While a great deal of attention has been given to Federal Reserve Chairman Ben Bernanke’s address in Jackson Hole, Wyoming on Friday, the remarks provided that day by his trans-Atlantic counterpart, European Central Bank President Jean-Claude Trichet, deserve equal, if not more, attention. Trichet highlighted the need for “ambitious” fiscal consolidation in promoting the global economic recovery.
Credit-rating agency Standard & Poor’s has a message to U.S. policymakers: We are watching you on the growing national debt.
House Gone, Senate Eyeing the Exit – The House started its six-week recess Friday and the Senate will adjourn at the end of this week. Debate and a vote on the nomination of Elena Kagan to the Supreme Court is expected to take up a lot of the schedule, and oxygen, this week for senators.
"The current fiscal path of the federal government is unsustainable." This sentence begins any discussion about the future of US fiscal policy and CBO uses it a lot. But when they go into detail about the increased possibility of a fiscal crisis related to our rising fiscal debt picture, it's bound to raise some eyebrows on Capitol Hill - not to mention sending shivers down some spines on both sides of the aisle.
If You Can’t Stand the Heat… – Washington has been experiencing a heat wave, but it can’t all be blamed on the friction between the two parties. Before members of the House can escape at the end of the week for a long break, they must complete work on the war supplemental that has bounced around more than a beach ball. The Senate will stay an extra week before its month-long recess and will try to complete a small business measure amid votes on the Elena Kagan nomination to the Supreme Court, campaign finance reform, and energy legislation.
Opens and Tours – Americans did not fare well in sporting events across the pond this weekend; leaving us Yanks to rely on past memories of success at the British Open and Tour de France as well as the understanding that our economy is not quite as bad off as those of the countries that are beating us. Meanwhile, lawmakers in Washington continue to negotiate treacherous links and steep climbs in the quest to complete legislation.
The IMF just released its experts' assessment of the US economic and fiscal outlook to the public (although it was dated June 21). The report recommends ways in which the US can get itself back on track fiscally, when to do it, and what goals it should set for the medium term.
After the Fireworks – The Independence Day celebrations have concluded. The fireworks have fizzled and most of us are back to work. Capitol Hill is quiet after its own pyrotechnics last week as lawmakers tried to finish work on some contentious issues before its recess this week. It failed to get many of its tasks fully completed as disagreements on how to fund legislation continued to bog down the agenda.
CRFB just released its analysis of the long term outlook. The analysis noted that while the debt picture has improved somewhat under CBO's extended baseline scenario, there is still much work to be done to prevent debt from reaching unsustainable levels.
After much anticipation, the CBO has released its Long Term Budget Outlook, which gives the first glimpse at the long-term effects of the recently-enacted health care legislation. In the report, which was released at the third meeting of President Obama's fiscal commission, the extended-baseline scenario (current law) shows drastic improvement from last year's outlook, but the alternative scenario, which is composed of policies more likely to occur, shows a shocking amount of debt.
