Economics

Obama will need more economic growth

To pay for the Obama taxing and spending agenda, the country will need much more economic growth. Unfortunately, the rate of growth is slowing just when we need greater rates of growth. It's commonly thought that annual real (after-inflation) growth of three percent is required just to keep up with population. More than that is needed to restore the loss in middle-class income during Obama's first term. But here's what has happened to the rate of growth. The direction of change in economic growth is moving in the wrong direction, and it's far below what is needed. Darkening the horizon…
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Growth in Gross Domestic Product by metropolitan area

Here's an interactive visualization that illustrates the growth in Gross Domestic Product by metropolitan area. Dollar amounts are in chained 2005 dollars to eliminate the effects of inflation. Each metropolitan area is indexed to start at 100% so we can see the relative rates of growth. The top two charts show the growth in GDP for government, and then for the private sector. The bottom chart shows growth in GDP per capita (per person). Highlight one or more metropolitan areas to make the line stand out from the others. Use Ctrl+Click to add or subtract others. Use the visualization below,…
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Growth in Gross Domestic Product by state

Here's an interactive visualization that illustrates the growth in Gross Domestic Product by state and region. Dollar amounts are in chained 2005 dollars to eliminate the effects of inflation. Each state or region is indexed to start at 100% so we can see the relative rates of growth. The top two charts show the growth in GDP for government, and then for the private sector. The bottom chart shows growth in GDP per capita (per person). Click to highlight one or more states or regions to make its line stand out from the others. Use Ctrl+Click to add or subtract…
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A spending problem, or a revenue problem?

Does the United States have a revenue problem or a spending problem? The interactive visualization below may help you decide. Spending and revenue are presented as a percentage of Gross Domestic Product (GDP). One observation is the tax revenue has risen on a fairly steady progression until the Bush II and Obama recessions. This is in spite of the top marginal tax rate varying wildly during this period. Were the budget surpluses of the late years of the Clinton presidency due to rising tax revenue, or declining spending? Data from U.S. Bureau of Economic Analysis (BEA). Use the visualization below,…
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GDP growth by state and region

Here is a visualization that shows the rate of growth of gross domestic product by state, regions, and the entire country. You may select one or more areas from the list by using Ctrl while clicking. The data is indexed, so that each area starts with a value of 100 in 1997. Data is from U.S. Bureau of Economic Analysis (BEA). Visualization created by myself using Tableau Public. Use the visualization below or click here to open in a new window. Powered by Tableau
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States that Spend Less, Tax Less — and Grow More

Dave Trabert and Todd Davidson of Kansas Policy Institute contribute an editorial to the Wall Street Journal that explains the importance of controlling spending. By restraining spending, states can have low taxes, which in turn allows the private sector economy to grow. States that Spend Less, Tax Less -- and Grow More States with an income tax spent 42% more per resident in 2011 than the nine states without an income tax. By Dave Trabert and Todd Davidson In the midst of a dismal recovery where every job counts, one fact stands out: States that tax less achieve better economic…
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Economic growth is slowing

While the United States economy started to grow after the recent recession, the trend in growth is slowing. During the 80s and 90s the federal government spent at around the level of 19 percent of GNP. Now the federal government spends at the rate of 25 percent of the economy. Add in state and local governments, and we're at 36 percent. This is not trickle-down government, it's suffocating government, where government threatens to overwhelm the private sector. As government intervenes in more areas of the economy, as Obama's bureaucrats extend their span of control over the economy (think General Motors),…
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Cost of an Obama tire job: $900,000

It's entirely predictable that trade sanctions are costly to the country that imposes them. Yet politicians can be persuaded to support them in the name of saving American jobs and getting "tough" with countries perceived to be a problem. We see this in the case of President Barack Obama and the tariffs, or taxes, on tires imported from China. Here's what The Peterson Institute for International Economics said in its report US Tire Tariffs: Saving Few Jobs at High Cost: However, our analysis shows that, even on very generous assumptions about the effectiveness of the tariffs, the initiative saved a…
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Duration of unemployment isn’t improving

Although the unemployment rate has declined, there are still problems in the labor market that don't appear to be improving. The duration of unemployment -- that is, how long it is until people find jobs -- rose rapidly during the recession. It peaked and has stayed largely unchanged for the past year, as shown in the chart below. In March a Wall Street Journal article explained the problems facing the long-term unemployed: "But some economists argue that in the wake of a severe recession, the lines between cyclical and structural unemployment can become blurred. Workers who lose their jobs because…
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Andover, a Kansas city overtaken by blight

