Edward Conard

Top Ten New York Times Bestselling Author

  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Wednesday, November 8, 2023

AI Summary. With short-term interest rates far enough above zero, they are again the central bank's main lever for steering the economy toward equilibrium, a difficult task because policy changes affect spending, output, and inflation with lags that can span years. Equity yields have changed little while bond yields rose significantly, moving equity pricing further from equilibrium.

Bob Prince and Shane Murphy Bridgewater Associates
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Bridgewater analysis finds the US economy is close to a sustainable equilibrium, but equity earnings yields vs. bonds may indicate poor future equity returns.

Are short-term interest rates again the central bank's main lever toward equilibrium?

Core argument: Equity yields have changed little while bond yields have risen significantly, moving equity pricing further from equilibrium, a configuration last seen in 2000, which was followed by a decade of poor equity returns.

The short-term interest rate is a key variable in managing these conditions and is once again the central bank’s primary policy lever (since interest rates are far enough above zero). The central bank pulls the lever in order to steer the economy toward equilibrium. This is challenging when you start from a major disequilibrium because policy actions affect changes in spending, output, and inflation with significant lags (the process can take years), and in the meantime, markets are responding to central bank actions and having their own impact on the path of the economy. Recently, equity yields have changed little as bond yields have risen significantly, such that equity pricing has moved further from equilibrium. The last time we were here was 2000, which was followed by a decade of poor equity returns.

Takeaways by Macro Roundup® AI

  1. Equity yields have changed little while bond yields have risen significantly, moving equity pricing further from equilibrium, a configuration last seen in 2000, which was followed by a decade of poor equity returns.
  2. The short-term interest rate is again the central bank's primary policy lever now that rates are far enough above zero, and the central bank uses it to steer the economy toward equilibrium.
  3. Steering from a major disequilibrium is difficult because policy actions affect spending, output, and inflation with lags that can take years, while markets respond to central bank actions and shape the economy's path themselves.

Related Articles:

  • An Update from Our CIOs: Entering the Second Stage of Tightening — A second stage of the monetary tightening cycle is led by long-term interest rates: after a period when short-term rate hikes continued but bond yields traded sideways, long-term yields resumed rising. The earlier reprieve reflected market expectations of future easing and Treasury issuance shifted toward short-term bills funded by excess central bank reserves.
  • Soft Landing Summer — The estimated 12-month US recession probability has been cut to 15%, matching the postwar unconditional average implied by a recession occurring roughly once every seven years, and far below the 60% Bloomberg consensus. The authors expect interest rates to fluctuate in a higher range than in the post-2008 period.
  • Why No Recession (Yet)? — Real interest rates have risen by almost 10 percentage points, compared with 4 points during the 2004–2006 tightening, yet activity has held up because households entered the episode with large savings accumulated during the pandemic. As those surplus savings are used up and borrowers refinance at higher rates, the full impact of tightening has not yet been felt.

AI Summary. Using administrative tax data with the Survey of Consumer Finances, the authors estimate the top 1% pre-tax income share fell from 11.1% in 1962 to 9.4% in 1979, then rose to 13.8% by 2019, a 3 percentage point rise over the full period. Their after-tax measure shows increases of only 1.4 points since 1979 and 0.2 points since 1962.

Gerald Auten and David Splinter Working Paper
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Gerald Auten and David Splinter have updated their income inequality estimate and find that the after-tax income share of the top 1% in the US has been steady since the 1960s, disproving Piketty-Saez-Zucman’s claims otherwise.

How much has the top 1% income share actually risen?

Core argument: Using administrative tax data with the Survey of Consumer Finances and other sources, the authors estimate the top 1% pre-tax income share fell from 11.1% to 9.4% between 1962 and 1979, then rose to 13.8% by 2019, a 3 percentage point increase overall.

