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The results of my survey of economists will be published in mid September. It's going to take longer than I thought to swim through the data and pull out the good stuff. And I have been advised by smart people that this week is a bad one to compete for attention in the news.  I can tell you that I've seen the raw results and there will be surprises.

Let's do a little experiment here. I asked economists to rank issues by how important they are to the economy. I'm asking you the same thing now. In the comments, tell us what you think is the number one issue for the United States from an ECONOMIC perspective.

I'm guessing your answers will be all over the place, and that says a lot about the challenge of democracy. If you don't know which issue is most important to the economy, it's hard to know which candidate would do the best job.

In your view, what is the most important issue for the economy?
 
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Aug 27, 2008
I agree with energy. I think cheaper, renewable and environmentally safe energy will do more for individuals and businesses than any tax reforms.

A lot of people said education. I think it's useless to make education a top spending priority. I could go into detail of why I feel that way, but that's not the point of this blog...
 
 
Aug 27, 2008
The key issue is productivity per capita. This has many factors that lead into it, but ultimately the more people working (and not receiving government welfare), the better the education, and the better the technology, the higher the productivity per capita. That is the key factor in raising the standard of living.
 
 
Aug 27, 2008
1. the national debt (from the iraq/afganistan wars combined with the unwillingness of the government to tax for this)
2. the aging baby boomer population and the issues that stem from that namely health care (and social security)
 
 
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Aug 27, 2008
The tax system. How many thousand pages is it now? And every year congress adds new crap to it for their favorite lobbyist. We need the Fair Tax. No more tax forms. No more legislators making up absurd rules to benefit chosen groups so that they can grease their pockets. No more fear of audits. No more IRS thugs abusing small businessmen. No more of this nation spending $500B on tax compliance. Corporations that have moved their headquarters overseas to evade the second highest corporate tax rate in the industrialized world can come back home and spend their profits here.

There are others, but you asked for #1.
 
 
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Aug 27, 2008
I'm delighted to see all the votes that energy and the deficit are getting. In a perfect world, only dilbert blog readers would be able to vote.

However, trying hard to set aside my own biased cognitive dissonance, I vote for regulation.
 
 
Aug 27, 2008
The price of oil
 
 
Aug 27, 2008
#1 issue, ever dwindling rights of private property. Private property is what makes enconomies thrive. #2 issue, government monopoly over money and their out of control printing money out of thin air leading to bubbles upon bubbles.
 
 
Aug 27, 2008
That's a great question. Forgive me for being somewhat cynical, though. Didn't you, In an earlier post on this topic, say in effect that you really didn't give a damn what anyone who wasn't an economist thought about things economic? For which I heartily excoriated you. Which you deserved.

The answer to your question is not a simple one, since so many things contribute to the economy, and almost all of them are interrelated. It's virtually impossible to pick ONE thing, because each thing affects other things. Take the relationship between taxation and spending, for just one simple example. Cutting (or raising) taxes really doesn't affect government spending, but it does effect the economy. Saying taxation is the number one issue would therefore ignore it's effects on everything else that would be hit with either a raising or lowering of taxes. You can't address a single element of the economy as though it exists in a vacuum, ignoring its effect on everything else.

But if you want to nail it down to just one thing, here goes my contribution: entitlements. Entitlements include things like Social Security and Medicare. They are guarantees, which means that no matter how much money is available to the feds from taxation, entitlements HAVE to be paid. If there isn't enough tax money, the government HAS to borrow to pay all entitlements.

This is bad, because there's no way to stop it or reign in this spending. People talk about how bad 'pork' is; that is, how bad earmarks for congressional districts are. Yes, they're bad, but they're only about 1% of the budget. Now look at just the Medicare drug benefit. The unfunded amount of that one entitlement alone is $8.1 trillion (yes, with a 't') dollars. The US GDP was roughly $14 trillion in 2007. That means it would take 40 cents out of every single dollar just to fund that one entitlement's unfunded-ness.

In other words, to cover that out of taxation, your taxes would go up an ADDITIONAL 40% over what you're paying now - and everyone in the country, and every business, would be taxed at the same amount. Staggering, huh?

