Janet Yellen Speaks, Makes Critical Points, and Presents a Graph I Shoulda Made
I’ll have more to say about this remarkable speech given yesterday by Fed Vice Chair Janet Yellen (getting ready to go on NOW with Alex Wagner on MSNBC). Well—remarkable in the sense that it’s brimming with common sense that is far too uncommon these days. Read this now and study this chart, one I’m kicking [...]
SOTU: Watch Away from the Ball
When watching a basketball game, though your eye is drawn toward the player with the ball, it’s good to watch how the play’s developing away from the ball—trying to see how players without the ball are moving–looking not just where the play is, but where it will be a few passes ahead. That’s also the [...]
Is It Really Important to Stabilize the Public Debt? And, If So, When and At What Level?
Suppose, just for entertainment purposes, that we wanted to have a sane, rational, and even informative discussion about what to do about our public deficits and debt (the latter being the cumulative sum of the former)—one that asks the questions posed in the title but doesn’t automatically default to the “hair-on-fire, we’re Greece!, hard choices, [...]
Who Gets Hurt Most by Higher Unemployment?
The recent CBO report projects real GDP growth to be a measly 1.4% this year, down from a rate closer to 3%, they claim, were it not for all the fiscal cuts baked in the 2013 cake: CBO estimates that economic growth in 2013 would be roughly 1½ percentage points faster than the agency now projects [...]
Senator John McKeynes
From this AM’s NYT: …the potential impact of the cuts is being cited by both parties. Senator John McCain, Republican of Arizona, said the military side alone would eliminate 350,000 jobs directly, and 650,000 more that depend on the government programs. So, not only is this pure Keynesian analysis, but the Senator is recognizing both [...]
On the Negative GDP Report
Jeez, I knew we were growing too slowly but I didn’t think we were contracting. And I still don’t—not in any way that’s likely to stick through revisions and incoming data. Today’s GDP report for the last quarter of 2012 had the economy contracting at an annual rate of 0.1%, which implies a quarterly rate [...]
Has the Fire in the Hair of Deficit Hysterions Been Extinguished?
As Paul K writes this AM, it does seem to be the case that the debt crisis mongers are getting less love and attention these days. I was on TV the other day with a Republican congressman and when he launched into his talking points on the crushing Greco-style crisis we face, his words just [...]
Real Spending Cuts in the Real World
The factoid I think I’ve been touting the most in cable TV arguments lately is that when it comes to spending cuts, we’ve already cut government spending by $1.5 trillion over ten years ($1.7 with interest savings) by lowering discretionary spending caps. Yet, Republicans—and too many moderators—deny that these cuts occurred. Just yesterday, Ezra quotes [...]
The Great Debt Ceiling Vote of 2013: Huh???
As I’ve pledged, I won’t respond to the key-dangle of the latest fiscal crisis. I will not come running with a bucket of tax increases and spending cuts every time some crisis monger yells “deficit!” in a crowded theater. I will instead focus on a) the big economic issues from which these artificial crises are [...]
President Obama’s Second Inaugural Speech
I thought the President gave a strong and progressive second inaugural speech today, one that resonantly underscored the most important themes he’s been promulgating since before anyone even knew who he was. What I don’t see so clearly is the path that goes from our budget constraints to meeting the aspirations the President articulated today. [...]
A Three-Month Extension on the Budget Ceiling: Institutionalizing Crisis Mode
Two points leading to two conclusions: First, as I said before, and Paul Krugman said today, as far as the actual numbers go, there’s no need to be in fiscal crisis mode. It would take $1.4 trillion to stabilize the debt-to-GDP ratio over the next decade, which in functional times would not be a particularly heavy lift. Second, [...]
A Little Table (or two) Showing Why We’re Neither Greece Nor in Need of Default
(Updated with added table!) I promised myself (and my readers) that I’d take a break from fiscal policy and focus on the real economy for a while—very important not to get sidetracked into every morsel of crazy being doled out down here in DC. But given some arguments I’ve been having with those insisting we’re [...]
