News
Bloomberg | U.S. May Avert Plunging Over Fiscal Cliff in 2013
The U.S. will avoid plunging off a fiscal cliff in 2013, according to economists surveyed by Bloomberg News, as lawmakers find enough common ground in budget negotiations to avert a recession.
WSJ | U.S. Seeks Action on Europe Crisis
The Obama administration dispatched one of its top economic officials to Europe on Tuesday to press officials in Greece, Spain, France and Germany to calm a widening crisis that threatens to spark new trouble for the U.S. economy.
Politico | Politics of 2013 ‘fiscal cliff’ worries economists
Democrats and Republicans are trying to stir up votes for November by locking horns over the coming fiscal cliff, but they’re stirring up just as much anxiety among economists who fear that the rhetoric upsets consumer confidence and squashes the stock market.
Bloomberg | EU Weighs Direct Aid to Banks, Euro Bonds as Crisis Antidote
The European Commission called for direct euro-area aid for troubled banks, and touted a Europe- wide deposit-guarantee system and common bond issuance as antidotes to the debt crisis now threatening to overwhelm Spain.
Econ Comments & Analysis
WSJ | A Fiscal Union Won't Fix the Euro Crisis
Increasingly, euro-zone hardliners have called for putting in a disciplined, unified fiscal arrangement similar to the one we have in the U.S. Unfortunately, their vision of fiscal union has badly missed the essence of the U.S. experience and would not fix the euro crisis.
CATO | We Can Cut Government: Canada Did
Two decades ago Canada suffered a deep recession and teetered on the brink of a debt crisis caused by rising government spending. The Wall Street Journal said that growing debt was making Canada an “honorary member of the third world” with the “northern peso” as its currency. But Canada reversed course and cut spending, balanced its budget, and enacted various pro-market reforms.
Blogs
National Review | Public Pensions and Rosy Projections
Last week, my collegue Eileen Norcross produced a chart that underlies a very scary unreported threat for many municipal budgets around the country. In this particular case, the chart showcases the Warwick, R.I.’s municipal budget
Political Calculations | Economic Growth and the Chains of Debt
What we see is that high levels of national debt with respect to the size of a nation's economy, would appear to have a medium-strength effect upon its real rate of economic growth. For every 10% increase in a country's national debt with respect to its GDP, it would appear that its real economic growth rate is reduced on average by roughly 3/8th of a percent.
