April 05, 2021 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
This is an unusual, interesting recession. Personal savings are up, as is personal income. In this recession, unemployment did not increase gradually, it skyrocketed, reaching its recession maximum in just two months. Currently, Texas has an unemployment rate that is above the national rate, and by a fair bit.  Typically, Tex...
Tags: Economic Trends

The Employment Situation and Recovery in Texas

Posted: March 24, 2021 by Dennis W. Jansen, Andrew J. Rettenmaier
What is the employment situation in Texas, as well as in select Texas Metropolitan Statistical Areas (or MSAs), and how does it compare nationally?  What was the impact of the pandemic and the pandemic-inspired business closures on employment?  Where are we now, and what is needed to restore employment to pre-pandemic levels? &n...

Trade-Offs in Winterizing the Texas Power Grid

Posted: March 17, 2021 by Dennis W. Jansen, Liqun Liu, and Andrew J. Rettenmaier
On February 8, a Monday, ERCOT notified power generators that freezing temperatures were on the way, and at that time were forecast for February 11 to 15, Thursday through Monday.  Versions of this warning were repeated on future days.  On February 11, Thursday, ERCOT announced that there could be record peak demand for winter power du...
Tags: Fiscal Policy

PERC’s Pandemic Misery Index: February 2021 State-level Update

Posted: March 01, 2021 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
PERC introduced its Pandemic Misery Index, or PMI, in a blog post on September 8, 2020. Taking a cue from Arthur Okun’s misery index that added together the inflation rate and the unemployment rate, PERC’s PMI includes a measure of the public health impact of COVID-19 by using the total number of deaths per 10,000 of population, and ...

Pandemic Misery Index: February 2021 Update for Metropolitan Areas

Posted: February 26, 2021 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
The Private Enterprise Research Center introduced the Pandemic Misery Index (PMI) to provide a simple metric to measure the performance of various political entities for both states and metropolitan statistical areas (MSA) in dealing with the COVID-19 pandemic. This post provides an update to our reported PMI values for various MSA’s throu...
Tags: Economic Trends, Interactive

U.S. GDP 2020

Posted: February 01, 2021 by Dennis W. Jansen, Andrew J. Rettenmaier
Late last week, the preliminary Q4 2020 Real GDP estimate was released by the Bureau of Economic Analysis (BEA). Real GDP increased 1% from Q3 to Q4, increasing from $18.597 trillion to $18.780 trillion. For the year, Q4 2019 through Q4 2020, Real GDP was down 2.5%.  But it was a volatile and rocky road during the coronavirus pandemic &ndas...
Tags: Economic Trends

The Comptroller and the Texas Budget: A Primer

Posted: January 13, 2021 by Dennis W. Jansen, Andrew J. Rettenmaier
The Comptroller's Duties The Texas legislature is meeting again beginning Tuesday January 12, to set the budget for the coming biennium.  As part of this budgeting process, Texas Comptroller Glenn Hegar is on the news discussing revenue forecasts for the next two years. What is a comptroller, an...
Tags: Fiscal Policy

Personal Income and Consumption

Posted: December 21, 2020 by Dennis W. Jansen, Andrew J. Rettenmaier
We are living in strange times.  The unemployment rate rose from 3.5%  to 14.7% in April, and in November, the rate dropped to 6.7%, still far higher than a year ago.  In a typical recession, personal income would surely have fallen.  With such a spike in the unemployment rate, it would not be surprising to think that persona...

Federal Fiscal Aid to States: Insurance or Bailout?

Posted: December 16, 2020 by Dennis W. Jansen, Liqun Liu
One major reason for the difficulty of arranging a second major federal Covid-19 relief package is disagreement between the Senate majority and the House majority regarding federal fiscal aid to state and local governments.  The issue of providing fiscal aid to states has been so difficult that the proposed legislation is now split into two...
Tags: Fiscal Policy

County and MSA (Metropolitan Statistical Area) GDP Data Released Today

Posted: December 09, 2020 by Dennis W. Jansen, Andrew J. Rettenmaier
Today, the U.S. Bureau of Economic Analysis released its estimates of county-level Real GDP for 2019.  That’s right, today - almost mid-December of 2020 - we have official Real GDP values for the calendar year 2019.  We now ‘know’ what happened a year ago.  And it goes without saying that 2020, the year of the vi...
Tags: Economic Trends