Some Perspective on the Fiscal Cliff Deal
I’ve been debating the fiscal deal all day—just had a rousing conversation on the Larry Kudlow show, arguing with Jimmy Pethokoukis and Larry about the characteristics and implications of the deal. As my readers know, I judge it as an incomplete step mostly in the right direction, but whether we’re able to continue in that [...]
What Did You Learn From the Cliff Debate, Dorothy? (And the most important question in today’s politics.)
Well, I’m glad that’s over. Now that the House has passed the Senate compromise bill, the full spate of tax increases and spending cuts that went into effect yesterday will be shut off (though the sequester was just suspended for a couple of months). Still, I don’t mean to be a downer, but any relief [...]
Krugman et al: Close the Argument by Addressing CBO’s Alternative Budget Path
Paul Krugman and a host of others are making important and highly salutary points about budget deficit hysteria. Policy makers should listen to them. However, unless I’ve missed it, these critics have neglected to tackle a key part of this: why the CBO’s alternative baseline showing persistent structural deficits, is wrong. I fear that policy [...]
Too Many Baselines!
Here’s an important piece by Ezra Klein on recent budget debates stressing a couple of points that I hold near and dear. First, there’s the “compared-to-what,” or budget baseline problem. Whenever we’re talking about revenue increases or spending cuts, we’re comparing those changes to some line in a budget that represents our existing plans for taxes [...]
A Few Fiscal Points re this AMs WaPo
Two front page articles in today’s WaPo caught my attention (yes, I still read the “broadsheets”). The first was a cliff update but it is the accompanying graphic upon which I wanted to comment (saw “My Fair Lady” last night so I’m minding my elocution). It is conventional wisdom in this town, especially by the [...]
In Case You Were Dying For More Polemics On the Chained CPI…Here Ya Go:
Though the actual negotiators are presumably busy assembling their new Christmas presents—I spent two hours yesterday getting a new wireless printer to work (see note*)—some of us are still arguing about various facets of the fiscal cliff, in particular, the chained-CPI (details as to what this is about and CBPP’s view here). Here’s a rough [...]
Fiscal Cliff Update: It Ain’t Over ’til We’re Over, But Little Movement on Hill
Reading Jon Weisman in the NYT this AM, the question re the fiscal cliff is less “are we going over?” and more, “do I attach a parachute or a bungee cord?” There are definitely folks trying for a last minute deal of the type the President outlined on Friday: –extend tax cuts on 98% of households; [...]
2012 Look Back: Economic Beliefs that Have Served Us Poorly
Well…in honor of the fact that the world did not end on Friday, how’s about one of those renowned OTE end-of-the-year features? I’m compiling another CBPPs-greatest-graphs post, but as I’ve been writing something on economics education, I stumbled on a number of economic precepts that have taken a hit over the past year. Budget Deficits [...]
Edging Closer to a Deal on the Cliff?
Yet another counter-offer just out, this time from the President. As I noted earlier, they could close a deal this week, or it could still fall apart. A month ago, I was at 75/25 we’re going over. I’m now 60/40 we’re not. At this point, the biggest outstanding question is less can they agree on [...]
Fiscal Cliff: We May Be Getting Somewhere…or Not
It needs a lot of work, but Rep. Boehner’s latest fiscal cliff offer moves the ball down the field. Here it is, as I understand it: –Tax rates go up on households with incomes above $1 million (the top 0.3%!) as opposed to $250,000 raising allegedly $460 billion over ten years (but see below on [...]
The Limited Reach of the Estate Tax
The Tax Policy Center (TPC) today released some interesting info on the estate tax, another contentious part of the cliff debate. As I note here, because of the large exemptions, very few estates face the tax. The figure below quantifies the point, from the perspective of the parties’ two different preferred policies. The President and the [...]
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.
