Tax revenue equals tax rate times income. We could finance our European-style benefits with European middle-income taxes, but we would get stagnant European incomes in the bargain. There aren’t enough “rich” or “corporations” to soak for this much money. When the next recession, crisis, war or pandemic hits, the U.S. Trillion-dollar spending on industrial policies, subsidies, transfers, and bailouts don’t help.

The government has made pension and health care promises that it cannot pay for. The CBO projects 3 percent of GDP primary deficits - before interest payments - forever. The federal deficit is 5.8 percent of GDP, though the economy is humming. The Congressional Budget Office projects debt will grow exponentially.

has as much federal debt now as it did at the end of WWII. Our government’s inability to fix its finances means we’re pretty close to that point. When you kick the can long enough, you run out of road. John Cochrane, SIEPR Senior Fellow and the Rose-Marie and Jack Anderson Senior Fellow at the Hoover Institution: However, the growing share of the population reporting cognitive difficulties - likely from a COVID-19 infection - suggest that programs and policies may be needed to support workers still struggling with pandemic-related illnesses. Going forward, the lower rate of excess absences in 2023 may suggest that the recent increase in disability rates could slow down if the two are causally related. While still elevated, this represents a sharp reduction from excess absences in March 2020-December 2022, which were 61 percent higher than pre-pandemic levels. Between January and October of 2023, excess COVID-19-related absences from work were approximately 15 percent higher than pre-pandemic levels. workforce overall, but there’s some good news heading into 2024. In addition, the share of workers who are not employed and not looking for work due to disability or illness is higher than its pre-pandemic trend.ĬOVID has clearly had harmful effects on the U.S. Other work has shown that more working-age adults are reporting serious difficulty remembering, concentrating or making decisions, and the increases are higher among women and non-college graduates. My research with Evan Soltas estimates that excess COVID-19-related absences from work through mid-2022 resulted in approximately 500,000 fewer people participating in the labor force. The COVID-19 pandemic disrupted many sectors of the economy, including labor markets. Gopi Shah Goda, SIEPR Senior Fellow and Professor (by courtesy) of Economics, School of Humanities and Sciences: The partisan factors we document may intensify as the November election approaches. How consumer sentiment will trend, and what we should be making of these data in the current environment, are questions that will only be fully answered in the course of time. The rise of social media as a prominent information source - with its tendency to amplify bad news - may be fraying the link between economic fundamentals and consumer sentiment. These are challenging times for forecasting. This means that, if inflation continues to ease over the next 12 months, sentiment should improve as the post-pandemic inflation surge recedes. However, we also found that the downward drag from inflation has a half-life of about a year. While prices rose only 3.2 percent this year, they increased by a cumulative 18.6 percent over the last 3 years, and these prior price increases are still weighing negatively on consumers. Second, consumer sentiment is being dragged down by prior years’ inflation. While both Democrats and Republicans rate the economy more strongly when their party controls the White House, Republicans cheer louder and boo harder, in effect, drowning out Democratic voices and artificially depressing consumer sentiment. First, sentiment isn’t as bad as the numbers suggest due to partisan skew. Ryan Cummings, a visiting PhD student at Stanford, and I recently dived into the data and documented two new findings. Given the strong correlation between consumer sentiment and election outcomes, it’s especially important to understand why there’s a disconnect ahead of this November’s vote. Yet consumer sentiment is decidedly weak, with measures of the economic indicator at levels last seen during the global financial crisis. economy is strong by all objective measures, with low unemployment, robust GDP growth, and easing inflation. Shultz Fellow at SIEPR and Professor of Economics, School of Humanities and Sciences:

Stanford King Center on Global Development.

Stanford Environmental and Energy Policy Analysis Center (SEEPAC).

Stanford Center on China's Economy and Institutions (SCCEI).

California Policy Research Initiative (CAPRI).

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