Most people have a vague understanding that America has a huge long-run fiscal problem.
They’re right, though they probably don’t realize the seriousness of that looming crisis.
Here’s what you need to know: America’s fiscal crisis is actually a spending crisis, and that spending crisis is driven by entitlements.
More specifically, the vast majority of the problem is the result of Medicaid, Medicare, and Social Security, programs that are poorly designed and unsustainable.
America needs to fix these programs…or eventually become another Greece.
Fortunately, all of the problems can be solved, as these three videos demonstrate.
The first video explains how to fix Medicaid.
The second video shows how to fix Medicare.
And the final video shows how to fix Social Security.
Notwithstanding Media Coverage of Black Friday, Consumer Spending Does Not Drive Economy
November 28, 2011 by Dan Mitchell
By fighting for freedom in Washington, I’ve condemned myself to a life of frustration and aggravation. One of my many pet peeves is that so many people in DC believe that economic growth depends on consumer spending.
Back in the early days of this blog, I wrote the following.
Many people assume that consumer spending drives growth because it is roughly two thirds of the economy. But this puts the cart before the horse. Higher levels of consumer spending do not cause prosperity. Instead, more consumer spending is best understood as a symptom of prosperity.
So you can imagine how irritating it is for me to see news reports about how Black Friday spending will goose the economy.
This video, narrated by Hiwa Alaghebandian of the America Enterprise Institute, debunks this notion, while also explaining that Keynesian economics is flawed because it misinterprets the role of consumer spending.
Hiwa also narrated this video on IRS complexity.
Posted in Economics, Fiscal Policy, Keynes, Keynesian, Spending | Tagged Consumer Spending, Economics, Hiwa Alaghebandian, Keynesian Economics, Obama, stimulus | 1 Comment »
Everything You Need to Know about Entitlement Reform
November 28, 2011 by Dan Mitchell
Most people have a vague understanding that America has a huge long-run fiscal problem.
They’re right, though they probably don’t realize the seriousness of that looming crisis.
Here’s what you need to know: America’s fiscal crisis is actually a spending crisis, and that spending crisis is driven by entitlements.
More specifically, the vast majority of the problem is the result of Medicaid, Medicare, and Social Security, programs that are poorly designed and unsustainable.
America needs to fix these programs…or eventually become another Greece.
Fortunately, all of the problems can be solved, as these three videos demonstrate.
The first video explains how to fix Medicaid.
The second video shows how to fix Medicare.
And the final video shows how to fix Social Security.
Regular readers know I’m fairly gloomy about the future of liberty, but this is one area where there is a glimmer of hope.
The Chairman of the House Budget Committee actually put together a plan that addresses the two biggest problems (Medicare and Medicaid) and the House of Representatives actually adopted the proposal.
The Senate didn’t act, of course, and Obama would veto any good legislation anyhow, so I don’t want to be crazy optimistic. Depending on how things play out politically in the next six years, I’ll say there’s actually a 20 percent chance to save America.
