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Principles of Macroeconomics – Dr. Sobel – Data Handout

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Four Key Markets & Circular Flow of Income

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Source: U.S. Bureau of Labor Statistics (www.bls.gov)

US

SC

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U%

LFP%

E/P

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For reference, peak unemployment in the recent recession was 10.0% in October 2009, and

peak decline in Real GDP was -4.1% in mid 2009 (cumulative decline was 4.2%).

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Consumer Price Index 1860-2015

(Note: 1982-84 average =100) Year CPI Year CPI Year CPI Year CPI

1860 9.1 1899 8.5 1938 14.1 1977 60.6

1861 9.1 1900 8.5 1939 13.9 1978 65.2

1862 9.1 1901 8.5 1940 14.0 1979 72.6

1863 10.1 1902 8.5 1941 14.7 1980 82.4

1864 12.5 1903 8.8 1942 16.3 1981 90.9

1865 15.9 1904 9.1 1943 17.3 1982 96.5

1866 15.5 1905 9.1 1944 17.6 1983 99.6

1867 14.9 1906 9.1 1945 18.0 1984 103.9

1868 14.3 1907 9.1 1946 19.5 1985 107.6

1869 13.5 1908 9.5 1947 22.3 1986 109.6

1870 13.5 1909 9.1 1948 24.1 1987 113.6

1871 12.9 1910 9.1 1949 23.8 1988 118.3

1872 12.2 1911 9.5 1950 24.1 1989 124.0

1873 12.2 1912 9.5 1951 26.0 1990 130.7

1874 12.2 1913 9.9 1952 26.5 1991 136.2

1875 11.5 1914 10.0 1953 26.7 1992 140.3

1876 11.2 1915 10.1 1954 26.9 1993 144.5

1877 10.9 1916 10.9 1955 26.8 1994 148.2

1878 10.9 1917 12.8 1956 27.2 1995 152.4

1879 9.8 1918 15.1 1957 28.1 1996 156.9

1880 9.5 1919 17.3 1958 28.9 1997 160.5

1881 9.8 1920 20.0 1959 29.1 1998 163.0

1882 9.8 1921 17.9 1960 29.6 1999 166.6

1883 9.8 1922 16.8 1961 29.9 2000 172.2

1884 9.5 1923 17.1 1962 30.2 2001 177.1

1885 9.1 1924 17.1 1963 30.6 2002 179.9

1886 9.1 1925 17.5 1964 31.0 2003 184.0

1887 9.1 1926 17.7 1965 31.5 2004 188.9

1888 9.1 1927 17.4 1966 32.4 2005 195.3

1889 9.1 1928 17.1 1967 33.4 2006 201.6

1890 9.1 1929 17.1 1968 34.8 2007 207.3

1891 9.1 1930 16.7 1969 36.7 2008 215.3

1892 9.1 1931 15.2 1970 38.8 2009 214.5

1893 9.1 1932 13.7 1971 40.5 2010 218.1

1894 9.1 1933 13.0 1972 41.8 2011 224.9

1895 8.8 1934 13.4 1973 44.4 2012 229.6

1896 8.5 1935 13.7 1974 49.3 2013 233.0

1897 8.5 1936 13.9 1975 53.8 2014 236.7

1898 8.5 1937 14.4 1976 56.9 2015 237.0

Note: Data prior to 1913 from John J. McCusker (1992), 1913 forward from BLS

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2016 240.02017 245.12018 251.12019 255.7

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Monetary Policy

"Every major contraction in this country has been either produced by monetary policy or

greatly exacerbated by monetary policy. Every major inflation has been produced by

expansionary monetary policy." Milton Friedman (winner 1976 Nobel Prize in Economic

Science), "The Role of Monetary Policy," American Economic Review (Marcy 1968): 12.

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But What are the Long Term Effects?

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And Remember.....

Recent Inflation is up:

Most was held in bank reserves... but this

has been dropping since mid 2014...

And loans started

expanding again about

the same time

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Fiscal Policy

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The National Debt vs. Budget Deficits & Surpluses

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Pork Barrel Projects & Special Interest Politics

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Income Tax Rate Schedules / ATR & MTR

Federal Marginal Tax Rates 2015 SC Marginal (vs. 1959 SC)

So....(single)

Income Fed Tax SC Tax

$41,000 $6,050 $2,379

$41,100 $6,075 $2,386

Changes: +$100 +$25 +$7

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keep adding.....

So far.... 25% fed + 7% state + 6.2% + 1.45% = 39.65%

Then when you go to spend it:

1) Sales Taxes: 8.5% (6% SC / 2.5% local)

2) +2% Hospitality Tax if spent on meal out....

+ additional taxes on cell phone, cable, alcohol

+Gasoline has 16.75 cents per gallon state and 18.4 cents per gallon federal

+ Property taxes on home, car, boat, or business assets

Estimates of the combined effects:

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How We Got Here...

16th

Amendment (1913)

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Note these are for Federal Taxes Only

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Computing Average & Marginal Tax Rates