Economics Feed

"US fiscal alarm bells are drowning out a deeper problem"

If this keeps up, some day--maybe soon--our time will run out.

The US federal budget is haemorrhaging money. The non-partisan Congressional Budget Office calculates that in the first seven months of the 2023 fiscal year, underlying government revenues are down 10 per cent with spending up 12 per cent. This leaves the federal budget deficit more than three times larger than in the same months of the 2022 fiscal year.

"The antitrust assault on the startup economy"

"As the business world widely recognizes, incumbent/startup acquisitions efficiently combine a startup’s innovation excellence with an incumbent’s scale, scope and access to capital. This potent synthesis can accelerate the process of converting an innovation into a viable product for market release. Unfounded regulatory interventions based on hypothetical models of market failure harm consumers and startups by obstructing the path to commercialization."

"Every Flaw in Consumers is Worse in Voters, Part Deux"

Mike Munger:

Seven years ago, I pointed out a problem with the “market failure” justification for state action against markets. This objection has become more, not less, important with the passage of time. So I’m going to reprise the argument, and make it clear why this problem should be one of the central features of public policy.

The problem is this: every flaw in consumers is worse in voters.

The power of incentives . . .

I've heard it said that to be an economist you must recognize the power of incentives. But to be a good economist you must anticipate how clever people will game the incentives they are given:

My son’s school was having issues with messy bathrooms so every month they reward the boys or girls with ice cream depending on whose bathrooms are cleaner and according to my son it’s become a prank war where they just fuck up each other’s bathroom.

"Will the ‘Millionaires’ Tax’ Hobble the Massachusetts Economy?"

Well, I don't think it will help.

One business owner recently told me that the millionaires’ tax was a significant reason he made Florida his primary residence last year. He, like Calvo-Bacci and many others, was already antsy about the state’s high estate and business taxes as well as the rising cost of living, driving him toward friendlier pastures. Meanwhile, wealth advisers and business consultants throughout the state say that many of their clients are looking seriously into moving beyond Massachusetts’ borders. Some, they say, will definitely move, while others have commissioned studies in preparation to flee in a few years when current leases or other obligations run out.