Using administrative tax data in combination with the Survey of Consumer Finances and other data sources, this paper develops new estimates of the distribution of income in the U.S. since the 1960s. Our analysis examines levels and trends in all parts of the distribution in addition to top income shares. Our estimates for pre-tax income, based on distributing total national income, show that the top one percent share declined from 11.1% to 9.4% from 1962 to 1979 and then increased to 13.8% by 2019. Viewed over the full period, the top share increased by only 3 percentage points. While our pre-tax income measure includes labor and investment income, it provides an incomplete picture of economic resources available to individuals. A broader measure that includes Social Security benefits and other transfers lowers top one percent shares and results in a smaller increase. Our estimates for after-tax income indicate that the top one percent share increased only 1.4 percentage points since 1979 and only 0.2 percentage points since 1962.

Takeaways by Macro Roundup® AI

  1. Using administrative tax data with the Survey of Consumer Finances and other sources, the authors estimate the top 1% pre-tax income share fell from 11.1% to 9.4% between 1962 and 1979, then rose to 13.8% by 2019, a 3 percentage point increase overall.
  2. The authors estimate the top 1% after-tax income share increased 1.4 percentage points since 1979 and 0.2 percentage points since 1962.
  3. A broader income measure including Social Security benefits and other transfers lowers top 1% shares and yields a smaller increase than the authors' pre-tax measure of labor and investment income.

Related Articles:

AI Summary. Aggregate foreign demand for US bonds has been strong, in line with or above the post-global-financial-crisis norm, with Treasury purchases coming largely from private investors amid weak reserve growth and an absolute yield advantage. Foreign demand for long-term US agency bonds has been strong, with China a net buyer of agencies while selling Treasuries on net.

Brad Setser @Brad_Setser
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.@Brad_Setser finds that aggregate foreign demand for US bonds is in line with or above the post-crisis mean, but forecasts, “the bulk of new note issuance will need to be absorbed domestically (and obviously the Fed is adding to net supply)”

Is foreign demand for US bonds holding up?

Core argument: Aggregate foreign demand for US bonds has been strong, in line with or above the post-global-crisis norm, with Fed and Treasury valuation-adjusted monthly survey data showing solid overall demand and a modest shift toward Agencies over the last 12 months of data.

There is a lot of interest in foreign demand for US Treasuries (and US bonds generally) these days, given the scale of forthcoming issuance. And in aggregate foreign demand for US bonds has actually been pretty strong, in line or above the post-global crisis norm. The higher frequency data from the Fed (and now the Treasury) based on the valuation-adjusted monthly survey data tells the same story -- solid overall demand, with a modest shift toward Agencies in the last 12ms. Treasury demand appears to be coming largely from private investors -- which makes sense given that reserve growth has been weak and Treasuries offer an absolute yield pickup. China on net has sold Treasuries in the last 12ms of data even adjusting for Belgium/Euroclear. Foreign demand for long-term Agencies has been quite strong -- and China was a net buyer there over the last 12ms of data.

Takeaways by Macro Roundup® AI

  1. Aggregate foreign demand for US bonds has been strong, in line with or above the post-global-crisis norm, with Fed and Treasury valuation-adjusted monthly survey data showing solid overall demand and a modest shift toward Agencies over the last 12 months of data.
  2. Treasury demand appears to come largely from private investors rather than reserve managers, which Setser attributes to weak reserve growth and the absolute yield pickup Treasuries offer.
  3. China was a net seller of Treasuries over the last 12 months of data even after adjusting for Belgium/Euroclear, while being a net buyer of long-term Agencies, where foreign demand has been strong.

