In two recent blog posts (1/6 and 1/7), Paul Krugman highlighted a chart he made that, he says, illustrates clearly the failure of “austerity” around the world. We reproduce it above on the left. Read more »
Showing posts for "Fiscal Policy"
In July, North Carolina cut off unemployment benefits for those who have been on benefits for 19 weeks, down from 99. This made it a test run for what would happen nationally after January 1, when the federal extension of unemployment benefits expired. Read more »
The German federal elections on September 22 could be of enormous consequence for Greek solvency – and the future of the eurozone. Today’s Geo-Graphic shows that Greek solvency may itself be of great consequence to the German elections.
As the figure shows, when the yield spread between German and Greek government bonds falls (and market optimism for Greek solvency rises), support for the small right-of-center, free-market German FDP party rises. (The FDP is currently part of the Merkel-headed, CDU-led government.) When that spread rises, however, support for the FDP falls, while support for the left-of-center SPD party rises. (Support for Merkel’s CDU is invariant to shifts in Greek sentiment.) Read more »
European Central Bank president Mario Draghi has promised to do “whatever it takes to preserve the euro,” and the bank’s Outright Monetary Transactions initiative last September, aimed at pulling down crisis-country bond rates, no doubt calmed market fears of a eurozone breakup. But whereas eurozone sovereign bond spreads have narrowed, the gap in real economic performance – particularly unemployment – between the best and worst performers, as shown in today’s Geo-Graphic, has continued to grow precipitously. Compare this to the United States, which has a fiscal and banking union as well as a monetary one. There, jumps in unemployment rate dispersion across states caused by financial and other shocks are reversed in relatively short order. Read more »
Back in March, we showed that the $1.4 trillion in U.S. direct federal student loans that will be outstanding by 2020 will amount to roughly 7.7% of the country’s gross debt. This is 6.3 percentage points higher than it would have been had the scheme not been nationalized in President Obama’s first term. Read more »
President Obama is committed to pursuing a “[renewable-energy] strategy that’s cleaner, cheaper, and full of new jobs” (January 24, 2012). He highlighted the job point during the October 16 presidential debate: “I expect those new energy sources to be built right here in the United States. That’s going to help [young graduates] get a job.”
Green may be good, but this week’s Geo-Graphic shows that the jobs come at a hefty cost.
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In last week’s vice-presidential debate, Republican Paul Ryan defended the fiscal prudence of lowering top marginal income tax rates by arguing that it would be accompanied by “forego[ing] about $1.1 trillion in loopholes and deductions . . . deny[ing] those loopholes and deductions to higher-income taxpayers.” The $1.1 trillion he refers to is actually an amalgam of specific “tax expenditures” – benefits distributed through reductions in taxes otherwise owed – identified by the Joint Committee on Taxation. We break out the largest 10 of these graphically in the figure above. The full list is available here: http://subsidyscope.org/data/ Read more »
The IMF last week told the Greek government to get with the program—specifically, the economic adjustment program that Greece agreed to as a condition for receiving loans from the Fund. Greece is indeed way off target, but that’s apparently par for the course with such programs. In 2003, the IMF’s own independent evaluation office looked at the difference between actual and projected changes in fiscal balances in countries receiving funds from its Extended Fund Facilities (EFF) and so-called Stand-By Arrangements (SBA). As shown in the graphic above, nearly ¾ of market-based countries (that is, countries not in transition from central planning) receiving funds from the EFF or SBA underperformed their targets in the second year of their program. By this standard, Greece looks like a normal ward of the IMF. However, Der Spiegel reported on Monday that the Troika of official Greek lenders (the European Commission, ECB, and IMF) was now pegging Greece’s budget deficit at €20 billion. If accurate, that would put Greece on track to miss its IMF fiscal deficit target by €13 billion, or a whopping 6 percent of GDP – making it an extreme target-underperformer even by the standards of the many past underperformers. Read more »
In his Path to Prosperity, Republican vice presidential candidate Paul Ryan called for $40 trillion in spending over the next 10 years, $7 trillion less than President Obama called for in his 2013 budget. What accounts for the gap? $1 trillion is from Medicaid and other health programs. Another $1.4 trillion comes from anticipated (wished for?) interest-cost savings ($4.3 trillion compared with $5.7 trillion). So where does Ryan make his really big cuts? “Other” mandatory spending. $631 billion was spent on these programs in 2011, though Ryan proposes paring this to only $349 billion by 2018. Over ten years, Ryan slashes a whopping $3.5 trillion vis-à-vis Obama, targets unspecified, from this large and broad category, which includes political minefields like unemployment compensation, retirement benefits, earned income and child tax credits, food assistance, and veteran benefits. This sounds a lot like a New Year’s pledge to cut 1,000 calories a day from the category of “meals.” Read more »
Geo-Graphics provides a unique graphical take on geoeconomic issues, with links to the news and expert commentary. Follow via Twitter
In The Hacked World Order, CFR Senior Fellow Adam Segal shows how governments use the web to wage war and spy on, coerce, and damage each other. More
Red Team provides an in-depth investigation into the work of red teams, revealing the best practices, most common pitfalls, and most effective applications of these modern-day devil's advocates. More
Through insightful analysis and engaging graphics, How America Stacks Up explores how the United States can keep pace with global economic competition. More
India now matters to U.S. interests in virtually every dimension. This Independent Task Force report assesses the current situation in India and the U.S.-India relationship, and suggests a new model for partnership with a rising India.
Rates of heart disease, cancer, diabetes, and other noncommunicable diseases (NCDs) in low- and middle-income countries are increasing faster than in wealthier countries. The report outlines a plan for collective action on this growing epidemic.
This report asserts that elevating and prioritizing the U.S.-Canada-Mexico relationship offers the best opportunity for strengthening the United States and its place in the world.
Williams argues that the status quo for peace operations in untenable and that greater U.S. involvement is necessary to enhance the quality and success of peacekeeping missions.
The authors argue that the United States has responded inadequately to the rise of Chinese power and recommend placing less strategic emphasis on the goal of integrating China into the international system and more on balancing China's rise.
Campbell evaluates the implications of the Boko Haram insurgency and recommends that the United States support Nigerian efforts to address the drivers of Boko Haram, such as poverty and corruption, and to foster stronger ties with Nigerian civil society.