Perspectives on the Budget Surplus

This paper provides alternative measures of federal budget surpluses over 10-year and long-term horizons. Official baseline budget forecasts are based on a series of statutory requirements that may be at variance with reasonable expectation. More plausible notions of current policy toward discretionary spending, taxes and retirement trust funds imply that surpluses over the next 10 years will be substantially smaller than the baseline forecasts indicate. Properly accounting for long-term imbalances in social security and the rest of the budget implies that, under plausible definitions of current policy, the federal government faces a long-term shortfall.

New Results on the Effects of Tax Policy on the International Location of Investment

We study the effects of tax laws on foreign direct investment (FDI) and direct investment abroad (DIA), distinguishing in each case between investment financed by retained earnings and investment financed by transfers from abroad. We find that tax policy, through its effect on the rate-of-return available in the U.S., has an important effect on the international location of investment. FDI in the U.S. is very sensitive to after-tax rates-of-return available here. U.S. direct investment abroad is also affected, although to a lesser extent. We use these estimates to examine the effects of the 1981-82 tax changes on the international location of investment. We estimate that the tax changes lowered annual DIA by $0.5 billion to$1.0 billion (2% to 4% of its 1980 value), and raised annual FDI by $2 billion to$4 billion (11% of 20% of its 1980 value). We also discuss the welfare effects of tax policy toward international investment. Our results suggest that the tax effects on the international location of investment are important. Tax policies, such as ACRS andthe ITC, which raise the after tax rate-of-return on new investment without losing revenue from previous investment, not only stimulate domestic fixed investment, but also attract additional investment from abroad. The additional investment supplements the domestic investment impact on productivity and raises corporate tax revenue. However, our results should be taken as preliminary estimates, not as definitive statements about the long-run impacts of tax policy.

Late Turonian ammonites from Haute-Normandie, France

Upper Turonian chalks of Haute-Normandie yield a distinctive ammonite fauna within the Subprionocyclus neptuni ammonite Zone and the Plesiocorys (Sternotaxis) plana echinoid Zone. Well-localised material all comes from the phosphatic fauna of the Senneville 2 Hardground that marks the boundary between the Formation de Senneville and the Életot Member of the succeeding Formation de Saint-Pierre-en-Port. The association is dominated by Lewesiceras mantelli Wright and Wright, 1951, accompanied by Mesopuzosia mobergi (de Grossouvre, 1894), Lewesiceras woodiWright, 1979, Subprionocyclus hitchinensis (Billinghurst, 1927), Subprionocyclus branneri (Anderson, 1902), Subprionocyclus normalis (Anderson, 1958), Allocrioceras nodiger (F. Roemer, 1870), Allocrioceras billinghursti Klinger, 1976, Hyphantoceras reussianum (d’Orbigny, 1850), Sciponoceras bohemicum bohemicum (Fritsch, 1872), and Scaphites geinitzii d’Orbigny, 1850. The fauna represents the Hyphantoceras reussianum Event of authors, elements of which have been recognised on the north side of Tethys from Northern Ireland to the Mangyschlak Mountains of western Kazakstan, a distance of more than 3,500 kilometres

Trans-Tethyan correlation of the Lower–Middle Cenomanian boundary interval; southern England (Southerham, near Lewes, Sussex) and Douar el Khiana, northeastern Algeria

A 480 m section of marls with widely separated levels of nodular limestone in the Fahdene Formation north of Bou Khadra in Tebessa Province, northeastern Algeria, spans the Lower/Middle Cenomanian boundary. A total of 30 ammonite species are present, of which two: Forbesiceras reversum and Calycoceras (Newboldiceras) algeriense are new. The fauna allows recognition of the Northwest European upper Lower Cenomanian Mantelliceras dixoni Zone, the succeeding lower Middle Cenomanian Cunningtoniceras inerme Zone, the Acanthoceras rhotomagense Zone and its subzones of Turrilites costatus and Turrilites acutus. The sequence of index species occurs in the same order in both north-eastern Tunisia and the Southerham Grey Pit in Sussex (and indeed elsewhere in North-west Europe), indicating these to be robust assemblage zones and subzones that can be recognised on both the north and south sides of the Tethys. Other occurrences of taxa that are common in both sections and regions are markedly different, and include the co-occurrence of Cunningtoniceras inerme (Pervinquière, 1907) with Acanthoceras rhotomagense (Brongniart, 1822) in the costatus Subzone in north-eastern Algeria and central Tunisia, the extension of Acompsoceras renevieri (Sharpe, 1857) into the lower Middle Cenomanian in north-eastern Tunisia, whilst the acme of Turrilites scheuchzerianus Bosc, 1801, is in the dixoni Zone in Northwest Europe, and in the inerme Zone in northeasten Algeria and adjacent parts of Central Tunisia. These differences are not a result of collection failure or non-preservation, but must rather reflect environmental controls on occurrence and abundance

Activist Fiscal Policy to Stabilize Economic Activity

We review the evidence on the practice and effects of discretionary fiscal policy, particularly in the context of recent efforts to stimulate the economy, reaching two main conclusions. First, policy interventions have increased in this decade, pre-dating the 2009 stimulus. Second, despite a large economic literature on the topic, the state of theory and evidence is not as "shovel ready" as one would like. Although consumption and investment clearly respond to tax incentives and structural vector autoregressions show that lower taxes and higher government purchases can boost output, it is difficult to apply the findings in the current context, in part because multipliers and policy lags are likely to vary with economic conditions. Dynamic stochastic general equilibrium models can be adapted to address extreme economic conditions, but yield an extremely wide range of predicted impacts. The experience from large downturns – the U.S. Great Depression and the Japanese Lost Decade – is illuminating, but provides little evidence about policy effectiveness because systematic and sustained fiscal interventions were not attempted in either case.