The Republican presidential contenders will be at it again tonight in yet another debate, but for those who are already suffering from debate fatigue, this evening's affair at Dartmouth University in the first primary state of New Hampshire promises to be different. First of all, the questions will focus on the economy, meaning that voters should hear more from the candidates on the two intertwined issues that polls indicate matter most to them - the economy/jobs and deficits/national debt.
In a recent report, JP Morgan summed up a number of reasons, from a financial perspective, on why it is important for the Joint Select Committee on Deficit Reduction (or Super Committee) to "Go Big" and exceed their savings mandate of $1.5 trillion. The report warns that markets will be closely watching the committee's work, as fears that stagnant economic growth may persist are mounting in the face of inaction on the nation's debt.
Yesterday, we argued that to actually stabilize the debt as a share of the economy, you probably need to propose a plan with even more savings than what would stabilize the debt under current projections. The risks come from both the economic and political uncertainties:
Leading up to President Obama’s job speech tomorrow evening, there has been much speculation as to the measures the president will propose. The current expectations are that he will suggest a $200 - 300 billion jobs plan, including extensions of the payroll tax holiday, unemployment insurance, and certain business incentives.
In CBO's latest Budget and Economic Outlook, CBO includes revised projections of various economic indicators as part of its update. Since there is such a major relationship between economic conditions and fiscal policy, these numbers are of significant importance. CBO's latest economic projections do contain worse real GDP growth for the first few years, but much faster growth mid-decade.
The National Association for Business Economics (NABE) published the findings of its August 2011 Economic Policy Survey yesterday, in which 250 panel members were asked various policy questions between July 19 and August 2 of this year. The findings were very interesting, particularly that most panelists supported a mixture of spending cuts and revenue increases to reduce deficits.
With the housing market still depressed almost five years after the housing bubble burst, the Obama administration is seeking input from private investors on methods to convert foreclosed properties owned by Fannie Mae and Freddie Mac into rental homes.