A word about Kanye West’s finances.

A couple of days ago, Yeezy took to Twitter, claimed he had $53 million in personal debt, and asked Mark Zuckerberg—sadly, a non-Twitter user—to “invest $1 billion into Kanye West ideas.” This caused something of a stir. Then on Monday, he clarified a bit. “Yes I am personally rich and I can buy furs and houses for my family...but I need access to more money in order to bring more beautiful ideas to the world.” Kanye also added that he was “this generation’s Disney,” again implored Zuckerberg, as well as Google’s Larry Page, for an investment round, and then criticized Silicon Valley types for being more interested in building schools in Africa than helping the rap artists they listen to. So, you know, he Kanyed. Is that a verb yet? It should be a verb.

Let’s stay focused on the money, though. According to sources who spoke with TMZ, the $53 million Kanye’s referring to may not actually be debt. Instead, they say, it’s personal cash the rapper/designer/monologist invested in his various music and fashion ventures. In which case, that would pretty much be the opposite of debt. The guy is just bootstrapping a self-funded startup.

But if it is debt? Then $53 million is probably not an unmanageable amount, assuming that’s where Kanye’s liabilities end.

First, given his subsequent tweets regarding furs and real estate, I doubt that Kanye is talking about his net worth. The man could easily owe $53 million to his bank and still have $100 million in assets, in which case, all is well in the House of West.

And even if he’s technically insolvent—which is is to say, his debts outstrip his assets—chances are he can still pay his obligations. Forget that he’s married to Kim Kardashian—they apparently keep their money separate, anyway. According to Forbes, the man himself has been making somewhere around $22 million to $30 million a year. Using the low end to be conservative, that would leave him with debt equal to 240 percent of his income. Contra CNN, that doesn’t actually make him a “typical American”—the median U.S. household with debt owes about 107 percent of its income. But considering the low interest rate environment of the past few years, I find it hard to imagine he would be paying more than 10 percent on those loans (the figure is probably less), in which case he could whittle down that whole balance in five years and still have somewhere around half of his multimillion-dollar income left, on top of his wife’s. (Credit Karma says he’d owe $1.1 million a month.)

Another way to put all this: For Kanye, $53 million in debt is basically equivalent to the median American household, which earns $53,000 a year, carrying $127,000 in debt—or, you know, a mortgage.

But anyway, none of this should be interpreted as discouraging Mark Zuckerberg from investing $1 billion in Kanye West ideas. It’d be no worse than some of Zuck’s past projects, certainly.  

Read more in Slate about Kanye West.

Like all of the leading Republican presidential contenders, Ted Cruz has vowed to pass a series of implausibly large tax cuts that would disproportionately benefit the wealthy. But is his plan so heartlessly regressive that it would actually raise taxes on the poor?  

A new analysis by the nonpartisan Tax Policy Center says, indeed, it is.¹ The think tank finds that by 2025, Cruz's proposal—total cost: well more than $8 trillion over a decade—would increase the average federal tax burden for the bottom fifth of Americans by 0.6 percentage points, or $116 dollars. The top 1 percent, in contrast, would get a 14.1 percentage point cut, on average, worth $490,000. That would distinguish Cruz's framework from the proposals put forth by Jeb Bush, Donald Trump, and Marco Rubio, which at least have the decency to offer pretty much everyone a tax cut while handing an especially large windfall to the rich.

However, other analysts have reached different conclusions about the Cruz plan. The conservative Tax Foundation, for instance finds that it would actually raise after-tax incomes among the bottom 20 percent.

Why the discrepancy? It's a little technical, but basically boils down to whether you buy some of the vaguer policy promises that Cruz has made to voters. 

Cruz has never said that he wants to raise taxes on the poor. But it is a potential side effect of the highly regressive overhaul he's proposed. The Texas senator plans to eliminate a whole host of taxes—including the corporate income tax, the payroll taxes that fund Social Security and Medicare, and the estate tax—while setting a flat income tax rate of 10 percent. To make up for some of that lost revenue, Cruz would then introduce a 16 percent “business flat tax,” which, branding aside, is really just a variation on what the rest of the world calls a value-added tax, or a VAT.²

The key thing to know about a VAT is that it doesn't just hit business profits; it taxes payrolls as well. And at 16 percent, Cruz's VAT is actually steeper than the current U.S. payroll tax. The Tax Policy Center assumes that cost will get passed on to workers in the form of lower wages. And since the poor typically don't pay federal income tax, they won't benefit from Cruz's rate cuts. Hence, their overall tax burden will rise. Of course, it's possible that instead of cutting their employees' take-home pay, companies will pass the cost of the VAT onto customers. But in that case, the bump in consumer prices would eat away at Americans' purchasing power and, adjusted for inflation, wages would still fall. And at the end of the day, the poor would still end up worse off.

