Monday, May 28, 2018

Economic Update - An Unsustainable System - 05.27.18 [feedly]

Economic Update - An Unsustainable System - 05.27.18
http://economicupdate.podbean.com/e/economic-update-an-unsustainable-system-052718/


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Updates on decline of cities/private cities, freelancers' economy, why legalize sports betting now, Fiat-Chrysler-Porsche added to emissions cheating scandal, new federal jobs guarantee, Catholic University attacks tenure. Interview with Chris Hedges on unsustainable US system.




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Kate Manne review of Jordan Peterson

Jordan Peterson is a kind of Trumper pretending to be a philosopher.  This is not economics, but you do not need to waste time reading any of Peterson's garbage after enjoying Kate Manne's first class review.



Reconsider the lobster

Jordan B. Peterson's 12 Rules For Life: An antidote to chaos was born as an answer to a question posed on the internet discussion forum Quora: "What are the most valuable things everyone should know?" Peterson, a professor of psychology at the University of Toronto, proposed a list of maxims, which became popular with Quora users. As Peterson tells us in his book's introduction ("Overture"), the list received 120,000 views and 2,300 "upvotes". "My procrastination-induced musings hit a nerve. I had written a 99.9 percentile answer." "You win Quora. We can just close the site now", read one comment, as recounted by Peterson.

Each of the ensuing chapters of 12 Rules is a series of meditations – or, less kindly, digressions – leading up to its titular rule, presented as the solution to a problem revealed therein about life and how to make order out of chaos. The chaos is in turn presented as a universal, ahistorical fact about the nature of Being or human existence. Given all this, it is striking how many of the discussions reduce to advice about how to win at something, anything, nothing in particular: and how not to be a "loser", in relation to others whose similarity to oneself is secured by the time-honoured narrative device of anthropomorphization, under a more or less thin veneer of scientism. Rule One is "Stand up straight with your shoulders back", to avoid seeming like a "loser lobster", who shrinks from conflict and grows sad, sickly and loveless – and is prone to keep on losing, which is portrayed as a disaster. Peterson:

When a defeated lobster regains its courage and dares to fight again it is more likely to lose again than you would predict, statistically, from a tally of its previous fights. Its victorious opponent, on the other hand, is more likely to win. It's winner-take-all in the lobster world, just as it is in human societies, where the top 1 percent have as much loot as the bottom 50 percent – and where the richest eighty-five people have as much as the bottom three and a half billion.

Critiquing these hierarchical structures and finding, when possible, a way to live outside of them in more co-operative ways are obvious alternatives for human beings about which Peterson says little.

Rule Four is addressed to those who might currently feel inadequate: "Compare yourself to who you were yesterday, not to who someone else is today". Alternatively, if you're not winning the game you're playing, find another game at which to win. Then there is the odd, not infrequent, throwaway remark that betrays Peterson's fascination with ranking everything. When it comes to cats killed by cars, it is better to be torn apart by the engine they curled up in for the warmth rather than run over, for some reason. "Only loser cats die that way", he pronounces contemptuously of the latter, with an effect presumably intended to be jocular. Hierarchies turn up everywhere in Peterson's book – sometimes seemingly coming out of nowhere.

Peterson often writes in the first-person plural, with an effect either cosy or alienating, depending on whether or not you number among his chief addressees. One senses among his readers a version of his former self: a restless young buck from a small town in Alberta, Canada, looking to escape and achieve greatness in the wider world. "It was easier for people to be good at something when more of us lived in small, rural communities", he reflects. Strictly speaking, this seems false, or at least vulnerable to counter-examples. It was just easier to seem good relative to other people when one knew less about their exploits. "Someone could be homecoming queen. Someone else could be spelling-bee champ, math whiz or basketball star", Peterson reminisces. But since we have become digitally connected across the globe, "our hierarchies of accomplishment are now dizzyingly vertical". For Peterson, this makes giving up in despair all too tempting. He speaks at length in the voice of an imagined "internal critic", whom he has telling "us" things like this: "Your career is boring and pointless, your housekeeping skills are second-rate, your taste is appalling, you're fatter than your friends, and everyone dreads your parties. Who cares if you are prime minister of Canada when someone else is the president of the United States?"

But notwithstanding the mere existence of such great heights, we should ask: who in the world is likeliest to be experiencing vertigo at the moment? Peterson does not consider this question, but its answer is not far to seek: those with furthest to fall, given their historically great expectations. Privileged white men, all else being equal, who also happen to number disproportionately among Peterson's loyal readers.

