Private Enterprise Research Center (PERC)

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The mission of the Private Enterprise Research Center (PERC) is to provide Texas A&M University, the state of Texas and the Nation with analysis of important policy issues. PERC actively supports academic research and market oriented solutions to public policy problems.

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Now showing 1 - 20 of 33

The ACA and the States
(Private Enterprise Research Center, Texas A&M University, 2015-01-01) Rettenmaier, Andrew J.; Saving, Thomas R.
Are We Taming Health Care Spending
(Private Enterprise Research Center, Texas A&M University, 2014-01-01) Rettenmaier, Andrew J.; Saving, Thomas R.
Cadillacs for All
(Private Enterprise Research Center, Texas A&M University, 2019-09-25) Jansen, Dennis W.; Liu, Liqun; Rettenmaier, Andrew J.
Healthcare reform in the form of Medicare for All, which promises to reduce health care spending by reimbursing providers at Medicareâ€™s rates per procedure, is now receiving renewed interest. This, along with the delay of the â€˜Cadillac Tax,â€™ a provision of the Affordable Care Act that was created to tax employer-sponsored health insurance plans whose premiums exceeded specified thresholds, both have long run implications. In this issue of PERCspectives on Policy, authors Dennis W. Jansen, Liqun Liu, and Andrew J. Rettenmaier examine how each fit in the current debate and their potential effects on federal spending, revenues and deficits.
The Carrot and the Stick of Medicaid Expansion
(Private Enterprise Research Center, Texas A&M University, 2014-05-01) Rettenmaier, Andrew J.; Saving, Thomas R.
Energy and the Economy
(Private Enterprise Research Center, Texas A&M University, 2020-05-06) Jansen, Dennis W.; Rettenmaier, Andrew J.
With many of the most timely measures of economic activity lagging behind the fast moving changes in the U.S. economy, one source of extremely timely data is energy use. Energy use is not only tied to the weather as we heat and cool our homes; it is also tied to economic output as firms power their production facilities and establishments open for business and provide services. In this issue of PERCspectives on Policy, authors Dennis W. Jansen and Andrew J. Rettenmaier estimate the degree to which energy demand has changed from January 2017 to March 15, 2020, while taking into account the various dates that stay-at-home orders went into effect. By using data from the Energy Information Administration and controlling for weather conditions, the authors compare the actual and predicted use of energy, present the percent deviation between actual and predicted energy use, and show the decline in energy use relative to the insured unemployment rate for selected states and regions in the U.S. Results indicate that energy use has dropped markedly relative to expected use since the stay-at-home orders have been in place.
The Fedâ€™s Slow Realization of the Inflation Problem
(Private Enterprise Research Center, Texas A&M University, 2022-04-12) Jansen, Dennis W.; Rettenmaier, Andrew J.
For the 30 years prior to the peak of the previous business cycle in February 2020, monthly inflation rates based on the consumer price index averaged 2.4% while the personal consumption expenditures price index averaged just 2% - very close to the Federal Reserveâ€™s stated goal of 2% inflation. In recent months, inflation has soared to levels not seen in decades. Here, the authors show inflation rates since 1960 and discuss how the Federal Open Market Committeeâ€™s inflation projections since 2019 have continually been revised, as well as the actions taken (or lack of) by the Fed to curb rising inflation.
Federal Liabilities: They're Bigger than You May Think
(Private Enterprise Research Center, Texas A&M University, 2014-09-01) Liu, Liqun; Rettenmaier, Andrew J.; Saving, Thomas R.
Goodbye 2018, Hello 2019
(Private Enterprise Research Center, Texas A&M University, 2019-01-22) Jansen, Dennis W.; Liu, Liqun; Rettenmaier, Andrew J.
The decline of the stock market and its recent volatility have many wondering about the future prospects of the economy. Other leading economic indicators offer a mixed outlook: hours worked in manufacturing remains high and wages are rising. However, the yield curve is flattening, and an inverted yield curve often occurs in advance of a business cycle peak. In this issue of PERCspectives on Policy, authors Dennis W. Jansen, Liqun Liu and Andrew J. Rettenmaier consider indicators of the economyâ€™s health and use employment ratios to discuss how much employment could continue to grow in the near-term future.
Great (Inflation) Expectations
(Private Enterprise Research Center, Texas A&M University, 2021-04-28) Jansen, Dennis W.; Rettenmaier, Andrew J.