Now here's where things get a little ambiguous. Theoretically, Cruz has a proposal to deal with all these issues. The candidate says he wants to “expand” and “modernize” the Earned Income Tax Credit, which boosts after-tax earnings for low-wage workers, and could offset the the VAT's erosive effect on their wages. Unfortunately, the public version of Cruz's tax plan doesn't offer any further detail, so the Tax Policy Center assumes he won't actually increase the credit. The Tax Foundation, on the other hand, says Cruz is going to boost the EITC by 20 percent, which would more than make up for the VAT.

Who to believe? On this narrow point, I might actually go with the Tax Foundation, since it has a fairly decent working relationship with the Republican candidates, and the Cruz campaign may have offered it more in the way of specifics.

But in some ways, that's missing the forest for the trees. In the end, Cruz is proposing a multitrillion-dollar rejiggering of the entire U.S. tax system that, if it falls short on the dubious promise of delivering a staggering surge of economic growth, would have barely anything to offer society's neediest, and could leave them marginally worse off. The fact that we even have to discuss whether a major presidential candidate might actually hike taxes on the poor is horrifying on its own.

¹Some conservatives will argue that TPC leans liberal—which is accurate insofar as, unlike more conservative think tanks, its analyses don't assume that tax cuts will unleash a torrent of new economic growth. However, that assumption is also basically true to what the empirical literature tells us.

² That's calculated on a tax-inclusive basis—so if a blender cost $119, $19 would go to tax. If you look at it on a tax-exclusive basis (which is how most people think about sales taxes), it's a 19 percent rate (a $19 tax on a $100 blender). But we don't need to dive that deep into the weeds.

³The money a company earns in profit and spends on wages are considered its economic "value-add," hence “value-added tax.”

Read more Slate coverage of the GOP primary. 

One of the more contentious moments in Thursday night’s Democratic debate on PBS stemmed from a seemingly innocuous question that came via Facebook: “My father gets just $16 in food assistance per month as part of Medicaid's family community program in Milwaukee County for low-income seniors. How will you, as president, work to ensure low-income seniors get their basic needs met?”*

Can we talk about the candidates’ plans for Social Security?

Yes, we can. Here was an instance in which Bernie Sanders came armed with specifics and Hillary Clinton, usually the master of detail, offered not so much.

Let’s review.

Sanders is currently sponsoring a Senate bill that would give Social Security beneficiaries a boost of about $65 a month, which he would pay for by adjusting the payroll tax cap. As of right now, Social Security stops taxing earned income at $118,500. Under Sanders’ proposal, the Social Security Expansion Act, income in excess of $250,000 would be subject to Social Security taxes. He would also tax the investment income of high earners to support Social Security, another thing we currently don’t do.

Yes, that would mean a tax increase for some people. As Sanders said Thursday night:

Yes, the wealthiest people, the top 1.5 percent will pay more in taxes. But a great nation like ours should not be in a position where elderly people are cutting their pills in half, where they don't have decent nutrition, where they can't heat their homes in the wintertime. That is not what America should be about. If elected president, I will do everything I can to expand social security benefits, not just for seniors, but for disabled veterans as well.

Clinton’s position on Social Security, meanwhile, somehow manages to be both specific and diffuse at the same time. She’s offering people (usually women) a credit toward future Social Security benefits when they take time of out of the workforce to handle caregiving responsibilities. She’s also proposing a change in how benefits are calculated when a spouse dies, so the surviving partner (usually a woman) doesn’t lose half or more of the family’s Social Security benefit. She does not—and said so in the debate—plan to expand everyone’s benefits.

But Clinton hasn’t offered much detail on how she would finance her plans or how it would all work, and her statements on the issue have worked in plenty of wiggle room. Last month, for instance, she told the Des Moines Register, “Obviously lifting the cap at some point or another is a very live possibility.” On Thursday she wasn’t much more specific: “I'm interested in making sure we get the maximum amount of revenue from those who can well afford to provide it. So I'm going to come up with the best way forward. We're going to end up in the same place. We're going to get more revenue.”

That’s where Sanders pounced:

In all due respect, Secretary Clinton, a lot of the progressive groups, the online groups, have really asked you a simple question. Are you coming on board a proposal and what is that proposal? The proposal I outlined should be familiar to you, because it's essentially what Barack Obama campaigned on in 2008. You opposed him then. I would hope that you would come on board and say this is the simple and straightforward thing do.