PERC’s Pandemic Misery Index Updated -- How the States Stack Up

Posted: December 09, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
The PMI is an easy-to-use metric of how states are dealing with the twin crises brought on by the coronavirus pandemic, the public health crisis and the economic crisis.  Taking a cue from Arthur Okun’s misery index that added together the inflation rate and the unemployment rate, PERC’s PMI includes a measure of the public heal...
Tags: Economic Trends, Interactive

Higher Education Enrollment Takes A Hit

Posted: December 03, 2020 by Ashley Bullock, Dennis W. Jansen, Andrew J. Rettenmaier
Yet again we have events in 2020 bucking a long-standing trend.  This time it is college enrollment during a recession.  Traditionally enrollment in public and private 2-year and 4-year colleges increases rather dramatically during an economic recession.  With fewer employment options many individuals return to school, or stay in ...
Tags: Education

Texas Statewide Unemployment Rate for October is Back to August Levels

Posted: November 23, 2020 by Dennis W, Jansen, Andrew J. Rettenmaier
The Bureau of Labor Statistics reported late last week that the statewide Texas unemployment rate for October, seasonally adjusted, was 6.9%, essentially the same as the 6.8% rate reported for August. The statewide rate took a large upward turn in September to 8.3%, the first upward movement since April. The October reading indicates a return of...
Tags: Economic Trends

2020 Pandemic Misery Index: Update for Metropolitan Areas

Posted: November 09, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
The Private Enterprise Research Center introduced the Pandemic Misery Index (PMI) to provide a simple metric to measure the performance of various political entities, both states and metropolitan statistical areas (or MSA’s) in dealing with the COVID-19 pandemic.  This posting provides an update to our earlier reported PMI values for ...
Tags: Economic Trends, Interactive

The Recession: This Time It's Different

Posted: November 04, 2020 by Dennis W. Jansen, Andrew J. Rettenmaier
This recession is different, to say the least. It began with government-mandated business restrictions and business closures aimed at mitigating the public health ravages of Covid-19, and these led to a dramatic rise in unemployment that has no match in our history for speed and magnitude. Then as these government restrictions were lifted, there...
Tags: Economic Trends

Unemployment Rates and Nonfarm Employment

Posted: October 30, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
Starting in March, the labor market has been rocked by the responses to the Covid-19 pandemic, from the initial public health responses involving government-imposed lockdowns, followed by staged business reopenings, and overlaid with individual behavioral changes in response to the health implications and risks of the virus. In April, unemployme...
Tags: Economic Trends

"U.S. GDP Grew 33.1% In the Third Quarter!"

Posted: October 29, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
The U.S. Bureau of Economic Analysis (BEA) just reported that U.S. Real (or inflation-adjusted) Gross Domestic Product, U.S. Real GDP, grew at a record rate in the third quarter. This follows a record decline in the second quarter of 31.4%. What does this all mean with respect to our current economic condition? First, note that th...
Tags: Fiscal Policy

Texas Unemployment Rates Rise in All Texas MSAs

Posted: October 29, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
The unemployment rate increased between August and September in all 25 Texas metro areas according to yesterday’s release of labor area unemployment statistics by the Bureau of Labor Statistics. The figure below depicts the August and September unemployment rates for all Texas MSAs. The solid portion of each bar shows the Au...
Tags: Economic Trends, Health care

2020 Pandemic Misery Index: Assessing Metropolitan Areas in the U.S.

Posted: October 05, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
Last month, the Private Enterprise Research Center published the Pandemic Misery Index (PMI) for states, which measures the effects of the pandemic on each state and the states’ responses to the pandemic in terms of impact on health an...
Tags: Economic Trends, Interactive

Texas A&M University Highly Ranked for Freedom of Speech on Campus

Posted: October 01, 2020 by Ashley Bullock
“If there is a bedrock principle underlying the First Amendment, it is that the Government may not prohibit the expression of an idea simply because society finds the idea itself offensive or disagreeable.” -- Texas v. Johnson, 491 U.S. 397 (1989) Colleges and universities, ideally, are places where one can he...
Tags: Education

Unemployment Rate in College Station-Bryan Remains One of the Lowest in Texas

Posted: October 01, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
The August unemployment rate in College Station-Bryan dropped to 4.3% from a revised 5.3% in July. The local area unemployment rate continues to improve here, and throughout Texas.  The local rate was second only to Amarillo’s 4.1% rate among the 25 Texas Metropolitan Statistical Areas. Tied for the third-lowest rate were Sherman-Deni...
Tags: Economic Trends

