The lead editorials in both the WaPo and the NYT today riffed off of some points I made here a few weeks ago, points that have become more germane as the R candidates reveal more about their tax plans. The R’s tax plans, which all cut taxes aggressively, largely at the top of the income… Read more
Archive for the ‘Deficits, Debt and Taxes’ Category
Don’t even fool around with the debt ceiling
Over at the WaPo. The idea here is that because we are unlikely to acctually default on the federal gov’t’s obligations, I worry that some people are tuning out the debt ceiling debate. But there are good reasons not to do so. First, see the figure in the piece–even flirting with the debt limit distorts… Read more
Dynamic Scoring in Action: Unwarranted Certainty
Once the Republicans took the majority in Congress, they instructed the budget scorekeepers to do “dynamic scoring:” building macroeconomic feedback effects into their revenue estimates from proposed changes to tax policy. Because economists broadly assume that taxes distort decisions about activities with growth impacts, like labor supply or capital investment, cutting taxes often generates more… Read more
Austerity arithmetic: the dreaded r > g trap.
I’ve got a piece out in PostEverything on a lesson we should learn from some arithmetic embedded in the Greek debt crisis. Basically, I point out that when the interest rate a country must pay to service their sovereign debt is consistently and significantly above their growth rate, their debt/GDP ratio just keeps growing. In… Read more
No debt forgiveness in the Greek deal, as austerians announce Phyrrhic victory
There’s still much to learn about re the (heart-) breaking news re what looks like a terribly harsh and austere deal to keep Greece in the eurozone, but this ‘graf from the NYT story is, if not unexpected, really unfortunate: But any easing of Greece’s debt repayment obligations would not include something Greece had previously made… Read more