Showing posts with label deficits. Show all posts
Showing posts with label deficits. Show all posts

Friday, February 14, 2025

E.U. Defense: The State Governments Exploit a Conflict of Interest

Sometimes lemons can make use of political gravity to become lemonade. Of course, behind the lemons are human beings, who are of course innately economizers, political actors and moral agents. When accosted by proposals that additional governmental sovereignty be delegated from state governments to the federal level, state-government officials feeling the gravitas of narrow self-interest are inclined to resist even if the transfer is in the political and economic interest of the union as well as all of its states. I am of course describing a drawback that goes with state governments having too much power in a federal system, whose interests are not always identical with those of a particular state or even those that pertain to the state level as distinct from the federal level. I submit that a federal system in which such dynamics are ignored in favor of focusing on particular issues, such as the E.U.’s increased need for defense given Russia’s unprovoked invasion of Ukraine, can gradually slip “off the rails” toward dissolution or consolidation. By ceding the E.U. itself (i.e., the federal level) additional authority, including for revenues and expenditures, the European Council, which is composed of the state governors, could “kill two birds with one stone,” as that saying goes. Those birds would be unbalanced state power in the E.U. at the expense of a common purpose, and Russian President Putin’s military adventurism in Eastern Europe.


The full essay is at "E.U. Defense."

Monday, June 24, 2024

On the U.S. Government’s Budget Deficits and Debt: American Democracy Unhinged

It is true that a government’s budget can be read as a blueprint of priorities in terms of what is valued, and what is not so highly valued. The blueprint itself, as a whole, also evinces a priority in terms of values. As the big-ticket items, such as large spending categories and massive tax-cuts, get the most attention, whether a budget is in balance can go by the wayside, and what that says about the electorate (and thus the state of democracy) can easily be missed. Ultimately, public policy and even the votes of the elected representatives point back to the popular sovereign, the People—more specifically, the electorate, and its values. By 2024, the deficit and accumulated debt of the U.S. Government had reached such gigantic numbers that something could be said to be amiss concerning those values. The underlying culprit, which can be said to be an illness that is human, all too human, had by then infected American democracy beyond the wherewithal of virtually any elected federal representative to enunciate well enough that the electorate could look clearly at itself, and thus size itself up beyond the partial diagnoses that can be found in partisan attacks.


The full essay is at "U.S. Government Deficits and Debt."

Thursday, August 22, 2019

Limits to Overused Fiscal and Monetary Policy Can Result in Self-Induced Governmental Impotence

“The [U.S.] federal budget deficit is growing faster than expected as President Trump’s spending and tax cut policies force the United States to borrow increasing sums of money.”[1] This observation was made just after the Federal Reserve Bank relented under pressure from the White House to lower interest rates because bond investors had been investing with a possible future recession in mind. With the U.S. Government’s accumulated debt standing at $22.4 trillion and interest rates already low, the limits to both fiscal and monetary policy were apparent even if most Americans in the political and business elite were focused on avoiding a possible recession in 2020.

The full essay is at "Overused Fiscal and Monetary Tools."

See also: Skip Worden, Essays on Two Federal EmpiresAvailable at Amazon.


1. Jim Tankersley and Emily Cochrane, “Budget Deficit Is Set to Surge Past $1 Trillion,” The New York Times, August 22, 2019.

Wednesday, August 21, 2019

Anticipating a Recession: Economic and Political Indicators in the E.U.

Anticipation in August, 2019, at least among bond purchasers on Wall Street, of an impending recession in 2020 had at least in part to do with the E.U. In particular, a large state, Germany, had a disappointing second quarter in terms of contracting economic output, and the increasing prospect of Britain seceding from the Union was thought to result in the E.U. economy turning recessionary. I contend that both of these baleful indicators were over-emphasized. Additionally, adding the increasing political polarization in the E.U. as another contributor to an upcoming recession would be too much.

The full essay is at "Anticipating a Recession."