Related Articles:

  • Just One More — Under the Treasury Borrowing Advisory Council's recommendation, roughly $1.8t of new money would be raised through longer-dated coupon securities and about $700bn through short-term bills, lifting bills to around 22% of marketable debt outstanding. The author argues the more likely sequence is a sharp rise in yields that triggers recession and rate cuts, which then generate strong Treasury demand.
  • Preferred Habitats and Timing in the World’s Safe Asset — As the Federal Reserve shrinks its bond portfolio, the authors argue private investors, U.S. and foreign, are the more likely buyers of Treasury securities, since their purchases respond to yields and their holdings tilt toward longer-maturity bonds. Foreign governments have not materially added to their Treasury holdings in almost a decade and tend to hold shorter-maturity bonds.
  • Resilience Redux in the US Treasury Market — The authors argue that large, persistent US federal deficits and limited dealer balance-sheet flexibility will cause outstanding Treasury debt to grow rapidly relative to the market's capacity to intermediate trades, absent significant changes in market structure. They contend broad central clearing, all-to-all trading, real-time post-trade reporting, capital-regulation changes, and transparent official purchase programs could strengthen market capacity and resilience.

AI Summary. Alternative inflation gauges show disinflation has been substantial, with core measures running highest because owners' equivalent rent lags actual market rents that rose and then leveled off. Inflation has come most of the way toward 2% without a recession or a large rise in unemployment.

Paul Krugman Krugman Wonks Out
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.@paulkrugman argues disinflation has gotten us close to the Fed’s 2% target without a recession or a large rise in unemployment. He also notes that trying to lower the price level to its pre-inflationary level is “almost always” a bad idea.

Has inflation fallen most of the way to target without rising unemployment?

Core argument: Disinflation has taken the U.S. most of the way back toward 2 percent inflation without a recession or even a large rise in unemployment, though inflation probably has not fully returned to 2 percent.

If you want a measure that’s closer to how people currently spend their money, you want the Harmonized Index of Consumer Prices. “Core” inflation is actually the highest, because owners’ equivalent rent, for technical reasons, tends to lag far behind actual market rents — which rose a lot last year but have leveled off. One reason the Fed prefers that P.C.E. deflator over the Consumer Price Index, by the way, is that it puts less weight on those questionable housing prices. The bottom line is that disinflation is real — indeed, spectacular. Are we all the way back to 2 percent inflation? Probably not, although there’s a real angels dancing on the head of a pin feel to the debate over the right measure of underlying inflation, and even over what that term really means. But we’ve gotten most of the way there, without a recession or even a large rise in unemployment.

Takeaways by Macro Roundup® AI

  1. Disinflation has taken the U.S. most of the way back toward 2 percent inflation without a recession or even a large rise in unemployment, though inflation probably has not fully returned to 2 percent.
  2. Core inflation reads highest among the measures because owners' equivalent rent, for technical reasons, lags actual market rents, which rose a lot last year before leveling off.
  3. The Federal Reserve prefers the P.C.E. deflator over the Consumer Price Index partly because it puts less weight on questionable housing prices, while the Harmonized Index of Consumer Prices comes closer to how people currently spend their money.

Related Articles:

  • U.S. Wage Growth Is Slowing, Somewhat — U.S. wage growth has slowed substantially without a large rise in joblessness, though wages are still rising faster than in the decade before the pandemic, at a pace comparable to the late 1990s and 2006-2007. The author argues much of the earlier outsized pay gains reflected one-off job market churn and sectoral shifts.
  • An Update from Our CIOs: Entering the Second Stage of Tightening — A second stage of the monetary tightening cycle is led by long-term interest rates: after a period when short-term rate hikes continued but bond yields traded sideways, long-term yields resumed rising. The earlier reprieve reflected market expectations of future easing and Treasury issuance shifted toward short-term bills funded by excess central bank reserves.
  • Why No Recession (Yet)? — Real interest rates have risen by almost 10 percentage points, compared with 4 points during the 2004–2006 tightening, yet activity has held up because households entered the episode with large savings accumulated during the pandemic. As those surplus savings are used up and borrowers refinance at higher rates, the full impact of tightening has not yet been felt.

AI Summary. Nearly 110,000 Americans died of drug overdoses in a year, with more than two-thirds of those deaths caused by fentanyl, a synthetic opioid 50x as potent as heroin. A kilogram of precursor chemicals bought from Chinese manufacturers for about $800 can produce 415,000 fentanyl pills, which sell wholesale for as little as 50 cents each.

