Edward Conard

Top Ten New York Times Bestselling Author

  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…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 very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “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
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, July 11, 2024

AI Summary. US manufacturing labor productivity growth slowed broadly after the Great Recession, with the four largest firms in each industry averaging –0.5% growth from 2010 to 2022 versus 3.7% from 1987 to 2007, and smaller follower firms showing an identical 4.2 percentage-point decline. The authors find the slowdown spans all industries and firm sizes.

Danial Lashkari and Jeremy Pearce Federal Reserve Bank of New York
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Labor productivity in the US manufacturing sector grew 3.4% annually between 1987-2007 but declined 0.5% annually between 2010-2022. Even the fastest-growing industries and the largest firms experienced a slowdown.

Is the US manufacturing productivity slowdown limited to smaller firms?

Core argument: Labor productivity growth among the four largest firms in each U.S. manufacturing industry averaged 3.7% in 1987–2007 but –0.5% in 2010–2022, a 4.2pp reduction.

Most manufacturing industries, even those exhibiting stellar productivity gains in the 1990s, suffered a sustained productivity slowdown after the Great Recession, particularly puzzling in light of the widespread adoption of automation and robots. [The four largest firms in each industry] appear to have played a larger role in the productivity boom in the 1990s. For these firms, the average labor productivity growth in the 1987-2007 period was 3.7%, while follower firms in Compustat experienced growth of 2.9% in the same period. From 2010 to 2022, both leading firms and following firms experience similar productivity growth declines. Leading firms show an average growth rate of –0.5% in the second period, a 4.2pp reduction, while follower firms experience –1.3% growth, also a 4.2pp reduction. Thus the productivity slowdown appears to be a broad phenomenon affecting all industries and all firms in each industry. These findings diverge from recent findings in the literature that focus on large firms separating from smaller firms. While there is evidence of this separation, this looks to be mostly coming from growth in the 1990s and early 2000s.

Takeaways by Macro Roundup® AI

  1. Labor productivity growth among the four largest firms in each U.S. manufacturing industry averaged 3.7% in 1987–2007 but –0.5% in 2010–2022, a 4.2pp reduction.
  2. Follower firms in Compustat saw manufacturing labor productivity growth fall from 2.9% in 1987–2007 to –1.3% in 2010–2022, the same 4.2pp reduction as leading firms.
  3. The manufacturing productivity slowdown after the Great Recession appears to span all industries and firms, diverging from literature emphasizing large firms separating from smaller ones, a separation that appears to stem mostly from growth in the 1990s and early 2000s.

Related Articles:

  • America’s Manufacturing Productivity Problem — Weak US manufacturing productivity growth reflects a compositional shift, as high-tech, fast-productivity-growth industries were increasingly offshored and became a smaller share of US manufacturing, alongside weak manufacturing investment. Capital intensity—fixed assets used per worker—slowed in the 2000s and nearly flatlined in the 2010s, with stagnation in electrical and vehicle manufacturing.
  • 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.
  • Labor Market Conflict and the Decline of the Rust Belt — The authors argue that persistent labor market conflict in the Rust Belt's main industries lowered investment and productivity growth, shifting employment to the rest of the country, and estimate it accounts for roughly half the decline in the region's share of US manufacturing employment. Rising foreign competition plays a more modest quantitative role.

AI Summary. A 1% immigration-driven population increase with labor-force integration comparable to native-born workers expands employment and output immediately, leaving demand and supply balanced. Because capital accumulates only over time, the temporary shortage of capital relative to labor is argued to raise real returns to capital and depress real wages, with smaller effects if immigrants take manual jobs requiring less capital.

Anton Cheremukhin, Sewon Hur, Ron Mau and Alexander Richter Federal Reserve Bank of Dallas
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A @DallasFed analysis finds that “over the past year, the immigration wave contributed to the higher GDP growth by adding nearly 2 million newly employed workers…with very little effect on inflation.”

