The Fall issue of the journal Democracy contains a debate between Brookings Institution economists Isabel Sawhill and Greg Anrig on whether progressives should support entitlement reform.
The Fall issue of the Journal of Policy Analysis and Management contains a debate on fiscal policy between Urban Institute economist Eugene Steuerle and Brookings Institution economist Henry Aaron.
On September 5, the Bank for International Settlements published a study of private nonfinancial sector debt following a banking crisis. It finds that there is a prolonged period of debt consolidation until debt levels get back to pre-crisis levels.
On September 2, the International Monetary Fund published a study of starve-the-beast theory. According to this theory, tax cuts automatically induce spending cuts. Thus fiscal conservatives need only cut taxes without bothering to cut spending. The study, as well as many others, finds no evidence supporting this theory.
On September 1, the IMF published three studies on the problem of growing national debts. The first study, “Long-Term Trends in Public Finances in the G-7 Economies,” says that reducing the burden of debt will be harder in the future than it was in the past because of the ageing of western societies and the higher proportion of government spending devoted to health. The second study, “Fiscal Space,” attempts to calculate how much time various countries have before their debts begin to seriously impede growth. The third study, “Default in Today’s Advanced Economies,” explained that default on the debt is not really an option because defaults are usually triggered by high interest rates, not large nominal debts. Since defaulting on some or all of a nation’s debt won’t do anything to reduce interest rates, it doesn’t really offer any relief.
An August 25 paper from the Organization for Economic Cooperation and Development finds that banking crises historically add about 37 points to the government debt-to-GDP ratio.
On August 21, George Washington University law professor Neil Buchanan posted a paper suggesting creation of a “Growth Budgeting Board” that would provide more coherence to federal budgeting.
I last posted items on this topic on August 24.
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).
