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


Wednesday, October 9, 2024

AI Summary. The authors estimate that U.S. counties with larger Chinese population shares before the 1882 Chinese Exclusion Act, which barred Chinese laborers from entry and Chinese immigrants from naturalization, saw increasingly negative effects on both Chinese and white labor supply after its passage. Declines in manufacturing output and the number of establishments followed the labor declines.

Joe Long, Carlo Medici, Nancy Qian, and Marco Tabellini National Bureau of Economic Research
Date Posted:

The Exclusion Act reduced Chinese labor supply in the U.S. by 64%, the number of manufacturing establishments by 54-69%, and total manufacturing output by 62%. It “slowed economic growth in western states until at least 1940.” @carlomedici

Did excluding Chinese immigrants reduce white labor supply and manufacturing output?

Core argument: Counties with higher Chinese population shares on the eve of the 1882 Chinese Exclusion Act show increasingly negative estimated effects on white and total labor supply after the Act, with coefficients at zero beforehand.

The 1882 Chinese Exclusion Act barred all China-born “laborers” from entering the United States and all individuals of Chinese ethnicity from naturalization for ten years. [It] was renewed for ten more years in 1892, made indefinite in 1902 [and] repealed in 1943. We exploit two sources of variation: time variation in the introduction of the Act and cross-sectional variation ina county’s Chinese population share on the eve of the Act. The latter influences the intensity of treatment: counties with a higher Chinese population share will be more affected by the Act than counties with fewer Chinese immigrants. To understand the evolution of the effects, we estimate a dynamic specification. Figure 3a presents the estimates for the labor supply of Chinese, white and all races. For white and all labor, the coefficients are zero prior to the Act and become increasingly negative afterwards. The timing of the trend break coincides with the Act. Figure 3c plots the estimates for total manufacturing output and the number of establishments. The negative effects on manufacturing trail the negative effects on labor. We find no evidence of pre-trends.

Takeaways by Macro Roundup® AI

  1. Counties with higher Chinese population shares on the eve of the 1882 Chinese Exclusion Act show increasingly negative estimated effects on white and total labor supply after the Act, with coefficients at zero beforehand.
  2. Estimates show negative effects on total manufacturing output and the number of establishments that trail the negative labor supply effects, with no evidence of pre-trends.
  3. The Chinese Exclusion Act barred China-born laborers from entry and all individuals of Chinese ethnicity from naturalization for ten years, was renewed in 1892, made indefinite in 1902, and repealed in 1943.

Related Articles:

  • Creating and Connecting US and China Science: Chinese Diaspora and Returnee Researchers — The authors estimate that China-born researchers working in the US contributed to 27% of US-addressed scientific papers, while China-born researchers with US experience who returned home contributed to 38% of China-addressed papers. Papers with these authors averaged more citations and appeared more often in high-impact journals than other papers.
  • The Global AI Talent Tracker 2.0 — The United States remains the leading destination for the world's most elite AI talent and hosts 60% of top AI institutions. China's share of top AI researchers working domestically rose from 29% in 2019 to 47% in 2022, and India retained one-fifth of its top AI researchers in 2022 versus nearly none in 2019.
  • Top Talent, Elite Colleges, and Migration: Evidence from the Indian Institutes of Technology — Among top scorers on India's Joint Entrance Exam for the Indian Institutes of Technology, 62% of the top 100 and 36% of the top 1,000 migrated abroad within eight years, primarily to the U.S. for graduate school. The authors argue elite schools shape migration by signaling ability and providing access to networks.

AI Summary. If the average interest rate on US federal debt crept up to 4.4% by 2034 rather than staying below the 3.4% the Congressional Budget Office forecasts, interest payments would consume 29.7% of federal revenues, or 40.4% excluding Social Security payroll taxes. Those payroll taxes are projected to cover only 83% of benefits from 2035.

