CBO Says President’s Debt Path is Even Lower Than WH’s Own Estimate
Just in case your weekend isn’t getting off to an exciting enough start, here’s another chart to make you go “hmmm…” The Congressional Budget Office always re-estimates the President’s budget. Not that they don’t trust the President’s budget analysts at OMB, but, you know…they’re the official scorekeepers. When you work in the White House, as I [...]
CBO’s New Budget Update: A Fire Hose for Hair-On-Fire Austerions re Near Term Deficits
The good news is that according to CBO’s new budget update, the budget deficit is coming down fast and under their assumptions, will bottom out at 2.1% of GDP in 2015. The debt/GDP ratio begins falling in 2014, from about 76% to 71% in 2018. Just relative to their February projection, CBO’s taking down their [...]
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 [...]
Random Musings On the Budget Debate
I know, last month was all about budgets—we’re past that now, right? Nuh-uh. Just a few random synapse-firings for your consideration. –The next entry in the budget sweepstakes is of course the belated White House budget, out next Wed, I believe. I anxiously await answers to these questions: –the universal pre K idea announced in [...]
Today’s Papers
A few things that caught my sleepy eyes: –Jim Tankersley reviews the work of the expansionary contraction crowd, which is almost exclusively the work of economist Alberto Alesina with co-authors. I’ve long held the view that tax increases and budget cuts in weak economies are analogous to leeching in medieval medicine: it’s not that it [...]
Are Health Costs Really Slowing? And What Does it Mean If They Are?
[This post is based on Chapter 5 of the Council of Economic Advisers new Economic Report of the President.] The fact shown in the first chart below—a decline in the rate of health spending per person—is becoming pretty widely known. What’s not known is whether this trend will stick. As I suggest below, based on the [...]
No, Government Spending Really Isn’t Going Up Right Now
On the Bill Maher show the other night, I pointed out that contrary to the talking point that government spending is spiraling out of control, it in fact went up only 0.6%, 2009-2012. Whenever I say that, I get emails from people who don’t believe it, and not just complaining conservatives. Many progressives can’t believe [...]
Passing Some Real Time with Bill Maher
Had great fun on the Bill Maher show last night with the wonderful Rachel Maddow and reasonable Republican former Congressman Tom Davis. Bill is a true force of nature. Henceforth, I will not be able to refer to our over-stacked defense complex without envisioning “big fake …!” I thought Rachel made really piercing points about [...]
Amidst the Madness, Let’s Not Overlook the CPC’s Budget
Allow me to join the chorus of voices in support of another budget out this week, one I fear may be overlooked, by the Congressional Progressive Caucus. Here’s the exec sum, and note what comes first: job creation! OMG! That’s followed by many ideas we tout here at OTE, including a financial transaction tax, ending [...]
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 [...]
Paul Ryan’s New Budget: Been There, Didn’t Do That
We won’t have details until the AM, but as he describes it in a WSJ oped, Rep Paul Ryan’s budget looks a lot like the platform he and Gov Romney ran on, and lost on, last year. Repeal Obamacare and financial reform (Dodd-Frank), voucherize Medicare (after ten years), cut spending on food stamps and Medicaid [...]
The Tyranny of the Average
As someone who works with numbers a lot, I find averages to be tremendously helpful. I’d be lost without them.* But there’s one area where averages have been misleadingly used of late, an area where the stakes are extremely high—this is far from academic. I’m not exaggerating when I tell you that if we don’t [...]
Smart Talk on Sequester Myths
Two avowed centrists, Tom Mann and Norm Ornstein, have a nice “myths” piece in yesterday’s WaPo. I’m running off to do the Diane Rehm radio show on this stuff, so no time to summarize, but I particularly liked this point: 2. At least the automatic cuts will reduce runaway spending and begin to control the deficit. [...]
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 [...]
The Sequester Begins to Fester
As veteran OTE’ers know, this has happened before: I’ve come to the end of my rope and can’t write about this anymore. It’s just too ridiculous to spend time analyzing this part of contemporary fiscal policy–the part where they set fiscal time bombs and then scrum around defusing them…or not–as if it makes sense. It’s [...]
OTE Live!: Richard Kogan on How Sequestration Is Likely to Play Out
When I want to understand the details of how the automatic cuts known as sequestration are likely to play out, I think “Richard Kogan.” And I’m lucky enough to be able to walk down the hall and cajole him into sharing his deep, institutional knowledge with us.
“Obama’s Sequester?” Pure Nonsense
For my sanity and yours, I rarely get into the silliest corners of politics, but this conservative talking point that the word “sequester” must actually be called “Obama’s sequester,” like they had nothing to do with it, is really beyond the pale. I get that both sides are trying to position themselves to not get [...]
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 [...]
Central Banks: Why Are They Alone Fighting for Growth?
Might as well end the week where I started: talking—OK, complaining—about misguided fiscal austerity. And wondering, once again, why it’s only unelected central bankers, not politicians with jobless and wageless constituents, who are trying to do something about growth and unemployment (see figure below on the magnitudes of the liquidity they’re pumping into their economies). [...]
What’s Janet Yellen About?
Just a bit more of this great speech from Federal Reserve Vice-Chair Janet Yellen yesterday. First, her comments were well placed, coming a day before tonight’s SOTU wherein the President is expected to discuss measures that might, you know, help the economy instead of hurting it. The headwinds she mentions are all still active and [...]
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.
