The Private Sector Survey on Cost Control (PSSCC), commonly referred to as The Grace Commission, was an investigation requested by United States President Ronald Reagan, authorized in Executive Order 12369 on June 30, 1982. In doing so President Reagan used the now famous phrase, "Drain the swamp". [1] The focus was waste and inefficiency in the US Federal government. Its head, businessman J. Peter Grace, [2] asked the members of that commission to "Be bold and work like tireless bloodhounds, don't leave any stone unturned in your search to root out inefficiency." [3]
The Grace Commission Report [4] was presented to Congress in January 1984. The report was in depth and showed that if its recommendations were followed, $424 billion could be saved in three years, rising to $1.9 trillion per year by the year 2000. It estimated that the national debt, without these reforms, would rise to $13 trillion by the year 2000, while with the reforms they projected it would rise to only $2.5 trillion. [5] The report's recommendations that intruded into policy were ignored by Congress, but many other efficiency recommendations were considered and some were implemented. [6]
The US national debt reached $5.6 trillion in the year 2000 [7] [8] and reached 13 trillion in 2010 after the subprime mortgage-collateralized debt obligation crisis in 2008.
The report said that one-third of all income taxes are consumed by waste and inefficiency in the federal government, and another one-third escapes collection owing to the underground economy. "With two thirds of everyone's personal income taxes wasted or not collected, 100 percent of what is collected is absorbed solely by interest on the federal debt and by federal government contributions to transfer payments. In other words, all individual income tax revenues are gone before one nickel is spent on the services that taxpayers expect from their government." [5]
Reaganomics, or Reaganism, refers to the neoliberal economic policies promoted by U.S. President Ronald Reagan during the 1980s. These policies are commonly associated with and characterized as supply-side economics, trickle-down economics, or voodoo economics by opponents, while Reagan and his advocates preferred to call it free-market economics.
The Federal Old-Age and Survivors Insurance Trust Fund and Federal Disability Insurance Trust Fund are trust funds that provide for payment of Social Security benefits administered by the United States Social Security Administration.
Public finance is the study of the role of the government in the economy. It is the branch of economics that assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones. The purview of public finance is considered to be threefold, consisting of governmental effects on:
The national debt of the United States is the total national debt owed by the federal government of the United States to Treasury security holders. The national debt at any point in time is the face value of the then-outstanding Treasury securities that have been issued by the Treasury and other federal agencies. The terms "national deficit" and "national surplus" usually refer to the federal government budget balance from year to year, not the cumulative amount of debt. In a deficit year the national debt increases as the government needs to borrow funds to finance the deficit, while in a surplus year the debt decreases as more money is received than spent, enabling the government to reduce the debt by buying back some Treasury securities. In general, government debt increases as a result of government spending and decreases from tax or other receipts, both of which fluctuate during the course of a fiscal year. There are two components of gross national debt:
David Alan Stockman is an American politician and former businessman who was a Republican U.S. Representative from the state of Michigan (1977–1981) and the Director of the Office of Management and Budget (1981–1985) under President Ronald Reagan.
A student loan is a type of loan designed to help students pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenses. It may differ from other types of loans in the fact that the interest rate may be substantially lower and the repayment schedule may be deferred while the student is still in school. It also differs in many countries in the strict laws regulating renegotiating and bankruptcy. This article highlights the differences of the student loan system in several major countries.
This article concerns proposals to change the Social Security system in the United States. Social Security is a social insurance program officially called "Old-age, Survivors, and Disability Insurance" (OASDI), in reference to its three components. It is primarily funded through a dedicated payroll tax. During 2015, total benefits of $897 billion were paid out versus $920 billion in income, a $23 billion annual surplus. Excluding interest of $93 billion, the program had a cash deficit of $70 billion. Social Security represents approximately 40% of the income of the elderly, with 53% of married couples and 74% of unmarried persons receiving 50% or more of their income from the program. An estimated 169 million people paid into the program and 60 million received benefits in 2015, roughly 2.82 workers per beneficiary. Reform proposals continue to circulate with some urgency, due to a long-term funding challenge faced by the program as the ratio of workers to beneficiaries falls, driven by the aging of the baby-boom generation, expected continuing low birth rate, and increasing life expectancy. Program payouts began exceeding cash program revenues in 2011; this shortfall is expected to continue indefinitely under current law.
Citizens Against Government Waste (CAGW) is a non-profit 501(c)(3) organization in the United States. It functions as a think-tank, "government watchdog" and advocacy group for fiscally conservative causes. The Council for Citizens Against Government Waste (CCAGW) is the lobbying arm of CAGW, organized as a section 501(c)(4) organization and therefore is permitted to engage in direct lobbying activities. According to its web site, "CAGW is a private, non-partisan, non-profit organization representing more than one million members and supporters nationwide. CAGW's stated mission is to eliminate waste, mismanagement, and inefficiency in the federal government."
Joseph Peter Grace Jr. was an American industrialist who was president of the diversified chemical company, W. R. Grace & Co., for 48 years, making him the longest serving CEO of a public company.
