Focus on Budget and Debt

Focus on Budget and Debt

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On March 25, Pew published an update to its September 2010 budget report. It lays out options for stabilizing the national debt at 60 percent of GDP by 2025.

On March 24, the Center on Budget and Policy Priorities published a paper on principles to guide deficit reduction.

Also on March 24, 10 former chairs of the Council of Economic Advisers published an article in which they expressed deep concern about the rising national debt. However, no proposals were made for actually doing anything about it. In a March 28 commentary, former CEA chairman Joseph Stiglitz explained why he did not sign the letter.

On March 23, the Come Back America Initiative published a Sovereign Fiscal Responsibility Index.  The U.S. ranked near the bottom.

Also on March 23, the Concord Coalition published a report on the dilemma facing Republicans in crafting a budget that meets all of their stated goals. Conclusion: “A budget that uses honest numbers and reflects Republicans’ current policy preferences will result in large continuing deficits with growing debt and growing interest costs. On the other hand, a budget that shows greater progress on reducing the deficit will, of necessity, require an openness to changes that Republicans have been reluctant to put in play such as defense cuts, revenue increases and entitlement reforms that could affect current beneficiaries.”

And on March 23, the Federal Reserve Bank of St. Louis published a study which found that inflation is unlikely to reduce the real burden of the national debt because 40 percent of the privately held debt turns over annually and 7 percent consists of inflation–indexed securities.

On March 21, the National Bureau of Economic Research published a working paper by University of Maryland economists Carmen Reinhardt and M. Belen Sbrancia on the ways in which government historically have dealt with debt crises. One common method is “financial repression,” such as forcing institutions to buy government bonds at below market interest rates.

And on March 21, the conservative Mercatus Center published a commentary which found that government shutdowns tend to increase spending.

I last posted items on this topic on March 22.

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.