CBO to R’s on Their 37th Attempt to Repeal the ACA
Here’s the link but let me paraphrase: “you guys go ahead and keep gettin’ your crazy on…over here we’re kinda busy doin’ actual work, so can’t help you right now.” In fact, they did look into this before: On balance, CBO and JCT estimated, repealing the ACA would affect direct spending and revenues in ways [...]
What Debt Crisis, Indeed? Things that Make You Go Hmmmmm…
OK, I know that what’s happening in the debt debate is more complicated than a grad student found some mistakes in a spreadsheet and the spell that had bewitched the nation was broken. But that’s kinda what seems to be happening. This Politico piece tells of some Democrats coming around to the view that “[t]here’s no [...]
The Unbearable Brilliance of Colbert: Reinhart/Rogoff Takedown
OMG–this is an absolute master at the top of his game, explaining the Reinhart/Rogoff mistake, and in the next clip, interviewing the very cool young grad student who discovered it. As someone who spends his life trying to explain this stuff, I stand in slack-jawed awe at Colbert’s mastery of doing so in ways that [...]
Charting the Way Back to Factville: Fiscal Version
One of the stated goals of OTE is to help us find our way back to Factville, but man, it’s not gettin’ any easier. Here’s a US Senator (Tom Coburn) from yesterday: “the fact is, our country is headed toward bankruptcy” (from CQ News, no link). In fact, the fact is that this is factually [...]
The Political Economy of Reinhart/Rogoff and the Austerity Debate
Allow me to quickly try to tie together some current events (zipping up to NYC to give this talk). First, you’ve got the Reinhart/Rogoff (R&R) dustup which is generating lots of ink in the AMs papers—more on that in a moment. Second, indicators once again show that the ongoing expansion in American economy continues to [...]
Not to Pile On, But…Correcting Reinhart and Rogoff
I’m late to this and many excellent posts have already gone up citing a new paper that corrects what appear to be fundamental mistakes in Reinhart and Rogoff’s (R&R) influential finding that high debt levels lead to slower growth. Specifically, they argued that when a country’s debt-to-GDP level gets above 90%, real GDP growth takes [...]
The President is Right About Faster Growth Shrinking the Deficit
As I noted here, and despite the current dominance of austerity budgeting, President Obama made an important point when he released his budget last week when he asserted that “…nothing shrinks deficits faster than a growing economy.” Just a one percentage-point increase in real GDP at a time like this–when we’re still below potential and the [...]
A Little Less Fiscal Drag In the Budget
I don’t want to make a huge deal out of 0.7% of GDP, nor do I want to create the impression that fiscal policy is moving in the right direction. It’s not. But I give the White House and my old pals on the econ team over there credit for raising the 2014 budget deficit [...]
Budget Snippets
I’ve been gum flapping on the President’s new budget all day in two cities and I’m not done yet. But here are some brief thoughts, if not for your enlightenment then for your entertainment. –From the department of “who didn’t see that coming?” here’s Rep Eric Cantor’s response: “Let’s set aside our differences and come [...]
David Stockman Goes Way, Way Over the Top
He has a featured piece in today’s NYT which, while about 11.8% absolutely and totally on target, is mostly a horrific screed, an ahistorical, dystopic, Hunger-Games vision of America based on debt obsession and willful ignorance of macroeconomics and the impact of market failure. The first sign of a problem here comes from a mash-up [...]
Talking Growth, Inequality, and More on “Need to Know”
Here’s a free-ranging panel discussion I took part in on many of the hot econo-topics of the day, well managed by Jeff Greenfield. One notable point: Though the discussion was broadly focused on inequality, mobility, and growth, note how we kept going back to debt, deficits, and tax policies. This, IMHO, is a Washington disease [...]
Growth and Debt: It’s What Everyone’s Talkin’ About!
One way I get a bead on what folks are thinking about is when lots of people start asking the same question. Well, over the past week, a lot of people have been asking about the relationship between a country’s debt level and its growth. This seems to have been precipitated by a couple of [...]
Results of First OTE Contest!
Recall that I invited contestants to “write a short, one or two paragraph explanation of this obsession with budget deficits and what it will take to put that concern back in perspective.” I’ve read through the entries and enjoyed every one of them (h/t; HC, who helped). Here are some highlights: To RC, deep thought [...]
Musing from 32,000 Feet: Why Does Rep Paul Ryan Get So Much Attention?
Zipping across the land with a nice internet connection, so a good time to reflect a bit (looking down on clouds from above broadens the perspective a bit, I find). So, I’m doing a radio interview last night, and moderately impressed with myself for being able to speak coherently about four different budgets: Ryan’s, Senate’s, [...]
Which Of These Trends Bothers You More?
Here’s a simple graph I just made for a presentation this weekend that plots the deficit/GDP ratio and the unemployment rate (CBO data; fiscal years; 2013 forward are forecasts). Unemployment’s stuck at an elevated rate, and expected to stay there (these forecasts assume the sequester sticks, which I fear is correct). The budget deficit, on [...]
More on the Ryan Budget: A Guidepost on the Road to Gridlock
Like I said last night, we’ll have lots to say about Rep Ryan’s new (old, really—he even keeps the same name from last year!) budget as we crunch through the numbers. But the overview is the same: deep spending cuts in programs that support the least advantaged, large tax breaks with unspecified “pay-fors,” Medicare gets [...]
A Short Note on Deficits and Growth
Here’s a neat figure from Wonkbook today, showing the difference, in CBO’s opinion—one that matches mainstream econ—between the deficit’s impact on growth in the near term vs. the long term. In the near term given current conditions here and in most of Europe, deficit reduction is contractionary; in the longer term, lower deficits lead to [...]
The Nerf Sword of Damocles and An OTE Contest!
(This post was originally entitled the ‘Needle of Damocles’ but the very clever Chris Hayes just saw me and raised me on this point on his show this AM.) Three insights: One: The Sword that Became a Needle Ezra Klein and I were bemoaning the current state of fiscal affairs the other night on the [...]
Today’s Papers: Gas Prices and Simpson/Bowles II
Random observations re political economy from the broadsheets: –Steve Mufson provides a useful account of what’s going on with gas prices. Sometimes gas price spikes have obvious causes—like a geo-politically driven supply disruption—and sometimes, like now, it’s a bit harder to nail down what’s driving the spike. Mufson reports that the current spike is a: [...]
Three Reactions to the New Simpson-Bowles Deficit Reduction Plan
That deficit demolishing duo of distinction —Simpson/Bowles—is at it again, out with the shell of a new plan to reduce the deficit by $2.4 trillion over the next decade. My first reaction was “really??…another new plan??…we need that!??” My second was “why $2.4 trillion?” We at CBPP have argued that our first order goal should [...]
Why the Budget Hawks Should Retract Their Talons
The WaPo has another in a series of editorials warning against any complacency in our efforts to stabilize the debt. WE DETECTED a whiff of complacency when President Obama declared, in the State of the Union address on Tuesday, that $2.5 trillion in 10-year budget savings achieved so far put the nation “more than halfway towards the [...]
SOTU, The Morning After
There’s a plethora of analysis, criticism, praise, and commentary in this AMs papers on the big speech last night, to which I have only a little to add. As usual, start with Wonkbook but as far as I could absorb, the general consensus is that the President laid out an ambitious, progressive agenda that will [...]
Jared Bernstein’s areas of expertise include federal and state economic and fiscal policies, income inequality and mobility, trends in employment and earnings, international comparisons, and the analysis of financial and housing markets.
