Economic Report of the President 2014

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March 11, 2014

Yesterday, the White House released the annual Economic Report of the President.  The 415-page report outlines an optimistic view of the U.S. economy for 2014-15, including a 3.1% increase in growth overall and a mild decrease in unemployment.  Why is this important for fiscal responsibility?  Well, it is based off of the estimates for the 2015 federal budget, released last week.

How are news sources reacting?  Have students take a look at Bloomberg Businessweek and compare it to PBS NewsHour.  What differences can be seen in the way different media outlets are covering the story? How is that different from the White House blog?

Students could use the outlined chapters on the White House blog to get a good idea of the content and intent of the report to look for priorities in the federal budget, tied to UFR Lesson 1.5 on balancing the budget.

 

 

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Ryan and Mankiw and Krugman and Income Inequality

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March 7, 2014

It’s interesting to read the “conversation” between economists Greg Mankiw and Paul Krugman through their blogs.  The latest discussion returns to income inequality.

Krugman’s post on March 3 criticizes Representative Paul Ryan’s poverty report.  More specifically, it hones in on the so-called “poverty trap”, which Ryan uses as a reason to cut funding to programs such as Social Security and welfare.  In general, the poverty trap is caused by people becoming used to staying on welfare and decreasing opportunity to move higher along the socio-economic ladder.  Krugman disagrees completely.

Even before the release of Ryan’s report, however, Mankiw posted a response to one of Krugman’s blogs on income inequality.  The reason why I bring it up here, though, is because of Mankiw’s argument about mobility, which ties very well with Krugman’s March 3 post.

The key to this is the very different ways that Mankiw and Krugman view economics.  Mankiw comes from a more conservative side, and Krugman uses a more liberal lens.  With the new focus nationwide on income inequality due to President Obama’s State of the Union address,  it’s fascinating to see how economists from different sides of the aisle view the issue.

Go on back to the UFR blog posts from January 28 and December 20 for information over the last few months, and the December 5 blog to look at how it can tie really well to the UFR curriculum!

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Political Cartoon Roundup, Debt Ceiling Style

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March 4, 2014

Some great political cartoons have popped up in the last few weeks on the national debt, the proposed budget(s), and the looming debt ceiling.

139454 600 On to the Next Debt Limit cartoons

RJ Matson, St. Louis Post Dispatch, 2014

 

144565 600 Debt Ceiling Ahead cartoons

Michael Ramirez, Investors Business Daily, 2014

 

144608 600 Stressed Teens cartoons

Steve Kelley, The Times-Picayune, 2014

 

144545 600 Debt Ceiling Stuck cartoons

Chip Bok, 2014

 

144288 600 Speaker Boehner Lets House Vote to Lift the Debt Limit cartoons

RJ Matson, St. Louis Post Dispatch, 2014

 

 

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Revisiting Obamacare

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February 26, 2014

The LA Times reported today that “another attempt at Obamacare ‘reform’ blows up”.  I hadn’t read up on the Affordable Care Act in a few days, so I went searching, and found some interesting information.  If you’ve been having your students follow along on the ACA debates in Congress, here’s another chapter.

The quick and dirty story is that the Save American Workers Act introduced in late 2013 was shot down by a budget analysis by our friends at the Congressional Budget Office (CBO).  Two items of note in the CBO analysis:  the bill would increase the number of uninsured people, and would cost the federal government a lot of money in the process.  Fox Business confirms the information the LA Times reported, as does MSNBC.  Having students read articles from different newspapers about the same topic could be a great lesson in bias and sourcing, by the way.

Economist Paul Krugman is talking about the ACA on his blog at the New York Times website, and on February 14, economist Greg Mankiw posted his comparison between the ACA and Romneycare on his blog.

Fox News reports that there are now 4 million people enrolled in the ACA,  but the Huffington Post says that there is a growing number of the uninsured who are mistrusting of the ACA and are not enrolling because of the “hype”.

This sparks another great opportunity to look at rhetoric, politics, and decisions that are made that affect the national budget.  Have students look at all of the data – what is rhetoric and what is truth?  How can you tell?

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Friday Cartoon Roundup

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Friday, February 21, 2014

It’s time for political cartoons!  Rob had posted a great way to bring political cartoon analysis into the classroom back on October 13.  How can understanding political cartoons help students gain deeper understanding of difficult topics and concepts?

144747 600 Democrats face reality cartoons

Eric Alle, Pioneer Press, 2014

 

144732 600 Job Killers cartoons

Kevin Siers, The Charlotte Observer, 2014

 

144414 600 Obama golf vacation cartoons

Jimmy Margulies, The Record, 2014

 

 

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CBO weighs in on Minimum Wage

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February 18, 2014

Last week, President Obama expressed his support for a bill that would raise the minimum wage for companies with federal contracts, as he called for in his State of the Union address last month.  Not that I’m overly obsessed with the Congressional Budget Office, but they have posted an analysis of the Effects of a Minimum-Wage Increase on Employment and Family Income (Feb 18).

