PERC Publications

Permanent URI for this collection

http://hdl.handle.net/1969.1/199232

Search By Publication Type

Search By Publication Year

2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014

Search By Publication Topic

Browse

Now showing 1 - 14 of 14

Federal Reserve Asset Reductions and the Economy
(Private Enterprise Research Center, Texas A&M University, 2019-06-07) Saving, Thomas R.
At its September 2017 meeting, the Board of Governors of the Federal Reserve System announced that they would begin to reverse the massive acquisition of assets that began in 2009. What has been the impact of these asset sales, and what challenges face the Federal Reserve as the asset sales continue? This paper goes over the past 18 months of the asset reduction program and future challenges facing the Fed.
Federal Reserve Monetary Policy in the 21st Century
(Private Enterprise Research Center, Texas A&M University, 2023-07-21) Saving, Thomas R.
In the 21st Century, the tools of monetary policy changed fundamentally with the onset of the Great Recession and the Covid-Pandemic, both of which led to significant asset expansions of the Federal Reserve to the tune of $3.5 trillion and $4.5 trillion, respectively. To prevent these unprecedented open-market purchases of securities from reaching the economy, the Federal Reserve began paying member banks interest on bank reserve balances and borrowing reserves from non-bank financial institutions at an overnight borrowing rate. These asset expansions resulted in almost record prices in financial markets so that the purchased assets had low yields. As market interest rates rose, the payments required to prevent banks and non-bank financial institutions from expanding the money supply and producing inflation exceeded Federal Reserve income. As a result, the Federal Reserve is losing $50 billion a month! The Federal Reserve is now trying to unwind the massive expansion and in the last year has reduced its securities holding by almost $900 billion. But we are still several years from the Federal Reserve returning to its asset holdings to its former share of GDP.
Free Banking Is Back?
(Private Enterprise Research Center, Texas A&M University, 2022-11-15) Saving, Thomas R.
While none of the current cryptocurrencies, themselves, currently circulate in general commerce, many crypto exchanges have arisen that exchange the various cryptocurrencies for one another and for titles to U.S. dollars. Importantly, these crypto exchanges also allow crypto depositors to spend their cryptocurrencies in regular commerce by using debit cards, which are backed by an individualâ€™s holdings of crypto. In PERC Policy Study 2206, Thomas Saving explores how this expansion of assets that can be used in ordinary commerce affects the money supply and discusses how this expansion reduces the demand for U.S. currency. As a result, in this new free banking era, the price level will be determined in a local rather than a world market.
Getting Out of Our Health Insurance Quagmire
(Private Enterprise Research Center, Texas A&M University, 2019-09-03) Jansen, Dennis W.; Liu, Liqun; Rettenmaier, Andrew J.
Per-capita spending on health care in the U.S. is the highest in the world, and it is not clear that this high spending generates additional health benefits. This high spending, coupled with high and rising health insurance premiums, a large group of uninsured citizens, and a fair bit of inequality in the delivery of health care all point to an inefficient health care system. In policy study 1903, authors Dennis W. Jansen, Liqun Liu, and Andrew J. Rettenmaier argue that much of these inefficiencies in health care are due to ill-designed government policies. This study offers an outline of efficiency-enhancing reforms, including replacing the tax exclusion on employer-provided health insurance with tax credits, using the health saving account to strengthen cost-saving incentives, keeping government mandates in check, and ensuring pricing transparency to better achieve greater cost-consciousness among both providers and patients.
Health Care Spending in the United States: What is Next?
(Private Enterprise Research Center, Texas A&M University, 2016-12-01) Liu, Liqun; Rettenmaier, Andrew J.; Saving, Thomas R.
Health care spending will always command public policy attention given the prominence of government payers in this market and the role played by the tax system in subsidizing health insurance purchases. But, with President-elect Trump's campaign promise to repeal and replace the Affordable Care Act (ACA), and a Republican House and Senate that have campaigned on the same agenda, the health care insurance market will face another round of reforms. This study examines the past path and possible future paths of health care spending. It also discuss several ways to reform the public insurance programs and to reform the tax treatment of employer provided health insurance. These reforms would constrain the growth in explicit and implicit government spending on health care. Limiting government spending on health care while still replacing the ACA's coverage of the newly insured can be accomplished by a tax reform that reduces tax expenditures on employer sponsored health insurance, by offering risk-adjusted tax credits for the newly insured, by Medicare reforms that include more flexibility, premium support and increased means-testing, and by state-level innovations in the Medicaid program.
