US Economic Experts Panel

 

 

This week’s IGM Economic Experts Panel statements:

A: Because federal spending on Medicare and Medicaid will continue to grow under current policy beyond the 10-year window of most political budget debates, it is easy for a politician to devise a budget plan that would reduce federal deficits over the next decade without really making the U.S. fiscally sustainable.

B: Comparing two plans that would reduce federal budget deficits by identical amounts in each of the next 10 years, one that did so partly by reducing significantly the long-term growth rate of Medicare and Medicaid spending would do more to make the U.S. budget fiscally sustainable than one that did not lower the growth of these spending programs. 

This week’s IGM Economic Experts Panel statements:

A: Taking into account all of the economic consequences — including the incentives of banks to ensure their own liquidity and solvency in the future — the benefits of bailing out U.S. banks in 2008 will end up exceeding the costs.

B: Because GM and Chrysler were bailed out in 2008-09, the U.S. unemployment rate was lower at the end of 2010 than it would it have been if Congress and the executive branch had not intervened.

C: Taking into account all of the economic consequences — including effects on corporate managers' incentives and on creditors' expectations of how their claims will be treated in future bankruptcies — the benefits of bailing out GM and Chrysler will end up exceeding the costs. 

This week’s IGM Economic Experts Panel statements:

A: The U.S government should make further efforts to shrink the size of the country's largest banks — such as by capping the size of their liabilities or penalizing large banks more heavily through taxes or other means — because the existing regulations do not require the biggest banks to internalize enough of the "too-big-to-fail" risks that they pose.

B: The economic benefits to the U.S. of having a handful of banks with balance sheets greater than $1 trillion are small. 

This week’s IGM Economic Experts Panel statements:

A: The federal government would make the average U.S. citizen better off by using policies that directly focus more on increasing manufacturing employment than employment in other sectors.

B: Because firms and inventors do not capture the full returns from research and development, the government would increase the average well-being of Americans (and potentially of others too) by favoring R&D using the tax code. 

This week’s IGM Economic Experts Panel statements:

A: Consider one of two proposals for restraining future Medicare spending, each by the same amount: The method that President Obama enacted in the Affordable Care Act — reducing Medicare-related payments to private insurers and altering the payment system for doctors and hospitals — imposes risks on future Medicare patients because over time the supply of doctors, hospitals and insurers willing to offer them health services may decline in response to restrained payments.

B: Consider the other of two proposals for restraining future Medicare spending, each by the same amount: The method that Governor Romney advocates — giving future seniors a fixed payment for premiums and letting private insurers compete with Medicare — imposes risks on future Medicare patients because competition may not be powerful to enough to offer future seniors the same quality of care that is currently promised without supplementing their premium support. 

This week’s IGM Economic Experts Panel statement:

Claims by incumbent presidents and challengers about how many private-sector jobs can be created in a four-year period by sector-level or other targeted policies should be viewed as rough guesses, because overall macroeconomic conditions drive aggregate employment in ways that dominate any net effects of polices that focus on specific industries or households. 

This week’s IGM Economic Experts Panel statements:

A: One drawback of taxing capital income at a lower rate than labor income is that it gives people incentives to relabel income that policymakers find hard to categorize as "capital" rather than labor".

B: Despite relabeling concerns, taxing capital income at a permanently lower rate than labor income would result in higher average long-term prosperity, relative to an alternative that generated the same amount of tax revenue by permanently taxing capital and labor income at equal rates instead.

C: Although they do not always agree about the precise likely effects of different tax policies, another reason why economists often give disparate advice on tax policy is because they hold differing views about choices between raising average prosperity and redistributing income. 

This week’s IGM Economic Experts Panel statements:

A: By discounting pension liabilities at high interest rates under government accounting standards, many U.S. state and local governments understate their pension liabilities and the costs of providing pensions to public-sector workers.

B: During the next two decades some U.S. states, unless they substantially increase taxes, cut spending, and/or change public-sector pensions, will require a combination of severe austerity budgets, a federal bailout, and/or default.