Cato Studies

Policymakers must do something to slow the growing debt burden or else face a major fiscal meltdown

March/​April 2021 • Policy Report

Spending Splurge
Policymakers must do something to slow the growing debt burden or else face a major fiscal meltdown, according to Jeffrey Miron in “COVID19 and the U.S. Fiscal Imbalance” (Policy Analysis no. 905). He explains why proposals such as Medicare for All and the Green New Deal would only make the looming fiscal crisis worse.

America in Space
On the one‐​year anniversary of the U.S. Space Force, Robert Farley analyzes whether the idea was well‐​founded in “Space Force: Ahead of Its Time, or Dreadfully Premature?” (Policy Analysis no. 904). He concludes that American military operations in space have not yet reached the point to justify a separate service. See also: Policy Forum, Page 9.

Hold on, Mayor Pete
Massive investments in transportation infrastructure seem to draw support from across the political spectrum. These policies are often motivated by claims that our current infrastructure is crumbling or that such investments will spur economic growth. In “Transportation Infrastructure in the United States” (Research Brief in Economic Policy no. 242), Gilles Duranton, Geetika Nagpal, and Matthew Turner find that the available evidence does not support these claims.

Tit for Tat
In response to tariffs imposed by the Trump administration in 2018, several nations imposed retaliatory tariffs on American exports. In “The Impact of Retaliatory Tariffs on Agricultural and Food Trade” (Research Brief in Economic Policy no. 243), Colin A. Carter and Sandro Steinbach find that these retaliatory tariffs had a substantial negative consequence on the volume and value of international trade.

Price System
Trade models usually predict lower prices that benefit consumers but might hurt some workers. In “What Are the Price Effects of Trade? Evidence from the United States and Implications for Quantitative Trade Models” (Research Brief in Economic Policy no. 244), Xavier Jaravel and Erick Sager compare these models to a large dataset from the Bureau of Labor Statistics to produce a more‐​detailed model and explore the effect of other variables.

Deregulation at the Border
After four years of restrictionist policies under President Trump, the new Biden administration has indicated its interest in liberalizing immigration laws. In “Deregulating Legal Immigration: A Blueprint for Agency Action,” David J. Bier compiles 30 concise proposals from 15 authors for executive actions that Biden can take to improve America’s Kafkaesque immigration bureaucracy.

Own but Can’t Sell
Governments often attempt to formalize property rights for poor and indigenous populations, but at a steep cost with limits on the ability to sell or transfer this property. In “Property Rights without Transfer Rights: A Study of Indian Land Allotment” (Research Brief in Economic Policy no. 245), Christian Dippel, Dustin Frye, and Bryan Leonard estimate the negative impact of these policies on land values and the ability of property owners to benefit from their land.

Golden Ticket
The H-1B program provides an important method for college‐​educated foreign citizens to secure temporary legal employment in the United States, but protectionist concerns have motivated a cap of only 85,000 visas per year. “Buying Lottery Tickets for Foreign Workers: Search Cost Externalities Induced by H-1B Policy” (Research Brief in Economic Policy no. 246) by Rishi Sharma and Chad Sparber finds that this policy not only imposes harsh costs on wouldbe immigrants, but it also undermines the intended goal of protecting American jobs.

Trade Rules
Several developing countries have asked the World Trade Organization (WTO) to join them in a sweeping waiver of intellectual property rights relating to COVID-19 vaccines. In “An Unnecessary Proposal: A WTO Waiver of Intellectual Property Rights for COVID-19 Vaccines” (Free Trade Bulletin no. 78), James Bacchus explains why this proposal is counterproductive and unjustified.

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