November 27, 2013
Fiscal Drag in 2013
From Torsten Slok at Deutsche Bank:
[F]iscal drag in 2013 is 2.4%, ie if GDP growth in 2013 ends up being 1.7% then if we had not had the fiscal drag then GDP growth would instead have been 4.1% (=1.7% + 2.4%). ..
November 20, 2013
"Fiscal Policy: Accomplishments, Challenges and Opportunities"
That's the title of CEA Chair Jason Furman's presentation at the University of Wisconsin at Madison on Monday. Introduced by UW Chancellor Becky Blank, his discussion covered a wide range of issues. From WisBusiness:
Jason Furman, chairman of Obama’s Council of Economic Advisers, said Congress should invest in infrastructure at today’s low borrowing rates, reform the tax code, approve an immigration reform bill projected to cut the deficit and agree on long-term debt reduction, instead of implementing short-term cuts like sequestration that impede economic growth.
November 01, 2013
Who Supports SNAP Cuts?
You ax nothing from the recipient and everything from the tax slave...
October 30, 2013
SNAP Expenditure Reductions
(Updated with thoughts on "The Food Stamp President")
From CBPP (10/24):
The 2009 Recovery Act’s temporary boost in Supplemental Nutrition Assistance Program (SNAP) benefits ends on November 1, 2013, which will mean a benefit cut for each of the nearly 48 million SNAP recipients — 87 percent of whom live in households with children, seniors, or people with disabilities.
October 21, 2013
American Debt, Chinese Anxiety, Elaborated
Or, how the Tea Party is working hard to sabotage the dollar's role in global finance.
October 16, 2013
The AftermathUpdate, 10/20 12PM Pacific
After the failure of the Republican effort to defund the Affordable Care Act, what is the net macro effect? According the IHS-Global Insight, and S&P , 0.6 ppts were shaved off 2013Q4 GDP growth (SAAR). S&P puts a dollar figure to this impact -- $24 billion in lost output.
October 13, 2013
An exit strategy for Republicans
Like many other Americans and observers around the world, I find the ongoing spectacle in Washington both perplexing and distressing. But having seen the President follow the advice of our mighty blog for choosing the next chair of the Federal Reserve, I feel emboldened now to recommend a course of action for the House Republicans.
October 08, 2013
Movements in Short Term Treasurys
"Short-term U.S. debt prices tumbled again Tuesday amid rising investor concern about the prospect of a government-debt default, sending the yield on one-month U.S. Treasury bills to its highest level since the financial crisis."
October 07, 2013
Don't Eat the Shrimp!
(Update 10/8, 9PM)
Or think twice ... thanks to the government closure.
October 04, 2013
Estimated Macro Impacts of the Shutdown
Four business days into the shutdown, and we have already exceeded in length 90% of the government-wide shutdowns that have occurred. What is the macro impact? In an accounting sense, by end-of-Monday, the impact should be to shave off 0.2 ppts of 2013Q4 q/q annualized growth.
July 03, 2013
Off-balance-sheet federal liabilities
Here's the abstract for a paper I recently completed on Off-Balance-Sheet Federal Liabilities:
Much attention has been given to the recent growth of the U.S. federal debt. This paper examines the growth of federal liabilities that are not included in the officially reported numbers. These take the form of implicit or explicit government guarantees and commitments. The five major categories surveyed include support for housing, other loan guarantees, deposit insurance, actions taken by the Federal Reserve, and government trust funds. The total dollar value of notional off-balance-sheet commitments came to $70 trillion as of 2012, or 6 times the size of the reported on-balance-sheet debt. The paper reviews the potential costs and benefits of these off-balance-sheet commitments and their role in precipitating or mitigating the financial crisis of 2008.
What follows is a brief summary of the paper.
July 01, 2013
Another Item for the Annals of Innumeracy (and PoMo Math)
In response to what I thought were straightforward renditions of the data indicating reductions in government spending, reader W.C. Varones writes: “Cutting government spending" is a real stretch.” In a (perhaps vain) attempt to convince him that indeed spending is declining, I present data from BEA and CBO (I am hoping that he hasn’t joined the Jack Welch view of government statistics gathering).
June 14, 2013
IMF Article IV on the US: "deficit reduction in 2013 has been excessively rapid and ill-designed"
The IMF has just concluded its Article IV consultation with the US. The concluding statement observes:
May 30, 2013
Spurring growth in an era of constraints
From 30 'Memos to the Left' entitled 'Progressive Governance: The Politics of Growth, Stability and Reform'.
