On January 27, the Committee for Economic Development published a theoretical scenario of how a debt crisis could develop in the U.S. in the near future.
Also on January 27, the International Monetary Fund published an update to its Fiscal Monitor. It notes that the U.S. is the only major country still enacting countercyclical policies, which cause further deterioration in the fiscal balance, well past the end of the recession in mid-2009.
A January 26 Gallup poll found that the only government program that a majority of Americans favor cutting is foreign aid. A majority of Republicans would also cut funding for the arts and sciences, while a majority of Democrats would also cut the military and national defense.
On January 26, the Congressional Budget Office released its latest economic and budget forecast. Although the outlook for the economy has improved, the outlook for the budget deficit has worsened due to large tax cuts enacted in December.
Also on January 26, the CBO posted a very useful glossary of technical terms often used in the federal budgeting process.
And on January 26, the IMF published a working paper that examined the fiscal rules used by Chile to maintain structural balance.
A January 25 Kaiser poll found that 68 percent of Americans oppose any cuts in Medicare even though it is far and away the program that contributes most heavily to projected budget deficits.
Also on January 25, CNN and Opinion Research released a poll which showed that large majorities of people oppose any cuts in Medicare, Medicaid, Social Security, unemployment compensation, veterans benefits, education, or transportation programs. Foreign aid and pensions for government workers were the only programs with significant support for cuts.
On January 20, the Bank of Japan posted a paper examining the impact on the national debt of exceptionally high economic growth. It finds that productivity would have to grow at 6 percent per year for 10 years in order to eliminate the debt by the year 2050. Since sustained growth of that rate is extremely unlikely, the paper concludes that Japan cannot grow its way out of its debt problem.
I last posted items on this topic on January 25.