This helps to explain Peterson's first, and to me most vivid, choice of anthropomorphized creature: the lobster, with whom readers are invited to identify, based on a supposedly shared obsession with territory and status (and also something about serotonin that seemed question-begging). The lobster is a bottom-feeder, fighting other lobsters for territory and food scraps. Lobsters who lose ground are miserable beasts, according to Peterson, who often wind up dead or worse. "If a dominant lobster is badly defeated, its brain basically dissolves. Then it grows a new, subordinate's brain – one more appropriate to its new, lowly position." And such a position is "not good", to echo one of Peterson's oft-repeated, oddly subjectless, evaluative verdicts. (Not good for whom? The answer isn't always obvious.) Peterson also betrays the gender of his number one envisaged lobster, and hence audience, when he writes that the

top lobster, by contrast – occupying the best shelter, getting some good rest, finishing a good meal – parades his dominance around his territory, rousting subordinate lobsters from their shelters at night, just to remind them who's their daddy. The female lobsters (who also fight hard for territory during the explicitly maternal stages of their existence) identify the top guy quickly, and become irresistibly attracted to him. This is brilliant strategy, in my estimation. It's also one used by females of many different species, including humans.

Peterson's advice is primarily directed towards, and has resonated with, a very particular audience: those predominantly white, straight, cis, and otherwise privileged men who fear being surpassed by their historical subordinates – people of colour and white women, among others – and losing their loyal service. Greater equality of opportunity is of course a necessary condition and symptom of social progress. (Although it is very far from sufficient when it comes to social justice – and such progress is often concentrated in the upper echelons of society.) But new opportunities and better odds for at least some members of historically subordinate social groups cannot be expected to come as good news to all of history's traditional winners. It may result not only in disappointment and shame among some of them, but also resentment and violent outbursts among others. Peterson recognizes the existence of these corrosive reactions, but not their social locus. When it comes to diagnosing and treating these ills, he misses the mark spectacularly.

This is where Peterson is at his least perceptive and most pernicious, in my view. Rule Six might sound at the outset like an inoffensive over-generalization: "Set your house in perfect order before you criticize the world". But the chapter opens on a very strange note. "It does not seem reasonable to describe the young man who shot twenty children and six staff members at Sandy Hook Elementary School in Newtown, Connecticut, in 2012 as a religious person." (Indeed not.) "This is equally true for the Colorado theatre gunman and the Columbine High School killers." (Again, granted.) "But", Peterson continues, in the teeth of such rational and moral appearances, "these murderous individuals had a problem with reality that existed at a religious depth." Peterson moves to support this eyebrow-raising – even while highly unclear – claim with a passage from the diary of one of the Columbine killers, Eric Harris:

The human race isn't worth fighting for, only worth killing. Give the Earth back to the animals, they deserve it infinitely more than we do. Nothing means anything [any]more.

On the basis of this and one other entry (which recommends extending the final solution beyond the Jews to the entire human race – or, "KILL MANKIND!" in Harris's formulation), Peterson diagnoses Harris and his ilk with a kind of existential crisis – a crisis in Being, which is dignified by the capital letter, and companions in misery such as Tolstoy at his most misanthropic (and suicidal), who dismissed human existence as "meaningless and evil". Following the passage from Harris above, Peterson writes:

People who think such things view Being itself as inequitable and harsh to the point of corruption, and human Being, in particular, as contemptible. They appoint themselves supreme adjudicators of reality and find it wanting.

Eric Harris and Adam Lanza (the Sandy Hook killer) and the like are thus held to be "the ultimate critics" of the moral value of human beings and our (mis)deeds – as opposed to nihilistic, in denying or rejecting the very existence of moral values, a distinction which makes an important difference here. Remarkably, Peterson even credits these mass shooters with despair about the inevitability of human suffering and moral evil. Given what such "killers tell us . . . in their own words, who would dare say that this is not the worm at the core of the apple?" asks Peterson. This rhetorical challenge is easily met, however. If this was the source of their angst, then why choose to do moral evil, and cause yet more suffering?

Some may resist all attempts to ascribe to such people an even semi-coherent moral outlook. But that would risk making the same mistake as Peterson does, when he ignores a few distinctive facts about those who commit such violence. First, he fails to acknowledge that these killers are overwhelmingly male, typically white, and otherwise privileged (straight and cis, in particular). Second, they often betray an obsession with being top lobster (many, for example, have also committed acts of intimate partner violence, which typically function to express and enforce male dominance). This makes them members of the very group to which Peterson's book is chiefly offering advice. The resulting discussion is not good, to put it mildly; it is highly irresponsible and deeply deceptive by omission.