Joshua Rauh Liberty Lens
Date Posted:
Is Database:
Database

.@joshrauh forecasts that “if the average interest rate the federal government paid on its debt crept up to just 4.4%,” interest payments would exceed 29.7% of federal revenue in 2034. He argues the US is “playing with fire.”

How much of federal revenue would a one-point higher interest rate consume?

Core argument: If the average interest rate on US federal debt rises to 4.4% by 2034 rather than staying below 3.4% as the CBO forecasts, interest payments would consume 29.7% of federal revenues under current law.

What would happen to interest coverage if the average interest rate on the federal debt were to reach its 1982 level of 9.2%, or even its 1991 level of 7.2%. Instead, let’s just consider what would happen if over the coming decade interest rates were slightly higher each year, cumulating in a 1% rate difference in 2034. That is, instead of ending the next 10 years exactly where we’re starting, at less than 3.4% as the CBO forecasts, what if the average interest rate the federal government paid on its debt crept up to just 4.4%? If this happens under current law, interest payments will consume 29.7% of revenues and 40.4% of revenues excluding Social Security OASDI payroll tax revenues. If you think there’s going to be appetite for accessing the Social Security payroll tax revenues for non-Social Security purposes, keep in mind that starting in 2035 the revenues from those taxes will only be able to fund 83% of the benefits.

Takeaways by Macro Roundup® AI

  1. If the average interest rate on US federal debt rises to 4.4% by 2034 rather than staying below 3.4% as the CBO forecasts, interest payments would consume 29.7% of federal revenues under current law.
  2. Under that 4.4% average interest rate scenario, interest payments would take 40.4% of federal revenues excluding Social Security OASDI payroll tax revenues.
  3. Starting in 2035, Social Security payroll tax revenues will be able to fund only 83% of benefits.

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.
  • 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.
  • From Riches to Rags: Causes of Fiscal Deterioration Since 2001 — Federal debt held by the public rose from 32% to 98% of GDP over roughly two decades, despite earlier Congressional Budget Office projections that the debt would be paid off. The authors attribute 37 percentage points to major tax cuts, 33 to discretionary spending and Medicare expansions, and 28 to recession and pandemic responses.

AI Summary. The Congressional Budget Office projects that authorizing Medicare coverage of anti-obesity medications would raise federal spending by about $35bn on net over 2026–2034, with direct costs rising from $1.6bn to $7.1bn a year. Offsetting savings from improved beneficiary health would be small, under $50m initially and reaching $1.0bn.

Austin Barselau, Noelia Duchovny, Jared Maeda, et al. Congressional Budget Office
Date Posted:

Federal savings from extending Medicare coverage to include weight loss drugs like Ozempic and Wegovy won’t remotely offset the cost, which @USCO forecasts at $35B between 2026-2034. Over ⅔ of current Medicare beneficiaries are overweight or obese.

How would Medicare coverage of anti-obesity drugs affect federal spending?

Core argument: Authorizing Medicare coverage of anti-obesity medications would raise net federal spending by about $35 billion over 2026–2034, with total direct federal costs rising from $1.6 billion in 2026 to $7.1 billion in 2034.

Authorizing coverage of anti-obesity medications (AOMs) in Medicare would increase federal spending, on net, by about $35 billion from 2026 to 2034. Total direct federal costs of covering AOMs would increase from $1.6 billion in 2026 to $7.1 billion in 2034. Relative to the direct costs of the medications, total savings from beneficiaries’ improved health would be small—less than $50 million in 2026 and rising to $1.0 billion in 2034. Weight loss is associated with reductions in health-related spending per user that are less than the estimated federal cost per user of covering AOMs throughout the 2026–2034 period. Per AOM user, the average direct federal cost would be roughly $5,600 in 2026, decreasing to $4,300 in 2034. And average offsetting federal savings would be about $50 in 2026, reaching $650 in 2034.

