Economic Recovery Measures
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.
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.
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.
Federal Reserve chairman Ben Bernanke held a press conference yesterday following the conclusion of the Federal Open Market Committee meeting. Questions spanned a variety of topics including the Fed's current monetary policy stance, the economic outlook, the possible threat posed by European troubles, and Fed transparency. But one question did come up about the fiscal cliff and how the Fed would react if no action were taken. Here are his remarks:
The House is set to move forward on legislation that would enact a tax cut for small businesses. The Small Business Tax Cut Act (HR 9) allows small businesses (businesses with less than 500 employees) to temporarily deduct 20 percent of their domestic business income in 2012 up to 50 percent of employee wages. JCT has estimated that the bill would cost $46 billion, with almost all of that coming in the next few years.
Our recent paper on the fiscal cliff details the short-term or longer-term economic problems that the country will face if lawmakers either allow everything in the fiscal cliff to occur as scheduled or if they decide to extend it all. This blog will look farther into the potential short-term impacts, attempting to quantify what the cliff's 2013 effects would do to the economy.