This post describes the methods and inputs that I used in two prior posts: “Previewing the Bad News That’s Likely to Complicate the Debt Ceiling Battle” and “The Chart That Every Taxpayer Deserves to See.”
Technical Notes for CYNICONOMICS Debt Projections
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The Chart That Every Taxpayer Deserves To See
Update – The CBO’s report is now available. Using its revised projections, I’ve posted a new version of our chart here.
You may be aware that the Congressional Budget Office (CBO) is due to release its 2013 Long-term Budget Outlook in September. In “Previewing the Bad News That’s Likely to Complicate the Debt Ceiling Battle,” I offered an early look at what’s sure to be a significant change from the CBO’s 2012 report.
In this post, I’ll add a chart that seems to sum up our fiscal challenges as well as anything else. Like the charts in my earlier article, it’s derived from the CBO’s latest 10-year budget projections, last year’s 75-year projections, Social Security and Medicare Trustees’ Reports and other sources. Here it is:
“Anecdote This,” Dr. Furman
I’ll be camping out with my son this week at a scenic spot in the mountains (without Ginger Snap, who doesn’t do outdoor sleeping):
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Tagged ACA, Affordable Care Act, Applebee's, Barack Obama, Brunswick, Buffalo Wild Wings, Bureau of Labor Statistics, Chamber of Commerce, Darden Restaurants, Dean Baker, Dearborn, Denny's, employer mandate, Evan Soltas, Five Guys, Forever 21, Fort Wayne, Hardee's, Helene Jorgensen, Jason Furman, Long Beach, Medina, NBC Nightly News, Obamacare, Obamanomics, Olive Garden, Papa John's, Plano, Regal Entertainment Group, Southern Lehigh, St. Petersburg College, Subway, Walmart, Wegman's, Wendy's, Youngstown State
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Technical Notes for ‘Why Stock Prices Are More Stretched than You Think”
(Here’s the article that goes with this appendix.)
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Why Stock Prices Are More Stretched than You Think: A Tale of 3 P/E Multiples
Update: The charts below are based on reported earnings, which I converted to constant 2013 dollars using the CPI.
Back in May, I suggested the stock market was showing some signs of froth, although “maybe in the same way that froth was apparent in 1997 or 2006, several years before the respective peaks.”
Before making that statement, I checked a few valuation indicators that I use to gauge such things. I was especially interested in a comparison of three types of price-to-earnings (P/E) multiples, which I’ll share here.
America’s Urban Distress: How Much of the Problem Can We Blame on Liberal Politics?
Much of the distress in America’s cities is linked to regional developments, as shown by the unemployment data in this post. Population loss is a particular factor for the Northeast and Midwest (discussed here), while public pension shortfalls may be the biggest challenge for cities everywhere (covered here).
But what about politics? Does ideology play a role?
By popular demand (at least based on comments on the earlier articles, especially on Zero Hedge), below are two charts that compare unemployment rates to political bias for 218 cities.
Although the figures for political bias are from a 2005 report, they’re still relevant in my opinion, considering that:
- City-wide biases are unlikely to change rapidly.
- Political actions have long-term effects on economic performance.
Some readers will argue that correlation isn’t causation, while others are likely to conclude that causation runs from unemployment to politics and not the other way around.
I believe there’s some causation in both directions. But for now, I’ll just push the charts out there and step out of the way while you form your own conclusions…
Update – After the charts, I’ve added the list of 25 most liberal cities from the Bay Area for Voting Research report.
America’s Urban Distress: Why the Public Pension Problem Is Worse than You Think
In January, the Pew Charitable Trusts published a study showing that 61 U.S. cities have an aggregate pension funding gap of $99 billion and an additional shortfall of $118 billion for retiree health benefits. These figures were widely cited by the media in the aftermath of Detroit’s bankruptcy filing. They refer to fiscal year 2009, which was the latest year with a full data set.
Unfortunately, Pew’s analysis is ridiculously optimistic. Or, to be fair to the authors – who simply tabulated figures found in official reports – the ridiculousness is in the public data they used.
America’s Urban Distress: Which States and Regions Set Up Their Cities to Fail?
In 2011, the four U.S. cities with the highest unemployment rates were:
- Stockton, California (20.2%)
- Detroit, Michigan (20.0%)
- Flint, Michigan (19.0%)
- San Bernardino, California (17.8%).
Today, only one of those cities is still standing. Bankruptcy-free, I mean. Stockton went bust in June 2012, San Bernardino in August 2012 and Detroit last month.
With facts like these, I’ll go out on a limb and argue that our job creation and municipal solvency problems are nearly one and the same. And city leaders in Stockton, San Bernardino, Detroit and elsewhere failed to balance their books partly because they didn’t keep enough of their constituents employed.
But the stories behind these bankruptcies extend beyond the respective city borders to circumstances prevalent throughout certain states or regions. Urban distress tends to be concentrated in particular parts of the country, and I’ll take a closer look at those locations here.
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Tagged city bankruptcies, Corn Belt, Detroit, Rust Belt, San Bernardino, Stockton
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For the Next Fed Head, Obama seems to be Choosing between a Yawn and a Hiss
Update (August 1) – I shortened this article slightly from the original.
Based on media reports over the past few weeks, there are two clear front-runners in the competition to be named Ben Bernanke’s successor as Fed chairman.
Current Vice Chair Janet Yellen sits in one corner, former Treasury Secretary and National Economic Council (NEC) Director Larry Summers in the other corner, and pundits are actively placing their bets.
Here’s my $0.02:
