The Clash of Generations: Saving Ourselves, Our Kids, and Our Economy
The United States is bankrupt, flat broke. Thanks to accounting that would make Enron blush, Americaâ€™s insolvency goes far beyond what our leaders are disclosing. The United States is a fiscal basket case, in worse shape than the notoriously bailed-out countries of Greece, Ireland, and others. How did this happen? In The Clash of Generations, experts Laurence Kotlikoff and Scott Burns document our six-decade, off-balance-sheet, unsustainable financing scheme. They explain how we have balanced our longer lives on the backs of our (relatively few) children. At the same time, we've been on a consumption spree, saving and investing less than nothing. And thatâ€™s not to mention the evisceration of the middle class and a financial system that has proven it canâ€™t be trusted. Kotlikoff and Burns outline grassroots strategies for saving ourselvesâ€”and especially our children--from what could be a truly catastrophic financial collapse. Kotlikoff and Burns sounded the alarm in their widely acclaimed The Coming Generational Storm, but politicians didnâ€™t listen. Now the need for action is even more urgent. Itâ€™s up to us to demand radical reform of our tax system, our healthcare system, and our Social Security system, and to insist on better paths to investment return than those provided by Wall Street (mis)managers. Kotlikoff and Burns's "Purple Plans" (so called because they will appeal to both Republicans and Democrats) have been endorsed by a whoâ€™s who of economists and offer a new way forward; and their revolutionary investment strategy for individuals replaces the idea of financial capital with "life decision capital." Of course, we won't be doing all this just for ourselves. We need to fix Americaâ€™s fiscal mess before our kids inherit it.
The Anatomy of an Economic Crisis: Money, Prices, and Economic Order
What would Hayek have to say about financial crises and the Great Recession? In the mind of the public policymakers, the Great Recession constituted the most serious challenge to free market ideas since the Great Depression. The bust of the housing bubble led to a financial market crash, which in turn led to a severe economic downturn. Markets seemed to have failed. Our analysis of the causes of the crisis and the policy response must rely on some theoretical framework. The consensus of policymakers around the world converged on a Keynesian understanding of the macroeconomy while the Hayekian alternative was unfortunately ignored. Hayek developed a theory of the trade cycle in which loose monetary policy generates a boom, followed by a bust caused by the economic reality of scarce resources.
Fiscal Transparency in EU Accession Countries Progress and Future Challenges
This paper discusses the findings of fiscal transparency reports on standards and codes (ROSCs) for most EU accession candidate countries. Emphasis is given to the need to establish effective and accountable medium-term budget frameworks to establish policy credibility and anchor adjustment programs to meet EU fiscal goals. Adoption of budgeting and accounting standards consistent with the IMF Government Finance Statistics Manual 2001 framework will also help link budget decisions to EU standards of fiscal reporting. More consistent and comprehensive coverage of off-budget activities is needed for assessing fiscal risk and sustainability. Finally, local government issues need to be addressed by many of these countries since EU fiscal goals are set with reference to general government. Progress in all of these areas can be monitored by keeping fiscal ROSC assessments up to date.