Growing Government Transfers

I’ve received several emails today about a story posted last night by USA Today.  The story points out that government transfers now make up more than one-sixth of American incomes, the highest ever.  Naturally, some observers welcome this development, while others denounce it.

I thought it would be useful to side-step that debate and instead provide some historical context.  To begin, the following chart shows the ratio of government transfers to personal income from January 1959 through April 2009 (the most recent data):

Government Transfers 0 Continue reading “Growing Government Transfers”

Drawing the Line on Health Insurance

Some of CBO’s most important decisions involve principles, not numbers. For example, CBO has to decide when proposed policies should be treated as part of the government — and thus be recorded on the budget for Congressional purposes — and when not. Many calls are easy. But then there’s health insurance reform.

The fine folks at the Congressional Budget Office have a reputation as the number-crunching, uber-geeks of the Congressional budget process.  And that’s a reputation they wear proudly (and I am proud to wear as an alum).

But some of CBO’s most important decisions involve principles, not numbers.  For example, CBO has to decide when proposed policies should be treated as part of the government — and thus be recorded on the budget for Congressional purposes — and when not.  Many calls are easy: taxes and spending are clearly governmental, hence in the budget.  Many regulations (e.g., minimum wages and environmental rules) are clearly outside; they may create benefits and impose costs just as taxes and spending do, but they still leave most choice and control in private hands.

And then there are the hard cases such as health insurance reform.

Continue reading “Drawing the Line on Health Insurance”