The Center for Strategic and International Studies hosted an event today chaired by former Senators Sam Nunn (D-GA), who is a member of the steering committee for the Campaign to Fix the Debt, and Pete Domenici (R-NM) entitled "Economic and Foreign Policy Implications of America's Debt." It featured comments from former Treasury Secretary Robert Rubin, former Treasury Secretary and Secretary of State James Baker, and a panel of former members of Congress.
Are we really borrowing for free, and should we be taking advantage of it?
The Concord Coalition has just unveiled a new paper, authored by Edmund Andrews, Joe Minarik, and Diane Lim Rodgers, called "Not Just Their Problem: The Euro Debt Crisis and U.S. Fiscal Policy," shedding some light on our fiscal outlook in an international context.
In evaluating the fiscal cliff, it is interesting to see how it compares to past cases where the federal government has rapidly reduced deficits. The OMB has historical data on deficits as a percent of GDP going back to 1930, so we can evaluate based on this time period. For simplicity's sake, we will compare "cliffs" by the change in deficits from the previous year.
The New York Times has an article today entitled "In Washington’s New Mood of Austerity, Legislating Turns Into a Zero-Sum Game," detailing how the recent surface transportation/student loan/flood insurance bill involved some pay-fors that had avoided the budget axe in the past. As the author Jonathan Weisman describes it:
Today, the IMF released the concluding statement of its Article IV Consultation, calling for the U.S. to pass a deficit reduction plan quickly but phase in implementation to avoid unduly harming the recovery. Their economic forecast shows a continued slow recovery ahead--even with much of the fiscal cliff averted--as real GDP growth is projected to average 2.0 and 2.3 percent in 2012 and 2013, respectively.