Jamie Smyth, Christine Murray, Joe Leahy, and Sun Yu Financial Times
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Fentanyl margins remain very attractive; $800 in raw materials can manufacture over $200,000 worth of fentanyl, or up to $1.2mm in NYC. 2/3 of 110,000 overdoses in the US last year were caused by fentanyl.

How does the global fentanyl supply chain drive American overdose deaths?

Core argument: The American overdose crisis claimed nearly 110,000 lives last year, with more than two-thirds of those deaths caused by fentanyl, a synthetic opioid 50 times as potent as heroin.

The American overdose crisis has claimed nearly 110,000 lives last year. More than two-thirds of those deaths were caused by fentanyl, a synthetic opioid 50 times as potent as heroin. A kilogram of precursor can be purchased from Chinese manufacturers for about $800, which is enough to manufacture 415,000 fentanyl pills. Each pill can be sold wholesale for as low as 50 cents in the US. Street dealers can make as much as $3 per pill in New York City, say US prosecutors. US efforts to disrupt the fentanyl supply chain are resulting in increased seizures. Analysis by the Wilson Center in August showed that fentanyl seizures at the US-Mexico border increased 164% from 2020 to 2022. By the end of August, there had already been seizures of nearly 10,000kg in 2023 — far surpassing last year’s total of 6,400kg. Most experts believe fentanyl seizures are up because the overall volume of smuggling is increasing rather than any sustained success in the battle against the cartels.

Takeaways by Macro Roundup® AI

  1. The American overdose crisis claimed nearly 110,000 lives last year, with more than two-thirds of those deaths caused by fentanyl, a synthetic opioid 50 times as potent as heroin.
  2. A kilogram of precursor costing about $800 from Chinese manufacturers yields enough fentanyl for 415,000 pills, which wholesale for as little as 50 cents each and earn New York City street dealers as much as $3 per pill, according to US prosecutors.

Related Articles:

Thursday, November 9, 2023

AI Summary. The Census Bureau projects the U.S. population will peak at almost 370m before declining to 366m by the end of the century, with annual growth falling from 1.2% in the 1990s to 0.5% and to a projected 0.2% by 2040. Under its most likely scenario, deaths would exceed births by 2038.

Paul Overberg and Rosie Ettenheim Wall Street Journal
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According to new Census Bureau projections, the US population will stop growing by 2080 at 370mm and start to shrink by 2100. Nigeria and Pakistan are expected to be more populous than the US around mid-century.

Is the U.S. population projected to shrink this century?

Core argument: The Census Bureau projects the U.S. population will peak at almost 370 million before ebbing to 366 million in the final years of the century, with annual growth falling from 1.2% in the 1990s to 0.5% today and 0.2% by 2040.

Slowing growth would produce a peak U.S. population of almost 370 million before an ebb to 366 million in the final years of the century, according to the bureau. The projections outline a nation growing slowly compared with recent decades. Annual growth rates have fallen from 1.2% in the 1990s to 0.5% today and would fall to 0.2% by 2040. Small differences add up through compounding: The projected U.S. population in 2040 is 355 million, 25 million fewer than projected for that date in 2015. The difference is more than the current population of Florida. In 2022, preliminary data showed the U.S. birthrate was about 19% lower than in 2007. Death rates remain about 9% higher than 2019, the last year before the pandemic. By 2038, deaths would exceed births under the most likely scenario.

Takeaways by Macro Roundup® AI

  1. The Census Bureau projects the U.S. population will peak at almost 370 million before ebbing to 366 million in the final years of the century, with annual growth falling from 1.2% in the 1990s to 0.5% today and 0.2% by 2040.
  2. The Census Bureau's projected U.S. population for 2040 is 355 million, 25 million fewer than projected for that date in 2015, a gap larger than the current population of Florida.
  3. Preliminary data showed the U.S. birthrate in 2022 was about 19% lower than in 2007, while death rates remain about 9% above 2019, and under the most likely scenario deaths would exceed births by 2038.

