In an October 1 post, Syracuse University economist Len Burman suggested that the president be required to give an annual address to a joint session of Congress on the fiscal state of the union.
On September 30, the International Monetary Fund published a new report on the macroeconomic effects of fiscal consolidation. It finds that a deficit reduction equal to one percent of GDP will raise the unemployment rate by 0.3 percentage points in the short run. It also warns that if many countries adopt fiscal consolidation simultaneously, the effect could be destabilizing.
In a September 30 paper, economist David Henderson reviews the large deficit reduction program implemented by Canada in the 1990s.
Also on September 30, Pew released a study showing the extreme difficulty of getting the deficit on a sustainable path without both cutting entitlements and raising taxes.
On September 28, Congressional Budget Office director Doug Elmendorf testified before the Senate Budget Committee. He examined a number of tax and budget options for improving economic growth.
Also on September 28, OMB Watch and budget analyst Stan Collender both published commentaries highly critical of a proposal that Congress move from annual to biennial budgeting.
And on September 28, the Mercatus Center published a study by University of Rochester political scientist David Primo on how to construct budget rules that work.
A September 27 study by Harvard economist Alberto Alesina supports the expansionary potential of fiscal consolidation.
On September 22, George Washington University economist Jason Thomas published an article detailing the national debt, its composition, ownership and how it is managed by the Treasury Department.
A September 21 study from the Center for American Progress listed specific spending cuts that would be necessary to balance the budget if it were done solely on the spending side, as Republicans routinely insist but never detail. (Note: The “Pledge to America” released by House Republicans on September 24 contains exactly one specific spending cut — the cancelation of TARP, which would save approximately $16 billion at this point.)
A September 20 report from the Organization for Economic Cooperation and Development put much of the blame for America’s dismal fiscal situation on policies that Obama inherited from the previous administration: huge tax cuts, two wars, new homeland security expenses, Medicare Part D, and abolition of budget procedures (i.e., PAYGO in 2002) that restrained deficit spending. It also says that bringing the debt-to-GDP ratio down to a sustainable level will require higher revenues, which would best be accomplished through base-broadening.
In a September 20 commentary Urban Institute economist Eugene Steuerle complained that budget forecasters pay insufficient attention to demographic trends.
I last posted items on this topic on September 20.
Bruce Bartlett is an American historian and columnist who focuses on the intersection between politics and economics. He blogs daily and writes a weekly column at The Fiscal Times. Read his most recent column here. Bartlett has written for Forbes Magazine and Creators Syndicate, and his work is informed by many years in government, including as a senior policy analyst in the Reagan White House. He is the author of seven books including the New York Times best-seller, Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (Doubleday, 2006).