Takeaways by Macro Roundup® AI

  1. Authorizing Medicare coverage of anti-obesity medications would raise net federal spending by about $35 billion over 2026–2034, with total direct federal costs rising from $1.6 billion in 2026 to $7.1 billion in 2034.
  2. Savings from beneficiaries' improved health would be small relative to the direct costs of the medications, at less than $50 million in 2026 and rising to $1.0 billion in 2034.
  3. The average direct federal cost per anti-obesity medication user would fall from roughly $5,600 in 2026 to $4,300 in 2034, while average offsetting federal savings would rise from about $50 to $650.

Related Articles:

  • We May Have Passed Peak Obesity — Newly released data show the US adult obesity rate fell by about two percentage points between 2020 and 2023, with the steepest decline among college graduates. The author argues the new generation of diabetes and weight-loss drugs is highly likely behind the reversal, as one in eight US adults have used them.
  • The Year of Ozempic — GLP-1 medications act on receptors in the gut, liver, muscles, and brain, and studies report they reduce heart attacks and strokes, slow kidney disease progression, and shrink liver fat deposits. Users have also reported diminished cravings for alcohol, tobacco, gambling, and other compulsive behaviors, though anecdotal reports outpace clinical studies.
  • Today’s Most Important Technology — The share of patients taking semaglutide for weight control rather than type 2 diabetes rose from under 10% in 2019 to 41.7%. Obesity and overweight, affecting 1 in 8 people worldwide, cost the global economy $2tn — nearly 70 cents on the dollar from premature mortality and lost productivity — an impact projected to double by 2035 absent intervention.

AI Summary. China's shipbuilding capacity now exceeds the United States' by such a margin that it can build more ships in a month than American yards build in a year, with a workforce estimated at nearly 5x the US level. Chinese yards handled more than 1,700 orders in a year, compared with fewer than five for American shipyards.

Brady Africk and Mackenzie Eaglen Washington Post
Date Posted:

Chinese military spending was likely 3.9% of GDP in 2022, compared to the United States’ 2.9%. @MEaglen and @bradyafr note that “China can now build more ships in a month than the United States can in a year.” @AEIecon

How large is China's shipbuilding advantage over the United States?

Core argument: China can now build more ships in a month than the United States builds in a year, after 18 years of shipbuilding investment, and Beijing aims to keep widening that advantage.

China has been investing so much in shipbuilding over the past 18 years that it can now build more ships in a month than the United States can in a year — and Beijing aims to keep widening its advantage. The data shows a stark divide: China’s shipbuilding workforce is estimated to be nearly five times that of the United States and supports more than 7,000 vessels. Fewer than 200 are serviced by American shipyards — which fulfilled fewer than five orders in 2023, while their Chinese counterparts handled more than 1,700.

Takeaways by Macro Roundup® AI

  1. China can now build more ships in a month than the United States builds in a year, after 18 years of shipbuilding investment, and Beijing aims to keep widening that advantage.
  2. China's shipbuilding workforce is estimated at nearly five times that of the United States and supports more than 7,000 vessels, while American shipyards service fewer than 200.
  3. American shipyards fulfilled fewer than five orders in 2023, compared with more than 1,700 handled by their Chinese counterparts.

Related Articles:

  • China Is Ready for War — China's state-owned defense enterprises now account for four of the world's ten largest companies by combined defense and nondefense revenue — including the two largest, Aviation Industry Corporation of China and China State Shipbuilding — and five of the top 12 by defense revenue alone, up from none in the top 100 a decade earlier.
  • Keeping Up with the Pacing Threat: Unveiling the True Size of Beijing’s Military Spending — China's publicly released military budget understates its spending; adjusting for purchasing power and adding uncounted expenditures, the authors estimate the buying power of China's military budget at $711bn, roughly triple Beijing's stated figure and nearly equal to the United States'. Such parity favors China, whose spending concentrates on Asia while US resources are spread across multiple theaters.
  • China’s Shipyards Are Ready for a Protracted War. America’s Aren’t — China produced more than half of the world's commercial shipbuilding output, while Europe accounts for about 5% and the US next to nothing, with most of the remainder built in South Korea and Japan. Analysts argue that in a protracted conflict China's wartime-scale yards could quickly accelerate production, replace lost ships, and repair damaged ones.

