Opinion

Occam’s razor can cut Alaska’s budget problems to the bone

<strong>My latest from Alaska Dispatch News:</strong> As our legislators gather in Juneau to consider Alaska’s budget and how to bridge the billions of dollars of shortfall between state income and spending, there are a few key points I would like them to keep in mind. I have twice listened to presentations on the various budget proposals and have each time believed that the principle of Occam’s razor was not being applied. Occam’s razor is a problem-solving principle that says when you have competing hypotheses, you should select the one with the fewest assumptions. Budgets are the state’s hypotheses of what the fiscal situation will look like over the next year and beyond. In every case, the budget proposals I have seen are based on copious assumptions about future states of numerous variables, two of which I will discuss here. When a budget proposal begins making assumptions about variables a decade or more

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Debt

Why The Fed’s Monetary Policy is Failing

<h2><a href="http://www.professorhollybell.com/wp-content/uploads/2013/11/ID-100165710.jpg"><img class="alignleft size-medium wp-image-2622" alt="Debt" src="http://www.professorhollybell.com/wp-content/uploads/2013/11/ID-100165710-300x199.jpg" width="300" height="199" /></a>"There are studies that indicate that economic growth slows when public and private debt exceeds 260% to 275% of GDP. The U.S. hit the 260% level in 2000."</h2> <p>A recent paper by Hoisington Investment Management Company (<a href="http://www.hoisingtonmgt.com/pdf/HIM2013Q3NP.pdf" target="_blank">available here</a>) does an excellent job describing why the Federal Reserve is, and will continue to be, unsuccessful in its efforts to engineer economic growth by devaluing the U.S currency and attempting to increase inflation through persistent “Quantitative Easing”. They cite four factors:</p> <p>1)    <b>The Fed’s Forecast</b>: If the Fed’s forecasts were consistently right, we could have confidence that their actions might positively impact the economy. However, their forecasts for GDP and inflation have been “consistently above the actual outcomes”. They assume higher stock prices will lead to more spending because people feel wealthier if their portfolio is rising. This “wealth effect” has not occurred,

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Oil

Oil exec warns taxes could sink US energy rebirth

  <div class="rpuEmbedCode"> <div class="rpuArticle rpuRepost-ebf604cd950b34707d45ca0a15d529a1-top rpuNoTitle" style="margin: 0; padding: 0;"><a class="rpuThumb" href="http://s.tt/1y9tJ" rel="norewrite"><img style="float: left; margin-right: 10px;" alt="" src="http://img.1.rp-api.com/thumb/3921980" /></a> <a class="rpuTitle" href="http://s.tt/1y9tJ" rel="norewrite"><strong>Oil exec warns taxes could sink US energy rebirth</strong></a> (via <a class="rpuHost" href="http://s.tt/1y9tJ" rel="norewrite">AFP</a>) <p class="rpuSnip">A top US <i>oil</i> industry figure warned Tuesday that the country's energy renaissance could be threatened by "punitive" tax policies on <u>oil</u> and gas exploration. With the US government looking to remove tax breaks for big oil firms to help boost government revenues, Jack Gerard, the head of the American…</p> </div> <div class="rpuKeywords" style="display: none;">oil, Gerard, oil industry, Washington to pursue policies favorable to energy, energy production, tax, environmental groups, oil industry figure, big oil firms, XL oil pipeline, American Petroleum Institute, domestic energy production, Jack Gerard, key tax measures, major policy battles, gas, State Department approval, offshore drilling rig, Shell, large oil, tax policies, tax breaks, oil production, gas exploration, government revenues, energy renaissance, tax deductions,

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