Fiscal Policy in the News
It’s official, budget commissions are now sexy. Esquire magazine confirmed it with the creation of its own Blue Ribbon Commission to Balance the Federal Budget.
Today, President Obama has announced his intention to nominate Jacob Lew, the current Deputy Secretary of State for Management and Resources, to replace Peter Orszag as Director of OMB. Lew was previously OMB director during the Clinton administration.
OMB and the President have just kicked off the 2nd annual SAVE Awards, a contest that allows federal employees to submit their ideas to save money for the taxpayers by making the federal government more efficient. Last year's winner was Nancy Fichtner, who suggested that the VA allow patients to take their medication with them upon discharge. OMB has also proposed the implementation of a few other ideas that didn't win, such as using electronic payroll statements.
Alberto Alesina of Harvard University has a new paper out that talks about how differences in the composition of debt reduction packages make a difference in terms of success. He looks at which contractions have been fiscally successful, less harmful to growth, fiscally unsuccessful, or more harmful to growth. In addition, he examines the political ramifications of tightening fiscal policy and whether they necessarily lead to the incumbent being voted out of office.
The establishment of a fiscal commission either in Congress or by the President was attacked from both sides of the political spectrum. Liberals thought that the group would be cover for cutting entitlement programs, while conservatives thought the commission would be a cover to raise taxes. When President Obama's National Commission on Fiscal Responsibility and Reform came to be, both sides wanted to fence off different options for consideration. And it continues to happen.
Jeanne Sahadi wrote for CNN today on the sometimes-overlooked short-term perils that the growing US debt could create, and how they affect the average American today. Our debt can be linked to slower economic growth, higher interest payments, scaled-down government services, and higher inflation. The problems created will be more difficult to address—and the choices will be harsher—the longer that lawmakers take to deal with this problem.
Robert Samuelson has a blunt message for the American public in today's Washington Post: WAKE UP! In his op-ed Samuelson pans the lack of urgency by lawmakers and the public alike, particularly in light of the recent financial turmoil in Europe. He questions whether anyone is serious about reducing our deficits and debt.
The EU and IMF just recently agreed to provide a nearly $1 trillion rescue fund for European countries facing troubled fiscal waters. Meetings over the weekend between European finance ministers lasted until early today, after which the EU announced it would provide $560 billion in new loans and an additional $76 billion to existing lending programs to struggling countries.
In an article today from Huffington Post, Hue and Cry, Former South Carolina Senator Fritz Hollings takes aim at organizations, experts, and policymakers for not raising “hues and cries” about jobs, taxes, immigration, and budget deficits.