Does immigration-driven population growth raise inflation?

Core argument: A 1% immigration-driven population increase, with newcomers joining the labor force at native-born rates, expands employment, output, and consumption by 1% in a model without capital, balancing demand and supply and leaving GDP per capita unchanged.

If immigration increases the population by 1%, and these newcomers integrate into the labor force at rates comparable to native-born citizens, both employment and output expand immediately. In the absence of capital as a factor of production—machines, plants, and equipment—employment, output, and consumption would each expand by 1%, balancing demand and supply, maintaining price stability, and keeping GDP per capita unchanged. Accounting for capital as an input in the production process complicates the transmission mechanism. When labor inputs increase by 1%, reaching the same per capita output necessitates a simultaneous 1% increase in capital, which only builds over time. This delay creates temporary shortages of capital relative to labor, boosting real returns to capital but depressing real wages. If new immigrants are less skilled and more likely to accept manual labor positions, the need for capital accumulation diminishes, softening the inflationary impacts.

Takeaways by Macro Roundup® AI

  1. A 1% immigration-driven population increase, with newcomers joining the labor force at native-born rates, expands employment, output, and consumption by 1% in a model without capital, balancing demand and supply and leaving GDP per capita unchanged.
  2. Once capital is included as a production input, a 1% rise in labor requires a matching 1% rise in capital to hold per capita output constant, and capital accumulates only over time, creating temporary capital shortages that raise real returns to capital and depress real wages.
  3. Immigrants who are less skilled and more likely to take manual labor positions reduce the required capital accumulation, softening the inflationary impact of population growth.

Related Articles:

  • The Demographic Outlook: 2024 to 2054 — The Congressional Budget Office projects the US population will grow from 342mm in 2024 to 383mm in 2054, an average 0.4% a year — less than half the 0.9% pace of the prior five decades. Immigration accounts for about 70% of growth over the next decade and for all population growth beginning in 2040.
  • Unprecedented US Immigration Surge Boosts Job Growth, Output — The US foreign-born labor force has fully recovered from its pandemic decline and now exceeds what pre-pandemic trend growth would have implied, reaching 31.9M. Wages rose faster in immigrant-intensive occupations and industries than in those with a lower share of immigrants.
  • Importing Shelter Inflation — Shelter costs make up about 30% of the consumer price index, and their monthly inflation appears to be stabilizing above pre-pandemic rates rather than delivering the disinflation forward-looking data had implied. The author suggests this may be related to a surge in migration, estimated at 3.3m migrants in a year.

AI Summary. The authors estimate that surges in immigration and labor force participation have pushed short-run breakeven employment growth—the job gains needed to hold the unemployment rate steady—as high as 230,000 jobs/month under a high-immigration scenario, versus about 140,000 in their baseline. They estimate long-run breakeven growth at 70,000–90,000 jobs/month.

Nicolas Petrosky-Nadeau and Stephanie Stewart Federal Reserve Bank of San Francisco
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Despite the recent surge in immigration and rising labor force participation rates, @Petrosky_Nadeau at @sfffed projects that the US breakeven long-run employment growth rate will remain in its historical range of 70-90,000 jobs/month.

How many jobs per month are needed to hold unemployment steady?

Core argument: Petrosky-Nadeau of the San Francisco Fed projects US long-run breakeven employment growth will stay within its historical range of 70,000–90,000 jobs/month in 2024, despite the immigration surge and rising labor force participation.

