News
CNN: Money | Europe unveils bank-bailout plan
The EU proposal would include a single deposit guarantee organization covering all banks in the union, something similar to the FDIC that covers U.S. bank deposits.
Market Watch | CBO paints grim long-term debt picture
The U.S. debt will exceed the size of the nation’s economy in 25 years if the federal government doesn’t chart a “sustainable fiscal course,” the Congressional Budget Office warned in a new estimate on Tuesday.
WSJ | Dire CBO Report Urges Fiscal Fixes
By the end of this year, the CBO said, cumulative federal debt will reach roughly 70% of gross domestic product—the value of all goods and services produced by the economy—the highest level since just after World War II.
National Journal | Congress Embarks on Spending Spree
Congress is expected to do what it does best—spend money—this week, with the House taking up three appropriations bills and the Senate starting work on farm subsidies.
USA Today | Europe faces make-or-break month in dealing with debt
Europe is facing a make-or-break month. Its economy is sinking and the debt crisis that has hit some of its members threatens global economic disaster. Now its central bank appears likely to delay helping — in the hope that Europe's divided leaders will be pushed into action.
WSJ | Spain Warns It Needs Help
Spain made its most explicit suggestion yet that it would seek help from Europe for its struggling banks, as the country's budget minister said high interest rates on Spanish bonds were a signal the government risks losing access to financial markets.
Econ Comments & Analysis
Washington Times | FRASER: The broken budget process
Congressional and executive oversight of the federal budget is in turmoil. The political aversion to tackling federal overspending is enhanced and enabled by the inadequate processes that govern the budget.
CBO | Testimony on the 2012 Long-Term Budget Outlook
According to CBO’s projections, if current laws remained in place, spending on the major federal health care programs alone would grow from more than 5 percent of GDP today to almost 10 percent in 2037 and would continue to increase thereafter.1 Spending on Social Security is projected to rise much less sharply, from 5 percent of GDP today to more than 6 percent in 2030 and subsequent decades.
Bloomberg | Japan’s Unsustainable Deficit-Financing Model
Financing government debt and deficits hasn’t been a problem for Japan: Until recent years, the country’s big-saving consumers provided the funds to finance the shortfalls.
WSJ | Obama's Debt Boom
The longer we extend Mr. Obama's legacy of slow growth and more debt, the greater the economic price to fix it.
Blogs
Political Contributions | President Obama's Unsustainable Fiscal Path
We find then that President Obama's claim of putting an extra $1,000 in the typical middle-class family's pocket is both a bit understated and also ignores the true cost of the impact of his policies upon the nation's fiscal situation.
NRO: The Corner | Do Low Interest Rates Mean the Government Should Borrow More?
Interest rates are low. For some, that means that the U.S. government should borrow more money.
AEI: American | The 7 scariest facts from the new CBO long-term budget forecast
Today’s long-term budget forecast from the Congressional Budget Office is a great counter to the sudden enthusiasm for more government spending to boost the economy. Among the most interesting—and scary—factoids:
Cato @ Liberty | Will More Federal Debt Improve the U.S. Government’s Creditworthiness?
Many in the United States and Europe are arguing for further quantitative easing to bring down longer-term interest rates. …However, one has to wonder how much investment businesses are unwilling to undertake at extraordinarily low interest rates that they would be willing to undertake with rates reduced by yet another 25 or 50 basis points.
NRO: The Corner | A Look at Private-sector Austerity in the U.K.
As you know by now, much of the criticisms about austerity measures implemented in the U.K. make it sound like the country has dramatically cut spending. But the data show that to be far from the truth. Spending in the U.K. is growing at a slower rate than it was scheduled to, but it is growing.
AEI: American | The national debt isn’t $15 trillion. It’s $50 trillion
Measuring America’s debt on an accrual, rather than cash basis, grows the current shortfall from $15.7 trillion to over $50 trillion. America’s debt is traditionally measured on a cash basis, which values the current debt at $15.7 trillion.
Cato @ Liberty | Spending Cut Goal: 10% in Two Years
Many in Congress will resist of course, but presidents have their most leverage in the first year. Mitt will have nothing to lose but the country into a vortex of debt and economic despair if he doesn’t at least try.
AEI: American | CBO: Massive rise in U.S. debt crashes our economic forecasting model in 2035
Debt is so high, a massive 250% of GDP, that the CBO can no longer calculate its harmful impact on the economy, though one can assume the direction is down.