2020 Pandemic Misery Index: How the States Stack Up

Posted: September 08, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
Which state has been more effective at dealing with Covid-19, New York or Texas? Who has done better at stemming the spread of the virus and keeping businesses afloat, California or Florida?   The answer to these questions depends on how we define and measure ‘effectiveness.’  As shelter-in-place orders...
Tags: Economic Trends, Interactive

The Summer Without Vacations and the Hospitality and Leisure Industry

Posted: August 11, 2020 by Andrew J. Rettenmaier
Between June 2009, the end of the Great Recession, and February 2020, the start of the COVID Recession, total nonfarm employment grew by over 16%. In the private sector, employment grew almost 20%.  The figure below depicts employment by industry indexed to the respective industries’ employment in June 2009. Employment in Transportati...
Tags: Economic Trends

Hope Mounts as Covid-19 Counts Decrease in Texas – Updated August 4, 2020

Posted: August 05, 2020 by Dennis W. Jansen
The continued economic growth and reopening of the economy in Texas, and in Brazos County, critically depend on getting a handle on the recent surge of Covid-19 cases. Fortunately, recent evidence over the past weeks shows very good news, with declining rates of new infections and decreasing counts of active cases in most of the major population...
Tags: Health care

Forecasting Recovery from the Covid-19 Recession: The Long (and Winding?) Road

Posted: August 04, 2020 by Dennis W. Jansen, Andrew J. Rettenmaier
The nation’s output, real GDP (i.e., GDP adjusted for inflation), took a big hit in the second quarter, falling almost 10%. Looking forward, should we expect an improvement in economic conditions for the remainder of 2020? The second quarter includes the months of April, May, and June. Up to this point, April was the hardest...
Tags: Fiscal Policy

Plunging U.S. and European GDP in the Second Quarter of 2020: A Tale of Two Headlines

Posted: August 03, 2020 by Dennis W. Jansen
Recent estimates on GDP that show drastic declines for both the U.S. and Europe have taken a firm hold in the news cycle over the past few days. But these headlines point to very different magnitudes of change. For example, cnbc.com has the following two headlines: For the U.S. on July 30: “<a href="https://www.cnbc.com/2020...
Tags: Economic Trends

GDP Fell 32.9% in the Second Quarter! What Does that Mean?

Posted: July 31, 2020 by Dennis W. Jansen
The U.S. Bureau of Economic Analysis (BEA) reported yesterday that in its preliminary estimate the U.S. Gross Domestic Product – GDP – fell at an annualized rate of 34.3% in the second quarter. (The BEA also reported that Real GDP – GDP adjusted for inflation – fell at an annualized rate of 32.9%.) These are unprecedented...
Tags: Economic Trends, Fiscal Policy

June Unemployment Rate for College Station-Bryan MSA Ranks Among Lowest In Texas

Posted: July 29, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
In data just released by the Bureau of Labor Statistics, the June unemployment rate for the College Station – Bryan Metropolitan Statistical Area (MSA) was 5.9%, second only to Amarillo’s rate of 5.8% among Texas’ 25 official MSAs. Abilene came in third with an unemployment rate of 6.1%. For comparison, the May unemployment rat...
Tags: Economic Trends

Hope Mounts as Covid-19 Counts Decrease in Texas

Posted: July 28, 2020 by Dennis W. Jansen
The continued economic growth and reopening of the economy in Texas, and in Brazos County, critically depends on getting a handle on the recent surge of Covid-19 cases. Fortunately, the recent evidence from last week is relatively good news, with declining rates of new infections and declining counts of active cases. There are positive signs in ...
Tags: Economic Trends

Unemployment Rates Are Headed in the Right Direction

Posted: July 17, 2020 by Andrew J. Rettenmaier
The unemployment rate in the U.S. reached 14.7% in April, declined to 13.3% in May, and fell further to 11.1% in June.  While the trend is in the right direction, the June rate is still higher than the peak monthly rates in all of the post-war recessions. As the Great Recession waned, the national rate reached 10% in October 2009, and it re...
Tags: Economic Trends

The Unemployment Rate for May in the College Station–Bryan MSA Tied for Lowest in Texas

Posted: July 01, 2020 by Dennis W. Jansen, Andrew J. Rettenmaier
In data just released by the Bureau of Labor Statistics, the unemployment rate in May for the College Station–Bryan Metropolitan Statistical Area (MSA) was 8.9%, tied with Amarillo for lowest among the states’ 25 official MSAs.  Abilene came in third with an unemployment rate of 9.1%.  At the other extreme, McAllen-Edinburg...
Tags: Economic Trends