For over four years, the economies of the Euro zone, the UK, US and Japan have been mired in a slow and hesitating recovery from the deepest recession since the Great Depression. In the beginning, policymakers responded aggressively to both the illiquidity and insolvency problems in the financial systems, and the collapse in aggregate demand. ...
May 20, 2013
Are There Reasonable Approaches to Fiscal Consolidation?
According to the CBO, under the President’s budget, the deficit hovers around 2% of GDP, and debt-to-GDP stabilizes through 2023 at levels lower than today’s.
May 19, 2013
Sovereign debt concerns in 2013
Interest rates on government debt for a number of European countries-- notably Greece, Portugal, Ireland, Italy, and Spain-- shot up considerably during 2010-2012. Those yields have fallen significantly from their peaks, though these five countries still face higher borrowing costs than most other countries in Europe.
May 12, 2013
How Fannie Mae made its profit
Mortgage buyer and insurer Fannie Mae was in the news again this week.
April 26, 2013
Another mediocre GDP report: is this the new normal?
The BEA released today its estimate of 2013 first-quarter real GDP, which grew at a 2.5% annual rate from the previous quarter. That's below the average 3.1% growth rate since World War II, but better than the 2.1% average since the recovery began in 2009:Q3.
April 14, 2013
Growing student debt
I was curious to take a look at the growing student debt load and the government's exposure to potential repayment issues.
April 10, 2013
Who is holding all those U.S. dollars?
If recent trends continue, in a few months there will be $1.2 trillion in Federal Reserve notes (otherwise known as dollar bills) in circulation. Who is holding all these?
March 12, 2013
Assessing the Economics of the Ryan Plan
March 07, 2013
Still in Search of Expansionary Fiscal Contraction
The revisions in Euro zone and UK GDP figures have confirmed the lackluster performance in economies where rapid fiscal consolidation has been implemented. In the Euro zone, estimated growth has now been negative for five quarters. And in the UK, revised figures indicate negative growth for 2012Q4. In contrast, the US has exhibited continued, albeit modest, growth.
March 06, 2013
Fiscal tipping points
At the recent U.S. Monetary Policy Forum I presented the paper Crunch Time: Fiscal Crises and the Role of Monetary Policy, along with co-authors David Greenlaw (Managing Director and Chief U.S. Fixed Income Economist for Morgan Stanley), Peter Hooper (Managing Director and Chief Economist for Deutsche Bank Securities Inc.), and Frederic Mishkin (professor at Columbia University and former governor of the Federal Reserve). One of the goals of our research was to try to understand the events that can lead a country to a tipping point in which it faces rapid increases in the interest rate on its sovereign debt, as a result of which the country finds itself with an unmanageable fiscal burden.
March 05, 2013
Eliminating Energy-Related Tax Expenditures
With domestic oil production soaring, and petroleum and coal sector profits rising at a rapid clip, now seems the right time to cut back on tax expenditures related to oil extraction and processing.
February 26, 2013
Approximate Geographic Impact of the Sequester
February 19, 2013
Macroeconomic Advisers on the Sequester's Impact
Estimated self-inflicted macro harm, from Macroeconomic Advisers today:
February 11, 2013
Sequester in the Time of ZLB
In several weeks, absent action by policymakers, the Federal government will begin implementing $85 billion worth of across-the-board cuts during FY2013 (i.e., in the months before October). 
January 30, 2013
GDP falling again
The BEA released today its estimate of 2012 fourth-quarter real GDP, which declined slightly from the third quarter. How scary is that?
January 23, 2013
Links for 2013-01-23
Quick links to a few items I found of interest.
January 20, 2013
A long-run perspective on the U.S. deficit and debt
Federal Reserve Bank of St. Louis economist Daniel Thornton has a new paper looking at long-run factors in the U.S. deficit and debt. His graphs tell a familiar story, but one worth repeating.
January 17, 2013
Guest Contribution: "Debt Ceilings, Bombs, Cliffs and the Trillion Dollar Coin"
Today, we're very fortunate to have as a guest contributor Jeffrey Frankel, Harpel Professor at Harvard's Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. His weblog can be found here.
January 16, 2013
Debt-ceiling economics and politics
Let me outsource this topic to some others who've said it better than I could.
January 13, 2013
The near-term U.S. fiscal situation
Here I briefly survey some recent developments.
