by Joe Minarik, CED Senior Vice President and Director of Research

Sadly, we have seen the end of the Supercommittee. It failed to meet its deadline to report a deficit-reduction bill to the Congress.

But equally sadly, we have not seen the end of the issue. The exploding cigar of debt is still lit and burning. And we do not know precisely where in the cigar the charge is located. We are living on borrowed time – as well as borrowed money.

In the near term, the national sport – at least in Washington – will be the blame game. (In St. Louis, it's still baseball.) It will be an exciting game, because there is so much blame to go around.

by Charles Kolb for The Huffington Post

America's future can be seen clearly in today's European crisis over sovereign debt. What is not clear is the path our country will take to resolve our own economic crisis.

First, some facts. American companies are reportedly sitting on more than $2 trillion of cash that they could invest, but haven't yet. Businesses are not investing because they are awaiting consumers to start buying again. Consumers aren't buying because their homes today are worth some $7 trillion less than their 2006 value -- and home prices keep dropping. The Wall Street Journal's David Wessel reports that according to the International Monetary Fund, "holders of U.S. mortgage and other debt lost $2.7 trillion in the U.S. phase of the global crisis." These facts explain why the U.S. economy is effectively blocked -- with stagnant economic growth and 9 percent unemployment. "Neither a borrower nor a lender be" seems to sum up where we are.

By Charles Kolb for Change Magazine

The forces of globalization are finally hitting American postsecondary education. For nearly three decades, since the 1983 publication of A Nation At Risk launched a sustained focus on our mediocre, if not failing, K-12 system, American postsecondary education has avoided the accountability spotlight. Our postsecondary policy debates have focused mostly on input problems such as access, the cost of the federal student-loan program, the value of the Pell grant, and diversity. Issues such as graduation rates, the quality of learning, and cost- effectiveness were rarely addressed: Everyone simply assumed that America had the best postsecondary education system in the world.

Now that Republicans and Democrats on the Joint Select Committee on Deficit Reduction have exchanged "plans" to reduce deficits and meet at least their $1.2 trillion to $1.5 trillion goal, the time has arrived to assess where the supercommittee is going and where it should go.

CED Trustee Landon Rowland appeared as a guest on the Dylan Ratigan Show to discuss the corrupting influences of money in the election of judges. Please click here to view the video.

Joe Minarik on C-SPAN's Washington Journal

Joseph Minarik talked about the future solvency of Social Security, and he responded to telephone calls and electronic communications. Social Security went cash negative in 2011, meaning the the cost of benefits outstripped tax collections for the first time since the early 1980's. Among the topics Mr. Minarik addressed were the Social Security Trust Fund, the role of the Treasury Department, and the impact of the 2008 financial crisis on Social Security. Click here to watch the video...

By Jamie Merisotis and Charles Kolb for the Christian Science Monitor

In fact, the current generation of college-age Americans is on its way to being less educated than their parents - a shameful first in America's history.
Read more...

by Joe Minarik for Bloomberg Government

By now just about everyone understands that the root cause of the federal government's budget problem is health care, driven mostly by the $555 billion a year Medicare program.

 

While popular opinion fixates on Social Security as the big "entitlement" problem, health care is by far the bigger cost driver. Between now and 2085, Social Security spending is likely to increase from 4.8 percent of the gross domestic product to 6.4 percent, according to the Congressional Budget Office. That's an increase of 1.6 percentage point in 74 years.

 

Net health-care spending, meanwhile, is expected to increase from 5.1 percent of GDP to 17.2 percent in 2085, or more than a three-fold leap. CBO says the program will cost taxpayers $903 billion by 2020.

 

The enormous projected growth in health-care spending has led many elected lawmakers to the obvious conclusion: Forget about everything else, just focus on health care. Such a policy recommendation is airtight, except for one problem: It's wrong.

By Charles Kolb for the Huffington Post

The current price of a share of publicly traded stock reflects the discounted net present value of that company's expected future earnings. That's how an economist explains the value of a publicly traded American company. The company's aggregate value -- its market capitalization -- is the total value of all those outstanding shares, which reflect the stock market's value of the company's future earnings. That amount is discounted, of course, because a dollar's worth of future earnings is worth less than a dollar in hand today.

By Charles Kolb for the Huffington Post

Let's hope that the president elected in 2012 -- whether it is Mr. Obama again or a Republican -- is a conviction leader capable of providing not just bold words but also bold actions. Our country still needs bold structural reforms: in fiscal policy, tax policy, health care policy, infrastructure investments, and education.
Barack Obama ran a promising and bold 2008 election campaign, but sadly his governing reality has been timid and tepid -- a surprise to millions of his supporters and even to his opponents.