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Begin New Search Topic Markets Political Geography United States Content Type Working Paper Publishing Institution The Cato Institute

1. The Use of Public Assistance Benefits by Citizens and Non-citizen Immigrants in the United States

Author:
Leighton Ku and Brian Bruen
Publication Date:
02-2013
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Claims are sometimes made that immigrants use public benefits, such as Medicaid, the Supplemental Nutrition Assistance Program, or the Temporary Assistance for Needy Families programs, more often than those who are born in the United States. This report provides analyses, using the most recent data from the Census Bureau, that counter these claims. In reality, low-income non-citizen immigrants, including adults and children, are generally less likely to receive public benefits than those who are native-born. Moreover, when non-citizen immigrants receive benefits, the value of benefits they receive is usually lower than the value of benefits received by those born in the United States. The combination of lower average utilization and smaller average benefits indicates that the overall cost of public benefits is substantially less for low-income non-citizen immigrants than for comparable native-born adults and children. The report also explains that the lower use of public benefits by non-citizen immigrants is not surprising, since federal rules restrict immigrants' eligibility for these public benefit programs.
Topic:
Economics, Health, Humanitarian Aid, Markets, and Immigration
Political Geography:
United States

2. Why Growth Is Getting Harder

Author:
Brink Lindsey
Publication Date:
10-2013
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
For over a century, the trend line for the long-term growth of the U.S. economy has held remarkably steady. Notwithstanding huge changes over time in economic, social, and political conditions, growth in real gross domestic product (GDP) per capita has fluctuated fairly closely around an average annual rate of approximately 2 percent. Looking ahead, however, there are strong reasons for doubting that this historic norm can be maintained.
Topic:
Economics, Globalization, International Trade and Finance, Markets, Financial Crisis, and Governance
Political Geography:
United States

3. Fiscal and Generational Imbalances and Generational Accounts: A 2012 Update

Author:
Jagadeesh Gokhale
Publication Date:
11-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Official federal budget accounts are constructed exclusively in terms of current cash flows – receipts from taxes and fees and outlays on purchases and transfers. But cash-flows do not reveal economically relevant information about who benefits and who loses from government policies. Cash flows also do not reveal how changes in government's policies redistribute resources within and across generations, including reducing the tax burden on today's generations and increasing it on future ones. Because most government transact ions are targeted by age and gender, the federal government can bring about large resource transfers across generations. Intergenerational resource transfers will grow larger as the composition of budget receipts and expenditures changes with relatively faster growth of age-and-gender-related social insurance program. Intergenerational redistributions across generations through federal government operations could substantially affect different generations' economic expectations and choices and exert powerful long-term effects on economic outcomes.
Topic:
Economics, Government, Health, Human Welfare, Markets, and Monetary Policy
Political Geography:
United States

4. Central Banks: Reform or Abolish?

Author:
Gerald P. O'Driscoll Jr.
Publication Date:
10-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Advocates of central bank reform must examine why central banks emerged and what forces sustain them. They did not arise in an institutional vacuum, and will not be reformed in an institutional vacuum. The historical origins of central banks explain how they came into existence. The forces sustaining and feeding their growth may differ from those explaining their origin.
Topic:
Economics, International Trade and Finance, Markets, Monetary Policy, and Governance
Political Geography:
United States

5. The Misuse of Top 1 Percent Income Shares as a Measure of Inequality

Author:
Alan Reynolds
Publication Date:
10-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
This paper confirms recent studies which find little or no sustained increase in the inequality of disposable income for the U.S. population as a whole over the past 20 years, even though estimates of the top 1 percent's share of pretax, pretransfer (market) income spiked upward in 1986-88, 1997-2000 and 2003-2007.
Topic:
Economics, Government, Markets, and Social Stratification
Political Geography:
United States

6. Still a Better Deal: Private Investment vs. Social Security

Author:
Michael Tanner
Publication Date:
02-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Opponents of allowing younger workers to privately invest a portion of their Social Security taxes through personal accounts have long pointed to the supposed riskiness of private investment. The volatility of private capital markets over the past several years, and especially recent declines in the stock market, have seemed to bolster their argument.
Topic:
Economics, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
United States

7. Competition in Currency: The Potential for Private Money

Author:
Thomas L. Hogan
Publication Date:
06-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Privately issued money can benefit consumers in many ways, particularly in the areas of value stability and product variety. Decentralized currency production can benefit consumers by reducing inflation and increasing economic stability. Unlike a central bank, competing private banks must attract customers by providing innovative products, restricting the quantity of notes issued, and limiting the riskiness of their investing activities. Although the Federal Reserve currently has a de facto monopoly on the provision of currency in the United States, this was not always the case. Throughout most of U.S. history, private banks issued their own banknotes as currency. This practice continues today in a few countries and could be reinstituted in the United States with minimal changes to the banking system.
Topic:
Economics, Government, Markets, and Monetary Policy
Political Geography:
United States