In the short-run, recent surges in immigration and labor force participation have caused the current breakeven employment growth rate to rise as high as 230,000 jobs/month. Our baseline calculations assume a long-run unemployment rate of 3.8%. Short-run breakeven employment growth is estimated to be higher than long-run growth under each scenario, as shown in Figure 3. Under the baseline scenario, short-run breakeven employment growth is estimated to be around 140,000 jobs/month in the first quarter of ‘24 (dark blue line). It is significantly higher at 230,000 jobs/month under the CBO high immigration scenario (red line), reflecting the recent surge in immigration. Under the baseline projections, short-run breakeven growth will converge on the long-run rate (gray line) by the end of ‘25. However, this return to the long-run trend stretches further out to ‘27 for the CBO high immigration scenario. Long-run breakeven employment growth is estimated to range between 70,000 and 90,000 jobs/month in ‘24

Takeaways by Macro Roundup® AI

  1. Petrosky-Nadeau of the San Francisco Fed projects US long-run breakeven employment growth will stay within its historical range of 70,000–90,000 jobs/month in 2024, despite the immigration surge and rising labor force participation.

  2. Under the baseline projections, short-run breakeven growth converges on the long-run rate by the end of 2025, while convergence stretches to 2027 under the CBO high immigration scenario.

Related Articles:

  • The Demographic Outlook: 2024 to 2054 — The Congressional Budget Office projects the US population will grow from 342mm in 2024 to 383mm in 2054, an average 0.4% a year — less than half the 0.9% pace of the prior five decades. Immigration accounts for about 70% of growth over the next decade and for all population growth beginning in 2040.
  • New Immigration Estimates Help Make Sense Of The Pace Of Employment — The Congressional Budget Office estimates net immigration was 3.3m in 2023, versus the 1m it had projected, implying faster population and labor force growth than currently reported. The authors estimate this raised real economic growth by about 0.1 percentage point and, by lifting both production and demand, added little price or wage pressure.
  • Post-Pandemic Recovery for America’s Prime Age Labor Force: A Tale of Two Sexes — Prime-age women's labor force participation climbed about 5 points above its pre-pandemic level over a decade, while prime-age men's rose barely a point, only just regaining pre-pandemic levels. Despite economic expansion and labor shortages, work rates for prime-age American men are barely as high as at the trough of the severe Reagan-era recession.

AI Summary. Home insurers recorded a $16bn underwriting loss, the largest since at least 2000, according to AM Best, which expects losses to continue. An analysis by S&P Global Market Intelligence finds state-approved rate increases have averaged just 0.2 percentage point below what insurers requested, with California approving an average 21% increase.

Wall Street Journal Jean Eaglesham
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State regulators are greenlighting double-digit increases in home insurance premiums, in an effort to prevent insurance companies from withdrawing from their markets. The mean home insurance policy has increased by 20% nationally this year.

Are state regulators approving nearly all requested home insurance rate increases?

Core argument: Home insurers posted a $16 billion underwriting loss last year, the largest since at least 2000, according to AM Best, which expects losses to continue.

Home insurers racked up a $16 billion underwriting loss last year, the biggest amount since at least 2000, according to AM Best. It expects losses to continue. States are also giving home insurers almost everything they ask for on rates, an analysis conducted for The Wall Street Journal suggests. The average state-approved increase since the start of last year is just 0.2 percentage point below the increase requested by the industry, according to the analysis by S&P Global Market Intelligence. Ten states where regulators can reject requests upfront have all greenlighted double-digit increases since the start of last year, with half those increases close to or above the 20% national average, the S&P data show. California, which for decades kept a tight lid on home-insurance rates, has approved an average 21% rate increase over the period, according to the S&P data.

Takeaways by Macro Roundup® AI

  1. Home insurers posted a $16 billion underwriting loss last year, the largest since at least 2000, according to AM Best, which expects losses to continue.
  2. Average state-approved home-insurance rate increases since the start of last year came in just 0.2 percentage point below what insurers requested, according to an S&P Global Market Intelligence analysis conducted for The Wall Street Journal.
  3. California, which for decades kept a tight lid on home-insurance rates, has approved an average 21% increase since the start of last year, while ten states whose regulators can reject requests upfront all approved double-digit increases, according to S&P data.