According to the US GAO, the current level of unfunded payments under Social Security and Medicare are estimated at $53 trillion. Going back to the above example, that means every dollar made in the US would have to be taxed at 100%, and all other uses of that taxed money cut entirely for almost four years, to pay off the unfunded liabilities of those two programs.

Government spending is currently at about $20,470 per household, up from roughly half that in 2000. You've heard people say we can't drill our way out of the current energy crisis (not true, by the way); well, we can't tax our way out of the current entitlement crisis. I'd say we were spending like a drunken sailor on shore leave, but that would be an insult to drunken sailors.

If you'd like to read a really interesting book that talks about a solution to the entitlement fiasco, I'd strongly recommend you get a copy of "In Our Hands" by Charles Murray. We need to think outside the tax-and-spend box to get us through this. If we don't, it doesn't matter what else we do in any sector of the economy - we'll be pulled under by the weight of our unfunded liabilities.
 
 
Aug 27, 2008
The number one issue with the economy is the overall budget deficit, and the resulting national debt.
 
 
Aug 27, 2008
Lower taxes.

All taxes. Income, capital gains, inheritance, corporate, sales, you name it. For the rich too, not just the middle class
 
 
Aug 27, 2008
Restoring the Constitution and getting the government out of trying to plan (ruin!) the economy. A truly free market (not a managed market as we have now) and the federal government letting people keep more (all?) of their wages would have this country restored to the most prosperous country in the world.
 
 
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Aug 27, 2008
The number one economic issue as I understand it is the availability of the credit markets and their willingness to provide funding. I'm not an economist but I did stay in a holiday inn express last night.
 
 
Aug 27, 2008
Short-term economic issues, in order of importance:

3) the banking system needs a massive cleanup, especially the essentially non-regulated investment banks that got us into the mortgage meltdown mess
2) inflation - the Fed is in an impossible situation where it wants to raise rates to curb inflation, but can't do so because of the state of the economy. Stagflation, anyone?
1) jobs, especially in the manufacturing sector. While free trade is good in the long term, it's killing many industries in the short term, and having a manufacturing base is essential to the long-term health of the economy.

Long-term economic issues, in order of importance:

3) healthcare costs - I don't think I need to say a lot about this one, but it includes Medicare. We Gen Xers don't want to pay 50% of our salaries to support the babyboomers rising healthcare costs as they get old. Just die already, would you?
2) energy independence - this isn't something we can do quickly, but we need a plan to wean us off foreign oil, with all of its implications for the environment and for national security
1) education - we can't get the rest done with the state of our education system. In Detroit and other big cities, the high school graduation rate is less than 30% - yes, that's right, more than 70% of high school kids fail to graduate!
 
 
Aug 27, 2008
ENERGY !!!!! After 9-11 the President and Congress squandered possibly the biggest opportunity of the 20th and possilbly the 21st Century. They could have used their emergency powers and a non-partisan mandate to launch massive renewable energy programs to rid us of needing one drop of foreign oil. These projects would dwarf the New Deal, the Manhatten Project and the Marsahal Plan for post-war Europe combined. But no, they blew it big time over politics as usual. The American public is getting awfully tired of war in the Middle East and kissing Saudi butts for every gallon of gas.




 
 
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Aug 27, 2008
Stagflation
 
 
Aug 27, 2008
Too much money is spent by people that are not interested in the outcomes (profit or loss) of this spending.
 
 
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Aug 27, 2008
Soaring costs of commodities. By far.
 
 
Aug 27, 2008
Education.

Globalization of the economy and flattening of the world means it comes down to the resources each country has. The most important and expensive resource is intelligent people. Intelligent people (tech, biotech, science) is the main driver of improving technology which is the main driver of supporting a growing population, which supports a growing economy. However, our pathetic schools and anti-intelligent culture are seriously hindering the country's production of intelligent people. In a competitive market, it'll become more and more difficult to keep importing intelligent people to create technology.
 
 
Aug 27, 2008
Jobs.
 
 
Aug 27, 2008

grinwell wrote:
"Oh, and if you think illegal immigration is a drag on the economy, you need to go take an economics class. "

And if you think that people going to the hospital for free, and partaking in government entitlement programs without paying into them, and depressing the average wage of the blue collar worker is GOOD for the economy, you need to wake up.
 
 
 
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