econ 301 project
xbd1997
GovernmentSpr182.pdf
Government
Government Statistics
Sources
Debt Clock
FED Money Supply
CBO
OMB
Treasury
Government Statistics
Government Research Issues
Budget Deficit
Off-budget items can create discrepancies (USPS and GSEs)
National Debt
May not be analogous to household debt since fiscal policy
necessitates spending inverse to the business cycle.
Some debt is intra-governmental (SSA & FED)
Raw value may be less important than percentage of GDP.
Government Statistics
Government Research Issues
Tax Burden
Progressive vs. Regressive with income (sales vs. income tax)
Payroll tax is split between employer/employee but the employer
may pass burden onto employee in the form of a lower wage.
Excise taxes are imposed on businesses but they may be able to
pass onto consumers in the form of higher prices.
Some groups are better able and more incentivized to avoid
(or evade) taxes.
Government Statistics
Government Research Issues
Measuring Money
Money Supply: M1 & M2 categories.
Monetary Policy
By 1990s the FED stopped targeting the money supply.
Monetary expansion shows up in FED balance sheet.
Inflation Measurements: CPI
BLS creates a “Market Basket” to compute CPI monthly.
Annualized CPI?
CPI-U vs. CPI-W
May fail to account for:
Qualitative changes in products.
Substitution toward cheaper but similar products.
Cost of owning a home (post 1983 use rental value)
Government Statistics
Government Research Issues
Military Expenditures
Overstated since it includes “nation building” expenditures.
Understated as some “defense” expenditures are excluded.
Economics of War
Direct costs understate true economic costs.
Assessing true cost-benefit of war requires counter-factual
computations that are highly unreliable.
Wartime deaths estimates have a broad continuum.
Welfare Expenditures
Budget includes in-kind benefits such as health care, overstating
actual money received by recipients.
Defining “welfare” is debatable:
Means tested transfer payments or benefits to all citizens?