8. Questioning Homeownership as a Public Policy Goal

Author:
Morris A. Davis
Publication Date:
05-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
For decades U.S. housing policy has focused on promoting homeownership. In this study, I show that the set of policies designed to further homeownership has been ineffective and expensive and that homeownership as a public policy goal is not well supported.
Topic:
Economics, Government, Markets, and Urbanization
Political Geography:
United States

9. What Made the Financial Crisis Systemic?

Author:
Patric H. Hendershott and Kevin Villani
Publication Date:
03-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
The current narrative regarding the 2008 systemic financial system collapse is that numerous seemingly unrelated events occurred in unregulated or underregulated markets, requiring widespread bailouts of actors across the financial spectrum, from mortgage borrowers to investors in money market funds. The Financial Crisis Inquiry Commission, created by the U.S. Congress to investigate the causes of the crisis, promotes this politically convenient narrative, and the 2010 Dodd-Frank Act operationalizes it by completing the progressive extension of federal protection and regulation of banking and finance that began in the 1930s so that it now covers virtually all financial activities, including hedge funds and proprietary trading. The Dodd-Frank Act further charges the newly created Financial Stability Oversight Council, made up of politicians, bureaucrats, and university professors, with preventing a subsequent systemic crisis.
Topic:
Economics, Government, Markets, Global Recession, and Financial Crisis
Political Geography:
United States

10. Regulation, Market Structure, and Role of the Credit Rating Agencies

Author:
Mark A. Calabria and Emily McClintock Ekins
Publication Date:
08-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
During the financial crisis of 2008, the financial markets would have been better served if the credit rating agency industry had been more competitive. We present evidence that suggests the Securities and Exchange Commission's designation of Nationally Recognized Statistical Rating Organizations (NRSROs) inadvertently created a de facto oligopoly, which primarily propped up three firms: Moody's, S, and Fitch. We also explain the rationale behind the NRSRO designation given to credit rating agencies (CRAs) and demonstrate that it was not intended to be an oligopolistic mechanism or to reduce investor due diligence, but rather was intended to protect consumers. Although CRAs were indirectly constrained by their reputation among investors, the lack of competition allowed for greater market complacency. Government regulatory use of credit ratings inflated the market demand for NRSRO ratings, despite the decreasing informational value of credit ratings. It is unlikely that this sort of regulatory framework could result in anything except misaligned incentives among economic actors and distorted market information that provides inaccurate signals to investors and other financial actors. Given the importance of our capital infrastructure and the power of credit rating agencies in our financial markets, and despite the good intentions of the uses of the NRSRO designation, it is not worth the cost and should be abolished. Regulators should work to eliminate regulatory reliance on credit ratings for financial safety and soundness. These regulatory reforms will, in turn, reduce CRA oligopolistic power and the artificial demand for their ratings.
Topic:
Economics, Markets, Financial Crisis, and Governance
Political Geography:
United States

11. Corporate Welfare in the Federal Budget

Author:
Tad DeHaven
Publication Date:
07-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Rising federal spending and huge deficits are pushing the nation toward a financial and economic crisis. Policymakers should find and eliminate wasteful, damaging, and unneeded programs in the federal budget. One good way to save money would be to cut subsidies to businesses. Corporate welfare in the federal budget costs taxpayers almost $100 billion a year.
Topic:
Economics, Markets, Monetary Policy, and Financial Crisis
Political Geography:
United States

12. Capital Inadequacies: The Dismal Failure of the Basel Regime of Bank Capital Regulation

Author:
Kevin Dowd, Martin Hutchinson, Jimi Hinchliffe, and Simon Ashby
Publication Date:
07-2011
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
The Basel regime is an international system of capital adequacy regulation designed to strengthen banks' financial health and the safety and soundness of the financial system as a whole. It originated with the 1988 Basel Accord, now known as Basel I, and was then overhauled. Basel II had still not been implemented in the United States when the financial crisis struck, and in the wake of the banking system collapse, regulators rushed out Basel III.
Topic:
Economics, International Trade and Finance, Markets, Monetary Policy, and Governance
Political Geography:
United States

