Author: Peter Jacobsen

As I predicted, Biden’s latest policy announcement spelled the end of the student loan payment pause which began during Covid-19 lockdowns. However, ending the pause alone would be too unpopular so, along with that news, Biden announced student loan forgiveness. Individuals making less than $125,000 a year will have $10,000 of their federal student loan balance removed if the order proves successful. Many side-effects of the policy have been targeted for criticism. Rising college costs, increasing inflation, regressive effects, and moral hazards for future borrowers have been considered. However, as an economist I noticed that one incentive has been ignored.…

It’s been two week since a federal court threw out the CDC’s transport mask mandate, to the glee of some and the outrage of others. While many people—including flight attendants and passengers on planes—celebrated the court’s decision, others predicted the move would have dire consequences. CBS News, for example, reported that European airlines were forced to “cancel hundreds of flights as they grapple with coronavirus-related staffing shortages weeks after they ditched rules requiring passengers and staff to mask up in the air.” The news agency noted that UK airlines alone canceled 769 flights in total between March 31 and April…

Last week, the US Census Bureau released its “New Vintage 2021 Population Estimates” for the United States and surrounding territories. I’m always especially interested in net domestic immigration numbers, which reveal whether people are coming to a state or leaving it. These numbers are interesting because, taken as a whole, net migration patterns likely reveal changing preferences for different states. Although people have different preferences for things like weather and geography, it’s unlikely net immigration patterns are heavily influenced by these things when you compare one year to the next. Why? Well, things like weather and geography rarely change quickly.…

In May, the Treasury Department released the Biden administration’s revenue proposals for fiscal year 2022. One aspect of this document that has gone under-reported is the administration’s new plan for reporting requirements for financial institutions. The document is unequivocal about the administration’s goal for financial reporting, stating, “this proposal would create a comprehensive financial account information reporting regime.” The Biden administration’s goal here is to increase tax revenue by making sure no income avoids detection. How will the administration do this? It plans to leverage financial institutions like banks. “[T]his requirement would apply to all business and personal accounts from…

A recent CNBC article highlights a common economic fallacy surrounding the concept of inflation. The author claims that inflation can be beneficial because, “as inflation takes hold, wages may increase, too.” This statement, though misleading, holds a grain of truth. In order to understand where it goes horribly wrong, it’s important to understand the difference between nominal wages, simply the number on your paycheck, and real wages, what your paycheck can buy you relative to prices. Because, although it’s true that inflation is associated with higher nominal wages, this increase in nominal wages actually represents a period of lower real…

Yesterday, the Bureau of Labor Statistics (BLS) released numbers indicating that the average price level of consumer goods has risen 4.2% since this time last year. This is the highest rate since 2008. In other words, the average consumer making the same salary this year has taken a pay cut when you consider what their paycheck can actually buy. How does the BLS know this? One way the BLS keeps track of inflation is by using the consumer price index (CPI). The CPI uses some of the common goods urban consumers buy, and they keep track of the prices of…