Edward Conard

Top Ten New York Times Bestselling Author

  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…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 full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…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
  • “…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
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
Upside of Inequality Oxford Unintended Consequences

AI Summary. The authors model 13 illustrative federal tax and spending reforms based on standard public economics design principles and project that, over 30 years relative to current law, they would cut budget deficits by 38%, raise the capital stock 31%, GDP 21%, and wages nearly 7%, while lowering health premiums 27%.

Kody Carmody, Jon Huntley, Felipe Ruiz Mazin, et al. University of Pennsylvania
Date Posted:

The @BudgetModel proposes a series of policy changes that would reduce federal budget deficits by 38%, increase GDP by 21%, grow the capital stock by 31%, raise wages by 7%, and reduce health insurance premiums by 27% over the next 30 years.

Can principles-based tax and spending reforms cut deficits and raise GDP?

Core argument: The authors estimate that 13 illustrative tax and spending reforms would cut federal budget deficits by 38% over 30 years relative to current law, while growing the capital stock by 31%, GDP by 21%, and wages by almost 7%.

Expanding federal debt presents an opportunity to rethink U.S. federal fiscal policy while growing the economy and enhancing social insurance. We present illustrative fundamental reforms of federal tax and spending programs consistent with standard design principles that have emerged over time in the field of public economics. Specifically, we analyze 13 major tax and spending reforms that include a full accounting of their budgetary and economic interactions, arguably one of the most ambitious computational public finance experiments performed to date. Over the next 30 years, relative to current law, these reforms: (i) reduce federal budget deficits by 38%; (ii) grow the capital stock by 31%, GDP by 21%, and wages by almost 7%; (iii) reduce health insurance premiums by 27%; (iv) produce almost universal health insurance enrollment along with improvements in average health and productivity; (v) reduce old-age poverty; and (vi) reduce carbon emissions, relative to current law. These changes improve the welfare of many current and all future generations.

Takeaways by Macro Roundup® AI

  1. The authors estimate that 13 illustrative tax and spending reforms would cut federal budget deficits by 38% over 30 years relative to current law, while growing the capital stock by 31%, GDP by 21%, and wages by almost 7%.
  2. The authors' analysis projects that the reforms reduce health insurance premiums by 27% and produce almost universal health insurance enrollment, along with improvements in average health and productivity.
  3. The authors design the reforms around standard public economics design principles and find they reduce old-age poverty and carbon emissions relative to current law while improving the welfare of many current and all future generations.

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  • Fiscal Policy Under Trump II: The Role of Scott Bessent and Basic Budget Math — US federal debt has risen from 105% to 123% of GDP, the budget deficit has doubled from 3.1% to more than 6%, and government interest expense has grown from 1.3% to about 3.1% of GDP. The author argues this makes expansive fiscal policy harder to pursue than in the past.
  • As the Fed Cuts Rates, Treasury Yields Are Rising — Federal Reserve cuts to the federal funds rate target range were accompanied by falling short-term Treasury bill yields but rising longer-term yields, with the 10-year Treasury yield climbing from 3.63% to 4.42%. Deficit-increasing proposals from both presidential campaigns likely exacerbated the rise in longer-term yields.
Showing 48 database articles primarily about Taxation