CBO recently released its analysis of a hypothetical deficit reduction plan's effect on the economy. They use a $2.4 trillion deficit reduction plan (about the same as the hypothetical Biden group plan) to illustrate the short-term and long-term economic effects of fiscal consolidation, while showing how these effects either add to or detract from the original deficit reduction.
Highlighting the growing concern within international circles and among the various ratings agencies, the International Monetary Fund released its newest World Economic Outlook today, and the verdict is unpleasant.
Crunch Time – The playoffs are well underway in the NBA and NHL. A playoff atmosphere is also brewing in Washington even though the home teams are not in the picture. A debt limit deadline and several teams competing for debt reduction glory are creating an air of anticipation and trepidation. Who will go home and who will go all the way?
No Deficit of Talk – At least there no longer is a deficit of discussion when it comes to our fiscal situation. House Speaker John Boehner (R-OH) gave a major address Monday night to the Economic Club of New York where he said that increasing the statutory debt limit should be accompanied by spending cuts greater than the amount of the debt limit increase.
Today, Comeback America Initiative founder and CEO Dave Walker (former U.S. comptroller general) and Concord Coalition executive director Bob Bixby published an op-ed in POLITICO. They write that the nation has some very difficult fiscal choices ahead, and that the only way policymakers will ever truly be able to put the big ticket items on the table is if there is greater public understanding of the nation's fiscal challenges and the kinds of significant structural reforms we will need to make to solve them.
At 3:15 p.m. today, as part of the New America Foundation's 2011 Retreat, Slate Group Chairman Jacob Weisberg will moderate The Moment of Truth: America's Fiscal Crisis, featuring several fiscal policy experts--including CRFB president Maya MacGuineas.
It's sure to be an interesting and informative discussion, so don't forget to check it out!
Click here to watch the live video.
In early 2009, lawmakers enacted an economic stimulus package to help stem the economic freefall which was shedding hundreds of thousands of jobs per month as the unemployment rate was on a quick climb towards ten percent. Regardless of the merits or size of a fiscal stimulus package, we at CRFB warned against supposedly temporary provisions lasting much longer than the stimulus dictated.
Megan McArdle at The Atlantic writes about what happens if China stops buying U.S. Treasury bonds. She points out that a fiscal crisis is unlikely to be foreshadowed by signs such as a gradual rise in interest rates or other countries merely slowing down lending. Rather, citing the studies of Carmen Reinhart, she argues that changes would be much more precipitous.
With a possible federal government shutdown looming in only a few short hours, it is worth noting some of the costs if such an action occurs. With a lot hanging in the balance, a shutdown could have some serious consequences.