Related Articles:

  • Why Americans Are Having Fewer Babies — Sociologists find that US women born in the late 1980s had, on average, about one child fewer by their early 30s than they had intended, roughly double the shortfall for women born two decades earlier. The median age at which women give birth is 30, three years older than in 1990.
  • Immigrants & Their Kids Were 70% of U.S. Labor Force Growth Since 1995 — U.S. labor force data show immigrants accounted for 49% of labor force growth over roughly the past three decades and their children another 21%, together about 70% of an increase of nearly 32.8m workers. Immigrants rose from about 10% to 18% of the labor force, and immigrants plus their children from 18% to 29%.
  • Millennials Aren’t Having Kids. Here Are The Reasons Why — Childlessness rose first among women in their early 20s and then at successively older ages, tracking the millennial generation as it aged; sources consulted pointed to the broader economic climate. Much of the rise could be erased if women follow through on delayed family plans, but time for a reversal may be running out.

AI Summary. Labor productivity in U.S. manufacturing has been in secular decline since 2011, the first decade-long fall in the available data, even as services drove overall output growth. More than a third of the manufacturing slowdown since 2011 is accounted for by computers and electronics, a sector whose gains had soared in the 1990s and 2000s.

Economist Staff The Economist
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Productivity in America’s manufacturing sector has been in decline since 2011. Fourteen out of nineteen manufacturing sub-sectors, from machinery to textiles, saw declines during the 2010s.

Why has U.S. manufacturing productivity declined while services drive growth?

Core argument: U.S. manufacturing labour productivity fell 0.2% at an annualised rate in the third quarter even as GDP grew 4.9% annualised, with services driving the growth boost.

America’s GDP jumped by 4.9% at an annualised rate in the third quarter of the year. Nearly 80% of output is now made up of services, but one might expect manufacturing at least to pull its weight, given its supposed powers. In fact, labour productivity in manufacturing fell by 0.2% at an annualised rate, meaning that the boost to growth was driven by services. To make matters worse, productivity in the manufacturing sector has been in secular decline since 2011—the first decade-long fall in the available data. During the 1990s and 2000s manufacturing productivity soared, with the production of computers and electronics, especially semiconductor chips, leading the way. Gains seem to have topped out at around the time things went wrong more broadly, in the early 2010s. All told, more than a third of the overall slowdown in manufacturing since 2011 is accounted for by computers and electronics.

Takeaways by Macro Roundup® AI

  1. U.S. manufacturing labour productivity fell 0.2% at an annualised rate in the third quarter even as GDP grew 4.9% annualised, with services driving the growth boost.
  2. U.S. manufacturing productivity has been in secular decline since 2011, the first decade-long fall in the available data, after soaring through the 1990s and 2000s.
  3. More than a third of the overall slowdown in U.S. manufacturing since 2011 is accounted for by computers and electronics, the sector that led earlier gains, especially semiconductor chips.

Related Articles:

  • The Productivity Slowdown in Advanced Economies: Common Shocks or Common Trends? — Total factor productivity is the main factor accounting for differences in labor productivity growth across countries and over time, and its growth has been lackluster across large advanced economies since the mid-2000s. The authors find this slowdown appears in both manufacturing and market services, with U.S. productivity growth slowing before the Great Recession.
  • Bottlenecks: Sectoral Imbalances and the US Productivity Slowdown — The authors estimate that greater dispersion in productivity growth among an industry's input and idea suppliers has a strong negative effect on that industry's own productivity growth, using data on 462 US manufacturing industries and 42 non-manufacturing industries. Their evidence implies most of the US productivity slowdown can be explained by rising cross-industry variance in productivity growth.
  • American Labor’s Real Problem: It Isn’t Productive Enough — U.S. manufacturing output per hour has grown about 0.2% a year since 2009, below the overall economy and peer economies in Europe and Asia except Japan, with motor vehicle manufacturing productivity falling 32% from 2012 through last year. Unlike warehouses and hospitals, manufacturers face foreign competition and cannot pass higher labor costs to customers.