What’s The Beef? Economic Theory meets Antitrust Lawsuits During a Pandemic

Posted: June 25, 2020 by Dennis W. Jansen, Liqun Liu, Andrew J. Rettenmaier
“Grocers File Lawsuit Against Meatpackers for Violating the Sherman Act!”[1]  Plaintiffs claim that meatpackers conspired to limit the supply of and fix the prices of beef sold to Central Grocers and others in the U.S. wholesale market.  This is one of many such cases that claim...
Tags: Labor

Initial UI Claims Decline for the Tenth Week in a Row; Still High by Historical Standards

Posted: June 12, 2020 by Carlos I. Navarro, Andrew J. Rettenmaier
The figure below shows the counts of initial unemployment claims in the U.S. from the week ending March 14, 2020 to the week ending June 6, 2020. The week ending on March 28 had the highest number of initial claims at 6,867,000, with the number of initial claims declining each week since that time. Last week, 1,542,000 workers filed a claim. Ove...
Tags: Economic Trends

This Just In: April Unemployment Rates in Texas Range From 9.2% in Amarillo to 19.1% in McAllen-Edinburg-Mission

Posted: June 04, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
The figure below depicts the April rates for all of the Texas metropolitan statistical areas (MSAs). These data were released on June 3 by the Bureau of Labor Statistics. Only three Texas MSAs had unemployment rates less than 10%. Amarillo had the lowest rate of 9.2%, Abilene’s rate was 9.3% and College Station-Bryan’s rate was 9.4%....
Tags: Economic Trends

New U.S. Unemployment Insurance Claims Drop to 2.1 Million for the Week Ending May 23; Number of Insured Unemployed Decline

Posted: May 29, 2020 by Carlos I. Navarro, Andrew J. Rettenmaier
For the week that ended on May 23, 2020, 2,123,000 workers filed unemployment insurance (UI) claims. This is the eighth week that initial weekly claims have declined from the previous week. Initial claims averaged a week-to-week decrease of 13.5% since April 4th. The highest initial claims were recorded the week ending March 28 when they reached...
Tags: Economic Trends, Fiscal Policy, Interactive

Dealing With COVID-19 in Texas: Goodbye China, Hello Sweden

Posted: May 27, 2020 by Dennis W. Jansen, Liqun Liu
Among the many strategies undertaken by the countries in the world to fight the Covid-19 pandemic, two extreme forms stand out prominently. One is China's heavy-handed authoritarian approach which prescribes what individuals and businesses should and should not do with little consideration of civil liberties.  The primary goal...
Tags: Economic Trends, Health care

U.S. Unemployment Insurance Claims Fall to 2.4 Million for the Week Ending May 16; Texas’ April Unemployment Rises to 12.8%

Posted: May 22, 2020 by Carlos I. Navarro, Andrew J. Rettenmaier
For the week that ended on May 16, 2020, 2,438,000 workers filed unemployment insurance (UI) claims. This is the seventh week that initial weekly claims have declined from the previous week. The highest initial claims were recorded the week ending March 28 when they reached 6,867,000.  In the last nine weeks, we have seen 38.6 million initi...
Tags: Economic Trends, Interactive

Regrets? Yes, Regrets About the CARES Act

Posted: May 20, 2020 by Dennis W. Jansen
An article in The Wall Street Journal says that Bill Gates has regrets that the world was not better prepared for the pandemic.  While clear when vision is 20-20, would we make the same statement without the benefit of hindsight?  Should the world have been better prepared?  Quite possibly, although it is hard to predict the occur...
Tags: Federal Debt, Fiscal Policy

Private-Public Partnership in Fighting Covid-19

Posted: May 18, 2020 by Dennis W. Jansen, Liqun Liu
Mitigating the Covid-19 pandemic is a public health campaign that requires the joint efforts of both the private sector and the government.  Private enterprises provide creative solutions to a host of problems encountered in the pandemic, whereas appropriately placed government interventions take a social perspective in the fight against Co...
Tags: Fiscal Policy, Health care

This Time Is Different: Women's Unemployment Rate Tops Men's

Posted: May 13, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
Starting with the recession of July 1981 to November 1982, and continuing with the three subsequent NBER-dated recessions of July 1990 to March 1991, March 2001 to November 2001, and December 2007 to June 2009, the unemployment rate for men has increased more during (or immediately after) a recession compared to the increase in the unemployment ...
Tags: Economic Trends, Fiscal Policy