Thursday, February 2, 2017

Is Democracy Inimical to Prudent Government Budgeting: The U.S. and India Contrasted

At a time when the U.S. Government sported an accumulated debt of roughly $20 trillion, with continued deficits expected to add about $10 trillion more over the next ten years, the most populous democracy in the world, India, laid out a prudent budget proposal—one that had been “extremely well thought-out,” according to Deepak Parekh of the Housing Development Finance Corporation in India.[1]

The full essay is at "Prudent Government Budgeting."



1. Getta Anand, “Arun Jaitley, India’s Finance Chief, Aims to Spur Economy Hit by Cash Shortage,” The New York Times, February 1, 2017.

Wednesday, January 28, 2015

Syriza Party Governing in Greece: Austerity and the E.U.

Clarion calls of confrontation roiled through the E.U. after the state election in Greece on January 25, 2015. Would the E.U., heavily dominated by its largest state, and the European Central Bank (ECB) accept a larger public deficit (i.e., more government spending to alleviate the austerity) and continue the cheap loans, or would Alexis Tsipras, the new Greek prime minister, have to choose between continued austerity and default? 

The full essay is at "Essays on the E.U. Political Economy," available at Amazon.

Sunday, January 18, 2015

Behind the Lower 2014 U.S. Federal Budget Deficit: A New Default

The U.S. Government’s fiscal deficit of $483 billion for fiscal-year 2014 is the lowest since 2007.[1] At a preliminary 3% of GDP, that deficit is much better than the 2010 deficit, which came in at 10% of the GDP. To be sure, the American economy was larger in 2014. Also, the federal government’s overall fiscal improvement masks changes “behind the curtain” that may not be so palatable.

The full essay is at “U.S. Federal Budget Deficit.”


[1] Josh Zumbrun, “Budget Deficit Reaches a Seven-Year Low,” The Wall Street Journal, January 14, 2015. The budget deficit for the calendar year came in at $488 billion.

Relaxing State Deficit Restrictions: Power-Grab by the European Commission

As the World Bank came out with its revised prediction of 1.1 percent economic growth for the E.U. (“eurozone”) in 2015, down from the earlier estimate of 1.8%,[1] the European Commission announced that it would allow states more leeway in meeting the federal requirement that state budget deficits be no more than 3 percent of their respective economic outputs. Lest this appear as a sign of political impotence, the “strings” demonstrate the opposite.



The full essay is at "Essays on the E.U. Political Economy," available at Amazon.




[1] Ian Talley, “World Bank Lowers Global Outlook,” The Wall Street Journal, January 14, 2015.

Thursday, January 15, 2015

Fiscal Responsibility in Alaska: On the Challenge of Falling Oil-Tax Revenue

With West Texas Intermediate (WTI), the U.S. benchmark oil price, at $46.07 on January 12, 2015, lawmakers in Alaska were getting nervous because the government was relying on oil-industry taxes to cover 89% of the government’s operating revenue.[1] At the time, the government had a $3.5 billion deficit in the $6.1 billion budget.  How the governor, Bill Walker, planned to deal with the shortfall can give us a glimpse of what fiscal responsibility might look like in government.

The full essay is at “Fiscal Responsibility in Alaska.”



[1] Ana Campoy, Mark Peters, and Erica Phillips, “Energy-Heavy States Get a Crude Awakening,” The Wall Street Journal, January 13, 2015.

Wednesday, October 29, 2014

On the Credibility of the E.U.: Transfer Payments and State Deficits



In October of 2014, the prime minister of the E.U. state of Britain blatantly (and quite publically) refused to pay a “bill” that the E.U. Commission charged the state on account of upward revisions of its economic growth. “We won’t pay it,” David Cameron said defiantly into a microphone. Meanwhile, Jyrki Katainen, the E.U. commissioner for economic and monetary affairs, accepted the draft budgets of the states of France and Italy even though they violate the limit of 3% of GDP in the European Growth and Stability Pact. Those two states could face fines, however, and the commissioner also noted that the budgets would face strict scrutiny. I contend that these instances of tension between the state and federal levels speak volumes as to the attitude of state officials and likely their constituents toward the E.U. itself. The attitude does not bode well for the European Union as a system of public governance.



The full essay is at "Essays on the E.U. Political Economy," available at Amazon.