Tag: Boomergeddon
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Medicaid, the New Middle-Class Entitlement
by James A. Bacon The Medicaid program was enacted in 1965 to provide a medical safety net for low-income families and for destitute elderly who had exhausted their personal resources. It has morphed into an entitlement to preserve middle-class standards of living. The reasons are understandable. You’d have to have heart of stone not to…
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Red State, Blue State, Old State, New State
by James A. Bacon The American people have chosen four more years of partisan gridlock in Washington. There is a remote chance that President Obama and a Republican-dominated House of Representatives will reach a grand compromise to put the country back onto a fiscally sustainable path, but I’m not holding my breath. I foresee four…
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Repeat after Me: A Smaller Increase in Defense Spending Is Not a “Cut” in Defense Spending.
Defense cuts may have less impact on Virginia’s economy than many commentators, including myself, have feared. Much ado has been made of what “sequestration” — automatic spending cuts imposed upon the defense budget if Republicans and Democrats can’t agree on any other form of debt reduction — will have upon the Old Dominion’s defense-dependent economy.…
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Boomergeddon Watch: The Ring of Fire
Bill Gross, the head of PIMCO, the world’s largest bond manager, has published a jeremiad that makes my “Boomergeddon” thesis look Pollyanna-ish by comparison. To avoid an economic meltdown, says the money mogul, the United States needs to close its fiscal gap by $1.6 trillion, equivalent to 11% of the GDP. In my book, I…
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Faltering Innovation and America’s Grim Economic Future
A confluence of trends will reduce economic growth in the United States to half — or less — of the rate that has prevailed for the past 150 years, argues Robert J. Gordon, an economics professor at Northwestern University in a new paper published by the National Bureau of Economic Research, “Is U.S. Economic Growth…
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Boomergeddon in Virginia: Yes, It Can Happen Here, Too
Over the past five “Boomergeddon in Virginia” posts, I have systematically laid out the findings of the “Report of the State Budget Crisis Task Force” as they pertain to the Old Dominion. It’s a dismal picture. The tax base is eroding. Medicaid spending it out of control. Cutbacks in federal spending will slam both Virginia’s…
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Boomergeddon in Virginia: Retirement Benefits
When the editorial writers and talking heads speak of the looming retirement crisis in state government, they usually are referring to massive unfunded pension liabilities. This is a major concern and should by no means be underestimated. But the problem is actually bigger than pensions. Most of the 50 states have what’s known in actuary…
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Boomergeddon in Virginia: Federal Cutbacks
If there’s one thing that pundits of all ideological stripes agree upon, it’s that the federal government cannot continue running $1 trillion-a-year deficits without inducing a Boomergeddon-style fiscal and economic melt-down. The only question worth asking is how we avoid the worst-case scenario: through spending cuts, tax increases or a combination of the two. (It…
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Boomergeddon in Virginia: Medicaid Spending
Budget analysts have warned for years that state Medicaid spending eventually would grow so big that it would crowd out other budget priorities such as K-12 education. They don’t need to sound the warning anymore. That day is here. Unfortunately, the crowding out will get worse. As the authors of the “Report of the State…
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Boomgergeddon in Virginia: Our Eroding Tax Base
by James A. Bacon While the federal government is hurtling towards a Boomergeddon melt-down, the prospects of state and local governments don’t look much better. According to the “Report of the State Budget Crisis Task Force,” states’ major revenue sources are eroding and increasingly volatile. Despite its AAA bond rating, Virginia is no exception to…
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Boomergeddon in Virginia: the Volker Analysis
In case you took heart from Virginia’s paltry budget surplus from FY 2012, a new study, “Report of the State Budget Crisis Task Force,” should dispel the delusion that Virginia state and local governments face anything but years of grinding austerity ahead. “The ability of the states to meet their obligations to public employees, to…
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Expand Medicaid? Sure… If You Think Uncle Sam Can Keep His Financial Commitments
by James A. Bacon It looks like Virginia will get its first serious debate about Medicaid in decades. In its recent ruling on Obamacare, the Supreme Court made it optional for the states to participate in the law’s massive Medicaid expansion. After an initial phase-in period covered by the federal government, in which coverage will…
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How Badly Will Federal Spending Cuts Hurt? Not as Much as You Might Think.
by James A. Bacon Virginia’s economic growth in recent years has been fueled by a surge in federal government spending, and that surge soon will come to an end, warns William M. Shobe in the May issue of the Virginia Newsletter, “Beyond the Great Recession: Preparing Virginia for Expected Cuts in Federal Spending.” Writes Shobe:…
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The Rot Runs Deep, My Friends
Sure, America has big problems but we’ll overcome them. Americans are resilient. We’ve always bounced back. So goes the optimists’ refrain that the country is not hurtling toward Boomergeddon. But we’re not the same people we once were, my 83-year-old mother never tires of reminding me. The country has undergone a moral metamorphosis, she says….…
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Boomergeddon Watch: Japanese Debt Downgraded
From today’s Wall Street Journal: Fitch Ratings delivered a surprise announcement yesterday, downgrading Japan’s sovereign debt rating to A+, a far cry from AAA status. That puts the debt of Japan on a par with Estonia and Malta. Fitch cited Japan’s lack of progress in bringing its massive deficit under control. “With 93% of the…