If one clicks the link Peterson provides in an endnote, one finds that the next entry in Harris's journal begins thus:

wooh, different pen. HA!

alright you pathetic fools listen up; I have figured it out. the human race strives for exellence in life and community always wanting to bring more =good= into the comm. and nulify =bad= things.

Thus fortified by his new pen and this insight, Harris goes on to conclude:

People always say we shouldnt be racist. why not? Blacks ARE different, like it or not they are. they started on the bottom so why not keep em there. it took the centuries to convince us that they are equal but they still use their color as an excuse or they just discriminate us because we are white. Fuck you, we should ship yer black asses back to Afri-fucking-ca were you came from. we brought you here and we will take you back.

America=White. Gays . . . well all gays, ALL gays, should be killed. mit keine fragen. lesbians are fun to watch if they are hot but still, its not human. its a fucking disease. you dont see bulls or roosters trying to fuck do you? no, I didn't think so.

women you will always be under men. its been seen throughout nature, males are almost always doing the dangerous shit while the women stay back. its your animal instincts, deal with it or commit suicide, just do it quick.

In another entry, Harris indulges in a highly disturbing rape fantasy. Peterson completely neglects to mention any of this, or otherwise convey the fact that Harris was fixated on social hierarchies and desperate to be, or remain, on top of them. He was not, contra Peterson, someone who "believed that the suffering attendant upon existence justifies judgment and revenge" and who despaired because "human beings [are] a failed and corrupt species". Harris was a white supremacist, a vicious homophobe and a misogynist.

These are common and revealing moral co-morbidities of mass killers. (A few other salient examples: Dylann Roof, George Sodini, Marc Lépine – and more to follow.) Even when they do wax biblical, this need not be attributed to quasi-religious sensibilities, but rather the possibility they are projecting themselves into the highest position they can imagine – appointing themselves God, and wishing a pox on any mere mortal who fails to worship them. The virulently misogynistic, and also racist, mass shooter Elliot Rodger wrote:

Humanity has never accepted me among them, and now I know why. I am more than human. I am superior to them all. I am Elliot Rodger . . . . Magnificent, glorious, supreme, eminent . . . . Divine! I am the closest thing there is to a living god.

Rodger didn't really believe he was a god; on the contrary, he felt small, and was furiously over-compensating. He had previously written of feeling like "an insignificant little mouse" in the eyes of the girls who failed to grace him not only with sex, but also the "love and affection", and the social validation, he craved so sorely. Indeed, Rodger deemed it a "crime" that such women had collectively deprived him of these goods – choosing instead to "throw themselves" at the "obnoxious brutes" they preferred to him, "the supreme gentleman". Rodger declared: "On the day of Retribution, I will enter the hottest sorority house of UCSB (the University of California, Santa Barbara), and I will slaughter every single spoiled stuck up blonde slut I see inside there . . . . I'll take great pleasure in slaughtering all of you. You will finally see that I am in truth the superior one. The true Alpha Male. Yes". And Rodger tried to enact this plan, though he was partly foiled in its execution.

Such homicidal violence may indeed be a last resort to restore order and stave off chaos. But the chaos in question exists not in the fabric of some grand, impersonal, metaphysical reality; rather, it stems from a small tear in such an agent's hitherto dominant social position that undoes him – and makes him prone to take down others with him.

By way of last words in his so-called manifesto (really more of a memoir), Rodger went on:

When I think about the amazing and blissful life I could have lived if only females were sexually attracted to me, my entire being burns with hatred. They denied me a happy life, and in return I will take away all of their lives. It is only fair.

Peterson offers no effective antidote to the problem of the toxic masculine despair he reinforces and dignifies, having misrepresented it as a general and hence presumably equal opportunity crisis of Being. ("The stupidity of the joke being played on us does not merely motivate suicide. It motivates murder – mass murder, often followed by suicide. That is a far more effective existential protest.") He merely asserts that overcoming the thirst for vengeance in light of the world's unfairness is possible, somehow:

Truly terrible things happen to people. It's no wonder they're out for revenge. Under such conditions, vengeance seems a moral necessity. . . . . But people emerge from terrible pasts to do good, and not evil, although such an accomplishment can seem superhuman. I have met people who managed to do it.

