NewGeography.com blogs

We’re seeing a lot of debate in Washington about what is commonly referred to as the "national debt ceiling." This post is an attempt to shed some light – and provide some good resources for further information – on what this really means. National debt is not the total future obligations of the federal government to pay. It is basically all the public debt (like Treasury bills) plus money we owe to other governments – in other words this ceiling only puts a limit on how much the federal government can borrow, not on how much they can spend.

The national debt number is available "to the penny" at the Treasury Direct website. There are only a few categories of debt that are not subject to the limit, mostly having to do with the way that Treasury Bills are issued to pay all the interest up front (discounted) and the way that payment is handled in accounting terms. Raising the National Debt Ceiling involves raising the limit on the public debt ceiling.

There is a bigger number that most other countries use to define “debt”. The official definition for “debt” used in the European Union, for example, includes obligations to Social Security, Medicare, etc. at the national level, plus regional and local government debt. (Thanks to Yannick for initiating a discussion of the distinction with his comment to my 2009 piece on Public Debt Crisis.) In the U.S., the larger number is usually referred to as "total indebtedness". There is no limit set on the promises of the US government to spend money -- for example, the almost $13 trillion committed to the post-crisis bailouts and stimulus was not subject to the debt limit despite that number being almost equal to the total national debt. The limit only applies to how much the Treasury can borrow to meet its obligations. So if the question is “should the ceiling be raised?” then my answer is “it doesn't really matter.” Congress can keep spending without it.

When politicians say they are against raising the debt ceiling it’s usually referred to as “Grandstanding” – which Merriam-Webster explains is to act so as to impress onlookers.

Tuesday, the Houston Metropolitan Transit Authority (Metro) held a blogger luncheon with senior Metro people (Chairman, CEO, board members, managers) at the Rail Operations Center south of Reliant.  It was an informative event with a lot of good two-way Q&A.  And it included an impressive tour of the facility, which, btw, is not air conditioned in the main maintenance bay.  Let's just say it was the right time of year for a tour and I'm really glad I don't work there in the summer.  The facility is doing its job though: Metro claims to have the highest operational uptime for rail cars in the country.

Sometimes in my push for increasing commuter bus services and cutting back rail, I fail to give credit to a lot of good work that is going on at the "New Metro":
a few issues for our collective consideration:

They really are a lot more open and transparent, and are really trying to do the right things.  
There's been a lot to clean-up, and they've done a good job (although CEO Grenias says it will take another 2-3 years to completely turn around the organization).  
They've also done a good job continuing to reach out and create collaborative agreements to provide commuter bus services outside of their service area (like Baytown and Pearland).
They've fixed the poorly performing Airport Direct service, price and route-wise.
They shifted to a cash basis for the General Mobility Program instead of increasing debt.
They fixed their broken relationship with the FTA.

There was a lot of good talk about improving express commuter bus services to TMC, Greenway, and, most importantly, Uptown.  I pitched them on expanded HOV/HOT lanes (like the 610 Loop) and laptop trays and wifi on the commuter buses, which are under consideration.  They have a very high percentage of downtown commuters - 30-40% - and claim a pretty high number for TMC - 20-30% - but that includes people who park in Smithlands and ride the rail, which I don't consider a true commuter solution (it's not doing anything to reduce freeway congestion).

Ultimately, they're trapped by the voter referendum and the federal money process to keep pursuing a rail plan (and line prioritization) that really doesn't make a lot of sense given the new fiscal reality since the referendum was passed.  It will make even less sense if the Republican House guts rail funding.  But at least they're taking steps to "firewall" the rail plan financially so it doesn't end up stealing from critical local and commuter bus operations.  I may not agree with the overall strategic direction of the agency, but they do have good people doing good work within the constraints of the game they're forced to play.

This post originally appeared at houstonstrategies.com

The Bureau of the Census has just reported that the city of Chicago lost more than 200,000 people between 2000 and 2010. At 2,696,000, this takes Chicago to its lowest population since 1910, and nearly 1,000,000 fewer than its census population peak of 3,621,000 in 1950. In 1910, the city had a population of 2,185,000, and increased in 1920 to 2,702,000.

The Bureau of the Census had estimated Chicago's population at 2,851,000 in 2009, down from the 2000 census count of 2,897,000. Chicago is the seat of Cook County, which lost 180,000 between 2000 and 2010, though outside the city of Chicago, Cook County gained approximately 20,000 residents.

