Fiscal Policy Program: Latest Articles

As Congress struggles to decide how to proceed in crafting the economic stimulus bill, it needs to do more than develop a plan to pile trillions more on the national debt. Already, the federal deficit has grown by over half-a-trillion dollars as a result of government funds spent to try to rescue the economy - including money for the first stimulus package, taking over Fannie Mae and Freddie Mac, the TARP rescue for the financial sector, and the costs of… more

The agreement on the $700 billion bailout package begs the question, "How are we going to pay for all this?"

In the three presidential and vice presidential debates to date, the candidates have done their best to dodge the question. But it is not an issue that can be ignored for long. For anyone who needs to be reminded of the dangers of excessive borrowing, they need not look any further than the crisis we are currently in the midst of.

One of the many lessons from… more

Both Governor Schwarzenegger and Assembly Speaker Bass have stated that they would like to form a bipartisan commission to find ways to improve California’s tax system. They seek to modernize our tax system, make the state more economically competitive, and have a system that produces stable revenues.

These are great goals. California’s tax system was designed decades ago in a manufacturing era when borders were important and tangible goods ruled. Our tax system was not designed for the current information age with its mobile capital, worldwide-based workforce,… more

After a two-year hiatus, Social Security has made its way back onto the political stage. Both presidential candidates, recognizing that the program is insolvent over the long-run, are claiming that they will confront the system’s $4 trillion long-term shortfall. Senator Barack Obama has made a specific proposal to finance part of the shortfall through a tax on people making over $250,000 a year, while Senator McCain has pledged that he’ll "fight to save the future of Social Security” and “won't leave office without doing everything [he] can… more

Harry Markowitz’s 1952 essay Portfolio Theory broke new ground in developing ways to diversify financial portfolios. By the time he won the Nobel Prize nearly four decades later, countless financial innovations to help spread risk had been introduced, making the risks associated with investing more acceptable -- particularly to the American middle class. Sure the markets are taking a hit now, but those with diversified portfolios are certain to weather this downturn better than those without.

U.S. economic public policy would… more