December 03, 2012
Fiscal Slope Negotiations in the Context of Current Expenditures and Current Receipts
The latter is stabilizing at extremely low levels.
November 12, 2012
Maximizing GDP Growth with Minimal Budgetary Cost in the Face of the Fiscal Slope/Cliff
We can maintain momentum, while moving toward budget sustainability, by allowing the Bush tax rate cuts for incomes above $250,000 to expire
November 10, 2012
Links for 2012-11-10
A few links to some items I found of interest.
November 08, 2012
The Fiscal Cliff: International Implications
Most of the discussion has focused on the domestic repercussions of going off the fiscal cliff (or as my former colleague Chad Stone calls it, the “fiscal slope”). I think it important to remember that, as the single largest economy, policy in the US has profound implications for economic developments overseas. This is particularly true with the eurozone still in a fragile state, and China growing (relatively) slowly.
October 29, 2012
Romney/Ryan on FEMA and NOAA
With an update (10/31) "Obama cuts FEMA funding by 3 percent. Romney-Ryan cuts it by 40 percent. Or more. Or less.".
From National Journal, Governor Romney on FEMA:
October 04, 2012
At Long Last, One Member of the 47% Where He Belongs!
Keynesians in the Congressional Research Service!
Or, more accurately, non-New Classicals in the CRS
August 22, 2012
Federal receipts and expenditures
I was interested to take a look at the trends in receipts and expenditures of the U.S. federal government over the last 40 years.
August 11, 2012
Representative Paul Ryan's Economic Weltanschauung
Recapping my analyses of his budgetary and macroeconomic views, including supply side, interest and inflation rates, and command of economic history.
July 21, 2012
The fiscal cliff and rationality
What should happen, what could happen, and what will happen?
November 15, 2011
Links for 2011-11-15
Quick summaries of a few items of interest.
August 31, 2011
Recommendations for economic policy
August 18, 2011
August 10, 2011
Losing your AAA
On Friday, Standard & Poor's, one of the three main credit rating agencies, downgraded U.S. Treasury debt from AAA to AA+, citing doubts about the effectiveness, stability, and predictability of American policymaking and political institutions in being able to deal with the rising debt burden by the middle of the decade. It's been a wild ride for equity and commodity markets ever since.
August 05, 2011
More on the debt ceiling aftermath
Here are interviews I did earlier this week on the debt deal:
August 02, 2011
Assessing the damage
We finally get our debt-ceiling deal, only to watch the S&P500 fall 3.7% from Thursday's close. What gives?
August 01, 2011
Income Share by Top Fractile (continued)
Or, why it was so important to keep top marginal income tax rates constant for millionaires.
Figure 1 depicts the income shares accruing to the top 0.5 percent and top 0.1 percent of households (including realized capital gains). It is clear that their shares have declined going from 2007 to 2008; for the top 0.1%, their share has declined from 12.3% to 10.4% of total income.
July 18, 2011
Ending the debt ceiling stand-off
Here's how I'm hoping this might work out.
July 09, 2011
Debt ceiling options
As Congress and the President continue to wrangle over raising the debt ceiling, more of us are wondering, what would happen if the debt ceiling isn't raised? To paraphrase Sherlock Holmes, when you have eliminated the impossible, whatever remains, however improbable, must be Plan A.
May 27, 2011
Economic Underpinnings of "The House Republican Plan for America’s Job Creators"
Such as they are
In reading this short document (a word count was 2069, essentially a 8 page paper, shorter than the term papers I assign), I was pervaded by a sense of déjà vu. There are many interesting assertions (not a single footnote in the entire document). Rejoinders to some assertions are here. I’ll focus on some key guffaw-inducing assertions, relying largely upon previous Econbrowser posts.
April 26, 2011
The Washington Post reported last week on a discouraging poll. Americans supposedly want to reduce the deficit, but not if it means changing Medicare, cutting programs like defense or Medicaid, or raising taxes on anybody but the very richest Americans. Democrats and Republicans seem farther than ever from finding agreement. It's times like this that I'm glad there are some optimists around who still see some basis for making progress with America's daunting fiscal challenge.
March 22, 2011
National Journal: Ag Committee Supports Cuts to Food Assistance, Not Farm Subsidies
The House Agriculture Committee endorsed a letter this week to Budget Chairman Paul Ryan arguing that the Supplemental Nutrition Assistance Program, which helps low-income Americans purchase food, would make a better target for cuts than automatic subsidies to farms.