13. Intercity Buses: The Forgotten Mode

Author:
Randal O'Toole
Publication Date:
06-2011
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
The debate over President Obama's fantastically expensive high-speed rail program has obscured the resurgence of a directly competing mode of transportation: intercity buses. Entrepreneurial immigrants from China and recently privatized British transportation companies have developed a new model for intercity bus operations that provides travelers with faster service at dramatically reduced fares.
Topic:
Economics, Markets, Infrastructure, and Governance
Political Geography:
United States and China

14. Fannie Mae, Freddie Mac, and the Future of Federal Housing Finance Policy: A Study of Regulatory Privilege

Author:
David Reiss
Publication Date:
04-2011
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
The federal government recently placed Fannie Mae and Freddie Mac, the government-chartered, privately owned mortgage finance companies, in conservatorship. These two massive companies are profit driven, but as government-sponsored enterprises (GSEs) they also have a government-mandated mission to provide liquidity and stability to the U.S. mortgage market and to achieve certain affordable housing goals. How the two companies should exit their conservatorship has implications that reach throughout the global financial markets and are of key importance to the future of American housing finance policy.
Topic:
Economics, Markets, Privatization, Financial Crisis, and Governance
Political Geography:
United States

15. Estimating ObamaCare's Effect on State Medicaid Expenditure Growth

Author:
Jagadeesh Gokhale
Publication Date:
01-2011
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Unless repeal attempts succeed, the Patient Protection and Affordable Care Act of 2010 (ObamaCare) promises to increase state government obligations on account of Medicaid by expanding Medicaid eligibility and introducing an individual health insurance mandate for all US citizens and legal permanent residents. Once ObamaCare becomes fully effective in 2014, the cost of newly eligible Medicaid enrollees will be almost fully covered by the federal government through 2019, with federal financial support expected to be extended thereafter. But ObamaCare provides states with zero additional federal financial support for new enrollees among those eligible for Medicaid under the old laws. That makes increased state Medicaid costs from higher enrollments by "old-eligibles" virtually certain as they enroll into Medicaid to comply with the mandate to purchase health insurance. This study estimates and compares potential increases in Medicaid costs from ObamaCare for the five most populous states: California, Florida, Illinois, New York, and Texas.
Topic:
Government, Health, Markets, and Health Care Policy
Political Geography:
United States, New York, California, and Florida

16. Congress Should Account for the Excess Burden of Taxation

Author:
Christopher J. Conover
Publication Date:
10-2010
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
A well-established principle of public finance holds that taxes impose costs on society beyond the amount of revenue government collects. Estimates vary depending on the type of tax, but the “marginal excess burden” of federal taxes most likely ranges from 14 to 52 cents per dollar of tax revenue, averaging about 44 cents for all federal taxes.
Topic:
Economics, Government, and Markets
Political Geography:
United States

17. Has the Fed Been a Failure?

Author:
George A. Selgin, Lawrence H. White, and William D. Lastrapes
Publication Date:
11-2010
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
As the one-hundredth anniversary of the 1913 Federal Reserve Act approaches, we assess whether the nation's experiment with the Federal Reserve has been a success or a failure. Drawing on a wide range of recent empirical research, we find the following: (1) The Fed's full history (1914 to present) has been characterized by more rather than fewer symptoms of monetary and macroeconomic instability than the decades leading to the Fed's establishment. (2) While the Fed's performance has undoubtedly improved since World War II, even its postwar performance has not clearly surpassed that of its undoubtedly flawed predecessor, the National Banking system, before World War I. (3) Some proposed alternative arrangements might plausibly do better than the Fed as presently constituted. We conclude that the need for a systematic exploration of alternatives to the established monetary system is as pressing today as it was a century ago.
Topic:
Civil Society, Government, and Markets
Political Geography:
United States

18. Do Vouchers and Tax Credits Increase Private School Regulation?

Author:
Andrew J. Coulson
Publication Date:
10-2010
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
School voucher and education tax credit programs have proliferated in the United States over the past two decades. Advocates have argued that they will enable families to become active consumers in a free and competitive education marketplace, but some fear that these programs may in fact bring with them a heavy regulatory burden that could stifle market forces. Until now, there has been no systematic, empirical investigation of that concern. The present paper aims to shed light on the issue by quantifying the regulations imposed on private schools both within and outside school choice programs, and then analyzing them with descriptive statistics and regression analyses. The results are tested for robustness to alternative ways of quantifying private school regulation, and to alternative regression models, and the question of causality is addressed. The study concludes that vouchers, but not tax credits, impose a substantial and statistically significant additional regulatory burden on participating private schools.
Topic:
Education, Government, and Markets
Political Geography:
United States

