All Terrain Thinking

A Compendium of things I think are Important

Economics: It's not just whats' in your wallet

Questions of the Day
1990s: The Visible hand

Outlays and Receipts

1. How do the local, state, and federal governments raise revenue?  How do they allocate spending?
2. How big is government in the US?
3. What has happened to the composition of federal revenues and outlays?
4. What is the difference between progressive, proportional, and regressive taxes and identify examples of each.  

Deficits and debt

1. How do you feel about the Balanced Budget Amendment? Should we do it? Please briefly outline the case for doing it -why we should do it, and how we would accomplish it.
2. Is welfare reform the answer to the budget deficit? You might get that impression watching the news, but how closely related are they? How far toward balancing the budget can we go with our assault on welfare spending?
3. A balanced budget - and a car in each garage. What more could we ask for? But will our current successes at reducing the budget deficit fade quickly to more red? There are certainly reasons to be concerned - which is what you need to identify now. What are some foreseeable problem areas?
4. Why is it that the elderly are beginning to feel a bit paranoid - at least when it comes to federal finances. You need look no further than social security to understand the bases for their concern. What has happened to social security since its inception? to benefits, to number of recipients, to government outlays?
5. How does the government run a deficit? When will it be most likely to be inflationary?
6. You are the president's chief economic advisor. He comes to you, deeply disturbed about the size of the deficit being forecast for the upcoming fiscal year. His instincts are that such a large deficit, adding at least $150 billion to the national debt, has to wreak considerable damage on the economy. His political advisors, however, say "not to worry, the deficit hurts no one." Suppose the president asks you to carefully explain the economic consequences of a large budget deficit. What would you tell him?
7. What are the relevant differences in the effects of government spending financed through debt creation versus government spending financed through increases in the stock of money?
8. Where did the HUGE national debt originate? What is responsible for the national debt?
9. Differentiate the deficit from the debt and be able to describe the crowding out effect of the deficit and the burden of the debt.
10. Describe the cyclical patterns of the budget deficit.?
11. The FED has decided to raise interest rates and your job is to describe what you expect to be the impact of this on the deficit.
12. Describe the process known as monetization of the deficit and its impact on output and the price level.

Questions of the Day
1990s: The Visible Hand

1. What is the trilemma?

2. Explain the Asian crisis of 1997-99 and what impact did it have on the US economy?

3. What is the Euro and how is it related to

4. What is NAFTA?

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