Investing in Future Generation: Relating Debt Reduction and Environmental Protection
(Private Enterprise Research Center, Texas A&M University, 2016-12-01) Liu, Liqun; Rettenmaier, Andrew J. and Saving, Thomas R.
Governments often engage in activities that affect the welfare of future generations in opposite directions. Long-term projects aimed at protecting the environment benefit future generations, whereas increasing government debts, including the accrued benefits in Social Security and Medicare, cost them. From an efficiency point of view, these government activities should be coordinated. This study examines the discount rate for environmental programs, the gross (tax-inclusive) interest rate, its value, and realistic options for debt reduction. The study also reviews the recent growth in government debts of various forms. As of 2015, the total federal liabilities when Social Security and Medicare commitments to current retirees are included were almost $40 trillion or 222% of GDP. Therefore, the room for debt-reducing reforms is substantial. The study concludes that more efficiently coordinated generational policies would evaluate environmental projects with a stricter criterion (a higher discount rate for benefits to future generations) than the existing one, and debt-reducing options (including reducing or containing elderly entitlement debts) would be given comparable consideration.
Methodology for Constructing an Economic Index for the College Station-Bryan Metropolitan Statistical Area
(Private Enterprise Research Center, Texas A&M University, 2018-10-21) Jansen, Dennis W.; Navarro, Carlos I.; Rettenmaier, Andrew J.; Sekhposyan, Tatevik
This paper describes the need for timely GDP information, methodology, and data sources used to create the monthly publication, Economic Indicators.
Monetary Policy in a Zero or Negative Interest Rate World
(Private Enterprise Research Center, Texas A&M University, 2019-12-20) Saving, Thomas R.
The persistence of negative interest rates in the Euro-Zone and Japan coupled with low inflation raises the question of the efficacy of central banking in a negative interest rate world. Given that interest rates have been in decline for more than thirty years, are the negative interest rates in the Euro-Zone and Japan a precursor for the future of the other countries in the developed world? In policy study 1904, author Thomas Saving examines whether monetary policy can work with negative interest rates and the effects low and negative rates have on the public's wealth.
Money and Banking When Reserves Pay Interest
(Private Enterprise Research Center, Texas A&M University, 2020-04-09) Saving, Thomas R.
The Federal Reserveâ€™s decision in 2008 to begin paying interest on bank reserves, particularly excess reserves (the IOER), has changed the role of the banking system and the determination of the nationâ€™s money supply. Paying interest on bank reserves essentially turned these reserves into investment opportunities for banks, making banks active players in the Federal Reserve's monetary policy actions. In policy study 2001, Thomas Saving explores the current tools used by the Federal Reserve to control the money supply and the new role banks play in determining monetary policy actions.
Navigating the Earned Income Tax Credit
(Private Enterprise Research Center, Texas A&M University, 2017-09-01) Liu, Liqun; Rettenmaier, Andrew J.
The Earned Income Tax Credit (EITC) is the federal government's largest means-tested cash assistance program. The popular anti-poverty program's maximum credits and income eligibility ranges have been legislatively increased since its introduction in 1975. In 2014, the program distributed over $69 billion in tax credits to 25.8 million tax filers. This study examines the labor supply effects of the EITC, as well as how the distribution of earnings has changed during the years the program was expanded. The study focuses on the program's potential effects on employment, hours worked and annual earnings of women who are most likely to participate. Like other studies, this study finds that among women with less than college educations, participation in the labor market by single women with children has increased in response to expansions in the EITC program.Hours of work and annual earnings for this group have not increased relative to other single women with no children in the household, however. In general, earnings inequality among women with less than a college education has risen as has the share attributable to single women with children.
Paying for Medicare Now and in the Future
(Private Enterprise Research Center, Texas A&M University, 2016-03-01) Rettenmaier, Andrew J.; Saving, Thomas R.