Texas: the 2020 Fiscal Crisis

Posted: May 08, 2020 by Carlos I. Navarro
Contrary to what may be suggested, it is very difficult to assess public performance in an unprecedented situation. However, the natural law is constant in any equation. It is natural for humans to thrive in freedom. The right to enterprise, work and trade freely has been the most important variable when measuring the increase in real income in ...
Tags: Economic Trends, Fiscal Policy

Unemployment Rate in the US Hits Historic High Since Great Depression

Posted: May 08, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
Every month, the Bureau of Labor Statistics (BLS) releases an Employment Situation Summary for the United States. The summary released on May 8th, 2020, includes national unemployment estimates for the month of April 2020. The unemployment data depicted below are seasonally adjusted and are reported by the BLS. The last reported data point for t...
Tags: Economic Trends, Fiscal Policy

Over 30 Million Unemployment Claims During the Last Six Weeks

Posted: May 01, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
For the week that ended on April 25, 2020, 3,839,000 workers filed unemployment insurance (UI) claims. The revised count for the week ending April 18 is 4,442,000 claims. The highest initial claims were recorded the week ending March 28, when they reached 6,867,000. In the last six weeks, we have seen over 30 million initial claims, a number whi...
Tags: Economic Trends, Fiscal Policy, Interactive

Unemployment Claims Over the Last Four Weeks Top 22 Million

Posted: April 17, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
For the fourth week in a row, millions of U.S. workers filed unemployment insurance (UI) claims. For the week that ended on April 11, 2020, 5,245,000 workers filed UI claims. The revised count for April 4 is 6,615,000 claims. For the weeks ending on March 28 and March 21, the number of initial claims were 6,867,000 and 3,307,000, respectively. I...
Tags: Economic Trends, Fiscal Policy

The U.S. lost 10% of its workforce in only three weeks; Texas lost almost 6%!

Posted: April 09, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
For the second week in a row, seasonally adjusted initial Unemployment Insurance (UI) claims topped 6 million workers. For the week that ended on April 4, 2020, 6,606,000 filed UI claims. Last week’s revised count is 6,867,000 claims, and for the week ending on March 21, the revised number of initial claims is 3,307,000. In the last three ...
Tags: Economic Trends, Fiscal Policy

Unemployment Insurance Claims Reach Another Record High

Posted: April 03, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
Seasonally adjusted initial UI claims reached an unheard mark of 6,648,000 for the week that ended on March 28, 2020. This more than doubled last week’s record of 3,283,000, which has been revised upward to 3,307,000. The initial claims over these past two weeks are as large as the first 28 weeks, or almost 7 months, of the Great Recess...
Tags: Economic Trends, Fiscal Policy

Unemployment Claims by State

Posted: April 01, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
For the week ending on March 21, seasonally adjusted initial unemployment insurance (UI) claims soared to 3,283,000.  While seasonally adjusted state-by-state numbers on initial claims are not reported in the weekly news release, the claims that have not been adjusted for seasonality are reported. These unadjusted initial UI claims are depi...

Our Fight against Covid-19

Posted: March 31, 2020 by Dennis Jansen, Liqun Liu
As of the morning of March 31, 2020, the U.S. has 164,610 confirmed cases of Covid-19 and 3,170 deaths.  These numbers are not evenly distributed across the country. The State of New York alone has 67,384 confirmed cases and 1,342 deaths,1 becoming the newest hotspot in the Covid-19 pandemic, following earlier hotspots such as th...

A Staggering Increase in Initial Claims for Unemployment Insurance

Posted: March 26, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
The figure below presents the seasonally adjusted initial claims for unemployment insurance in the U.S. for the first week of 2007 through the week ending March 21, 2020.  As is evident, there was an unprecedented increase in claims last week, to 3,283,000.  This is an increase of 3 million over the previous week, and this weekly numbe...
Tags: Economic Trends, Fiscal Policy

How Did China Do It?