Related Articles:

  • As Insurers Around the U.S. Bleed Cash From Climate Shocks, Homeowners Lose — Insurers lost money on homeowners coverage in 18 states, up from 12 states five years earlier and eight a decade earlier, according to a New York Times analysis of financial data. In response, insurers are raising premiums by as much as 50% or more, cutting coverage, or exiting entire states.
  • A Hidden Crisis In US Housing — State-run "last resort" home insurance programs, which cover properties the private market won't, have more than doubled their market share since 2018, with liabilities passing $1tn; Florida's plan faces potential losses of $525bn and California's at least $290bn, six times its 2018 level. Of 36 such plans covering natural catastrophes, 21 do not explicitly detail how they would pay deficits.
  • Measuring the Climate Risk Exposure of Insurers — The authors estimate that U.S. life insurers' aggregate climate transition risk exposure rose by more than $150bn, about 28% of their market value, during a fossil fuel price collapse, with more than $85bn attributable solely to climate stress. The ten largest U.S. property and casualty insurers mostly showed excess reserves, indicating no sign of undercapitalization under physical climate stress.

AI Summary. The authors argue Congress should pair extension of the expiring tax law with revenue-neutral, pro-growth reform: permanently restoring 100% bonus depreciation for business investment, curbing itemized deductions that cost over $100bn a year, repealing green energy tax credits, and letting the pass-through business deduction lapse, saving over $600bn.

Kyle Pomerleau American Enterprise Institute
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.@kpomerleau argues that the expiration of the TCJA offers an opportunity to extend “the most pro-growth aspects” like the 100% bonus depreciation on a revenue-neutral basis by repealing green energy tax credits and business pass-through deductions.

How should lawmakers turn expiring tax cuts into pro-growth reform?

Core argument: Allowing the pass-through business deduction to expire would reduce the cost of extending the Tax Cuts and Jobs Act by more than $600 billion.

Lawmakers should approach 2025 as an opportunity to enact fiscally sustainable, pro-growth tax reform. They should attempt to accomplish three goals. First, aim for revenue neutrality or a bill that neither increases nor decreases federal revenue. Second, build on the most pro-growth aspects of the TCJA. First, lawmakers should restore 100% bonus depreciation, ideally on a permanent basis. This provision is the single most pro-growth policy in the law. Lawmakers could increase its growth potential by expanding it to apply to more assets. Third, further clean up the tax code. Even after the TCJA, the federal government still loses more than $100B a year from itemized deductions. Lawmakers could raise nearly as much by repealing the new green energy tax credits introduced in the IRA. Allowing the deduction for pass-through businesses to expire would reduce the cost of extending the law by more than $600B.

Takeaways by Macro Roundup® AI

  1. Allowing the pass-through business deduction to expire would reduce the cost of extending the Tax Cuts and Jobs Act by more than $600 billion.
  2. The federal government loses more than $100 billion a year from itemized deductions even after the TCJA, and repealing the green energy tax credits introduced in the Inflation Reduction Act would raise nearly as much.
  3. Lawmakers should restore 100% bonus depreciation, ideally permanently, and could expand it to more assets, as it is the single most pro-growth policy in the TCJA, while aiming for revenue neutrality.

Related Articles:

  • Tax Policy and Investment in a Global Economy — Using administrative tax data, the authors estimate that firms experiencing the mean corporate tax change under the 2017 US tax law increased investment by 20% relative to firms with no change, with long-run domestic and total capital up 7% and 13%. They find higher depreciation deductions largely offset added revenue from capital accumulation.
  • Making the Tax Cuts and Jobs Act Permanent: Two Revenue-Neutral, Pro-Growth Options for Tax Reform — Following the 2017 US tax law, real economic output, consumption, business investment, and payrolls grew faster than pre-law forecasts and nearly matched post-law projections, and an analysis of administrative corporate tax return data estimates firms with the average tax change raised domestic investment about 20% relative to firms with no change.
  • End of an Era: The Coming Long-Run Slowdown in Corporate Profit Growth and Stock Returns — The authors estimate that declining interest and corporate tax rates accounted for over 40% of real corporate profit growth from 1989 to 2019, while falling risk-free rates explain the entire expansion in price-to-earnings multiples. Real earnings before interest and taxes grew slightly more slowly than in 1962–1989, at 2.2% versus 2.4% per year.