Thursday, October 10, 2024

AI Summary. The authors estimate that a rise in long-term Treasury yields was driven mainly by higher term premiums, reflecting the Federal Reserve shrinking its balance sheet, greater Treasury issuance, and heightened economic uncertainty. As yields later declined, shifting interest-rate expectations likely played a relatively larger role amid weaker-than-expected data.

Anthony Diercks and Dev Asnani Federal Reserve Board
Date Posted:

In 2023:H2 the 10-year soared from 4% to 5%, then retreated to 3.9%. Averaging existing term structure models, Diercks and Asnani note that the 2,10 spread moves almost one-for-one with the term premium, and interpret the 2023 episode accordingly.

What drove the rise in long-term Treasury yields?

Core argument: The authors attribute the rise in Treasury yields in the second half of 2023 primarily to higher term premiums, fueled by quantitative tightening, greater Treasury issuance, and heightened uncertainty about the economic outlook.

Our analysis suggests that the rise in yields [in the second half of 2023] was primarily driven by an increase in term premiums, fueled by the combination of quantitative tightening, greater Treasury issuance, and heightened uncertainty about the economic outlook. However, survey-based measures likely overstated the rise in term premiums due to their delayed response to economic developments, a sluggishness, for which we provide formal evidence. We find that as yields declined, expectations likely played a relatively larger role amid a series of lower than expected data prints. Additionally, we identify a useful rule of thumb that emerges when averaging across the models: a rise in the slope (10-year minus 2-year) corresponds nearlyone-to-one with a rise in term premiums, while changes in the 2-year yield seem to be evenly split between expectations and term premiums.

Takeaways by Macro Roundup® AI

  1. The authors attribute the rise in Treasury yields in the second half of 2023 primarily to higher term premiums, fueled by quantitative tightening, greater Treasury issuance, and heightened uncertainty about the economic outlook.
  2. Survey-based measures likely overstated the rise in term premiums because of their delayed response to economic developments, a sluggishness for which the authors provide formal evidence.
  3. Averaging across models yields a rule of thumb in which a rise in the 10-year minus 2-year slope corresponds nearly one-to-one with a rise in term premiums, while 2-year yield changes split evenly between expectations and term premiums.

Related Articles:

  • 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.
  • 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.
  • Can U.S. Treasury Markets Add and Subtract? — 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.

AI Summary. The United States remains the main outlier among developed countries resisting depopulation, with fertility of just over 1.6 births per woman — high for a rich country but below the 2.1 replacement threshold — plus steady immigration. The Census Bureau projects the U.S. population will peak around 2080 and decline continuously thereafter.

Nicholas Eberstadt Foreign Affairs
Date Posted:

Noting the global collapse in fertility – and in turn family structure – Nicholas Eberstadt @AEIecon notes “Just how depopulating societies will cope with this broad retreat of the family is by no means obvious.”

Will the United States eventually face population decline too?

Core argument: The U.S. total fertility rate stood at just over 1.6 births per woman in 2023, high for a rich country but far below the roughly 2.1 replacement threshold that applies in affluent countries with high life expectancy.

The United States remains the main outlier among developed countries, resisting the trend of depopulation. As a rule of thumb, a total fertility rate of 2.1 births per woman approximates the replacement threshold in affluent countries with high life expectancy. With relatively high fertility levels for a rich country (although far below replacement—just over 1.6 births per woman in 2023) and steady inflows of immigrants, the United States has exhibited what I termed in these pages in 2019 “American demographic exceptionalism.” But even in the United States, depopulation is no longer unthinkable. Last year, the Census Bureau projected that the U.S. population would peak around 2080 and head into a continuous decline thereafter. A revolution in the family—in family formation, not just in childbearing—is underway in societies around the world, [signs of which] include nonmarital cohabitation and temporary unions; and the increase in homes in which one person lives independently.