AI Summary. Comparing successive Congressional Budget Office projection vintages shows US federal debt surged during the Great Recession and the COVID-19 pandemic, and both the level of debt and its projected path remained higher after each episode even though deficits shrank considerably as the economy normalized.

Karen Dynan Aspen Economic Strategy Group
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Assuming that real GDP growth of 2% continues, balancing the primary budget would require spending reductions and revenue increases equal to 3.3% of GDP between 2027-2052. @KarenDynan

Does US federal debt stay higher after recessions end?

Core argument: US federal debt surged during the Great Recession period and during the COVID-19 pandemic, according to CBO data shown alongside successive vintages of the agency's debt projections.

Figure 5 shows different vintages of CBO’s federal-debt projections to offer additional perspective on how those downturns (as well as other factors) affected federal debt. Looking at just the actual realizations of debt to date, shown by the solid portion of the red line, one can see the surges in debt that occurred during the Great Recession period and during the COVID-19 pandemic. The other lines in Figure 5 show CBO’s projections just prior to these episodes. The level of federal debt and its projected trajectory remained higher after each episode, even though, in both cases, the deficit (not shown) shrank considerably as the economy normalized.

Takeaways by Macro Roundup® AI

  1. US federal debt surged during the Great Recession period and during the COVID-19 pandemic, according to CBO data shown alongside successive vintages of the agency's debt projections.
  2. The level of US federal debt and its projected trajectory remained higher after both the Great Recession and the COVID-19 pandemic than in CBO's projections made just prior to each episode.
  3. Deficits shrank considerably as the economy normalized after the Great Recession and after the COVID-19 pandemic, yet federal debt stayed above its previously projected path in both cases.

Related Articles:

  • If Markets Are Right About Long Real Rates, Public Debt Ratios Will Increase For Some Time. We Must Make Sure That They Do Not Explode — Stabilizing public debt ratios would require cutting primary deficits to zero, which the author argues no government can do quickly without risking recession and boosting support for populist parties. With a US primary deficit around 4% and a dysfunctional budget process, the debt ratio is likely to keep rising for some time.
  • When Does Federal Debt Reach Unsustainable Levels? — The authors estimate that U.S. debt held by the public cannot exceed roughly 200% of GDP even under favorable market conditions, and that under current policy the ratio reaches 175–200% within about 20 years. After that point, they argue, no tax increases or spending cuts could avert default or inflationary debt monetization.
  • Living with High Public Debt — High public debt ratios are likely to persist because large sustained primary budget surpluses are politically unrealistic, real interest rates are already very low, faster global growth is hard to engineer, inflation is not a sustainable route to reducing debt, and financial repression is less feasible amid liberalized markets.

AI Summary. The six largest US deficit reduction deals since 1983 were scored at enactment as saving between 0.52% and 1.72% of GDP, with the 1985 Gramm-Rudman-Hollings Act the largest. Many of the cuts were later reversed, and the 1985 law was invalidated by the Supreme Court and replaced in 1987.

Brian Riedl Manhattan Institute
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Discretionary spending is not driving federal deficits: defense spending is at its lowest share of GDP since World War 2, and @Brian_Riedl projects discretionary spending will likely soon start falling as a % of GDP.

How much have the largest deficit reduction deals actually saved?

Core argument: The 1985 Gramm-Rudman-Hollings Act was the largest deficit reduction deal since 1983, scored at savings of 1.72% of GDP at enactment, followed by the 1990 Bush "Andrews Air Force Base" deal at 1.45%.

