Inflating Our Way to Fiscal Stability? Not an Option

Gross debt hit 101 percent of GDP at the end of 2013, the highest since the immediate postwar years. And despite the improved outlook for the next few years, the Congressional Budget Office has consistently argued that, in the long term, debt will continue to grow relative to GDP, leaving elected officials with the difficult … Continue reading Inflating Our Way to Fiscal Stability? Not an Option

Good News, Bad News and Silence

The Congressional Budget Office has released its updated budget projections. Good news: CBO now estimates that if the current laws that govern federal taxes and spending do not change, the budget deficit in fiscal year 2014 will be $492 billion. Relative to the size of the economy, that deficit—at 2.8 percent of gross domestic product … Continue reading Good News, Bad News and Silence

Once Again, We Chase the Shiny Objects

This week the Congressional Budget Office released The Budget and Economic Outlook: 2014-2024. From the press coverage, one would have guessed the report was either entitled Obamacare: the Job Killer that is Almost as Bad as Benghazi or Obamacare: Ending the “Job Lock” and Opening the Door to Leisure. In reality, the impact of the … Continue reading Once Again, We Chase the Shiny Objects

Budgetary Realities

As you likely know, the Congress seems poised to pass a $1.012 trillion omnibus spending bill to avoid another shutdown (see coverage from the Wall Street Journal, the Washington Post, the Hill).  It appears that both the Democrats and Republicans will get things they hold dear in the spending provisions and the riders (Ed O’Keefe … Continue reading Budgetary Realities

Taking Credit

Given the events of the past several years—and, most certainly, the past few weeks—one should not be surprised that Fitch has threatened to downgrade the nation’s credit rating (as you may recall, S&P issued a similar warning in 2011, and followed through). Although Fitch believes that Congress will raise the debt limit, it observes that … Continue reading Taking Credit

The Debt Ceiling and Social Security

Forgive me if I am confused. On May 13, 2013, the Social Security Board of Trustees released its annual report on the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds. A few salient points: In 2012, the OASDI Trust Funds had $840 billion in income, including $509 billion in contributions, $27 billion from … Continue reading The Debt Ceiling and Social Security

Collective Action Problems and the GOP

Ezra Klein has an interesting piece (Wonkblog) on the collective-action problem facing the GOP with respect to Obamacare. Stated concisely: Here's the Republican Party's problem, in two sentences: It would be a disaster for the party to shut down the government over Obamacare. But it's good for every individual Republican politician to support shutting down … Continue reading Collective Action Problems and the GOP