Economy

Economic Inequality: Facts, Theory and Significance

The well-documented rise in economic inequality in the United States over the last two decades is somewhat misleading. Almost all Americans, whether considered "rich" or "poor," are better off economi…

Economic Freedom and the Trade-off between Inequality and Growth

One of government's biggest challenges is to develop policies that raise the standard of living in a society without creating large income gaps between the rich and poor. But to a great extent, raisin…

Our Triple Deficits

Economists often refer to the U.S. trade deficit and the federal budget deficit as problems of inadequate domestic saving.  They speak of these deficits “crowding out” domestic investment.  They allud…

Giving No Credit Where It Is Due: Social Security Disability

The disability insurance component of the U.S. Social Security system is funded by a 1.8 percent payroll tax. It pays benefits to disabled adults who have earned a required number of credits based on…

How the Fed Creates Money

Signs of an economic slowdown, or recession, have prompted the Federal Reserve to lower interest rates.  The Fed reduces interest rates by increasing the supply of money available to borrow.  This add…

Increasing America’s Domestic Fuel Supply by Building New Oil Refineries

Rising oil and gasoline prices have many causes that are beyond the control of the U.S. government.  However, government policies have contributed to higher prices by reducing domestic refining capaci…

Economic Growth without Inflation

Can the economy grow faster without causing inflation to accelerate?  Some argue that the downside of a rapidly rising gross domestic product (GDP) is more inflation, and that you can't have more…

Taxes and Economic Growth

Some activities of government clearly contribute to economic growth. Beyond some minimum level, however, government becomes a net drain on the economy. Empirical evidence shows that as the tax burden…