Economic forecasters exist to make astrologers look good. Most had forecast growth of at least 3 percent (on an annualized basis) in the first quarter. But we learned this Monday morning (in the Commerce Department’s report) it grew only 2.5 percent. That’s better than the 2 percent growth last year and the slowdown at the [...]
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Prominent Democrats — including the President and House Minority Leader Nancy Pelosi — are openly suggesting that Medicare be means-tested and Social Security payments be reduced by applying a lower adjustment for inflation.
This is even before they’ve started budget negotiations with Republicans — who still refuse to raise taxes on the rich, close tax loopholes the rich depend on (such as hedge-fund and private-equity managers’ “carried interest”), increase capital gains taxes on the wealthy, cap their tax deductions, or tax financial transactions.
It’s not the first time Democrats have led with a compromise, but these particular pre-concessions are especially unwise.
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Part of the President’s State of the Union message and of his second term agenda apparently will focus on public investments in education, infrastructure, and basic R&D.
That’s good news. But how do we fund these investments when discretionary spending is being cut to the bone in order to reduce the budget deficit?
Answer: By treating public investments differently from current spending.
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