1.The 2013 Economy at Mid-Year Operating with one lane closed. Running on borrowed fuel. Still getting there, for some sectors. Looking for prosperity. Public Choice, the IRS, Antitrust & FEMA.Capitol Hill CampusJune 21, 2013

2. -4.00-3.00-2.00-1.000.001.002.003.004.005.006.00PercentYearReal GDP Growth, 1990 - 2012.Long Run Average = 3.132.4% in1Q2013 3. U.S. Report CardDecade Real Per Capita GDP GrowthAnnualized1951-1960 1.25%1961-1970 3.141971-1980 2.111981-1990 2.361991-2000 2.582001-2010 0.662001-2007 1.59Average, 1951-2010 1.89%Lawrence H. Officer and Samuel H. Williamson"Annualized Growth Rate and Graphs of Various Historical Economic Series," MeasuringWorth, 2011.URL: www.measuringworth.com/growth/ Accessed 03/22/12. 4. $10,000$10,500$11,000$11,500$12,000$12,500$13,000$13,500$14,000$14,500$15,0002000-01-012000-06-012000-11-012001-04-012001-09-012002-02-012002-07-012002-12-012003-05-012003-10-012004-03-012004-08-012005-01-012005-06-012005-11-012006-04-012006-09-012007-02-012007-07-012007-12-012008-05-012008-10-012009-03-012009-08-012010-01-012010-06-012010-11-012011-04-012011-09-012012-02-012012-07-012012-12-01U.S. Real & Potential GDPBillions 5. $10,000$10,500$11,000$11,500$12,000$12,500$13,000$13,500$14,000$14,500$15,0002000-01-012000-06-012000-11-012001-04-012001-09-012002-02-012002-07-012002-12-012003-05-012003-10-012004-03-012004-08-012005-01-012005-06-012005-11-012006-04-012006-09-012007-02-012007-07-012007-12-012008-05-012008-10-012009-03-012009-08-012010-01-012010-06-012010-11-012011-04-012011-09-012012-02-012012-07-012012-12-01U.S. Real & Potential GDPBillions 6. May 31, 2013, 12:39 p.m. EDTSocial Security trust fund to run dry in 2033Medicare finances improve modestly; Lewurges long-term fixMarketWatch. http://www.marketwatch.com/story/social-security-trust-fund-to-run-dry-in-2033-2013-05-31Federal disability trust fund on the brinkBy Tami Luhby @Luhby May 30, 2013: 5:42 AM ET 7. WHATS GETTING HOT?? Retail Sales Wholesale Shipments Housing Employment Manufacturing 8. $140,000$145,000$150,000$155,000$160,000$165,000$170,000$175,000$180,000$185,000U.S. Real Retail Sales, 1/2007 - 3/2013Millions, Seasonally Adjusted 9. 051015202530351992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Machinery, Equipment & SuppliesJanuary Sales, 1992-2013$Billions13.7%growth, 2010-13.7%%, 013 10. 050010001500200025001990-1990-1991-1992-1993-1993-1994-1995-1996-1996-1997-1998-1999-1999-2000-2001-2002-2002-2003-2004-2005-2005-2006-2007-2008-2008-2009-2010-2011-2011-2012-U.S. Housing Starts1/1990-2/20132016 11. 1240001260001280001300001320001340001360001380001400002000-01-012000-07-012001-01-012001-07-012002-01-012002-07-012003-01-012003-07-012004-01-012004-07-012005-01-012005-07-012006-01-012006-07-012007-01-012007-07-012008-01-012008-07-012009-01-012009-07-012010-01-012010-07-012011-01-012011-07-012012-01-012012-07-012013-01-01ThousandsU.S. Total Private Employment, 1/2000 - 2/20132014 12. Which Industries??? 13. Percent Change in Value Added by IndustryMining SupportDurablesNondurablesOil & GasMiningWholesale Trade 14. Whats Hot?Steel, Aluminum, Computers &Electronics, Machinery, Aircraft 15. U.S. Natural Gas Reserves, 2010 16. 01,0002,0003,0004,0005,0006,000Energy Consumption by Industry, 2006Trillion BTU, 17. LookingForProsperity 18. -3%-2%-1%0%1%2%3%4%5%6% WestVirginiaDistrictofColumbiaSouthDakotaMaineIowaNebraskaVirginiaConnecticutWisconsinMichiganRhodeIslandKansasNewMexicoMarylandAlabamaMontanaWyomingTennesseeVermontArkansasMississippiPennsylvaniaNewHampshireNewJerseyMissouriNewYorkSouthCarolinaMinnesotaFloridaMassachusettsColoradoOhioUtahCaliforniaAlaskaIdahoNorthCarolinaOregonDelawareWashingtonLouisianaGeorgiaKentuckyTexasIndianaArizonaOklahomaNevadaHawaiiNorthDakotaState Employment Growth, December 2011 - December 2012 19. ECONOMICS MEETS POLITICSThe Analysis is calledPUBLIC CHOICEPOLITICAL ECONOMYorPolitics without RomanceJames M. Buchanan, Nobel LaureateWe seek to explain the way the world works, not the way wemight wish it worked. 20. In the Rubble of Disasters, Politicians Find Economic IncentivesMolly D. Caselao and Thomas A. Garrett. The Regional Economist, Federal Reserve Bank of St. Louis, July2003, 10-13.The Federal Emergency Management Agency (FEMA) spent nearly $22billion on disaster relief between 1991 and 1999. Sometimes, aiddisbursement is not motivated by need, howeverResearchers tested whether the electoral importance of a state andwhether it was an election year motivated presidential disasterdeclarations in a state. In order to isolate the political impacts ofdisaster declaration and relief, the researchers controlled fro disastersize, private insurance disaster payments, state population, and otherstate effects.The studies found that those states with a higher measure of politicalimportance had a higher rate of presidential disaster declaration. Thestudies also found that the mean rate of disaster declaration washigher in election years compared to nonelection years.Researchers concluded that for each legislator a state had on a FEMAoversight committee, the state received an additional $31 million indisaster each year. The researchers calculated that nearly 45 percentof all FEMA disaster payments were motivated by political incentivesrather than by need. 21. QUESTIONS?