U.S. Budget and Economy

Ralph Nader was a guest on the June 29th program of This Week with George Stephanopoulos. A video of the interview can be found here . For about 4 minutes, George Stephanopoulos and Nader talked about Nader's recent criticisms of Obama. Stephanopoulos then asked the following: Here's what I don't get. Is there any doubt in your mind that Barack Obama would be a better president for your issues, for the things you care about, than John McCain? Nader replied: Well, anybody would be better than the Republicans. Stephanopoulos then asked why Nader trained all his fire on the Democrats, Nader protested that he was simply answering the question he had been asked, and Stephanopoulos replied that this was driven by issues that Nader had raised that week. Nader did go on to spend about 30 seconds making a number of criticisms of McCain. To see firsthand how much Nader was training his fire on Obama versus McCain, I went to Nader's website at http://www.votenader.org/ . The...

My prior post looked at Net Operating Cost and Net Position as presented in the Financial Report of the United States Government. As mentioned, these two measurements are similar to the Unified Deficit and Debt Held by the Public which are presented in the U.S. Budget. The former two measurements are accrual-based and the latter two measurements are cash-based . The Net Operating Cost and Net Position are two of three major items shown in Table 1, titled "The Nation By the Numbers - An Overview", on page 3 of the 2007 Financial Report . The third major item is Social Insurance Exposures. Following is an excerpt starting on page 24 that describes this last item: For the ‘social insurance’ programs (e.g., Social Security, Medicare Parts A, B, and D), the Statement of Social Insurance (SOSI) shows the estimated future scheduled benefit expenses net of contributions and tax income (excluding interest), based on each program’s actuarial trust fund report. Table 8 shows esti...

The Government Management Reform Act of 1994 (GMRA) required the U.S. Government to submit consolidated financial statements audited by the GAO (U.S. Government Accountability Office) beginning with fiscal year 1997's Financial Report of the United States Government. Each year since then, the Administration has issued two reports that detail financial results for the government. These are the President’s Budget and the Financial Report of the United States Government. The following excerpt from page 4 of the 2007 Financial Report describes the difference between the two documents: The Budget's emphasis is on initiatives and how resources will be used , focusing on the Government's spending surplus or deficit. The Report focuses on the Government's net operating cost - how resources have been used to fund programs and services. How does the Government’s largely cash-based spending deficit differ from the largely accrual-based net operating cost? The Budget shows r...

My prior two posts looked at the effective tax rate for all taxpayers. Additional information can be obtained by looking at the effective tax rate by taxpayer income quintiles. The following graph shows the effective individual income tax rate by income quintiles (plus the top 10, 5, and 1 percent of incomes): The actual numbers and sources are at http://www.econdataus.com/efftax05.html . The graph shows an interesting thing about the Tax Reform Act of 1986. This tax cut lowered the top marginal rate from 50 percent in 1986 to 28 percent in 1988. However, the graph shows that the effective tax rate dropped for every quintile EXCEPT the upper quintile during this period. This was most noticeably true for the top 1 percent of incomes where the effective rate rose from 18.3 percent in 1986 to 20.7 percent in 1988. As the numbers show, the average pretax income for the top 1 percent of incomes was between $689 thousand and $867 thousand during this period, well within the top margi...