As advice goes, this is less than helpful (especially since Peterson's subsequent examples are an Indigenous Canadian man, a woman, Gandhi and, in the following chapter, Jesus, among others). Peterson's suggestion (the overarching rule of this chapter, recall) is to clean up your own house and cease to do wrong, inasmuch as you know you are doing it, before criticizing others. But another point worth noting about the killers above is that, by and large, they felt entirely justified in their actions; they thought their victims deserved to be punished.

In April, ten people were killed, and many more injured, after a van ploughed into them in the streets of Toronto, the city where Peterson happens to teach. The majority of the victims were women, and the alleged killer, Alek Minassian, twenty-five, wrote on Facebook, minutes beforehand:

The Incel Rebellion has already begun! We will overthrow all the Chads and Stacys. All hail the Supreme Gentleman Elliot Rodger!

The term "incel" (or "involuntarily celibate") is a newish word for a considerably older problem, which has come on the heels of feminist social progress. It encompasses generally privileged, often youngish, men protesting the world's perceived unfairness, in their having been deprived of (read: not having) what they thought they would and should have been able to take for granted. The desirable women, the "Stacys", are held to favour the alpha males, "the Chads". And so-called "nice guys", betas, "supreme gentlemen" – or, more ominously self-proclaimed "incels" – take themselves to deserve more of these "hot" women's sexual, emotional, and moral attention, understood as a social commodity as well as currency to buy status.

Peterson's 12 Rules For Life is a fast-acting, short-term analgesic that will make many of his readers feel better temporarily, while failing to address their underlying problem. On the contrary, the book often fuels the very sense of entitled need which, when it goes unsatisfied, causes such pain and outrage. Peterson might have done a good thing by reaching and trying to talk young white men out of their unwarranted resentment, which is the predictable result of social norms changing for the better and the fairer. Some historically subordinate group members can sometimes now compete with and defeat the historically dominant person, who may subsequently have to master the art of losing gracefully. This might have been said with the candour, and sometimes ruthlessness, which Peterson clearly prides himself on being capable of elsewhere. Unfortunately, when it comes to this morally important battle, Peterson shrinks from conflict, and thereby avoids provoking – or improving – his readers.

Still, despite these and other objections, I agree with Peterson's last rule entirely: "Pet a cat when you encounter one on the street". Unless they are a loser cat (i.e. dead), as perhaps goes without writing.



--
John Case
Harpers Ferry, WV

The Winners and Losers Radio Show
7-9 AM Weekdays, The Enlighten Radio Player Stream, 
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China to Clear Qualcomm-NXP Once Confident of ZTE Deal [feedly]

A Rescue Plan for a Jobs Crisis in the Heartland

The national unemployment rate hit 3.9 percent in April, the lowest level since 2000. Still, wage growth has been and remains underwhelming. More alarming, America faces a historic crisis of male joblessness in what we call the Eastern Heartland, a band of states that runs from Louisiana north through to Ohio and Michigan.

Some of these places, like Detroit and Cleveland, were once industrial powerhouses that have been hammered by automation and an exodus of industrial employment to places with lower labor costs. Other places, like Mississippi, spent much of middle 20th century escaping from excruciating poverty, only to experience increases in joblessness over the past 20 years.

Federal policy can't bring the Rust Belt back to its former glory, and we shouldn't try to artificially relocate economic activity to less productive places. But we must do more to fight the scourge of long-term joblessness, and we should focus our efforts in the places where joblessness is most severe.

To meet this challenge, many economists have argued for a universal basic income or more generous earned-income tax credit. We would support an E.I.T.C. expansion. But the most direct way to encourage work is with a new wage subsidy that benefits workers and encourages companies to replace joblessness with employment.

The subsidy program should be more generous in struggling areas, like the Eastern Heartland, although even a flat nominal wage subsidy would deliver more bang in depressed areas with lower prices. Targeted employment subsidies aren't going to reverse the tectonic trends of regional change, but they can potentially change the hard crash of regional collapse into a softer landing.

The longstanding tendency of incomes to rise more quickly in formerly poor areas has now slowed or reversed. Divergence is replacing convergence. Migration has fallen and poor people are much less likely to move to richer areas. Moreover, the migrants who leave depressed areas are much more skilled than those who stay, depriving the area of their most likely economic leaders.

In Flint, Mich., over 35 percent of prime-aged men — between 25 and 54 — are not employed. In Charleston, W.Va., the joblessness rate for this group is 25 percent. These places represent some of the more extreme examples of what may be America's largest and least understood social problem: the rise of prime-aged male joblessness, which has reached over 15 percent for most of the past decade from under 6 percent for all of the late 1960s.