As states have begun to ease pandemic-related restrictions, we enter a new economic period that has the potential for rapid economic growth, but also a period of rising inflation. In this edition of PERCspectives on Policy, authors Dennis W. Jansen and Andrew J. Rettenmaier discuss changes in personal income and its components, the M2 money supply, and assets held by the Federal Reserve have changed over the past year and whether inflation is on the horizon. Rather than suffer a decline as seen in a typical recession, personal income per capita rose 10% between February 2020 and April 2020. The largest component of personal income, employee compensation, fell over 10 percent during that period. Government transfer receipts were up substantially. Personal consumption expenditures fell sharply, while personal savings rose. The federal debt increased to $4.34 trillion - 25% - between February 2020 and February 2021. Assets held by the Federal Reserve and the broad measure of the M2 money supply both increased substantially, to $3.2 trillion and $4.2 trillion, respectively.
How Much Will We Spend on Health Care?
(Private Enterprise Research Center, Texas A&M University, 2016-10-10) Rettenmaier, Andrew J.; Saving, Thomas R.
This atypical election cycle has diverted attention from the growing evidence that premiums for health insurance sold on the exchanges are rising while options have declined. Health expenditures are also again growing faster than the economy. In this issue of PERCspectives on Policy, PERC Executive Associate Director Andrew Rettenmaier, and PERC Director Thomas Saving, discuss the numerous factors that may lead to the continuing rise in health care spending for years to come.
Is Social Security Wealth?
(Private Enterprise Research Center, Texas A&M University, 2015-05-01) Rettenmaier, Andrew J.; Saving, Thomas R.
Is the Federal Reserve Independent?
(Private Enterprise Research Center, Texas A&M University, 2016-05-09) Saving, Thomas R.
The power to coin money and regulate the value thereof is constitutionally delegated to Congress, preventing true Federal Reserve independence. This issue of PERCspectives on Policy, by PERC Director Thomas Saving, discusses Federal Reserve independence through the lens of Great Recession and Great War deficits to analyze how the Federal Reserve has historically contributed to Treasury financing of fiscal deficits. At first glance it seems that the Federal Reserve was a partner to the Treasury by financing more than half of the Recession debt in recent years. However, the lack of inflation that would be expected is a result of the Federal Reserve sterilizing much of its asset expansion by paying interest on excess reserves.
It is Time to Fix Social Security
(Private Enterprise Research Center, Texas A&M University, 2022-09-12) Jansen, Dennis W.; Rettenmaier, Andrew J.
This year, the Social Security program is projected to run a cash flow deficit of $121 billion, one-fifth of the U.S. annual federal deficit, and is expected to be insolvent in 12 years. In this issue of PERCspectives on Policy, authors Dennis Jansen and Andrew Rettenmaier discuss the Social Security Trust Fund, the nature of current spending, the program’s role in reducing wealth inequality, past reforms and why we need to make necessary changes sooner, rather than later.
Market Risk and Retirement Plans
(Private Enterprise Research Center, Texas A&M University, 2022-01-13) Jansen, Dennis W.; Rettenmaier, Andrew J.
At retirement, the goal of most workers is to be able to pay their anticipated living expenses using their employer-sponsored retirement plan, savings, and Social Security. Today, most workersâ€™ employer-sponsored retirement plans are defined contribution, or 401k, plans, yet some workers are still enrolled in defined benefit plans, otherwise known as pensions. In this issue of PERCspectives on Policy, Dennis Jansen and Andrew Rettenmaier discuss how both types of plans are subject to market risk by simulating the investment outcomes for each plan under similar constraints. The authors illustrate that the pension plan delivers a defined benefit to its participants that exceeds the benefit produced by a defined contribution plan in 60% the simulated outcomes, but the pension plan itself falls short in 46% of the outcomes and also has the distinct disadvantage of non-portability.
Migration Nation
(Private Enterprise Research Center, Texas A&M University, 2016-01-01) Rettenmaier, Andrew J.; Saving, Thomas R.
Every year thousands of Americans move across county lines. In general, non-migrants experience higher average incomes than their migrant counterparts. This issue of PERCspectives on Policy explores how migrants and non-migrants incomes are distributed for a sample of the largest counties and suggests that the growth in counties' per capita income is due to both the potential of immigrants and composition of the workforce.
Moving Up
(Private Enterprise Research Center, Texas A&M University, 2015-09-01) Rettenmaier, Andrew J.; Saving, Thomas R.
