Tag: federal deficit

Bernstein, Baker: Trade deficit, not the budget deficit holding back the economy

November 7, 2013 at 2:06 pmCategory:Uncategorized

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Here’s the intro to today’s ”must read” from two of the nation’s most astute economists:

Taking aim at the wrong deficit
By Jared Bernstein and Dean Baker

Jared Bernstein

Dean BakerWASHINGTON – Ask most people in this city what the most important step is to increasing economic growth and job creation, and they’ll reply, “Reduce the budget deficit!”

They’re wrong. So-called austerity measures — lowering budget deficits while the economy is still weak — have been shown both here and in Europe to be precisely the wrong medicine. But they could be on to something important if they popped the word “trade” into that sentence.

Simply put, lowering the budget deficit right now leads to slower growth. But reducing the trade deficit would have the opposite effect. Not only that, but by increasing growth and getting more people back to work in higher-than-average value-added jobs, a lower trade deficit would itself help to reduce the budget deficit….

Read the rest of the essay at the New York Times by clicking here.

Economist: The right is “delusional” about US spending and deficits

October 16, 2013 at 9:27 amCategory:Uncategorized

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More hard and compelling facts this morning from the estimable Dean Baker of the Center for Economic Policy Research:

The story of out-of-control debts and deficits is just plain wrong. US deficits have fallen in the past four years

It is understandable that the public is disgusted with Washington; they have every right to be. At a time when the country continues to suffer from the worst patch of unemployment since the Great Depression, the government is shut down over concerns about the budget deficit.

There is no doubt that the Republicans deserve the blame for the shutdown and the risk of debt default. They decided that it was worth shutting down the government and risking default in order stop Obamacare. That is what they said as loudly and as clearly as possible in the days and weeks leading up to the shutdown. In fact, this is what Senator Ted Cruz said for 21 straight hours on the floor of the US Senate.

Going to the wall for something that is incredibly important is a reasonable tactic. However, the public apparently did not agree with the Republicans. Polls show that they overwhelmingly oppose their tactic of shutting down the government and risking default over Obamacare. As a result, the Republicans are now claiming that the dispute is actually over spending. Read More…

Two underreported facts about federal deficit reduction

April 9, 2013 at 12:32 pmCategory:Uncategorized

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Deficit reduction graphIn the incessant yammering that continues about the federal budget deficit, one of the great underreported facts in recent months is that President Obama and Congress have actually already made enormous progress.

As Richard Kogan of the Center on Budget and Policy Priorities and Allan Freyer of the Budget and Tax Center have reported here and here, the fiscal cliff deal combined with other decisions have combined to slash the projected deficit over the next decade by $2.7 trillion. Indeed, with another $1.5 trillion in savings/tax increases, the country will be in a good place on this issue.

Today, Kogan highlights (see the graph at left) another related and underreported fact about the deficit reduction already enacted: the vast majority of it (70%) comes from program cuts.  Kogan’s data provides more compelling evidence that tax increases simply have to be a part of any new federal budget deal if the’re going to be a truly balanced approach to deficit reduction that doesn’t throw the country back into recession with Europe-like austerity.

Poll indicates further erosion in support for Norquistian tax policy

December 7, 2012 at 1:05 pmCategory:Uncategorized

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From today’s WaPo:

“Eighty percent of Americans agree on almost nothing (even Olympic swimming!).

But a Quinnipiac University poll released Thursday found exactly such consensus on one of the central issues in the debate over the “fiscal cliff”: 85 percent of registered voters, including 77 percent of Republicans, said it was a “bad idea” for members of Congress to promise to “never increase taxes on corporations or the wealthy under any circumstance”.

While not explicitly mentioned in the poll question, the result has been widely interpreted as gauging support for the anti-tax pledge advocated by Grover Norquist and his group, Americans for Tax Reform.”

Read the entire article by clicking here.

 

Some perspective on the federal debt

November 27, 2012 at 8:48 amCategory:Uncategorized

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The federal debt is an issue that needs to be addressed. Virtually everyone agrees on this.

But how big of an issue? And how should it be addressed? These are questions that deserve more robust debate than they’re receiving. As evidence of this fact, check out these recent articles by two of the nation’s most astute economic observers in which debt worries are put in their rightful place. Read More…