The United States federal budget comprises the spending and revenues of the U.S. federal government. The budget is the financial representation of the priorities of the government, reflecting historical debates and competing economic philosophies. The government primarily spends on healthcare, retirement, and defense programs. The non-partisan Congressional Budget Office provides extensive analysis of the budget and its economic effects. It has reported that large budget deficits over the next 30 years are projected to drive federal debt held by the public to unprecedented levels—from 98 percent of gross domestic product (GDP) in 2020 to 195 percent by 2050.
Fiscal conservatism is a political and economic philosophy regarding fiscal policy and fiscal responsibility with an ideological basis in capitalism, individualism, limited government, and laissez-faire economics. Fiscal conservatives advocate tax cuts, reduced government spending, free markets, deregulation, privatization, free trade, and minimal government debt. Fiscal conservatism follows the same philosophical outlook of classical liberalism. This concept is derived from economic liberalism and can also be referred to as fiscal liberalism outside the United States.
The history of the United States public debt started with federal government debt incurred during the American Revolutionary War by the first U.S treasurer, Michael Hillegas, after the country's formation in 1776. The United States has continuously had a fluctuating public debt since then, except for about a year during 1835–1836. To allow comparisons over the years, public debt is often expressed as a ratio to gross domestic product (GDP). Historically, the United States public debt as a share of GDP has increased during wars and recessions, and subsequently declined.
The Hoover Commission, officially named the Commission on Organization of the Executive Branch of the Government, was a body appointed by President Harry S. Truman in 1947 to recommend administrative changes in the Federal Government of the United States. It took its nickname from former President Herbert Hoover, who was appointed by Truman to chair it.
The economic policy of the George W. Bush administration was characterized by significant income tax cuts in 2001 and 2003, the implementation of Medicare Part D in 2003, increased military spending for two wars, a housing bubble that contributed to the subprime mortgage crisis of 2007–2008, and the Great Recession that followed. Economic performance during the period was adversely affected by two recessions, in 2001 and 2007–2009.
Water supply and sanitation in Jamaica is characterized by high levels of access to an improved water source, while access to adequate sanitation stands at only 80%. This situation affects especially the poor, including the urban poor many of which live in the country's over 595 unplanned squatter settlements in unhealthy and unsanitary environments with a high risk of waterborne disease. Despite a number of policy papers that were mainly focused on water supply and despite various projects funded by external donors, increases in access have remained limited.
This article discusses the domestic policy of the Ronald Reagan administration from 1981 to 1989. Reagan's policies stressed conservative economic values, starting with his implementation of supply-side economic policies, dubbed as "Reaganomics" by both supporters and detractors. His policies also included the largest tax cut in American history as well as increased defense spending as part of his Soviet strategy. However, he significantly raised (non-income) taxes four times due to economic conditions and reforms, but the tax reforms instituted during presidency brought top marginal rates to their lowest levels since 1931, such that by 1988, the top US marginal tax rate was 28%.
The economic policy of the Barack Obama administration, or "Obamanomics" was characterized by moderate tax increases on higher income Americans, designed to fund health care reform, reduce the federal budget deficit, and decrease income inequality. President Obama's first term (2009–2013) included measures designed to address the Great Recession and subprime mortgage crisis, which began in 2007. These included a major stimulus package, banking regulation, and comprehensive healthcare reform. As the economy improved and job creation continued during his second term (2013–2017), the Bush tax cuts were allowed to expire for the highest income taxpayers and a spending sequester (cap) was implemented, to further reduce the deficit back to typical historical levels. The number of persons without health insurance was reduced by 20 million, reaching a record low level as a percent of the population. By the end of his second term, the number of persons with jobs, real median household income, stock market, and real household net worth were all at record levels, while the unemployment rate was well below historical average.
Political debates about the United States federal budget discusses some of the more significant U.S. budgetary debates of the 21st century. These include the causes of debt increases, the impact of tax cuts, specific events such as the United States fiscal cliff, the effectiveness of stimulus, and the impact of the Great Recession, among others. The article explains how to analyze the U.S. budget as well as the competing economic schools of thought that support the budgetary positions of the major parties.
Deficit reduction in the United States refers to taxation, spending, and economic policy debates and proposals designed to reduce the Federal budget deficit. Government agencies including the Government Accountability Office (GAO), Congressional Budget Office (CBO), the Office of Management and Budget (OMB),and the U.S. Treasury Department have reported that the federal government is facing a series of important long-run financing challenges, mainly driven by an aging population, rising healthcare costs per person, and rising interest payments on the national debt.
The economic policy of the Joe Biden administration, or "Bidenomics" is characterized by relief measures and vaccination efforts to address the Coronavirus pandemic, investments in infrastructure, and strengthening the safety net, funded by tax increases on higher-income individuals and corporations. Other goals include: increase the national minimum wage and expand worker training; narrow income inequality; invest in clean energy; expand access to affordable healthcare; and forgive student loan debt. The March 2021 enactment of the American Rescue Plan to provide relief from the economic impact of the COVID-19 pandemic was the first major element of the policy. Biden's Infrastructure Investment and Jobs Act was signed into law in November 2021 and contains about $550 billion in additional investment. His Build Back Better Act passed the House in November 2021 and is pending in the Senate.