The recent Economic Watch blog post on national debt quoted AIER Research Associate Keming Liang.

The section referencing Liang’s quote appears below.

The United States’ national debt has hit a historic peak. As a percentage of gross domestic product, the federal debt has reached its highest level since World War II – 83 percent.

In 1929, the national debt was just 16 percent of GDP. With the onset of the Great Depression and World War II, national debt swelled to 122 percent of GDP in fewer than two decades. Yet, the country quickly rebounded. A guaranteed revenue stream and a historic tendency toward economic growth have given the United States government ability to overcome high debt.

But can government display the same resiliency this time around?

“We were able to increase our GDP and increase exports after the World War,” said economist Keming Liang, a research associate for the American Institute for Economic Research.

But now, “We have all the problems of government spending,” he said. “The baby boomers qualify for Social Security. That is a substantial thing for the government to fund.”

“China and other countries have expressed concern about whether the level of U.S. debt is sustainable,” Liang said. “We should be concerned about how sustainable this borrowing could be and how far it could go.”

Click here to read the full article

Senior Fellow R.D. Norton was interviewed by local radio station WSBS (Great Barrington, MA) about AIER's annual Friedman Day.

Click here to listen to the interview.

Daily Finances recent article on car loans quoted AIER Research Fellow Polina Vlasenko on the availability of credit. The section referencing Vlasenko's quote appears below.

Recently, as a sovereign debt crisis spread from Greece across the continent, the Libor rate has shot up to a 10-month high. The Libor dollar rate rose again Wednesday, hitting 0.5378%, up from 0.5363% on Tuesday. While this is nearly double last year's rate, it's still down substantially from the 4.8% it reached at the height of the global financial crisis in 2008.

"An increase in Libor is significant because it indicates some sort of change in the market, and banks are being more cautious," says Polina Vlasenko, research analyst at the American Institute for Economic Research in Great Barrington, Mass. "If this proves to be a sustained trend, something that will go on for a couple of months, then slowly all other interest rates will start creeping up. If banks in London are worried, then at some point banks in the U.S. will start worrying."

An article about AIER's Friedman Day 2010 has been published in the May 28 edition of the Philadelphia Inquirer. Entitled "Until then, we're all government employees," this op-ed was written by Senior Fellow R.D. Norton and emphasizes the costs of the nation's deficit and debt. A section of the full article appears below.

Every April, the Tax Foundation announces the arrival of Tax Freedom Day. The idea is that this is the day of the year when Americans are "free" of the burden of taxation, assuming every penny earned before that date is used to pay federal, state, and local taxes.

This year, Tax Freedom Day arrived on April 9, three weeks earlier than it did before the recession. The relative tax burden went down partly because of the stimulus-package tax cuts and partly because tax collections decline during recessions.

But does this mean the burden of government decreased over the last year or two? Probably not.

A few years ago, the American Institute for Economic Research introduced an alternative measure: the day when Americans have earned enough money to pay for all government spending. We call this Friedman Day.

Friedman Day falls later than Tax Freedom Day because it takes into account more than taxes. It also considers the money government borrows to pay for spending that exceeds tax revenue.

Click here to read the full article.

The publicationThe Hill has published "Friedman Day a reminder of gov’t’s growing deficit" by R.D. Norton, a senior fellow at the American Insitute for Economic Research.

Several years ago, the American Institute for Economic Research began to estimate what we call “Friedman Day”: the day when Americans have earned enough money to pay for government spending. This year’s date: May 29th.

Friedman Day falls nearly seven weeks later than the Tax Foundation’s “Tax Freedom Day.” Why? Because it includes more than taxes: The money government borrows to pay for spending that exceeds tax revenue.

While deficits and the national debt have now moved to the center of the political stage, Congress still appears unwilling and unable to make hard decisions.

The late Nobel Prize-winning economist Milton Friedman, after whom Friedman Day is named, liked to point out that when it comes to the size of government, it’s not how much governments collect in taxes that matters most, it’s how much government spends.

If you cut taxes but don’t reduce spending, you haven’t done anything to shrink the size of government. All you’ve done is shift the burden of paying for government to future generations, who will pay the interest on the money you borrow.

Click here to read the full article on The Hill.