Friday, July 12, 2024

AI Summary. Congressional Budget Office cost estimates of spending and tax legislation with large projected deficits lowered the valuation of outstanding U.S. Treasury securities by more than 20% over the period studied, with effects concentrated at longer maturities. The authors estimate 57 cents of every dollar of fiscal expansion is unbacked and passed through to Treasury valuations.

Roberto Gomez Cram, Howard Kung, and Hanno Lustig National Bureau of Economic Research
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Market reaction to CBO scoring of legislative proposals with large negative cash flow projections implies an estimated 57¢ of each dollar in major fiscal expansions is unbacked by future surpluses and passed through to Treasury valuations. @HannoLustig

How do projected deficits affect Treasury valuations and long-term yields?

Core argument: CBO cost releases with large negative cash flow projections lowered the valuation of all outstanding U.S. Treasurys by more than 20% between 1997 and 2022, with effects concentrated at longer maturities.

The CBO cost releases of U.S. spending and tax [legislative] proposals contain valuable news about future primary surpluses priced in by U.S. Treasury investors. Using daily event windows, we find that cost releases with large negative cash flow projections have lowered the valuation of all outstanding Treasurys by more than 20% between 1997 and 2022. The valuation effects are concentrated at longer maturities, with an overall increase of 4% in long-term nominal yields driven by an increase in nominal term premia and inflation expectations and a decrease in convenience yields. We account for these valuation effects in a model with Bayesian [rationally updating] bond investors who use the cost releases to learn about the long-run dynamics of U.S. deficits. Using the estimated model, we infer that 57 cents of every dollar in the fiscal expansion is unbacked and passed through to Treasury valuations. Our estimates imply that a one percentage point surprise increase in the expected supply of Treasurys, expressed as a fraction of GDP, corresponds to an increase of the 10-year nominal yield by 31 bps and a drop in the convenience yield of 7.5 bps.

Takeaways by Macro Roundup® AI

  1. CBO cost releases with large negative cash flow projections lowered the valuation of all outstanding U.S. Treasurys by more than 20% between 1997 and 2022, with effects concentrated at longer maturities.
  2. Using daily event windows around CBO cost releases, the authors find an overall 4% increase in long-term nominal yields, driven by higher nominal term premia and inflation expectations and lower convenience yields.
  3. The authors' estimated model of Bayesian bond investors implies 57 cents of every dollar of fiscal expansion is unbacked, and that a one percentage point surprise increase in expected Treasury supply relative to GDP corresponds to a 31 bps rise in the 10-year nominal yield.

Related Articles:

  • An Update to the Budget and Economic Outlook: 2024 to 2034 — The Congressional Budget Office projects a federal budget deficit of $1.9tn in fiscal 2024, or $2tn excluding payment-timing shifts, rising to $2.8tn by 2034. On that adjusted basis, deficits equal 7% of gross domestic product in 2024, dip to 5.5% by 2027, and reach 6.9% by 2034, versus a 3.7% average over the past 50 years.
  • The Fed and the Secular Decline in Interest Rates — The authors find that the long-run decline in US Treasury yields since 1980 is fully accounted for by movements in a narrow window around Federal Reserve policy meetings, while yield changes outside that window prove transitory. They suggest the Federal Reserve conveys information to markets about the long-run level of interest rates.
  • Markets Think Inflation Will Be Too High For The Next 20 Years — Inflation expectations derived from the gap between regular Treasury yields and inflation-indexed Treasury yields show expected annual inflation over the next 10 and 20 years running considerably above expected inflation for the decade beginning 20 years out. Before the pandemic-era inflation surge, actual inflation and expected future inflation tracked each other closely.