Posted: March 25, 2020 by Dennis W. Jansen, Liqun Liu, Andrew J. Rettenmaier
By the time a lockdown was imposed on January 23, 2020 in the central Chinese city of Wuhan, ground zero of Covid-19 pandemic, five million people had traveled out of the city in the previous few weeks, according to the city’s mayor.  It was the peak of the pre-holiday traveling season, and Wuhan is a major transportation center in Ch...
Tags: Economic Trends, Health care

Coming Soon: A Massive Rise in Local Unemployment

Posted: March 20, 2020 by Dennis W. Jansen, Andrew J. Rettenmaier
Bars closed.  Cinemas and theaters and sporting arenas closed.  Concert halls closed.  Graduations and ring day and parents/family weekend-all canceled.  Hotel occupancy dropping through the floor.  Restaurants struggling to make a go of it serving food to go.  Companies are hurting. But it’s no...
Tags: Economic Trends

Initial Claims for Unemployment Insurance

Posted: March 19, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier
The figure below presents the seasonally adjusted initial claims for unemployment insurance in the U.S.  beginning the first week of 2007 to the week ending March 14, 2020.  As is evident, there was an abrupt increase in claims last week by 70,000 workers from the previous week. While the initial claims reported for the past week will ...
Tags: Economic Trends, Fiscal Policy

Covid-19 and the Cost-Benefit Analysis

Posted: March 19, 2020 by Dennis Jansen, Liqun Liu
The novel coronavirus "Covid-19," first found in December 2019 in the Chinese city of Wuhan, has as of the morning of March 18, 2020 spread to 157 countries/regions with 207,615 confirmed cases and 8,249 deaths.  The corresponding numbers for the U.S. are 7,324 confirmed cases and 115 deaths, respectively.1 March 11 the...
Tags: Fiscal Policy

Phase One U.S.-China Trade Agreement

Posted: January 30, 2020 by Dennis W. Jansen, Liqun Liu, Andrew J. Rettenmaier
After twenty months of mutual tariff escalations and numerous rounds of negations, the U.S.-China trade dispute finally reached a temporary resolution.  The phase one trade agreement between the U.S. and China was signed on January 15 at the White House by President Trump and China’s lead negotiator, Vice Premier Liu He.  ...
Tags: International Trade

NAFTA to USMCA

Posted: January 30, 2020 by Dennis W. Jansen, Liqun Liu, Andrew J. Rettenmaier
On January 16, 2020 the U.S.-Mexico-Canada Agreement (USMCA) was passed on a Senate vote of 89-10.  The new USMCA is an update of the North American Free Trade Agreement (NAFTA) and includes several notable changes. The new trade agreement comes 26 years after NAFTA became effective on January 1, 1994. While the provisions in the USMCA affe...
Tags: International Trade

A January FOMC Post-Mortem

Posted: January 29, 2020 by Dennis W. Jansen, Thomas R. Saving
Media coverage the day following the Federal Reserve Open Market Committee’s (FOMC) action on January 29, 2020 widely applauded the Fed’s decision to maintain its target for the Fed Funds rate.  But the most important aspect of the December meeting was the decision to increase the interest paid on bank reserves, the IOER, from 1...
Tags: Federal Reserve, FOMC, Interest Rates

Interest Rates and Fed Policy in 2019

Posted: January 27, 2020 by Dennis W. Jansen, Thomas R. Saving
The year 2019 was a year of declining market interest rates. In fact, 10-year Treasuries fell from 2.8% in January to a low of 1.47 in early September, during the period of the interest rate inversion. At that point, 3-month Treasuries were yielding almost 2%. The inversion ended in early October but the 3-month, 1-year and 10-year rates were al...
Tags: Federal Reserve, Interest Rates

A December FOMC Post-Mortem

Posted: December 12, 2019 by Dennis W. Jansen, Thomas R. Saving
Media coverage the day following the Federal Reserve Open Market Committee’s (FOMC) action on December 11, 2019 widely applauded the Fed’s decision to maintainin its target for the Fed Funds rate.  But the most important aspect of the December meeting was to maintain the interest paid on bank reserves, the IOER, at its current l...
Tags: FOMC

Medicare Around the Country

Posted: December 11, 2019 by Carlos I. Navarro, Andrew J. Rettenmaier
PERC’s Medicare Maps have been updated this year using data from the Centers for Medicare and Medicaid Services (CMS) Medicare Geographic Variation da...
Tags: Geography, Interactive, Medicare

A Year of Interest Rates and Fed Policy

Posted: December 10, 2019 by Dennis W. Jansen, Thomas R. Saving
The year 2019 was a year of declining market interest rates.  In November 2018, the 10 year treasury rate was as high as 3.24% and then it declined steadily through the first eight months of the year, reaching 1.47% at the beginning of September 2019.  Importantly, the Fed had raised its upper bound target for the Federal Funds Rate (a...