The 6 Largest Deficit Reduction Deals Since 1983 Were:1983 Social Security Deal (Saved 0.52% of GDP). The 1985 Gramm-Rudman Hollings Act (1.72%). The 1990 Bush “Andrews Air Force Base” Deal (1.45%). The 1993 Clinton Budget Deal (1.08%). The 1997 Balanced Budget Deal (0.72%). The 2011 Budget Control Act (1.01%) Savings scored at the time of enactment. Many cuts were later reversed, and the 1985 law was invalidated by the Supreme Court and replaced with a 1987 version.

Takeaways by Macro Roundup® AI

  1. The 1985 Gramm-Rudman-Hollings Act was the largest deficit reduction deal since 1983, scored at savings of 1.72% of GDP at enactment, followed by the 1990 Bush "Andrews Air Force Base" deal at 1.45%.
  2. The other largest deficit reduction deals since 1983 were the 1993 Clinton budget deal (1.08% of GDP), the 2011 Budget Control Act (1.01%), the 1997 balanced budget deal (0.72%), and the 1983 Social Security deal (0.52%).
  3. Savings from these six deals were scored at the time of enactment, and many of the cuts were later reversed, while the 1985 Gramm-Rudman-Hollings Act was invalidated by the Supreme Court and replaced with a 1987 version.

Related Articles:

  • When Does Federal Debt Reach Unsustainable Levels? — The authors estimate that U.S. debt held by the public cannot exceed roughly 200% of GDP even under favorable market conditions, and that under current policy the ratio reaches 175–200% within about 20 years. After that point, they argue, no tax increases or spending cuts could avert default or inflationary debt monetization.
  • Living with High Public Debt — High public debt ratios are likely to persist because large sustained primary budget surpluses are politically unrealistic, real interest rates are already very low, faster global growth is hard to engineer, inflation is not a sustainable route to reducing debt, and financial repression is less feasible amid liberalized markets.
  • Did the U.S. Really Grow Out of Its World War II Debt? — Decomposing U.S. debt-to-GDP movements, the authors find the post-World War II decline from 106% to a trough of 23% was explained mostly by primary budget surpluses and interest-rate distortions from surprise inflation and pegged nominal rates; absent those, the ratio would have fallen only to 74%.

AI Summary. Survey data show 56% of Generation Z adults had a boyfriend or girlfriend as a teenager, compared with 69% of millennials, 76% of Generation X, and 78% of baby boomers. Similarly, 58% of Generation Z adults held a teenage part-time job, versus 70% of millennials, 79% of Generation X, and 82% of baby boomers.

Daniel Cox, Kelsey Eyre Hammond, and Kyle Gray American Enterprise Institute
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An @AEI survey finds Gen Z is socially isolated relative to prior generations with only 56% of them reporting having had a romantic partner as a teenager, compared with 69% of Millennials and 78% of Baby Boomers.

Are younger adults less likely to have dated or worked as teenagers?

Core argument: 56% of Gen Z adults report having had a boyfriend or girlfriend as a teenager, compared with 69% of millennials, 76% of Generation Xers, and 78% of baby boomers, while 41% of Gen Z say they had no such experience.

American teenagers are increasingly less likely to have a romantic partner—a boyfriend or girlfriend—than they once were 56% of Gen Z adults report having had a boyfriend or girlfriend as a teenager, while 41% say they did not have this experience. Nearly seven in 10 (69%) millennials and more than three-quarters of Generation Xers (76%) and baby boomers (78%) say they had a boyfriend or girlfriend for at least some part of their teen years. Working a part-time or summer job was once a ubiquitous experience for cash-strapped teenagers, but today’s teens are less likely to take on these responsibilities. 58% of Gen Z adults say they had a part-time job at some point during their teen years. Close to four in 10 (38%) Gen Z adults say they did not have a part-time job as a teenager. For previous generations, part-time work was much more prevalent. Seven in 10 (70% ) millennials, nearly eight in 10 (79%) Generation Xers, and 82% of baby boomers worked in a part-time position as a teenager.