The Eastern Heartland is the epicenter of much of America's economic distress. Between 1965 and 2016, real gross domestic product in the Eastern Heartland increased by only 2.07 percent a year. Its relative G.D.P. would have been more than 50 percent higher had it grown at the rate of America's Coastal states and more than double had it grown at the rate of the Western Heartland states. The Eastern Heartland has suffered disproportionately from the opioid epidemic, and overall prime-aged male mortality rates are over 30 percent higher than for the rest of the country.

A Rescue Plan for a Jobs Crisis in the Heartland

By Edward L. Glaeser, Lawrence H. Summers and Ben Austin

Mr. Glaeser and Mr. Summers are professors of economics at Harvard, where Mr. Austin is a Ph.D. candidate.



As technological trends reduce the demand for less skilled labor, we must both strengthen American skills and encourage the employment of all Americans. The simplest way to encourage employment across America is just to add a few dollars into workers' hourly wages, which would effectively increase the national minimum wage without discouraging employers from creating new jobs. The benefit could go entirely to workers, or be split between workers and employers to increase the incentives to generate new jobs.

Subsidizing employment makes sense, because the suffering associated with not working appears far more profound than the pain associated with being part of the working poor. Two percent of prime-aged men earning over $50,000 report that they are unsatisfied with their lives. The share reporting such unhappiness rises to 4 percent among men earning between $35,000 and 50,000, and 7 percent for men earning less than $35,000. But the share of jobless men reporting such unhappiness is 18 percent.

The fans of programs that accept, and even encourage, joblessness, like universal basic income, seem to forget that human satisfaction doesn't come primarily from material comfort, but from purpose, a feeling of accomplishment and the social support that often occurs in a work environment. An America in which 40 or 50 percent of adults live without working, relying on the generosity of a federal handout, is a nightmare.

The earned-income tax credit has been effectively promoting employment for over 40 years, but its design makes it poorly suited to fighting the ocean of male joblessness. Its benefits are skewed strongly toward single-earners in families with children. Three-quarters of long-term jobless prime-aged men do not live in households with children, limiting their maximum credit to $510 in 2017. Of the men who do live in households with children, over 80 percent live with a spouse, and two-thirds of those spouses are working. The earned-income tax credit is a good policy, but it has little impact on jobless men.

Textbook economic theory suggests that the subsidy can be paid either directly to the employer or to the worker, and it will have equivalent effects since wages will adjust. But in practice, paying directly to the employer may do more for employment when wages are downwardly rigid because of explicit or implicit minimum wages. An employer-based system may also be easier to administer.

The main downside of subsidizing employment is the cost, and that's why regional targeting makes sense. The wage subsidy can be lowered in labor markets with low joblessness, and it should be phased out entirely for the prosperous and the long-term employed. The subsidy should be highest for workers who have been jobless for a long period, and for veterans, or for those overcoming a labor market disadvantage.

America's joblessness is a social disaster, and to fight that disaster our resources should be targeted toward the areas that suffer most. In the mid-20th century, we could trust in the free flows of capital and labor to equalize regional suffering, but those flows have dried up in the 21st century. We cannot bring back the Rust Belt, but we must do more to make sure that its residents have jobs.

Edward L. Glaeser and Lawrence H. Summers are professors of economics at Harvard, where Ben Austin is a Ph.D. candidate.

Follow The New York Times Opinion section on Facebook and Twitter (@NYTopinion), and sign up for the Opinion Today newsletter.




--
John Case
Harpers Ferry, WV

The Winners and Losers Radio Show
7-9 AM Weekdays, The Enlighten Radio Player Stream, 
Sign UP HERE to get the Weekly Program Notes.

Effects of Copyrights on Science [feedly]

a downside of intellectual property law


Effects of Copyrights on Science



Barbara Biasi and Petra Moser at VoxEU:

Effects of copyrights on science: Summary Copyrights grant publishers exclusive rights to content for almost a century. In science, this can involve substantial social costs by limiting who can access existing research. This column uses a unique WWII-era programme in the US, which allowed US publishers to reprint exact copies of German-owned science books, to explore how copyrights affect follow-on science. This artificial removal of copyright barriers led to a 25% decline in prices, and a 67% increase in citations. These results suggest that restrictive copyright policies slow down the progress of science considerably.