Paul Krugman really doesn’t like the possibility that there is a structural shift in employment, because it weakens the argument for the massive Keynesian spending spree he’d like to see the government initiate.  To that end, he published this piece on his blog February 13th.

Before we go on, some readers may wonder what a structural shift is and why it weakens the argument for Keynesian spending.  A structural shift is when employment permanently shifts (well, as much as anything is permanent in economics) from one economic sector to another, say from construction to healthcare.

The reason that a structural shift weakens the Keynesian’s argument is that moving workers from one sector to another takes time.  They may need retrained.  They may need to move to another location.  Think of our construction worker moving to health care.  He or she probably doesn’t have the skills to be immediately employable in health care.  Some sort of education or training has to happen first.

This poses a problem for Keynesian expansionists, because their argument is that the only problem is a drop in aggregate demand (consumer spending) brought about by….well, animal spirits.  Since there is no real problem, government can increase spending (it doesn’t matter what you spend the money on.  You could dig holes and fill them back up), fool the consumer into thinking she is better off, and voilá, aggregate demand goes up with the government spending.

Problem solved.  It’s a beautiful thing.

However, spending can’t solve the problem of unemployment brought about by a structural shift.  It takes time to retrain the affected workers.  There are things government can do to speed the process, but spending willy-nilly is not one of them.

Hope that clears things up.  Let’s get back to Krugman’s piece.

He claims that unemployment in every sector has just about doubled since the recession began, and that this is proof that no structural shift is going on.  He has a nice chart to show the increase in unemployment by sector.

There is a problem though.  The Bureau of Labor Statistics—the same source that Krugman claims originated his data—reports that construction jobs fell by 2 million, or 26.7 percent, from December 2007 through December 2010, while education and healthcare jobs grew by1.2 million, or 6.5 percent.

This appears to contradict Krugman’s data, but it is possible that both sets of data are true.  If they are both true, then Krugman is being no less dishonest than if he created his numbers out of thin air.
If Krugman is telling the truth when he presents a graph showing that unemployment approximately doubled from 2007 to 2010 in both the construction and the education and healthcare sector, then is must be that large numbers of unemployed construction workers migrated to being unemployed education and healthcare workers.

There is no other possible explanation.

This, of course, completely contradicts Krugman’s argument.  If his data are true, he’s using data that confirms a structural shift to argue that there is no structural shift, by neglecting to disclose the jobs data I’ve disclosed above.

Krugman is not a dumb guy.  He has a well-deserved Nobel Prize for his work on international economics.  He has a career of looking at data, in depth and with insight.  His failure to provide the entire story has to be considered something besides an oversight.  We have to conclude that he’s purposely being deceitful.

I don’t know why a guy with all of Krugman’s gifts and accomplishments would use data deceitfully.  It is a shame, though, that an economist at the top of his profession and with the New York Times bullhorn uses that bullhorn to confuse instead of to enlighten.

CensusScope’s dissimilarity index measures the distributions of blacks and whites across a city to quantify the level of integration and segregation. The site discerned three major Midwestern cities in the top ten: Detroit, MI in second; Milwaukee, WI in third; and Chicago, IL in fifth. These cities are major hubs for their region, both socially and economically. But does segregation affect quality of life? And does it help or hinder job growth?

In order to get a decent comparison between these segregated cities and their quality of life, it’s necessary to take into account three cities with relatively low segregation: Minneapolis at 107; Austin, TX at 179; and Madison, WI at 213.

To estimate quality of life, let’s look at three factors from the American Community Survey, 2009: Percentage of population with a Bachelor’s degree of higher; percentage of population considered unemployed; and percentage of families below the poverty level. Comparing the different values with their respective city produces an interesting result.

The cities with the most segregated neighborhoods tend to have a less-educated base, contain a higher amount of unemployed workforce, and also have more families below the poverty level. On the other hand, Madison, Minneapolis, and Austin all boast high levels of educational attainment, relatively low unemployment rates, and a smaller percentage of families living below the poverty level, although Austin comes close.

However, Madison and Austin are relatively smaller than the other areas listed here, and have prospering tech sectors and contain well-known universities that tend to dominate the city’s economy. With respect to this, segregation may not be a factor at all. Instead, the city’s development and more tech-oriented economies may be the answer.

From these results, one may be able to cite segregation as an obstruction to a strong quality of life. One variable that seems to stick out amongst the data is that of educational attainment. Does education reduce segregation, or does segregation impede education?>