 

The CBO states that there are two main effects:  (1) some workers would be raised out of the federal poverty threshold, and (2) some jobs for low-wage workers would be eliminated.  However, when taking all increases and decreases into account, they estimate overall real income would rise by $2 billion.

However, the effect on the federal budget is what is really interesting in terms of applying UFR principles and concepts.  The wages that the federal government would have to pay to select hourly employees would increase, and at this moment, that cost would be absorbed into discretionary appropriations, which are capped right now by current law.  And, of course, there would be changes in collected federal income tax with the changes in real income (increases for some, decreases for others).

Tying this to UFR Lesson 1.4 on Taxation and the National Debt as well as Lesson 1.5 on Balancing the Federal Budget is a good way for students to gain clear understanding on how decisions are made at the federal level and what trade offs are required.  However, what about using this ongoing debate on minimum wage, income inequality, and “the 1%”  to look more closely at political rhetoric (Lesson 2.5)?  How much of what we see is rhetoric, and how much is fact?  How do we determine the difference, and how in the world do we teach that to students?

 

Remember also that Rob posted a UFR blog post on Jan 29 entitled “Minimum Wage as Minimal Government Intervention?

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Friday Roundup – CBO (redux) and Cartoons!

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After the last few posts on the CBO report on the Affordable Care Act, I thought I’d stay away from it in this post, but then found this blog post in the New York Times Economix section from Princeton economist Uwe Reinhardt with a fascinating overview of how the report uses Obamacare as a negative income tax.  I thought it would be an interesting addition to the “sides” being played and outlined in the February 7 and February 11 UFR blog posts.

Daniel Kurtzman, 2014

 

Scott Stantis, 2014

 

John Trevor, 2014

 

aca job loss

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Revisiting the CBO report on Affordable Care

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February 11, 2014

The economic and policy blogosphere has exploded over the weekend and I thought I’d take some time to provide some links about the “debate.”

First, the Congressional Budget Office has offered an FAQ on their report from last week about Obamacare.

Economist Paul Krugman has two blog updates, one entitled “Why do you care how much other people work?“, and one addressing Representative Paul Ryan’s comment on the dignity of work in regards to the CBO report and the Affordable Care Act.   On the other hand, economist Greg Mankiw looks at wages and labor supply (great lesson on labor supply in there!).  Glenn Kessler at the Washington Post says it’s all been taken out of context.  An op-ed piece for the Chicago Tribune agrees.  Nicholas Wapshott at Reuters says people should not pay attention to the rhetoric around the CBO report.  The LA Times agrees.

So, who is right?  Is all of this politics or rhetoric?  It’s a great opportunity to take opposing viewpoints such as the blogs and opinion pieces above and let students determine who is “right”, who is “overreacting”, who is “taking things out of context”, and what is rhetoric.

By the way, it’s very difficult to find news pieces that do not have rampant overriding opinions.  What does that tell students?

 

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Obamacare and Jobs and the CBO – oh my!

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February 7, 2014

This week a lot of conversation has turned to Obamacare and the January jobs report.  How do these come together?  I thought this political cartoon handled that question admirably:

144072 600 OBAMACARE AND JOBS cartoons

Randy Bish, Pittsburgh Tribune-Review, 2014

 

On Tuesday, the Congressional Budget Office released the February 2014 baseline projections for the Affordable Care Act.  The entire report can be found online.  Have students dive into the data – what does this mean?  Is this good news or bad news for the president?  How can you tell?  Backing up statements with facts is a fantastic learning tool, not to mention a skill that comes in handy in the future.

Almost immediately, the responses to the CBO report started being shown on different news outlets.  The Washington Post has a blog called “The Fact Checker” that tries to go behind the rhetoric to the facts.  This week, blogger Glenn Kessler does a great job outlining economists’ reactions to the report.  Have students compare how the Post blog compares to the blogs of economist Greg Mankiw and economist Paul Krugman on the topic of the CBO report.  Can they determine who is the conservative economist and who is the liberal economist?  What clues did they use?

UFR Lesson 2.5 gives an overview of rhetoric and what affects it has on the political landscape as well as economics and the federal budget.  How could all of this come together – the primary source of the CBO report, the three different blogs and opinions on that report, and the UFR lesson on rhetoric?

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State of the Union cartoon roundup

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January 31, 2014

Of course, many political cartoons have shown up after the president’s State of the Union address earlier this week.  Consider adding political cartoons to the analysis you have students do on a regular basis.  In addition to helping understand satire and “both sides of the aisle”, it also helps students learn to apply critical thinking skills to political issues.

Rick McKee, The Augusta Chronicle, 2014

 

R.J. Matson, St. Louis Post Dispatch, 2014

 

Dave Granlund, New York Times, 2014

 

Michael Ramirez, Investors Business Daily, 2014

 

Jeff Kortorba, Omaha World-Herald, 2014

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