19. How Urban Planners Caused the Housing Bubble

Author:
Randal O'Toole
Publication Date:
10-2009
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Everyone agrees that the recent financial crisis started with the deflation of the housing bubble. But what caused the bubble? Answering this question is important both for identifying the best short-term policies and for fixing the credit crisis, as well as for developing long-term policies aimed at preventing another crisis in the future.
Topic:
Economics, Markets, and Financial Crisis
Political Geography:
United States, California, and Georgia

20. Halfway to Where? Answering the Key Questions of Health Care Reform

Author:
Michael Tanner
Publication Date:
09-2009
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Although neither the House nor the Senate passed a health care bill by President Obama's August deadline, various pieces of legislation have made it through committee, and they provide a concrete basis for analyzing what the proposed health care reform would and would not do. Looking at the various bills that are moving on Capitol Hill, we can determine the following: Contrary to the Obama administration's repeated assurances, millions of Americans who are happy with their current health insurance will not be able to keep it. As many as 89.5 million people may be dumped into a government-run plan. Some Americans may find themselves forced into a new insurance plan that no longer includes their current doctor. Americans will pay more than $820 billion in additional taxes over the next 10 years, and could see their insurance premiums rise as much as 95 percent. The current health care bills will increase the budget deficit by at least $239 billion over the next 10 years, and far more in the years beyond that. If the new health care entitlement were subject to the same 75-year actuarial standards as Social Security or Medicare, its unfunded liabilities would exceed $9.2 trillion. While the bills contain no direct provisions for rationing care, they nonetheless increase the likelihood of government rationing and interference with how doctors practice medicine. Contrary to assertions of some opponents, the bills contain no provision for euthanasia or mandatory end-of-life counseling. The bills' provisions on abortion coverage are far murkier.
Topic:
Government, Health, Human Welfare, and Markets
Political Geography:
United States and America

21. Would a Stricter Fed Policy and Financial Regulation Have Averted the Financial Crisis?

Author:
Jagadeesh Gokhale and Peter Van Doren
Publication Date:
10-2009
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Many commentators have argued that if the Federal Reserve had followed a stricter monetary policy earlier this decade when the housing bubble was forming, and if Congress had not deregulated banking but had imposed tighter financial standards, the housing boom and bust—and the subsequent financial crisis and recession—would have been averted. In this paper, we investigate those claims and dispute them. We are skeptical that economists can detect bubbles in real time through technical means with any degree of unanimity. Even if they could, we doubt the Fed would have altered its policy in the early 21st century, and we suspect that political leaders would have exerted considerable pressure to maintain that policy. Concerning regulation, we find that the banking reform of the late 1990s had little effect on the housing boom and bust, and that the many reform ideas currently proposed would have done little or nothing to avert the crisis.
Topic:
Economics, Government, Markets, and Financial Crisis
Political Geography:
United States

22. Yes, Mr. President: A Free Market Can Fix Health Care

Author:
Michael F. Cannon
Publication Date:
10-2009
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
In March 2009, President Barack Obama said, “If there is a way of getting this done where we're driving down costs and people are getting health insurance at an affordable rate, and have choice of doctor, have flexibility in terms of their plans, and we could do that entirely through the market, I'd be happy to do it that way.” This paper explains how letting workers control their health care dollars and tearing down regulatory barriers to competition would control costs, expand choice, improve health care quality, and make health coverage more secure.
Topic:
Economics, Health, and Markets
Political Geography:
United States

23. Three Decades of Politics and Failed Policies at HUD

Author:
Tad DeHaven
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
The U.S. Department of Housing and Urban Development has long been plagued by scandals, mismanagement, and policy failures. Most recently, HUD's subsidies and failed oversight of Fannie Mae and Freddie Mac helped to inflate the housing bubble, which ultimately burst and cascaded into a major financial crisis.
Topic:
Development, Economics, Markets, and Financial Crisis
Political Geography:
United States

24. Troubled Neighbor: Mexico's Drug Violence Poses a Threat to the United States

Author:
Ted Galen Carpenter
Publication Date:
02-2009
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
While U.S. leaders have focused on actual or illusory security threats in distant regions, there is a troubling security problem brewing much closer to home. Violence in Mexico, mostly related to the trade in illegal drugs, has risen sharply in recent years and shows signs of becoming even worse. That violence involves turf fights among the various drug-trafficking organizations as they seek to control access to the lucrative U.S. market. To an increasing extent, the violence also entails fighting between drug traffickers and Mexican military and police forces.
Topic:
Security and Markets
Political Geography:
United States and Mexico

