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• Do Lower Tax Rates Really Increase Government Revenue?

  By Alejandro Reuss | June 2011

  This is an old saw from a school of thought called “supply-side” economics. The supply-side economists, or “supply-siders,” were group of conservative economists influential with the Reagan administration. The term “supply-side” comes from their rejection of Keynesian economics’ emphasis on total demand to explain the total level of output (or GDP). The main issues, they argued, were on the supply side of the economy, especially the supply of labor and money capital (saving). Read more »

  
  

• What Is Behind Union Decline in the U.S.?

  By Alejandro Reuss | March 2011

  The total number of union members in the United States peaked in the late 1970s and early 1980s, at over 20 million. As of 2010, it remained near 15 million. The story of union decline in the United States, however, does not begin in the 1980s, nor is it as modest as these figures would suggest. Union density (or the “unionization rate”), the number of workers who are members of unions as a percentage of total employment, has been declining in the United States for over half a century. Read more »

  
  

• Why Is Unemployment Still So High?

  By Alejandro Reuss | February 2011

  Overall demand (in the U.S. economy as a whole) is not enough to buy all the goods and services that U.S. workers could produce, if all the economy’s resources were fully employed. If the managers of firms do not think they will be able to sell the goods that could be produced when running at full capacity, they will lay off workers and idle plant and equipment. Read more »

  
  

• Why is the Government Buying Long-Term Bonds?

  By Alejandro Reuss | January 2011

  Basically, the government is purchasing long-term bonds in order to push down long-term interest rates. (While the Federal Reserve is buying both government and private bonds, here we will focus just on purchases of government bonds.) The reduction in long-term interest rates, in turn, is meant to stimulate investment and other forms of spending. Read more »