Political Calculations

Paul H. Rubin —  14 November 2011

Just came across a very interesting blog-website, Political Calculations.  Lots of very interesting data, such as the trend in inequality in the U.S. since 1994.  (There is no increase and no trend.)  Certainly worth a look.

Paul H. Rubin

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PAUL H. RUBIN is Samuel Candler Dobbs Professor of Economics at Emory University in Atlanta and formerly editor in chief of Managerial and Decision Economics. He blogs at Truth on the Market. He was President of the Southern Economic Association in 2013. He is a Fellow of the Public Choice Society and is associated with the Technology Policy Institute, the American Enterprise Institute, and the Independent Institute. Dr. Rubin has been a Senior Economist at President Reagan's Council of Economic Advisers, Chief Economist at the U.S. Consumer Product Safety Commission, Director of Advertising Economics at the Federal Trade Commission, and vice-president of Glassman-Oliver Economic Consultants, Inc., a litigation consulting firm in Washington. He has taught economics at the University of Georgia, City University of New York, VPI, and George Washington University Law School. Dr. Rubin has written or edited eleven books, and published over two hundred and fifty articles and chapters on economics, law, regulation, and evolution in journals including the American Economic Review, Journal of Political Economy, Quarterly Journal of Economics, Journal of Legal Studies, and the Journal of Law and Economics, and he frequently contributes to the Wall Street Journal and other leading newspapers. His work has been cited in the professional literature over 8000 times. Books include Managing Business Transactions, Free Press, 1990, Tort Reform by Contract, AEI, 1993, Privacy and the Commercial Use of Personal Information, Kluwer, 2001, (with Thomas Lenard), Darwinian Politics: The Evolutionary Origin of Freedom, Rutgers University Press, 2002, and Economics, Law and Individual Rights, Routledge, 2008 (edited, with Hugo Mialon). He has consulted widely on litigation related matters and has been an adviser to the Congressional Budget Office on tort reform. He has addressed numerous business, professional, policy, government and academic audiences. Dr. Rubin received his B.A. from the University of Cincinnati in 1963 and his Ph.D. from Purdue University in 1970.

2 responses to Political Calculations

  1. 

    I have subscribed to Political Calculations for several years. The Ironman has tremendous insight into developments in the economy. I highly recommend his work on the budget and tax systems:

    September 21, 2011
    The Biggest Driver of U.S. Government Revenue
    http://politicalcalculations.blogspot.com/2011/09/biggest-driver-of-us-government-revenue.html

    “What’s the biggest single factor that determines how much money the U.S. federal government will collect in any given year? For our money, it’s Median Household Income. … ”

    [The relationship is shown in a graphic. The relationship has an R squared of 0.99584. Such a tight relationship is seldom observed in the social world. This holds over a period of 43 years, during which the tax code has been revised several times.]

    September 22, 2011
    Why Hiking the Top Income Tax Rate Won’t Fix President Obama’s Deficits
    http://politicalcalculations.blogspot.com/2011/09/why-hiking-top-income-tax-rate-wont-fix.html

    “How much does the top income tax rate affect how much money the government collects each year?

    * * *

    “What we do see indicates that the maximum tax rate has little to no bearing on how much money the federal government collects per household in any given year.

    * * *

    “With that being the case, there is no legitimate reason to set higher income tax rates today, as they are now demonstrated to have little to no effect on how much money the government collects in any given year. …”

    * * *

    September 19, 2011
    Obama vs America: 2012 Spending Edition
    http://politicalcalculations.blogspot.com/2011/09/obama-vs-america-2012-spending-edition.html

    A chart shows the relationship between Median Household Income and Federal Spending per Household. It stuck close to the trendline until 2008, when it went vertical. It is now way above the trend line.

    See Also:
    http://politicalcalculations.blogspot.com/2010/12/zero-deficit-line.html

    If I have it right, In 2010, the country had 118,682,000 households with a median income of $49,445, and the Federal government took in $2.165 trillion, spent $3.720 trillion, and borrowed $1.556 to cover the deficit.

    The Ironman’s trend line indicates that the expenditure budget should have been be around $2.467 trillion or $20,790 per household. That still would have produced a deficit of $300 billion, but that would be less than 20% of the actual deficit.

  2. 

    I suspect that “trends” may appear and disappear, depending on your data set. A quick review of the comments to the above article revealed the following comment/link:

    “As of 2006, the United States had one of the highest levels of income inequality, as measured through the Gini index, among high income countries, comparable to that of some middle income countries such as Russia or Turkey,[8] being one of only a few developed countries where inequality has increased since 1980.[9]”

    http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States#cite_note-Weeks-8 and Weeks, J. (2007). Inequality Trends in Some Developed OECD countries. In J. K. S. & J. Baudot (Ed.), Flat World, Big Gaps (159–174). New York: ZED Books (published in association with the United Nations).