25. Health-Status Insurance: How Markets Can Provide Health Security

Author:
John H. Cochrane
Publication Date:
02-2009
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
None of us has health insurance, really. If you develop a long-term condition such as heart disease or cancer, and if you then lose your job or are divorced, you can lose your health insurance. You now have a preexisting condition, and insurance will be enormously expensive—if it's available at all. Free markets can solve this problem, and provide life-long, portable health security, while enhancing consumer choice and competition. “Heath-status insurance” is the key. If you are diagnosed with a long-term, expensive condition, a health-status insurance policy will give you the resources to pay higher medical insurance premiums. Health-status insurance covers the risk of premium reclassification, just as medical insurance covers the risk of medical expenses. With health-status insurance, you can always obtain medical insurance, no matter how sick you get, with no change in out-of-pocket costs.
Topic:
Economics, Health, Markets, and Privatization
Political Geography:
United States

26. Financial Crisis and Public Policy

Author:
Jagadeesh Gokhale
Publication Date:
03-2009
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
This Policy Analysis explains the antecedents of the current global financial crisis and critically examines the reasoning behind the U.S. Treasury and Federal Reserve's actions to prop up the financial sector. It argues that recovery from the financial crisis is likely to be slow with or without the government's bailout actions. An oil price spike and a wealth shock in housing initiated the financial crisis. Declines in stock values are intensifying that shock, threatening to deepen the current recession as U.S. consumers and investors cut their expenditures. An offsetting wealth injection from additional risk-bearing investors could initiate a quicker recovery. Thus, supporters of government intervention justify the bailout's debt-financed fund injections—in essence, they want to compel future taxpayers to join the group of today's risk bearing investors.
Topic:
Economics, Globalization, International Trade and Finance, and Markets
Political Geography:
United States

27. Organ Sales and Moral Travails: Lessons from the Living Kidney Vendor Program in Iran

Author:
Benjamin E. Hippen
Publication Date:
03-2008
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Kidney transplantation in the United States is burdened by a terrible policy failure. The cost of this failure will be paid in the currency of years of human lives unnecessarily lost, as well as a massive increase in federal expenditures over the next decade and beyond. The number of patients with end-stage renal disease (ESRD) in the United States has grown, but the supply of kidneys—for the preferred treatment for ESRD, kidney transplantation— has not kept pace with the demand. Unfortunately, the issue is not simply one of supply and demand: in the United States the supply of kidneys for transplantation is kept artificially low by a prohibition on the sale of human organs.
Topic:
Health, Human Welfare, and Markets
Political Geography:
United States, Iran, and Middle East

28. Dismal Science: The Shortcomings of U.S. School Choice Research and How to Address Them

Author:
John Merrifield
Publication Date:
04-2008
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Pressing questions about the merits of market accountability in K-12 education have spawned a large scholarly literature. Unfortunately, much of that literature is of limited relevance, and some of it is misleading. The studies most widely cited in the United States used intense scrutiny of a few small-scale, restriction-laden U.S. programs—and a handful of larger but still restriction-laden foreign school choice expansions—to assert general conclusions about the effects of "choice," "competition," and "markets." The most intensely studied programs lack most or all of the key elements of market systems, including profit, price change, market entry, and product differentiation—factors that are normally central to any discussion of market effects. In essence, researchers have drawn conclusions about apples by studying lemons.
Topic:
Economics, Education, and Markets
Political Geography:
United States

29. The Case against Government Intervention in Energy Markets

Author:
Richard L. Gordon
Publication Date:
12-2008
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Many politicians and pundits are panicked over the existing state of the oil and gasoline markets. Disregarding past experience, these parties advocate massive intervention in those markets, which would only serve to repeat and extend previous errors. These interventionists propose solutions to nonexistent problems.
Topic:
Energy Policy, Government, and Markets
Political Geography:
United States

30. Markets vs. Monopolies in Education: A Global Review of the Evidence

Author:
Andrew J. Coulson
Publication Date:
09-2008
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Would large-scale, free-market reforms improve educational outcomes for American children? That question cannot be answered by looking at domestic evidence alone. Though innumerable “school choice” programs have been implemented around the United States, none has created a truly free and competitive education marketplace. Existing programs are too small, too restriction laden, or both. To understand how genuine market forces affect school performance, we must cast a wider net, surveying education systems from all over the globe. The present paper undertakes such a review, assessing the results of 25 years of international research comparing market and government provision of education, and explaining why these international experiences are relevant to the United States.
Topic:
Economics, Education, Government, and Markets
Political Geography:
United States