That was a successful hit. Not a huge one, maybe, but a hit nonetheless.

In fact, Clinton did oppose raising the payroll tax cap during the 2008 campaign. And Social Security advocates have been concerned until very recently about her positions in 2016, noting that her website says she would “oppose” benefit cuts or raising taxes on the “middle class” to close the Social Security shortfall. What did that mean exactly?

The result was this exchange with Sanders on Twitter last week, in which Clinton committed to not cutting Social Security.

But Sanders offered up a reminder Thursday night that Clinton’s position isn’t as comprehensive as his. And it may soon need to be.

And, oh yes, all of this is important because without Social Security, the Census Bureau estimates that half of all Americans 65 or older would live in poverty. That’s something everyone should remember. 

Correction, Feb. 12, 2016: The article originally misquoted a debate question by paraphrasing it, rather than quoting the moderator word-for-word.

Read more Slate coverage of the Democratic primary.

At this point, a Republican tax plan would not be a Republican tax plan if it weren’t a morally and mathematically risible giveaway to America’s wealthy. The latest reminder of this fact comes to us from the nonpartisan Tax Policy Center, which Thursday released an assessment of Florida Sen. Marco Rubio’s especially plutocrat-friendly proposal.

Rubio’s blueprint is interesting because it drowns one big, potentially very popular idea—an expanded child tax credit of up to $2,500 per young one—in a heap of giveaways to the GOP donor class. This seems to have been part of Rubio’s strategy to appear as all things to all Republicans. But the end result is just a bit silly-looking, the tax-policy equivalent of getting drunk at Golden Corral and going overboard on the buffet line. (Oooh, pot roast. Oooh, banana pudding. Oooh, immediate expensing of capital investment.) Rubio’s plan eliminates taxes on dividends and capital gains—so you pay nothing to the IRS from money earned on stocks. It significantly lowers the corporate tax rate without really trying to balance the revenue loss. It crunches the number of income-tax brackets while lowering rates. And it eliminates the estate tax, which currently only applies to millionaires, anyway.

Total tab: $6.8 trillion during the first 10 years. (That’s more than Washington is projected to spend on the defense budget this decade, by the way.) Then, another $8 trillion over the next 10.

The biggest beneficiaries of this tax largesse are, of course, the affluent. By 2025, more than 70 percent of these tax cuts go to the highest-earning fifth percent of tax payers; more than 40 percent go to the top 1 percent. The average taxpayer of the top 0.1 percent of taxpayers would get a $1.12 million break. The average taxpayer in the poorest 20 percent of Americans would get $232 under the Rubio plan.

It didn’t have to be this way. One can sort of imagine a world in which Rubio would have campaigned primarily on his expanded child tax credit, which alone costs more than $1.2 trillion over a decade. It would have been an ambitious, middle-class-friendly tax cut that, while perhaps not enough to satiate the Wall Street Journal’s editorial board, would have at least distinguished Rubio’s economic thinking as something other than cartoonish supply-siderism.

Of course, Republicans (including the candidate’s advisers) argue that Rubio’s tax plan would unleash a surge of economic growth that would help make up for the lost revenue. But mainstream economics suggests that insofar as tax cuts are good for long-term growth at all, they only help if they're balanced by spending cuts. And, as Jonathan Chait illustrated at length earlier Thursday, Rubio, who among other things wants to increase defense spending, makes only the most pitiful gestures toward balancing his budget math.

But who knows. Maybe Rubio is waiting for after the campaign to make the numbers work. If that's the case, his plan isn’t so much laughable as cruel, as the spending cuts necessary to balance his tax cuts would almost certainly require decimating federal programs that service the poor.

Remember, Rubio is fighting to represent the Republican mainstream. He’s the conservative establishment’s vision at work.

Read more of Slate’s coverage of the 2016 presidential election.  

Conventional wisdom says that the health of the stock market doesn't matter much to the wider economy. Shares go up. Shares go down. But the swings of the S&P 500 don't really influence things like growth rates or unemployment. On days like today, when global markets are getting slaughtered—JPMorgan's trading desk said it was "hard to imagine an uglier morning”—that consensus is pretty comforting.

But not everybody agrees with it. UCLA economist Roger Farmer has been arguing for some time that the stock market does, in fact, sway the real economy. The man is generally something of a contrarian but is also respected for his “fearsome math skills and deep understanding of how modern [economic] models work,” as Bloomberg View's Noah Smith has put it. Last year, the professor published a paper titled “The Stock Market Crash Really Did Cause the Great Recession.” On days like today, it's pretty discomforting.

