The Bowtie Economist's Daily Dose of 70-Word Wisdom


Lotto Luck

12/06/2012

Lotto Luck Lotteries are designed to raise government revenue and bigger jackpots lead to more sales. To that end, 42 states now cross-sell both Powerball and Mega Millions and while prices for each were doubled to $2 on 1/1/12, sales…

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Devil in the Deductions

12/05/2012

If all 1040-Schedule A deductions, including the mortgage interest deduction are capped at about $35,000, then homeowners with houses priced north of $500,000 would be the ones primarily affected, and their homes would fall in value. Interestingly, they might respond…

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Cost-Benefit Analysis

12/04/2012

Higher taxes on the rich will reduce their incentives to work, save and invest, clipping maybe 0.5% off of GDP. But that’s not the end of the story. The relevant question is: will the benefit to society of redistributing some…

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Down GDP, Down!

12/03/2012

With personal income growth flat, savings rates up and real disposable income down 0.2% in October, it’s not surprising personal consumption grew just 1.4%! The weak pace of income growth will limit Q4 GDP growth to less than 1.5% and…

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Family Feud

11/30/2012

The Friday File: Husbands that are close to their in-laws reduce the risk of divorce by 20%. However, wives that are close to their in-laws increase divorce risk by 20%. Why? Men who like their in-laws show how important their…

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The 60’s are Back

11/29/2012

Median inflation-adjusted income (MIAI) for men in 2011 was $32,986, $14 shy of $33,000. While that’s $3,023 below the pre-recession high of $36,009 set in 2007, the all-time high of $37,017 was set in 2000. Worse, MIAI for men first…

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Boomer Medicare

11/28/2012

Booming Medicare When Medicare was introduced in 1965, woman 65 had, on average, 18 more years of life, men, 13.5. Today, those numbers are 21 and 19 respectively. In 1980, Medicare consumed 5% of federal spending; now it’s 13.5%. Raising…

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Partisan Divide

11/27/2012

Following the recent elections, 25 states (15 Republican/10 Democratic) will have veto-proof majorities up from 13 states four years ago. Moreover, all but three states (IA, KY and NH) have one party control of their legislatures, the highest number since…

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Regressive Deductions

11/26/2012

While 30 million taxpayers benefit by taking the deduction for state and local taxes paid, half of all the benefits go to just three million taxpayers with AGIs over $200,000. Worse, the loophole encourages state and local governments to be…

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Thanksgiving Day Dieting

11/21/2012

Rather than assume your guests are rational (like economists) and will stick to their dietary resolutions, use behavioral economics to structure your Thanksgiving meal. First, keep the food in the kitchen; that forces guests to get out of their chairs…

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