Medicare celebrated its golden anniversary this past year. The program now provides insurance coverage for over 50 million Americans, and accounts for 20 percent of the nation's health care spending. Its shares of the nation's output and total health care spending have grown significantly over its first 50 years. Here we note how Medicare spending is projected to grow based on several alternative forecasts. We then estimate how lifetime Medicare benefits, taxes, and premiums are distributed across and within generations. Our estimates show that Medicare is progressive within generations. We also show that that across generations the program has, up to now, provided increasing replacement rates relative to pre-retirement earnings. Accounting for all lifetime taxes and premium payments in support of the program, we estimate that net benefits for medium earning workers will remain positive even for today's new labor force entrants. Though the program is progressive within generations, each generation's retirement benefits are paid in part by higher taxes on succeeding generations. Moving toward equalizing the tax burden across generations can be accomplished by constraining the tax financed portion of Medicare so that per capita spending grows at the same rate as per capita GDP. We outline four alternative ways to recast the program's financing and insurance structure so as to constrain the tax-financed portion of retiree health care spending.
Property Titles of Non-Renewable Natural Resources in Mexico: An Alternative to "Constitutional Nationalism"
(Private Enterprise Research Center, Texas A&M University, 2022-09-26) Salinas-Leon, Roberto; Rodriguez-Rodriguez, Martin; Navarro, Carlos I.
Here, the authors propose the benefits of instituting a Sovereign Mexican Fund (SMF), which emulates the Alaska Trust Fund, in order to reconcile the capital investment needs of the energy sector in Mexico with the strong sense of nationalism of its people. The main virtue of the Sovereign Mexican Fund as a public policy model is that it is inclusive - all citizens participate, and all, without exception, are recipients of their share of energy income. The SMF democratizes energy income by spreading ownership of capital among all Mexicans of the present and future generations. This case study presents a roadmap with a high degree of feasibility to make the people of Mexico the primary beneficiaries of the country's mineral and hydrocarbon wealth. The short-term challenges are also discussed.
Rethinking Federal Debt: What Do We Really Owe?
(Private Enterprise Research Center, Texas A&M University, 2016-08-01) Saving, Thomas R.
Ever since the Federal Reserve began its series of Quantitative Easing Federal Reserve assets have increased fourfold. During this same period federal deficits have increased the level of publicly held debt by 260%. There is an important relation between these two seemingly independent events because increases in Federal Reserve asset holdings have a direct impact on the cost of servicing the federal debt as all Federal Reserve profits belong to the Treasury. The measured publicly held federal debt nets out debt held by government agencies. In these calculations the Federal Reserve is not considered a government agency even though all profits of the Federal Reserve, $97.7 billion in 2015, are transferred to the Treasury. The Federal Reserve is in a very important in sense owned by the United States Treasury, and this ownership must be accounted in the debt burden. There are two ways to account for this Treasury Federal Reserve connection as it applies to measuring the taxpayer burden of federal debt: (i) a flow or income statement approach and (ii) a stock or balance sheet approach. From an income statement perspective the Federal Reserve's 2015 transfer to the Treasury of $97.7 Billion reduces federal debt by just over 43%. From a balance sheet perspective, using all assets and liabilities of the Federal Reserve, the publicly held federal debt is reduced by 11%.
Statistics of Income County-to-County Migration Data: An Overview
(Private Enterprise Research Center, Texas A&M University, 2016-03-01) Narkiewicz, Adam
The aim of this document is to present some basic information and general trends in the data used to create the PERC county-to-county migration overview map. As such, the analysis is limited only to variables used on the map: namely, non-migrant population, immigration and emigration rates, exemptions per return, and average incomes. The document contains possible explanations and interpretations of certain features exhibited by the data. I analyze counties using four basic dimensions: (1) population, (2) income per capita, (3) population growth, and (4) income per capita growth. For each dimension I investigate how the situation evolved over time and how a given dimension relates to other variables in the dataset. These data reveal trends occurring in the US economy and shed light on how the economic situation of particular counties fits in the bigger picture.

Browse

Browsing PERC Publications by Subject "Energy_Environment"

Results Per Page

Sort Options