Takeaways by Macro Roundup® AI

  1. The U.S. total fertility rate stood at just over 1.6 births per woman in 2023, high for a rich country but far below the roughly 2.1 replacement threshold that applies in affluent countries with high life expectancy.
  2. The Census Bureau has projected that the U.S. population would peak around 2080 and enter continuous decline thereafter.
  3. Relatively high fertility for a rich country combined with steady immigrant inflows has given the United States what was termed in 2019 "American demographic exceptionalism.".

Related Articles:

  • The Global Fertility Crisis Is Worse Than You Think — Adjusting United Nations figures for lower recorded births, the author estimates the global fertility rate was 2.18, below the 2.21 replacement threshold. Population is not yet falling because women born in the 1990s and 2000s are having children while older generations live longer, so births still exceed deaths, with a projected peak in about 30 years.
  • Thoughts and Comments on Demographic Aging and Shrinking — As an arithmetic matter, the greying of societies is driven much more by smaller families than by longer lives, which the author attributes to a withering away of the family. Demographic simulations project that by 2040 couples in their 60s in China will likely have at least one living parent to care for, and many will have two or three.
  • Changing Sub-Saharan Africa’s Growth Trajectory — Sub-Saharan Africa's working-age population is growing nearly 3% a year, versus close to zero in much of the world, and is projected to exceed China's within about a decade and reach a quarter of the global total. With modest productivity growth near 2%, the region is likely among the world's fastest-growing.

AI Summary. Manufacturing's share of US employment has declined steadily since the end of the Second World War, with no obvious change in that rate after China joined the World Trade Organization or after the US adopted protectionist policies. The authors argue this suggests technology, including robotics and automation, primarily drives the trend.

Michael Strain Aspen Strategy Group
Date Posted:
Is Database:
Database

.@MichaelRStrain notes that US manufacturing employment declined steadily both before and after “The China Shock,” and cautions against the bipartisan turn to industrial policy and protectionism.

Does technology, not trade, drive the long decline in manufacturing employment?

Core argument: Manufacturing's share of US employment has fallen consistently since the end of the Second World War, with no obvious change in the rate of decline in the decade after China's 2001 WTO accession or during the post-2017 protectionist period.

Manufacturing’s share of employment has fallen consistently since the end of the Second World War. There is no obvious change in the rate at which manufacturing’s employment share declined during the decade following China’s accession to the World Trade Organization in 2001 or during the post-2017 period, when the US adopted protectionist policies. The slope of the trend line does change following the 2008 global financial crisis and Great Recession. This change roughly corresponds with the slowdown in aggregate US productivity growth, which is generally thought to have begun around 2005 and with the slowdown in manufacturing productivity growth. Labor productivity (output per hour for all workers) in the manufacturing sector has not grown since the 2008 financial crisis. Taken as a whole, this is suggestive evidence that advances in technology—robotics, automation—are primarily responsible for longer-term trends in manufacturing employment.

Takeaways by Macro Roundup® AI

  1. Manufacturing's share of US employment has fallen consistently since the end of the Second World War, with no obvious change in the rate of decline in the decade after China's 2001 WTO accession or during the post-2017 protectionist period.
  2. The slope of the manufacturing employment-share trend line does change after the 2008 financial crisis and Great Recession, roughly corresponding with the slowdown in aggregate US productivity growth generally thought to have begun around 2005 and in manufacturing productivity growth.
  3. Manufacturing labor productivity, measured as output per hour for all workers, has not grown since the 2008 financial crisis, evidence suggesting that advances in robotics and automation are primarily responsible for longer-term manufacturing employment trends.