Using a statistical tool known as a Granger causality test, Farmer finds that changes in the stock market can predict changes in unemployment a quarter later. Using that relationship, he's then able to build an economic model that very closely matches what transpired in the Great Recession. Of course, that doesn't necessarily mean the plummeting share prices are what caused mass joblessness in 2008 and 2009. It's possible the stock market was just reacting to other changes in the economy that happened to drive unemployment as well. But other data you might expect to help forecast the jobless rate—including “real GDP, real investment spending, the three month treasury bill rate, the CPI inflation rate and the spread of BAA bonds over ten year treasuries”—don't have the same predictive relationship as stocks, Farmer finds. He concludes that the drop in the stock market alone could have driven unemployment far higher than it actually rose had it not been for the drastic interventions by the Federal Reserve.

What this leaves unanswered is how the stock market could crash the economy. Previously, Farmer has blamed "animal spirits"—which is just the term of art economists have adopted to describe what the rest of us call human emotion. The stock market plunges, businessmen get pessimistic, and they stop hiring or start laying off workers. During a recent appearance on Bloomberg's What'd You Miss, however, he suggested "wealth effects" might be at play. That's another fairly common-sense—but up-until-recently controversial—notion that when people feel richer they spend more, even if their wealth might only exist on paper. Likewise, when they feel poorer, they spend less. Here's how Farmer put it:

If you’re, say, a 65-year-old couple, and your 401(k) drops by 10 percent and goes up again the next day, you’re not going to do very much. If your 401(k) drops by 10 perent and stays down for three or four months, you might decide not to take that cruise you were going to take, you might decide you’re not going to put as much money into your grandchild’s college fund. And you’re going to cut back on spending. And that I think is the channel. So confidence, in my view, drives the real economy.

Here's where this story sort of falls apart for me. The most recent research suggests Americans' spending habits just aren't that sensitive to stock prices. When Nobel Prize winner Robert Shiller and his collaborators Karl Case and John Quigley last looked into the subject, they found “at best weak evidence of a link between stock market wealth and consumption.” Insofar as the link was real at all, it wasn't very large. This makes sense when you consider that stock ownership is concentrated among relatively well-off households who can often keep spending like normal when the economy turns rocky. Middle-class Americans care a lot about home values, since that's where their money is tied up, not the S&P 500.

But even if Farmer's theory has some weak points, it's at least interesting. Given how far markets have already dropped, does he think we're headed for a downturn? “A lot depends on whether declines remain persistent or whether the U.S. economy comes back up again,” he told Bloomberg. In other words: who knows. 

Well, you're probably going to hear more about the death of Twitter on Thursday. 

The little blue bird released its latest financial results Wednesday evening, and while it beat investors’ expectations on earnings, the company reported that its user base shrank slightly during the winter. Not including “fast followers” who access the service only through text messages, Twitter’s monthly active users declined from 307 million during the third quarter to 305 million in the fourth. Including those fast followers, who are concentrated among feature-phone owners in the developing world, monthly active users stayed steady at 320 million.

Twitter has struggled to grow its user base quickly enough to satiate Wall Street, and initial news of the decline seemed to fulfill investors’ collective nightmares about the company's future. Its stock immediately fell almost 12 percent in after-hours trading. However, shares bounced back shortly as the market seemed to process the actual news. In its letter to shareholders, the company said monthly users returned to their third quarter levels during January and add it was “confident that, with disciplined execution, this growth trend will continue over time.” During a conference call with investors, executives also noted that the company actually grew its number of new users over the fourth quarter. Its overall monthly numbers declined because it failed to court back enough former users who had stopped checking their feeds.

So in management's telling, Twitter stumbled a bit on user growth, but things are picking back up apace. Presumably, the investor freakout will be a tad more severe if the promise doesn't come true next quarter.

In other news, the exec team said that the algorithmic timeline it debuted Wednesday is already increasing user engagement. Perhaps #RIPTwitter was a little premature, after all.  

It's never a good look when a major bank has to pipe up and reassure the world that it's still financially sound. But such is the lot this week of Deutsche Bank, which has been getting absolutely savaged by the markets as of late. Its shares, down more than 40 percent this year on the New York Stock Exchange, are trading at a record low, while the cost of insuring its debt has spiked, a sign investors are becoming more worried that it might default. The beating has been so bad that CEO John Cryan felt compelled to send his employees an upbeat memo on Tuesday promising them that the bank “remains absolutely rock solid.”

Its stock kept tumbling.