An October FOMC Post-Mortem

Posted: October 31, 2019 by Dennis W. Jansen, Thomas R. Saving
Media coverage the day following the Federal Reserve Open Market Committee’s (FOMC) action on October 30 widely applauded the Fed’s lowering of its target for the Fed Funds rate. The most important change in the October meeting was reducing the interest paid on bank reserves, the IOER, by 25 basis points, from 1.80% to 1.55%.  T...

The Fed and Interest Rates: Where to Now?

Posted: October 25, 2019 by Dennis W. Jansen, Thomas R. Saving
Since September, when the Federal Reserve reduced the top of the target range for the Fed Funds rate from 2.25% to 2.00%, a reduction 25 basis points, and reduced the interest rate paid on bank reserve balances from 2.1% to 1.8%, a cut of 30 basis points, market interest rates have continued to fall. As a result, the interest rate paid to banks ...
Tags: Federal Reserve, FOMC, Interest Rates

Lifetime Implications of Childhood Peers

Posted: October 21, 2019 by Dennis W. Jansen
“The simple but true fact of life is that you become like those with whom you closely associate - for the good and the bad.”  --Colin Powell   “A man is known by the company he keeps” ― Aesop   Wise parents tell their children to choose their friends carefully.  This has lon...
Tags: Peer Effects

A September FOMC Post-Mortem

Posted: September 20, 2019 by Dennis W. Jansen, Thomas R. Saving
Media coverage on the day following the Federal Reserve Open Market Committee’s (FOMC) action, as announced on September 18, widely applauded the Fed’s lowering of its target for the Fed Funds Rate.  The most important change in the September meeting was reducing the interest paid on bank reserves, the IOER, by 30 basis points. ...
Tags: Federal Reserve, FOMC, Interest Rates

The Fed and Interest Rates: Where Do We Go From Here?

Posted: September 13, 2019 by Dennis W. Jansen, Thomas R. Saving
As market interest rates continue their downward slide, the press is awash with predictions of how much the Fed will reduce interest rates at its September 17 and 18 meeting. The very fact that market interest rates are changing without Fed action begs the question of whether the Fed can even influence the direction of change in market interest ...
Tags: Federal Reserve, Interest Rates

FOMC July 31: A Post-Mortem

Posted: August 05, 2019 by Dennis W. Jansen, Thomas R. Saving
On July 31 the Fed announced a 25 basis point cut in both its target band for the federal funds rate and in its rate of interest on excess reserves (IOER).  The new IOER would be 2.15%.  Media coverage widely parroted the statement that the Fed had lowered interest rates for the first time since the onset of the Great Recession.  ...
Tags: Federal Reserve, FOMC, Interest Rates

FOMC July 30-31: Ten Reasons to Cut Rates

Posted: July 29, 2019 by Dennis W. Jansen, Thomas R. Saving
Speculation is running high regarding whether the Federal Open Market Committee (FOMC) will cut interest rates – either the Federal Funds Rate upper bound or more importantly, the interest rate on reserves– at its next meeting scheduled for July 30 and 31.  Opinions are split on what the FOMC should do, and what they will do.&nb...
Tags: Federal Reserve, FOMC, Interest Rates

FOMC June 18: A Post-Mortem

Posted: June 25, 2019 by Dennis W. Jansen, Thomas R. Saving
Media coverage of the Federal Reserve Open Market Committee’s action on June 18 reported that the Fed left interest rates unchanged, with the Federal Funds Rate range holding steady at 2.25% -2.5%.  Unremarked upon by the financial media, and unmentioned in the lead section of the Fed's statement, was the fact that the Fed’s...
Tags: Federal Reserve, FOMC, Interest Rates

The Cost of Tariffs on Chinese Products

Posted: June 13, 2019 by Dennis W. Jansen, Liqun Liu, Andrew J. Rettenmaier
Who pays for U.S. tariffs on Chinese goods?  According to some in the popular press, the answer is that the tariffs on China are paid entirely by U.S. importers, and eventually by U.S. consumers.  This answer seems to be based on the observation that U.S. importers must pay the tariff to the U.S. Customs authorities before the imported...
Tags: International Trade

The Fed Must Reduce Rates Now!