AI Summary. The supply of short-term US Treasury bills has risen by $2tn over 12 months, and bills have grown as a share of total debt outstanding. Absorbing this supply requires continued demand from banks, money market funds, and households, and falling appetite could push short-term rates higher and raise the risk of funding-market strains.

Torsten Sløk Apollo
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Torsten Sløk notes the increase in T-bills’ share of outstanding Treasury debt may be a problem if September rate cuts lead to a “lower appetite for T-bills from households and money market funds.”

Does rapidly rising short-term Treasury supply threaten funding markets?

Core argument: The supply of Treasury bills has risen by $2 trillion over the past 12 months, with T-bills also rising significantly as a share of total debt outstanding.

The supply of T-bills has increased by $2 trillion over the past 12 months, and the share of T-bills outstanding as a share of total debt outstanding has trended significantly higher over the same period. Why is the rapid growth in the supply of T-bills a problem? Because a big increase in supply requires a big increase in demand. Growing the amount of T-bills outstanding while the Fed at the same time is doing QT increases the risk of an accident in funding markets, which is what we saw in repo markets in September 2019. In other words, the strong growth in the supply of T-bills will require a continued increase in demand from banks, money market funds, and households. If the Fed starts cutting rates, say, in September, we could see lower appetite for T-bills from households and money market funds, which ultimately would put upward pressure on short rates because of the big supply of T-bills not being met by similar strong demand.

Takeaways by Macro Roundup® AI

  1. The supply of Treasury bills has risen by $2 trillion over the past 12 months, with T-bills also rising significantly as a share of total debt outstanding.
  2. Rapid growth in T-bill supply alongside the Fed's quantitative tightening raises the risk of an accident in funding markets, as occurred in repo markets in September 2019.
  3. Fed rate cuts could lower T-bill appetite from households and money market funds, which would put upward pressure on short rates if large supply is not met by similarly strong demand.

Related Articles:

  • Who Buys Treasuries When the Fed Reduces its Holdings — Analysis of Federal Reserve balance sheet reduction finds that households and broker-dealers absorbed the additional supply of Treasury securities during the 2017–2019 episode, with household holdings correlated with hedge fund holdings. In the first year of the reduction begun in 2022, households purchased a large share while hedge funds did not, and insurance companies and foreign investors also increased holdings.
  • Long Live the Dollar — Foreign investors have been the dominant net buyers of longer-dated US Treasuries, purchasing a net $700bn over a 14-month period against $860bn in total net issuance. These purchases came largely from non-official entities such as hedge funds, pension funds, insurance funds, and banks, potentially motivated by high US interest rates or currency speculation.
  • Liquidity Deteriorating in Treasury Markets — A liquidity gauge for US government debt measures the average gap between quoted yields and values implied by fitted yield curves across Treasury notes and bonds with at least one year to maturity, and it indicates deteriorating liquidity. Small average yield errors signal favorable conditions, as mispricings are corrected quickly.

AI Summary. The Congressional Budget Office projects Affordable Care Act subsidies will cost $1.3tn over a decade and the law's Medicaid expansion for adults earning below 138% of the poverty line another $1.4tn, assuming enhanced subsidies expire as scheduled. Richer subsidies drew more enrollment than forecast, with 20.1m people receiving exchange subsidies, more than double the 2021 number.

The Editorial Board The Wall Street Journal
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The Wall Street Journal Editorial Board notes that the CBO’s June 2024 estimate of the cost of ObamaCare subsidies from 2022-31 has risen by $450B from the July 2021 estimate, with 20M people receiving subsidies, double the number in 2021.

Have health insurance subsidies cost far more than projected?

