The U.S. fiscal imbalance—the excess of what we expect to spend, including repayment of our debt, over what government expects to receive in revenue—is large and growing. And with politicians proposing large new expenditures, little is being done to rectify the country’s fiscal health. Although some policymakers argue that fiscal meltdowns have never happened in U.S. history and that therefore “this time is no different,” the reality is that the nation’s fiscal situation has been deteriorating since the mid-1960s, is far worse than ever before, and could lead to a fiscal crisis if no major spending adjustments occur in the next few decades.
Committed to bringing attention to this growing danger, the Cato Institute inaugurated a significant project to investigate and document the federal government’s current financial position and the implications of federal fiscal policies and practices on the government’s financial sustainability. Two key project reports were to be crafted and distributed, both written by Jeffrey Miron, director of undergraduate studies in the Department of Economics at Harvard University.
The first report, issued several months ago, wasFiscal Imbalance: A Primer– which detailed the key principles necessary for understanding the true state of government financial health.
We are now able to provide, for free reading and downloading, the project’s second and most advanced report – U.S. Fiscal Imbalance over Time: This Time Is Different. This paper illustrates that while fiscal meltdown may not be imminent, the nation’s fiscal situation has been deteriorating since the mid 1960s, is far worse than ever before, and will continue to deteriorate if no adjustments occur as time moves forward.
The paper projects fiscal imbalance as of every year between 1965 and 2014, using data-supported assumptions about GDP growth, revenue, and trends in mandatory spending on Social Security, Medicare, Medicaid, and other programs. What does the paper reveal? The only way to restore fiscal balance is to scale back mandatory spending policies – particularly on large health care programs. This is a vast challenge of paramount importance.
It is our goal – and Cato’s ongoing commitment – that these reports help limit the unsustainable spending the federal government is undertaking, and provide effective strategies for diminishing our government’s dangerous fiscal instability.
In this new ebook, two scientists with more than half a century of experience between them explore the realities and myths of global warming.
With December’s U.N. Paris Climate Conference in the headlines, it has become increasingly difficult to differentiate climate science from rhetoric. In Lukewarming: The New Climate Science that Changes Everything, Pat Michaels and Chip Knappenberger explain the real science and spin behind the headlines and come to a provocative conclusion: global warming is not hot—it’s lukewarm. While that may not sound massive, it does, as the book’s subtitle notes, change everything. Climate change is real, it is partially man-made, but it is clearer than ever that its impact has been exaggerated—with many of the headline-grabbing predictions now being rendered implausible or impossible. This fresh analysis is engaging and enlightening to readers of all backgrounds, and provides an invaluable foundation of information to those interested in being genuinely informed about global warming and the solid base of facts behind it.
On June 23, 2005, the Supreme Court ruled that the city of New London, Connecticut, could condemn fifteen residential properties in order to transfer them to a new private owner. Although the Fifth Amendment only permits the taking of private property for "public use,“ the Court ruled that the transfer of condemned land to private parties for "economic development” is permitted by the Constitution—even if the government cannot prove that the expected development will ever actually happen. The Court’s decision in Kelo v. City of New London empowered the grasping hand of the state at the expense of the invisible hand of the market.
Cato adjunct scholar Ilya Somin’s new book, The Grasping Hand: “Kelo v. City of New London” and the Limits of Eminent Domain, is a detailed study of one of the most controversial Supreme Court cases in modern times. In the book, Somin argues that Kelo was a grave error, and that economic development and “blight” condemnations are unconstitutional under both originalist and most “living constitution” theories of legal interpretation. Moreover, they victimize the poor and the politically weak for the benefit of powerful interest groups, and often destroy more economic value than they create.
Our growing national debt recently topped $18 trillion, and is projected to approach $27 trillion within 10 years. Including the unfunded liabilities of Social Security and Medicare, our real indebtedness exceeds $90 trillion. Yet, politicians from both parties continue to avoid the difficult decisions that must be made.
A new book by Cato Senior Fellow Michael D. Tanner drives home the simple truth that there is no way to address America’s debt problem without reforming entitlements.
At an upcoming book forum at the Cato Institute, Tanner and other leading scholars will discuss the desperate need for entitlement reform and the heavy implications our current situation holds for the future of the U.S. economy.
If you can’t make it to the Cato Institute, this event will be broadcast live online.
The economic reforms and subsequent growth in China may be the most astonishing and hopeful event of our age. Weiying Zhang was among the leaders who set China on its path of change.
In his new collection of essays, he provides a unique perspective on his country’s market economy, implementation of economic policies, and the potential for Chinese economic development. Weiying especially emphasizes the importance of entrepreneurs in the new China and celebrates leaders who mixed sustained idealism with judicious compromise. Readers will appreciate Weiying’s ability to address both everyday economic issues and the questions that confront a nation’s leaders, not the least a nation seeking to escape mass poverty.
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