Posted: June 11, 2019 by Dennis W. Jansen, Thomas R. Saving
The FOMC’s press release from its May 1 meeting emphasized that the economy was on an even keel, and that no change in the Fed Funds Rate target was in store. This steady-as-you-go decision was highlighted in the popular press. Hardly noticed was the small 5 basis point reduction in the interest rate on excess reserves, IOER, despite the f...
Tags: Federal Debt, Interest Rates

Reforming Social Security the Right Way

Posted: June 04, 2019 by Dennis W. Jansen, Liqun Liu, Andrew J. Rettenmaier
Social Security (and specifically the Old Age, Survivors and Disability Insurance, or OASDI) is in deficit.  We are collecting less in Social Security taxes than we pay out in benefits,  the trust fund is declining and is expected to be fully depleted in sixteen years, in 2035. Baby Boomers are retiring in record numbers, the number of...
Tags: Social Security

The Downsides of Minimum Wage Increases

Posted: May 10, 2019 by Jonathan Meer
The House of Representatives recently took up the Raise the Wage Act, which would more than double the federal minimum wage to $15 an hour over the next five years. The debate among economists over the impacts of minimum wage increases on employment is still ongoing, even as there is widespread agreement that low-income families need support. Bu...
Tags: Minimum Wage

Federal Liabilities and Individual Assets: The Case of Social Security

Posted: March 01, 2019 by Dennis W. Jansen, Liqun Liu, Andrew J. Rettenmaier
Each spring or early summer, the Social Security and Medicare Trustees issue their annual reports on the status of the programs’ Trust Funds. The news stories that follow primarily focus on the year when the Trust Funds will be exhaust...
Tags: Social Security

The Cost of Democratic Socialism

Posted: February 20, 2019 by Svetozar Pejovich
A defining feature of the 20th century was the struggle between capitalism and three major types of socialism: Communism, national socialism, and fascism. All three types of socialisms, as well as Cuba and Venezuela today, failed to duplicate the accomplishments of capitalism in raising the standard of living. Yet, a supposed new brand of social...

The Little-Known Fact That Will Make the National Debt Even Harder to Tackle

Posted: December 19, 2018 by Dennis W. Jansen, Thomas R. Saving
The federal government is skirting dangerous shoals with an irresponsible fiscal policy. We are running massive budget deficits in a booming peacetime economy. These deficits are increasing our federal debt—which means we are also paying more to service the debt and more interest on every dollar of debt. While the Federal Reserve has be...
Tags: Federal Debt

Pensions Rescued by Borrowing: What Could Go Wrong with That?

Posted: October 02, 2018 by Dennis W. Jansen, Liqun Liu, Andrew J. Rettenmaier
A Tale of Two Cities   The dominant form of pensions for public sector workers are defined benefit plans. Such plans typically specify a retirement age and a benefit formula that determines the yearly payment to retirees. The benefit formulas are based on the number of years of employment, the average of their...
Tags: State and Local Pensions

How Not to Solve the Problem of Trade Deficits

Posted: July 09, 2018 by Dennis W. Jansen, Liqun Liu, Andrew J. Rettenmaier
The U.S. has run persistent trade deficits since the early 1990s and the annual trade deficit has increased to $566 billion in 2017.  This has raised concerns that our trading partners are taking advantage of us.  Since March, President Trump has roared about our trade deficit with China, equal to $375 billion in 2017, as well as China...
Tags: International Trade

Riding the Spending Wave

Posted: July 06, 2018 by Andrew J. Rettenmaier
The Congressional Budget Office’s recently released long-term forecast does not paint a pretty picture of the federal government’s financial future.  Deficits are expected in all future years as federal spending grows faster than tax revenues. The aging of the US population combined with rapidly growing per capita health care sp...
Tags: Fiscal Policy

Social Security Trust Fund Underscores Need for Reform

Posted: July 03, 2018 by Dennis W. Jansen, Thomas R. Saving
The Social Security Trust Fund is basically an interest-bearing I.O.U. from the U.S. Treasury to the U.S. Social Security Administration.  As long as general revenue is used to cover all shortfalls in Social Security taxes, the trust fund plays no important economic role in allocating resources, but may highlight the need for reform...
Tags: Social Security

Fiddling While Rome Burns?

Posted: June 05, 2018 by Dennis W. Jansen, Andrew J. Rettenmaier
Economists often counsel that we should look at 'revealed preferences,' the idea that actions speak louder than words.  What does this viewpoint tell us about our commitment to fiscal responsibility since last January? Recent actions by Congress have both lowered tax revenues and raised previously set spending caps....
Tags: Fiscal Policy

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