The ups and downs of Teutonic high finance might not seem like a super pressing concern here in the United States, where Donald Trump might still be on the verge of turning the presidential election into a full-on Idiocracy prequel. But given the fragile state of global markets, it's possible that any trouble at Germany's largest bank could spread.         

What's wrong with Deutsche Bank? In part, it's dealing with the same problems facing banks all across Europe. The combination of sagging global growth and low interest rates has made it difficult to earn money from lending. Loans to energy companies are going bust. Stricter rules designed to make the financial system more stable have made investment banking less lucrative, leading some institutions to shrink that line of business. This has all culminated in a “chronic profitability crisis” among Europe's banks, as the Wall Street Journal puts it.

Things have been especially ugly for Deutsche Bank, though, because of its legal rap sheet. Last month, Frankfurt's finest announced a prodigious 6.7 billion euro annual loss, thanks in large part to the billions of dollars it has had to set aside to pay fines and settle litigation involving all manner of fraud and international sanctions violations. With more law-enforcement trouble potentially looming, investors are worried that Deutsche Bank is one big, unforeseen financial penalty away from serious trouble. Forget turning a profit—the bank might have to stiff some of its bondholders.

Understanding why requires a little bit of background. In order to prepare for new international requirements set under the Basel III agreement, banks have been trying to build up their capital bases—the financial safety cushions that are supposed to buffer them from losses on riskier assets. One can spend many deeply dull hours learning the ins and outs of what does and doesn't count as bank capital. But to simplify, “tier 1” capital, the type that's relevant to Deutsche Bank's predicament, is basically money that a financial institution doesn't have to pay back to a lender. That typically includes funds raised by issuing stock, or retained profits.

But in Europe banks have also been fattening up their capital ratios by selling large quantities of so-called contingent convertible bonds, or CoCo Bonds, which Bloomberg has described as "high-yield hand grenades." These securities are a sort of cross between a stock and a bond. Like a regular bond, they pay interest. But banks can choose to skip payments if need be. And should their capital levels fall too low, the bank can convert them into stock or, in many cases, simply write off the debt.  

Investors have gone cuckoo for CoCo bonds—sorry, I'm so sorry—in part because they offered fairly high interest rates, which have been hard to come by in recent years, but also because they were pretty sure banks would treat them as normal debt. Now that seems like less of a sure bet. This week, CreditSights analyst Simon Adamson warned that Deutsche Bank might have to miss coupon payments by next year. “While we are confident about 2016 coupons, we are less so about coupon payments in 2017,” he wrote. The bank has tried to reassure CoCo bondholders that in fact it has all the money it needs to keep paying them, but credit markets still went into a tizzy.The anxiety has been fueled, in part, by Deutsche Bank's precarious legal situation since, again, one big settlement could change its entire financial standing. In a worst-case scenario, the bank could theoretically have to force losses on bondholders by swapping their CoCos for stock or wiping away the debt entirely.

Is that really something to lose sleep over? Maybe. “When the first one goes sour and halts coupon payments, it’s possible investors could suddenly wake up to the inherent risk and flee all CoCos, destabilizing the corporate bond market and possibly even the financial system,” Bloomberg opines. At the very least, it's one more potential source of instability at a moment when markets are already full of them. So much for German reliability.

Update, Feb. 10, 2016, at 8:40 a.m.: Deutsche Bank’s stock jumped in Frankfurt on Wednesday after the Financial Times reported that it was considering buying back billions of euros worth of bonds as a show of financial strength. Repurchasing debts that have fallen below their face value could also help the bank book a profit. Notably, the program would not include the CoCo bonds that have had investors worried

Advertisements during the Super Bowl often make plays for attention by aiming for offense. This year, however, our early contender for winner of the controversy sweepstakes wasn’t particularly vulgar. Instead, it was a commercial for Rocket Mortgage, an app from Quicken Loans that promises to deliver mortgage judgments in as little as eight minutes. It proposes to “do for mortgages what the Internet did for buying music, and plane tickets, and shoes.” If we embrace this model, the ad suggests, we would be patriotically creating jobs and swelling the economy, as new homeowners rush to buy goods to fill their new homes.

Wondering how “people [are] going to afford all of this,” CNET’s Chris Matyszczyk worries that by making mortgages easier to acquire Quicken’s service might undermine “rational decision-making.” On Twitter, meanwhile, the judgments came fast and hard.

Ultimately, Rocket Mortgage may not even be equipped to make good on its advertised promises. On the website Marketwatch, Andrea Riquier observes that while it’s “technically possible for a mortgage applicant to have all the data and documentation lined up” to make it through the process in less than 10 minutes, most are likely to “move more slowly.”