Related Articles:

  • The Dangerous Myth of Deglobalization — China's manufacturing surplus rose by about 1 percentage point of global GDP over a four-year span and is far larger than those of Germany and Japan. China's $800bn goods trade surplus depends on the large U.S. trade deficit, which is still indirectly financed by China through the large offshore dollar stockpiles held by Chinese exporters.
  • Manufacturing Jobs Have Recovered, But Not Everywhere — U.S. manufacturing employment recovered the 650,000 jobs lost in the 2020 recession, rising above 12.9m workers and exceeding the pre-pandemic level of 12.8m — the first such post-recession recovery since the late 1970s. Even so, manufacturing's share of private-sector employment fell from 31% in 1970 to 9.7%.
  • Trade Intervention for Freer Trade — The authors argue the United States should counter surplus countries' trade policies either by restricting their goods exports through tariffs or by restricting their capital inflows through taxes, volume limits, reserve requirements, transaction approvals, or investor eligibility rules. They contend capital controls are a more targeted alternative to uniform tariffs, which impose equal costs on more and less mercantilist countries.

AI Summary. An analysis of American Time Use Survey data found that time Americans spend at home rose by 1 hour 39 minutes a day, or 10%, from 2003 through 2022, with much of it spent alone. Work done at home accounted for 29% of all work activity in 2022, up from 13% in 2003 and 17% in 2019.

Ronda Kaysen and Alicia Parlapiano New York Times
Date Posted:

Btw 2003 and 2022, Americans increased the amount of time spent at home by an hour and 40 minutes, or 10%. Americans 15-34 saw the greatest increase, gaining ~2 hours a day at home.

How much more time are Americans spending at home?

Core argument: Americans' time spent at home rose by 1 hour 39 minutes a day, or 10%, from 2003 through 2022, according to an analysis of American Time Use Survey census data, with much of that time spent alone.

A recent analysis of census data found that Americans are spending more time at home, and a large part of it alone. The analysis, based on responses to the American Time Use Survey, shows that time spent at home increased by 1 hour 39 minutes a day, or 10%, from 2003 through 2022. It’s a trend that rose sharply during the pandemic and had yet to return to more typical levels by 2022 — a sign that the pandemic may have hastened a cultural shift already in progress. The rise in working at home during the pandemic has been a big chunk of that, taking up 29% of all work activity in 2022. But even before then, from 2003 to 2019, the share of work time at home had crept up to 17% from 13%. Other activities followed a similar track — a gradual rise over years followed by a spike during the pandemic that was still felt sharply in the first two months of 2022.

Takeaways by Macro Roundup® AI

  1. Americans' time spent at home rose by 1 hour 39 minutes a day, or 10%, from 2003 through 2022, according to an analysis of American Time Use Survey census data, with much of that time spent alone.
  2. Work done at home accounted for 29% of all work activity in 2022, after the share of work time at home had already climbed from 13% in 2003 to 17% in 2019.
  3. Time at home rose sharply during the pandemic and had not returned to more typical levels by 2022, suggesting the pandemic may have hastened a cultural shift already in progress.

Related Articles:

AI Summary. Higher baseline Medicare prescription-drug spending plus a new demonstration program could cost $140bn through 2031, which the author estimates would eliminate nearly 60% of the deficit reduction projected from the Inflation Reduction Act. The Committee for a Responsible Federal Budget estimates the law's tax subsidies could cost $400bn above original projections.

James Capretta American Enterprise Institute
Date Posted:
Is Database:
Database

Savings from the 2022 Inflation Reduction Act will fall well short of @USCBO estimates. The promised deficit reduction will be 60% lower, mostly due to the higher-than-forecast cost of prescription drug coverage under Medicare Part D.

Is the projected deficit reduction from the drug-pricing law disappearing?

Core argument: If higher Medicare Part D baseline spending reaches $15 billion in 2025 and carries forward through 2031, the cost would total $105 billion, with a new CMS demonstration program maintained through 2031 adding $35 billion more.

