Bruce Yandle's Economic Situation Report, June 2013
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The document provides an overview of the mid-2013 US economy. It notes that the economy was operating with constrained capacity, relying on debt to fuel growth, and seeing improvements in some sectors but still seeking broader prosperity. Charts show historical GDP growth, sector growth in manufacturing and retail, and improvements in housing and employment. It analyzes which industries are growing and notes opportunities in areas like energy and discusses how economic factors intersect with political incentives, using FEMA disaster funding as an example.
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Bruce Yandle's Economic Situation Report, June 2013
- 4. The 2013 Economy at Mid-Year • Operating with one lane closed. • Running on borrowed fuel. • Still getting there, for some sectors. • Looking for prosperity. • Public Choice, the IRS, Antitrust & FEMA. Capitol Hill Campus June 21, 2013
- 5. -4.00 -3.00 -2.00 -1.00 0.00 1.00 2.00 3.00 4.00 5.00 6.00 Percent Year Real GDP Growth, 1990 - 2012. Long Run Average = 3.13 2.4% in 1Q2013
- 6. U.S. Report Card Decade Real Per Capita GDP Growth Annualized 1951-1960 1.25% 1961-1970 3.14 1971-1980 2.11 1981-1990 2.36 1991-2000 2.58 2001-2010 0.66 2001-2007 1.59 Average, 1951-2010 1.89% Lawrence H. Officer and Samuel H. Williamson "Annualized Growth Rate and Graphs of Various Historical Economic Series," MeasuringWorth, 2011. URL: www.measuringworth.com/growth/ Accessed 03/22/12.
- 14. May 31, 2013, 12:39 p.m. EDT Social Security trust fund to run dry in 2033 Medicare finances improve modestly; Lew urges long-term fix MarketWatch. http://www.marketwatch.com/story/social-security-trust- fund-to-run-dry-in-2033-2013-05-31 Federal disability trust fund on the brink By Tami Luhby @Luhby May 30, 2013: 5:42 AM ET
- 21. WHAT’S GETTING HOT?? • Retail Sales • Wholesale Shipments • Housing • Employment • Manufacturing
- 22. $140,000 $145,000 $150,000 $155,000 $160,000 $165,000 $170,000 $175,000 $180,000 $185,000 U.S. Real Retail Sales, 1/2007 - 3/2013 Millions, Seasonally Adjusted
- 23. 0 5 10 15 20 25 30 35 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Machinery, Equipment & Supplies January Sales, 1992-2013 $Billions 13.7% growth, 2010- 13.7%%, 013
- 29. Percent Change in Value Added by Industry Mining Support Durables Nondurables Oil & Gas Mining Wholesale Trade
- 30. What’s Hot? Steel, Aluminum, Computers & Electronics, Machinery, Aircraft
- 31. U.S. Natural Gas Reserves, 2010
- 32. 0 1,000 2,000 3,000 4,000 5,000 6,000 Energy Consumption by Industry, 2006 Trillion BTU,
- 40. ECONOMICS MEETS POLITICS The Analysis is called PUBLIC CHOICE POLITICAL ECONOMY or “Politics without Romance” James M. Buchanan, Nobel Laureate We seek to explain the way the world works, not the way we might wish it worked.
- 42. In the Rubble of Disasters, Politicians Find Economic Incentives Molly D. Caselao and Thomas A. Garrett. The Regional Economist, Federal Reserve Bank of St. Louis, July 2003, 10-13. The Federal Emergency Management Agency (FEMA) spent nearly $22 billion on disaster relief between 1991 and 1999. Sometimes, aid disbursement is not motivated by need, however… Researchers tested whether the electoral importance of a state and whether it was an election year motivated presidential disaster declarations in a state. In order to isolate the political impacts of disaster declaration and relief, the researchers controlled fro disaster size, private insurance disaster payments, state population, and other state effects. The studies found that those states with a higher measure of political importance had a higher rate of presidential disaster declaration. The studies also found that the mean rate of disaster declaration was higher in election years compared to nonelection years. Researchers concluded that for each legislator a state had on a FEMA oversight committee, the state received an additional $31 million in disaster each year. The researchers calculated that nearly 45 percent of all FEMA disaster payments were motivated by political incentives rather than by need.
- 43. QUESTIONS?