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House Bill Leaves IRS Enforcement Depleted [feedly]

House Bill Leaves IRS Enforcement Depleted
https://www.cbpp.org/blog/house-bill-leaves-irs-enforcement-depleted

The House Appropriations Committee's 2019 funding bill for the IRS doesn't begin to address the decline in enforcement funding in recent years. That's particularly ill-advised as the IRS soon begins enforcing the 2017 tax law, which creates many new opportunities for tax avoidance and will affect every individual and business taxpayer in America.

Although the bill modestly increases funding for the IRS accounts that fund information technology, it leaves enforcement funding at the 2018 level — and down roughly $1.6 billion (25 percent) since 2010 in inflation-adjusted terms.  (See chart.)

House Bill Would Leave IRS Enforcement Division Funding 25 Percent Below 2010 Level

 

Also, the bill doesn't include President Trump's proposal for added enforcement funding — $362 million in 2019 and more in later years — that wouldn't count against the 2011 Budget Control Act's annual cap on overall funding for non-defense appropriations. This proposed "cap adjustment" recognizes that tax enforcement raises significantly more money than it costs, so it makes sense to exempt some enforcement dollars from the funding caps. This approach has a long bipartisan history, dating back to 1990s legislation enacted under President George H.W. Bush.

Congress has cut total IRS funding by 18 percent since 2010 in inflation-adjusted terms, and the overall IRS workforce has shrunk by about a fifth.  The enforcement division has been particularly hard hit, absorbing nearly 14,000 of the agency's roughly 18,000 staff losses. Those cuts have led to a sharp declinein audits.

Now, the IRS faces a once-in-a-generation challenge from the 2017 tax law. Given some of the law's features and the hasty way it was drafted, it will likely fuel aggressive efforts by some businesses and wealthy individuals to push the law's outer limits, and possibly beyond, to minimize their taxes. As the IRS funding bill advances, Congress needs to increase enforcement funding and adopt the President's cap adjustment proposal.



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CBO Forecast of Weak Revenues Under Trump Policies Shows Impact of 2017 Tax Law [feedly]

CBO Forecast of Weak Revenues Under Trump Policies Shows Impact of 2017 Tax Law
https://www.cbpp.org/blog/cbo-forecast-of-weak-revenues-under-trump-policies-shows-impact-of-2017-tax-law

he new Congressional Budget Office (CBO) analysis of President Trump's 2019 budget shows how seriously his tax policies — particularly the 2017 tax law, which will cost $1.9 trillion over the next decade (and even more if policymakers make any of its temporary tax cuts permanent) — are eroding the nation's revenue base.

CBO estimates that revenues will total just 16.5 percent of gross domestic product (GDP) in 2019 under the President's tax policies, well below the 17.4 percent average over the last 40 years.  Further, that historical average includes years when the economy was weak and revenues were depressed. In 2019, CBO assumes the economy will be operating at its full potential (that is, at the maximum level of GDP that's sustainable in the long term).   If you look only at years over the past four decades when GDP was at or above potential, revenues averaged 18.4 percent of GDP, even further above CBO's projection for 2019 (see figure).

Under Trump Policies, Revenues Will Fall Well Below Historical Average Despite Strong Economy

CBO projects that under the Trump budget, revenues will remain below the 40-year average for the next six years even if the economy remains strong.  Moreover, the Trump budget suppresses revenue growth after 2025 by making permanent the majority of the 2017 tax cuts that are scheduled to expire.

A revenue-to-GDP ratio that's at or below the historical average is concerning at times when unemployment is low and the economy is running at or near full capacity.  It's fiscally reckless now because we know that an aging population will significantly raise government retirement and health costs, making clear the need for revenues in the coming years to rise well above the historical average, as we've discussed

Over the next two decades, the share of the population age 65 or older will grow from 15 to 21 percent and the share of the population over age 85 — who have much higher health care costs than other elderly individuals — will grow even faster.  That will increase spending on Social Security, Medicare, Medicaid, and other programs.

Compounding the higher costs associated with these demographic realities, health care costs — in both the public and private sectors — have long grown faster than the economy and will likely continue doing so, partly due to new procedures, drugs, and treatments that improve health and save lives but also add to costs.  The pace of health care cost growth has slowed over the past decade, but we don't know the extent to which the slowdown will persist.

Other factors will add to the fiscal pressures of future years, including higher interest costs on the national debt as well as the need to address unmet national needs ranging from infrastructure to child care.

By showing that the 2017 tax law helped put revenues on a risky path, the new CBO report should be a red flag for policymakers, underscoring the need to restructure that law to put revenues on a sounder footing.



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