Putting the data together, it is clear that higher baseline spending on Medicare part D, plus the added spending from the demonstration program, threatens to eliminate whatever might be left of the deficit reduction from the original IRA. Assuming the higher spending CBO cited for 2025 turns out to be $15 billion, and that this higher spending carries forward in the baseline through 2031, the total cost would be $105 billion. Further, if the new CMS demonstration is maintained through 2031 (which the PDPs are certain to press for), the total cost would go up by an additional $35 billion. The combined tab of $140 billion from the higher baseline and the new demonstration would eliminate nearly 60% of the total deficit reduction promised from the IRA. The other 40% was already at risk too. Based on data from the Joint Committee on Taxation and CBO, the Committee for a Responsible Federal Budget estimates the costs associated with the IRA’s various tax subsidies could be $400 billion above the original projections.

Takeaways by Macro Roundup® AI

  1. If higher Medicare Part D baseline spending reaches $15 billion in 2025 and carries forward through 2031, the cost would total $105 billion, with a new CMS demonstration program maintained through 2031 adding $35 billion more.
  2. The combined $140 billion tab from higher Part D baseline spending and the new CMS demonstration would eliminate nearly 60% of the total deficit reduction promised from the Inflation Reduction Act.
  3. The Committee for a Responsible Federal Budget estimates, drawing on Joint Committee on Taxation and CBO data, that costs of the IRA's various tax subsidies could run $400 billion above original projections.

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.
  • How to Balance the Budget Without Raising Taxes or Cutting Benefits — Medicare's projected doubling of cost as a share of GDP is accounted for by increased use of healthcare services, especially newly developed procedures and therapies; without that expansion, spending would fall from 3.2% to 2.4% of GDP rather than rise to 5.4%. The author argues beneficiaries wanting these added services should pay supplemental premiums.
  • The Budget and Economic Outlook: 2024 to 2034 — The Congressional Budget Office projects the federal budget deficit will grow from $1.6tn to $2.6tn over a decade, rising from 5.6% to 6.1% of gross domestic product. That end-point is well above the 3.7% average of the past 50 years, as outlays are projected to rise faster than revenues over most of the period.

AI Summary. A hurricane weakening to Category 3 before landfall means insured losses are estimated at $35bn–$45bn rather than a worst-case scenario above $100bn, according to analysts at Bloomberg Intelligence. Catastrophe-bond investors are projected to face a maximum loss of 4%, versus earlier warnings of 2%–15% from a direct hit on Tampa.

Gautam Naik Bloomberg
Date Posted:

Milton made landfall as a Category 3 hurricane. According to a Bloomberg estimate, this reduced insured losses to a $35-45B range, compared with >$100B if it had maintained its strength as a Category 5.

How much do storm losses fall when a hurricane weakens?

Core argument: Bloomberg Intelligence analysts estimate Hurricane Milton's weakening to a Category 3 storm before landfall means insured losses may total $35 billion to $45 billion rather than a worst-case scenario above $100 billion for insurers and reinsurers such as Munich Re and Swiss Re.

“Hurricane Milton’s weakening to a Category 3 storm before making landfall likely means the insurance industry and reinsurers such as Munich Re and Swiss Re may escape a worst-case scenario of more than $100 billion of losses,” according to analysts at Bloomberg Intelligence. Lower wind intensity suggests insured losses may instead be $35 billion to $45 billion, BI said. Catastrophe bonds Losses are expected to be in the range of $20 billion to $60 billion, meaning cat-bond investors look to be facing a maximum hit of 4%. Before Milton landed, Icosa Investments AG warned that a direct hit to Tampa threatened to cause insured losses anywhere from $40 billion to $150 billion, resulting in cat-bond losses of 2% to 15%.

Takeaways by Macro Roundup® AI

  1. Bloomberg Intelligence analysts estimate Hurricane Milton's weakening to a Category 3 storm before landfall means insured losses may total $35 billion to $45 billion rather than a worst-case scenario above $100 billion for insurers and reinsurers such as Munich Re and Swiss Re.
  2. Catastrophe bond investors appear to face a maximum hit of 4% from Hurricane Milton, with losses expected in the range of $20 billion to $60 billion.
  3. Icosa Investments AG warned before Hurricane Milton made landfall that a direct hit to Tampa threatened insured losses of $40 billion to $150 billion and cat-bond losses of 2% to 15%.

