Economic Recovery Measures

The Economic Effects of Avoiding (Much of) the Fiscal Cliff

Update: CBO confirmed our numbers today, finding a remaining fiscal contraction of about 1 1/4 percent.

Treasury Sells Remaining Shares in AIG

The Treasury Department reported today that it will sell its remaining shares in AIG, ending a more than four-year assistance program. The final sale, comprising about 16 percent of AIG's common stock, is expected to bring in around $7.6 billion in returns.

What's On Congress's Plate

First off, CRFB would like to congratulate President Obama and all of those who were elected and re-elected to the Senate and the House. CRFB is looking forward to continue working with policymakers from both sides of the aisle to help make deficit reduction a reality.

Saving For a Rainy Day

As the East Coast and other communities affected by superstorm Sandy begin the work of rebuilding and assisting those who need help, the CRFB and Fix the Debt teams are keeping everyone in our thoughts. Just as there are preparedness lessons we can learn from Sandy, there are very important takeways for the federal budget too.

AIG Drives TARP Estimate Lower

The CBO has released its newest estimate of the Troubled Asset Relief Program (TARP), showing that it would cost taxpayers a total of $24 billion. This is $8 billion lower than their last estimate done in March.

QE3 Is on the Way

After months of speculation and anticipation, the Federal Open Market Committee decided to undertake a third round of quantitative easing. The centerpiece of QE will be the purchase of more mortgage-backed securities at a pace of $40 billion per month.

Treasury Winds Down TARP Support of AIG

As the Troubled Assets Relief Program (TARP) continues to wind down, the biggest programs remaining are the support of GM and AIG. The latest estimate of TARP from CBO projected the two programs would cost $41 billion combined, larger than the $32 billion overall cost projection for TARP. That means the remaining elements of TARP have been a net gain for taxpayers.

It's Not Free Money

Paul Krugman and other advocates of more federal stimulus spending cite today’s extremely low real interest rates, near zero or negative, as reason to borrow and spend this "free money." As Jared Bernstein, another stimulus advocate, points out, though, the notion of free federal debt is a fallacy.

How Might the Fiscal Cliff Play Out?

This week’s The Economist offers another analysis of the end-of-year fiscal cliff of tax increases and spending cuts that the United States faces under current law. The article also explores how "the election will determine whether a nasty dose of austerity can be avoided."

When It Comes to Deficit Reduction, Timing Matters

The news that Britain has entered into a double-dip recession touched off a fierce debate last week over the role of austerity in the country's downturn.

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