Finite Lifetimes, Borrowing Constraints, and Short-Run Fiscal Policy

Recent developments in public finance in the analysis of dynamic government debt policies have emphasized effects on the distribution of real resources across generations. At the same time, macroeconomists have emphasized the importance of the length of the time horizon over which agents optimize their decisions about consumption for judging the effects of fiscal policy on aggregate demand. Much of the discussion of these issues has focused on whether linkages among generations are sufficient to give consumers infinite horizons. To the extent that horizons are finite, debt burdens can be shifted to future generations, and substitutions of debt for taxes have real effects. This paper argues that, as a matter of quantitative significance, theoretical and empirical emphasis on the importance of finite horizons for the analysis of many fiscal policies is misplaced. Studies of the role of finite horizons in determining the effects of short-run fiscal policies on consumption have been conducted largely under the assumption of perfect capital markets. We show that while the marginal propensity to consume (MPC) out of temporary tax changes is nonzero in finite- horizon models, it is not very large. We demonstrate that the MPC is, however, quite sensitive to the importance of restrictions on borrowing in the economy. The clear implication is that shifting emphasis from the length of the planning horizon to the structure of capital markets is an important step for empirical research.

The Medicaid Cost Crisis: Are There Solutions to the Financial Problems Facing Middle-Class Americans Who Require Long-Term Health Care

Medicaid was originally designed as a welfare program to provide healthcare to the poor. Despite the initial intentions of Congress, Medicaid has instead become a multi-billion-dollar insurance policy for elderly middle-class Americans who require long-term health care. The Medicaid crisis has been described as a battle between elderly people\u27s desire for long-term care coverage and their concomitant reluctance to pay for it themselves. This battle is waged between the older and younger generations, commencing when the younger generation observes that their inheritance is growing smaller or disappearing altogether due to the immense cost of their parents\u27 long-term health care

The Medicaid Cost Crisis: Are There Solutions to the Financial Problems Facing Middle-Class Americans Who Require Long-Term Health Care

Medicaid was originally designed as a welfare program to provide healthcare to the poor. Despite the initial intentions of Congress, Medicaid has instead become a multi-billion-dollar insurance policy for elderly middle-class Americans who require long-term health care. The Medicaid crisis has been described as a battle between elderly people\u27s desire for long-term care coverage and their concomitant reluctance to pay for it themselves. This battle is waged between the older and younger generations, commencing when the younger generation observes that their inheritance is growing smaller or disappearing altogether due to the immense cost of their parents\u27 long-term health care

Social Security and Individual Welfare: Precautionary Saving, LiquidityConstraints, and the Payroll Tax

Recent advances in the examination of efficiency gains from dynamic tax reforms have used simulation models to isolate intragenerational and/or intergenerational effects. Important considerations having to do with uncertainty or capital market imperfections are frequently missing from such a framework. In this paper, we focus on the welfare gains from introducing social security retirement annuities, given lifetime uncertainty and borrowing restrictions.Our principal findings are four. First, given the considerations mentioned above, "precautionary saving" exceeds life-cycle saving (that would have taken place in the absence of lifetime uncertainty), lending further support to the notion that the perfect-certainty version of the life-cycle model provides an inadequate explanation of observed saving behavior. Second, the introduction of an actuarially fair social security system leads to a significant partial equilibrium increase in lifetime consumption and welfare, accompanied by a reduction in the capital stock.The increase in lifetime welfare is reduced, however,and in many cases eliminated, when borrowing restrictions are imposed.Third, extending the model to general equilibrium, we find that the partial equilibrium gains in lifetime welfare from participation in social security are offset by the interaction of higher steady-state interest rates and binding liquidity constraints. Finally, replacing the proportional payroll tax with a progressive tax (essentially a linear tax with an exemption), we show that age-specific tax schemes can restore much of the potential gain from introducing social security.

Liquidity Constraints, Fiscal Policy, and Consumption

macroeconomics, liquidity constraints, fiscal policy, and consumption

Efficiencies in the Small and Medium-Sized Private College Business Office

The college business office is a complex office involving many facets of institutional business. No matter whether the functions are performed by a single person or in a department, depending on the size of the college, much the same procedures are necessary for the operation of the department

Weather Modification Studies: The Potential for Creating and Utilizing Ice Crystals in Weather Modification Activities

A method utilizing ice crystals to circumvent nucleation processes in cloud seeding activities is discussed in the framework of nuclei activation concepts. Ice, in the form of small crystals, would be a highly efficient cloud seeding materia up to 0 degrees Celsius. The lower limit on humidity would necessitate dispensing the crystals into air that is saturated with respect to ice but no requirement for 100 percent RH(relative humidity) was found. In fact, the lower limit varies with temperature linearly from about 95 percent RH at -5 degrees Celsius to 75 percent RH at -30 degrees Celsius. Preparation of small crystals was found possible at liquid nitrogen temperatures and the volume which could potentially be seeded seems to be large enough to seriously consider the ice crystals as a possible triggering material

Climatology of Hailstorms in Utah--The Hail Suppression Potential by Cloud Seeding

Hail damage in Utah was examined for individual counties and the entire state. A survey of informal observes was taken and the resulting data base was analyzed. Data from NWS was also examined. County hail damage figures average 4 to 5 percent of production and ranking of counties according to dollar damage occurs in only 4 of the 29 counties (Box Elder, Utah, Millard, and Cache). In many cases the highest dollar damage occurred in the counties of greatest dollar damage should receive the greatest concentration of hail suppression effort. In addition storm severity and crop growth stage were identified as important elements

Availability of climate data for water management

Presented at the Central Plains irrigation conference on February 17-18, 2004 in Kearney Nebraska.Includes bibliographical references.Evapotranspiration from crops causes depletion of soil water reserves and without rainfall or irrigation to replenish the soil moisture serious crop stress can occur. The Nebraska Automated Weather Data Network (AWDN) was initiated in 1981 in order to provide information on weather variables that effect crop water use: air temperature, humidity, solar radiation, wind speed/direction, soil temperature, and precipitation. By 2003 the public access to AWDN and related products reached 12M per year. This paper describes the Automated Weather Data Network (AWDN) and the interfaces that provide near real time climate services with emphasis on evapotranspiration (ET) or crop water use. Currently, automated weather stations are monitored daily at 54 locations in Nebraska and 10 new stations have been purchased with federal drought funds. There are over 150 stations available in a nine state region

Tabulation and Application of Pan Evaporation Data for Utah Through 1976

Monthly values of evaporation, wind movement and water temperatures are presently for all available station in Utah. A brief review is given of factors which effect evaporation along with several examples of how pan evaporation data ware used