A strategic plan for economic development in Andover, Kansas lists one of the city's strengths as "Andover appearance -- clean, new, fresh, new, safe, inviting. Very little blight." But in order to implement a tax giveaway to buyers of new homes, the city essentially declared the entire city blighted. The ordinance passed by the city doesn't use the word blight. Instead, it states that "one or more of the following conditions exist within said area." Two of the conditions are "a predominance of buildings which, by reason of dilapidation or obsolescence, are detrimental to public health, safety and welfare" and…
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In Kansas, more debunking of the benefit of high taxes

From Kansas Policy Institute. Proponents of high taxes are again quoting a study from the Institute for Taxation and Economic policy (ITEP). The study argues high-income tax states perform as well or better than states without an income tax. The result runs contrary to findings by the Organization for Economic Co-operation and Development (OECD), a Paris-based organization comprised of 34 developed countries, including the United States. The OECD study concluded: Growth-oriented tax reform measures include tax base broadening and a reduction in the top marginal personal income tax rates. ITEP comes to their counter-intuitive conclusion by carefully choosing three measures:…
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Debunking the debunkers on taxes and growth

By Americans for Prosperity State Policy Manager Nicole Kaeding While Congress and the President currently debate the best path to hold off the upcoming fiscal cliff, many states across the country have already tackled similar challenges this year. Some states took up the challenge of passing tax reform, but others decided to follow failed tax-and-spend policies. The hard-fought battles for lower tax rates and broader tax bases will benefit taxpayers and businesses struggling in this weak economic recovery. Instead of applauding these changes, opponents have relied on a faulty analysis to claim that lower taxes do not promote economic growth.…
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Rich States, Poor States 2012 edition released

This month American Legislative Exchange Council (ALEC) released the fifth edition of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index. As in the past, Kansas performs in the middle of the pack in one measure, below average in another, with little or no progress achieved in making Kansas competitive with other states. The report's authors are Arthur B. Laffer, Stephen Moore, and Jonathan Williams. Besides the ranking of the states, the Rich States, Poor States report always contains useful information about economic and tax policy. This year a chapter is titled "10 Golden Rules of Effective Taxation," starting with…
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Thinking beyond stage one in economic development for Wichita

Critics of the economic development policies in use by the City of Wichita are often portrayed as not being able to see and appreciate the good things these policies are producing, even though they are unfolding right before our very eyes. The difference is that some look beyond the immediate -- what is seen -- and ask "And then what will happen?" -- looking for the unseen. Thomas Sowell explains the problem in a passage from the first chapter of Applied economics: thinking beyond stage one: When we are talking about applied economic policies, we are no longer talking about…
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Kansas Policy Institute to host economic development summit

This Wednesday (April 11th) Kansas Policy Institute will host an educational event focusing on local economic development. This event is vitally important as it is becoming apparent that Wichita's traditional process of economic development is not working very well. Also, we've recently learned that in both Kansas and Wichita, business tax costs are very high, with only a handful of states ranking worse. To register at no cost for this event, click on EcoDevo Through Economic Competitiveness . Following is information from KPI on this event. Just last month, Wichita voters took to the ballot box to weigh in on…
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Modern-day students and attitudes towards government

Recently Economics Professor Jack Chambless of Valencia College in Orlando asked his college students to write an essay "explaining their definition of the American Dream and what they expected the federal government to do to help them achieve their version of this dream." The results are shocking, to say the least. Here's what Chambless explained during an appearance on Fox New Channel (video here or below). "About 10% of the students said they wanted the government to leave them alone and not tax them too much and let them regulate their own lives. But over 80% of the students said…
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Buffalo: A Template for Wichita?

Can we in Wichita learn lessons from the decline of Buffalo, New York? Steven Malanga chronicles the fall of this city in a recent piece in the Wall Street Journal. After describing the many forms of government subsidy poured into Buffalo, Malanga concludes: "These massive investment subsidies failed partly because officials were ill-suited to select the right projects and often instead gave money to favored insiders. Even former Mayor Anthony Masiello described the federal government's redevelopment funds as "a politically motivated system trying to please everybody.'" That sounds familiar to us in Wichita. While Buffalo suffered from some problems that…
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