Takeaways by Macro Roundup® AI

  1. 56% of Gen Z adults report having had a boyfriend or girlfriend as a teenager, compared with 69% of millennials, 76% of Generation Xers, and 78% of baby boomers, while 41% of Gen Z say they had no such experience.
  2. 58% of Gen Z adults say they held a part-time job during their teen years, versus 70% of millennials, 79% of Generation Xers, and 82% of baby boomers.
  3. Close to four in 10 (38%) Gen Z adults say they did not have a part-time job as a teenager, an experience that was much more prevalent for previous generations.

Related Articles:

  • Is There Really a Generational Difference in Identifying as Lesbian, Gay, or Bisexual? — General Social Survey data show that increases among young American adults appear in same-sex sexual behavior as well as in identification, with 20% reporting a same-sex partner versus 18.5% identifying as lesbian, gay, or bisexual. The increases are larger among 27- to 41-year-olds.
  • Millennials are Shattering the Oldest Rule in Politics — British "silent generation" and baby boomers grew more conservative with age, and Gen X is following the same path, but millennials, born 1981-1996, diverged from that trajectory. The most likely explanation is a cohort effect, with US survey data showing millennials favoring greater redistribution from rich to poor than earlier generations.
  • Young Adults in the U.S. Are Reaching Key Life Milestones Later Than in the Past — Pew Research Center analysis of Census Bureau data finds 21-year-olds in the US are less likely than their counterparts four decades earlier to have a full-time job, be financially independent, live on their own, be married, or have a child. Among 21-year-olds, 39% worked full time versus 64% four decades earlier, and a quarter were financially independent versus 42%.

AI Summary. Polls that correctly anticipated Democratic and abortion-rights victories also show voters disapproving of the Democratic president and Trump leading in battleground states; an Ohio exit poll found 39% approval for the president among voters who legalized abortion and marijuana there. Analysis attributes Democratic overperformance in special elections to a low-turnout advantage.

Nate Cohn New York Times
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High-propensity voters made up a disproportionate share of the electorate in this week’s Democratic wins. In Ohio, self-reported Biden voters outnumbered Trump voters by 2pp, in a state that Trump won by 8pp in 2020. @Nate_Cohn

Do off-year Democratic wins signal strength in the next presidential election?

Core argument: Ohio's exit poll showed Biden with a 39% approval rating among voters who legalized abortion rights and marijuana, and only 25% said he should run for re-election, below the 35% who said the same of Trump.

The polls showed the Democrat winning Kentucky. They showed abortion rights and marijuana legalization prevailing in Ohio — and showed them to be popular in many red states all over the country. They also show that voters disapprove of Mr. Biden and that Mr. Trump leads in the battleground states. If the polls were right about Ohio, Kentucky, and elsewhere, perhaps they’re right about the president as well. Tuesday night’s Ohio exit poll was a good example. Mr. Biden had a 39% approval rating among the voters who made abortion and marijuana legal in the state. Only 25% said he should even run for re-election, less than the 35% who said the same for Mr. Trump. Democratic advantage in low-turnout elections is a big deal. It probably explains the entire Democratic overperformance in special elections over the last year, based on an analysis of the nearly two dozen special elections with sufficient data for analysis, using a combination of Times/Siena polling and records from L2, a voter file vendor. The Ohio exit poll offers yet another piece of evidence: Self-reported Biden voters outnumbered Trump voters by two points, even in a state Mr. Trump won by eight points.

Takeaways by Macro Roundup® AI

  1. Ohio's exit poll showed Biden with a 39% approval rating among voters who legalized abortion rights and marijuana, and only 25% said he should run for re-election, below the 35% who said the same of Trump.
  2. Self-reported Biden voters outnumbered Trump voters by two points in the Ohio exit poll, in a state Trump won by eight points.
  3. An analysis of nearly two dozen special elections, combining Times/Siena polling with records from the voter file vendor L2, suggests the Democratic advantage in low-turnout elections probably explains the party's entire overperformance in those races.

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