America prides itself as a place where people who work hard and don't quit can move up. However, there are concerns growing economic inequality has stymied economic mobility. This issue of PERCspectives on Policy identifies how income inequality and mobility at the county level are related to intergenerational mobility. Thriving economic conditions are shown to be positively associated with upward mobility.
The Pandemic and Texas State Tax Revenue
(Private Enterprise Research Center, Texas A&M University, 2021-01-22) Jansen, Dennis W.; Rettenmaier, Andrew J.
Government budgets have undergone drastic changes due to the coronavirus pandemic. In this issue, authors Dennis W. Jansen and Andrew J. Rettenmaier share the state of Texasâ€™ tax collections compared to previous years. The role of sales taxes, oil and gas production taxes, hotel occupancy taxes, and alcoholic beverage taxes in filling state or city and county coffers is also discussed. The authors find that total tax collections in the first four months of fiscal year (FY) 2021 were 8.1% below total tax collections for the same months of FY 2020. Sales tax collections, the stateâ€™s biggest contributor, were 5.3% lower than the previous year for the same period. The plunge in oil and natural gas prices in FY 2020 led to vast declines in tax collections and in FY 2021 were running at 38% below the same months the previous year. Collections from both the hotel occupancy tax and the alcoholic beverage tax have also suffered substantial declines.
Pandemic Misery Index: States and Texas MSAs
(Private Enterprise Research Center, Texas A&M University, 2020-09-25) Jansen, Dennis W.; Navarro, Carlos I.; Rettenmaier, Andrew J.
How does Texasâ€™ response to the coronavirus pandemic compare to that of other states? In this issue of PERCspectives on Policy, Dennis W. Jansen, Carlos I. Navarro, and Andrew J. Rettenmaier discuss which states, and which metro areas within Texas, have been more effective at dealing with Covid-19 using a Pandemic Misery Index. The Pandemic Misery Index (PMI) balances health risk and economic risk by combining the average unemployment rate starting in March and the total number of deaths due to the coronavirus per 10,000 people in each state. A low unemployment rate and number of fatalities indicate greater effectiveness and equate to a lower PMI score. With both high unemployment rates and high death rates, New York and New Jersey have the highest PMI scores, while Utah and Nebraska hold the lowest PMI scores. Within Texas, the College Station-Bryan MSA held the third-lowest PMI, beat by the Abilene MSA in second place and the Sherman-Denison MSA in first place.
Poverty in the U.S.
(Private Enterprise Research Center, Texas A&M University, 2023-05-02) Jansen, Dennis W.; Rettenmaier, Andrew J.
In 1964, President Lyndon B. Johnson declared a â€˜war on poverty.â€™ Since then, the U.S. poverty rate declined from 19% to 11.6% in 2021, but one may wonder why it has not dropped further. In this issue of PERCspectives on Policy, Dennis Jansen and Andrew Rettenmaier examine how poverty thresholds in the U.S. were first established, the problems caused by leaving out transfer payments and tax credits, and the disadvantages of using the Consumer Price Index (CPI) to annually update those thresholds. The authors also examine how those thresholds would change if based on the Personal Consumption Expenditures (PCE) price index. Using the PCE price index, the poverty threshold for a family of four in 2021 would have been 23% lower than the current CPI-based threshold. The authors note that while taxes and all transfers have reduced income inequality and its growth relative to income before taxes and transfers, many of the programsâ€™ designs can actually reduce earned income.
Prior Commitments
(Private Enterprise Research Center, Texas A&M University, 2017-05-01) Liu, Liqun; Andrew Rettenmaier and Thomas Saving
The US Government's total liabilities were $22.8 trillion in 2016. The liabilities include the familiar debt held by the public of $14.2 trillion. They also include the accrued pension and other retirement benefits payable to federal civilian and military employees of $7.2 trillion and $1.3 trillion in other liabilities. Altogether these official liabilities are 23% larger than GDP. But are the official liabilities the end of the story? Because retirees don't have a legal claim to their Social Security and Medicare, their accrued benefits are not included in the official liability tally. But if these accrued benefits--limited to just those payable to current retirees--were treated as liabilities they would add another $19.8 trillion to federal liabilities. This issue of PERCspectives on Policy explores the rationales for treating accrued Social Security and Medicare benefits payable to current retirees as comparable to the other official federal liabilities.

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