Focus on Budget and Debt

Focus on Budget and Debt

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On March 3, the European Central Bank published a study which found that rising levels of national debts led to increases in taxes on labor.

A March 2 YouGov poll found that people want government spending cut, but only on programs that don’t affect them.

A March 1 study by the Committee for a Responsible Federal Budget warned that higher interest rates could add substantially to the government’s borrowing costs very quickly.

Also on March 1, the U.S. Government Accountability Office issued a report on duplicative government programs, with suggests for consolidation and cost savings.

In a March 1 commentary, University of Wisconsin economist Menzie Chinn discussed the prospects for “crowding out” in financial markets resulting from large federal budget deficits.

And on March 1, the Tarrance Group issued a poll which finds that 63 percent of voters incorrectly believe that the federal government spends more on national defense and foreign aid than it does on Medicare and Social Security. Also, three-fifths of voters believe that the budget can be fixed just by eliminating waste, fraud and abuse.

A February 28 working paper by economists Carmen Reinhardt and Kenneth Rogoff predicts that rising debt levels worldwide will inevitably lead to “financial repression” as governments cope with the burden. Such measures include forced purchases of government bonds, interest rate caps, and restrictions on capital outflows.

Also on February 28, the National Bureau of Economic Research posted a working paper on fiscal limits in advanced economies. A major problem is that at high debt levels, central banks lose control of monetary policy.

On February 24, the Commission on Wartime Contracting in Iraq and Afghanistan issued an interim report.  It notes that $177 billion has been spent on contractors in Iraq and Afghanistan since 2001 and estimates that 7 percent may have been lost due to fraud.

A February 14 survey from the Rockefeller Foundation found strong support for improving the nation’s infrastructure, but equally strong opposition to any means of paying for it.

I last posted items on this topic on February 28.

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. 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, Imposter: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (Doubleday, 2006).

Bruce Bartlett’s columns focus on the intersection of politics and economics. The author of seven books, he worked in government for many years and was senior policy analyst in the Reagan White House.