Related Articles:

  • Florida’s Home Insurance Industry May Be Worse Than Anyone Realizes — A working paper by researchers at Harvard, Columbia, and the Federal Reserve finds that nearly 20% of Florida insurers rated financially stable by the rating agency Demotech became insolvent, with 99.7% of that agency's ratings in the sample at A or above. The researchers argue this signals Florida's insurance market is more precarious than already known.
  • The Great Florida Migration Is Coming Undone — Florida's housing market is cooling amid excess inventory and weaker buyer demand, with analysts warning some cities could see a price correction. Home insurance premiums in parts of the state are up as much as 400% over five years, pricing out some homeowners and prompting institutional investors to sell properties.
  • Snow Belt to Sun Belt Migration: End of an Era? — The correlation between US county population growth or net migration and historical extreme heat and cold days has declined over roughly the past 50 years, and in 2010–2020 was essentially zero. The authors argue this pivoting is likely to continue and reverse the 20th-century Snow Belt to Sun Belt migration pattern.

AI Summary. Chinese authorities are requiring a growing number of schoolteachers and other public sector workers to surrender their passports, under a "personal travel abroad management" system that lets local officials control who may travel abroad, how often and where. Restrictions have been expanded to rank-and-file staff at schools, universities, local governments and state-owned groups.

Ryan McMorrow, Nian Liu, Sun Yu, and Gloria Li Financial Times
Date Posted:

China is seemingly banning foreign travel for most schoolteachers and other public sector employees, forcing those individuals to turn their passports over to local governments.

Is China expanding passport confiscation to ordinary public sector workers?

Core argument: Chinese authorities are collecting passports from a growing number of schoolteachers and other public sector employees under a system known as "personal travel abroad management," which lets local officials control who travels abroad, how often and where.

Chinese authorities are demanding that a growing number of schoolteachers and other public sector employees hand in their passports. The passport collection drive, carried out under what is known as “personal travel abroad management”, allows local government officials to control and monitor who can travel abroad, how often and to where. Interviews with more than a dozen Chinese public sector workers and notices from education bureaus in half a dozen cities show restrictions on international travel have been greatly expanded from last year to include rank-and-file employees of schools, universities, local governments and state-owned groups. The passport collection appears to be based on national regulations from 2003 that established a system to restrict travel for key personnel such as mid- to high-level officials and allowed local authorities to set rules for all state employees’ international travel.

Takeaways by Macro Roundup® AI

  1. Chinese authorities are collecting passports from a growing number of schoolteachers and other public sector employees under a system known as "personal travel abroad management," which lets local officials control who travels abroad, how often and where.
  2. Interviews with more than a dozen Chinese public sector workers and notices from education bureaus in half a dozen cities show international travel restrictions expanded from last year to cover rank-and-file staff at schools, universities, local governments and state-owned groups.
  3. The passport collection appears to rest on national regulations from 2003 that established a system restricting travel for key personnel such as mid- to high-level officials and allowed local authorities to set rules for all state employees' international travel.

Related Articles:

  • 2023 Letter — Rising numbers of Chinese nationals are being apprehended at the US-Mexico border, with US officers encountering around 1,000 in one month early in the year and nearly 5,000 by November. Most Chinese emigrants leave through legal means, going primarily to Singapore, Japan, and Thailand.
  • China to See Biggest Millionaire Exodus in 2024 as Many Head to U.S. — China is projected to see a record 15,200 high-net-worth individuals — those with at least $1m in assets — leave the country, the world's largest such outflow, according to a Henley & Partners report. The prior year's 13,800 departures went mostly to the US, Canada, and Singapore.
  • China Shuts Down Its International-Adoption Machine — China became a leading source country for international adoption, with about 160,000 children placed abroad over three decades, and has now ended the program. American families adopted 82,658 Chinese children between 1999 and 2022, nearly one-third of all US adoptions from foreign countries.