Core argument: The Congressional Budget Office estimated that ObamaCare subsidies would cost $450 billion more from 2022 to 2031 than its July 2021 projection, one reason being that richer subsidies drew millions more sign-ups than originally forecast.

The Congressional Budget Office estimated in its revised 10-year budget forecast [in June ‘24] that ObamaCare subsidies would cost $1.3T over the next decade. The law’s Medicaid expansion for healthy adults earning below 138% of the poverty line is projected to cost another $1.4T. And that’s assuming the ObamaCare subsidy sweeteners that Democrats enacted in their March ‘21 Covid bill and extended in the Inflation Reduction Act expire as scheduled in ‘25. The ObamaCare subsidies are expected to cost $450 billion more from 2022 to 2031 than CBO’s July 2021 projection. One reason is the richer subsidies lured millions of more people to sign up than originally forecast. As a result, 20.1 million people this year are receiving subsidies on the ObamaCare exchanges, more than double the number in 2021.

Takeaways by Macro Roundup® AI

  1. The Congressional Budget Office estimated that ObamaCare subsidies would cost $450 billion more from 2022 to 2031 than its July 2021 projection, one reason being that richer subsidies drew millions more sign-ups than originally forecast.
  2. The Congressional Budget Office's revised 10-year budget forecast estimated ObamaCare subsidies would cost $1.3 trillion over the next decade, with the law's Medicaid expansion for adults earning below 138% of the poverty line projected to cost another $1.4 trillion.
  3. Some 20.1 million people are receiving subsidies on the ObamaCare exchanges, more than double the number in 2021.

Related Articles:

  • An Update to the Budget and Economic Outlook: 2024 to 2034 — The Congressional Budget Office projects a federal budget deficit of $1.9tn in fiscal 2024, or $2tn excluding payment-timing shifts, rising to $2.8tn by 2034. On that adjusted basis, deficits equal 7% of gross domestic product in 2024, dip to 5.5% by 2027, and reach 6.9% by 2034, versus a 3.7% average over the past 50 years.
  • 84 Percent of Spending Growth Will Come from Health, Social Security, and Interest — The Congressional Budget Office projects federal deficits will grow from $1.7tn to $2.6tn and spending from $6.4tn to $10.1tn over a decade, with net interest costs more than doubling from $870bn to $1.6tn. Health care (35%), Social Security (28%), and interest (21%) account for 84% of projected spending growth.
  • Policy Steps in the Federal Budget and Health Care to Achieve Sustainable Fiscal Conditions in the U.S. — The authors project that the US fiscal trajectory is unsustainable, with deficits and debt exceeding both historical norms and official projections, arguing that official forecasts understate how labor shortages raise health care prices in inefficient sectors. They argue that reducing health care spending, increasing capital, and fiscal retrenchment could restore sustainable fiscal conditions.

AI Summary. The United Nations projects world population will peak at about 10.29bn in 2084 before easing to 10.18bn by 2100, from roughly 8.09bn. Populations in much of Europe and in China have already peaked and are declining, while sub-Saharan Africa is projected to reach just under a third of the world total by 2100.

Danny Dougherty Wall Street Journal
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Updated UN population projections show India has surpassed China as the largest country. By the end of the century, sub-Saharan Africa is expected to make up 1/3 of the global population.

When will world population peak, and where is it already declining?

Core argument: The world's population is projected to peak at about 10.29 billion in 2084 before declining to 10.18 billion by 2100, up from 8.09 billion in July 2023.

The Earth will top out at around 10.29 billion people in 2084, before declining to 10.18 billion by 2100. That compares with the Earth’s population in July 2023 of 8.09 billion. Across much of Europe—and in longtime population leader China—population levels have already peaked and are declining. Notably, this population reversal means that India has now surpassed China as the world’s most populous country, with 1.44 billion people last year, compared with China’s 1.42 billion. India’s population won’t peak until 2061, the U.N. projects. The U.S. population, estimated at 343.5 million in 2023, is expected to keep climbing through the end of the century, but at a slowing rate. Amid those slowing growth rates, sub-Saharan Africa is expected to make up a larger slice of the world population, climbing to just under a third by 2100. This reflects not just growth in Africa, but also declining Asian populations and flattening population growth in the Americas.

