News
CNN Money | The $7 trillion fiscal cliff
Congress has invented a new extreme sport: Skating on the edge of a $7 trillion fiscal cliff.
Bloomberg | Father of Treasury Floaters Says Now Worst Time for Sales
Almost two decades after advising the U.S. to sell floating-rate notes to lower debt expenses, Campbell Harvey says starting to issue the securities now would be a costly mistake for American taxpayers.
Econ Comments & Analysis
Politico | Obama’s deficit attention disorder
President Barack Obama seems to be governing in some parallel universe — where the United States exists without mortal dangers threatening its economy and the nation’s most pressing exigency is the reelection of its president.
WSJ | How Retirement Benefits May Sink the States
Chicago Mayor Rahm Emanuel recently offered a stark assessment of the threat to his state's future that is posed by mounting pension and retiree health-care bills for government workers. Unless Illinois enacts reform quickly, he said, the costs of these programs will force taxes so high that, "You won't recruit a business, you won't recruit a family to live here."
Fortune | How to cut Social Security mercifully
Well, there's at least one virtue to the depressing numbers that Social Security's trustees unveiled last week -- they prove that I was right in February when I wrote that the system's finances had deteriorated badly thanks largely to the energy price boosts created by Arab Spring. Those increases were the primary factor in Social Security's inflation adjustment being 3.6% this year rather than the 0.7% assumption that had been baked into the trustees' 2011 report.
CATO | How the Swiss 'Debt Brake' Tamed Government
Americans looking for a way to tame government profligacy should look to Switzerland. In 2001, 85% of its voters approved an initiative that effectively requires its central government spending to grow no faster than trendline revenue.
Blogs
American | Senate transportation bill opens door to more bailouts
House and Senate conferees will meet on May 8 to iron out differences between the two chambers’ versions of the highway reauthorization bill. In addition to the transportation policy under debate, the 47 Senate and House members serving on the conference committee will decide the fate of an unrelated and troubling provision in the Senate-passed bill: Defined-benefit pension plan funding relief for corporations.
National Review | Can Spending Caps Constrain the Size of Government?
The reform, called a “debt brake” in Switzerland, has been very successful. Before the law went into effect in 2003, government spending was expanding by an average of 4.3% per year. Since then it’s increased by only 2.6% annually.
American | GDP and the slowdown in government spending
An across-the-board fall in government consumption and investment subtracted 0.60 percentage points from overall economic growth, the bulk coming from a fall in defense spending, which fell at an 8.1 percent annualized rate. State and local government expenditures fell at a 1.2 percent rate in the quarter, subtracting 0.14 percentage points from growth in GDP.
National Review | There’s Austerity and Then There’s Austerity
Austerity means different things to different people. For some people, austerity means adopting a debt-reduction package made of a mix of spending cuts and tax increases. For others, it means adopting a package made mainly of spending cuts — including reforms of social programs.