Takeaways by Macro Roundup® AI

  1. The world's population is projected to peak at about 10.29 billion in 2084 before declining to 10.18 billion by 2100, up from 8.09 billion in July 2023.
  2. India has surpassed China as the world's most populous country with 1.44 billion people, compared with China's 1.42 billion, and the U.N. projects India's population will not peak until 2061.
  3. Sub-Saharan Africa is expected to account for just under a third of the world's population by 2100, reflecting African growth alongside declining Asian populations and flattening growth in the Americas.

Related Articles:

  • Exploring the Implications of Sub-Saharan Africa’s Demographic Explosion — Sub-Saharan Africa is projected to hold a quarter of the world's working-age population within a few decades and to surpass China's working-age population in roughly a decade. Even with modest productivity growth near 2%, the region's growth is estimated at 4.5–5.5%, raising its share of global output from about 3% while remaining small.
  • The World Is Becoming More African — United Nations forecasts project Africans will rise from 8% of the world's people in 1950 to one-quarter by 2100, with the continent holding the world's largest workforce within a decade. McKinsey & Company estimates Africa's per-person economic growth has averaged 1% annually since 1990, against India's 5% and China's 9%.
  • How Europe Is Paying Other Countries To Police Its Borders — Interceptions of people at sea by Tunisian authorities doubled to 81,000, and the European Union is projected to spend €278mn on migration in Tunisia, with two-thirds of one €105mn package dedicated to border management. Critics argue that outsourcing border enforcement is a short-term fix that leaves the EU open to blackmail by host governments.

AI Summary. The US became the world's largest exporter of liquefied natural gas, with exports up 12%, while the US, Australia, and Qatar together accounted for 60% of global liquefied natural gas exports. Asian countries led import growth, with China becoming the world's largest importer as its imports rose 12%.

Victoria Zaretskaya Energy Information Administration
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In 2023 the US became the largest LNG exporter, increasing exports by 12%. Import capacity expanded in Asia and Europe with Chinese LNG imports growing by 12% as the PRC became the world’s largest LNG importer.

Who leads global liquefied natural gas exports and imports?

Core argument: The US became the world's largest LNG exporter in 2023, with exports up 12% from 2022, while the US, Australia, and Qatar together accounted for 60% of all global LNG exports.

In 2023, the US became the world’s largest LNG exporter, with exports increasing by 12% compared with 2022. Exports from the three largest global LNG exporters—the US, Australia, and Qatar—accounted for 60% of all LNG exports in 2023. LNG import capacity was expanded primarily in Europe and Asia. In Asia, new capacity was added primarily in China, India, the Philippines, and Vietnam. Asian countries continued to lead the growth in LNG imports globally, with imports increasing by 3.5% (1.2 Bcf/d) in 2023. LNG imports increased by 12% (1.0 Bcf/d) in China, the most of any country in the world, making China the world’s largest LNG importer for the second year since 2021. LNG imports in India increased by 11% (0.3 Bcf/d) as new regasification terminals were placed in service and LNG prices declined.

Takeaways by Macro Roundup® AI

  1. The US became the world's largest LNG exporter in 2023, with exports up 12% from 2022, while the US, Australia, and Qatar together accounted for 60% of all global LNG exports.
  2. China's LNG imports rose 12% (1.0 Bcf/d) in 2023, the largest increase of any country, making China the world's largest LNG importer for the second year since 2021.
  3. Asian countries led global LNG import growth in 2023 with imports up 3.5% (1.2 Bcf/d), and India's imports rose 11% (0.3 Bcf/d) as new regasification terminals entered service and LNG prices declined.

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