News
CNN Money | CBO: Fiscal cliff deal adds $4 trillion to deficits
The fiscal cliff deal approved by Congress will increase deficits over the next decade by close to $4 trillion, according to the Congressional Budget Office.
Politico | Will tax deal grow or shrink deficit?
Like everything else in Washington these days, measuring the cost of the New Year’s tax compromise approved by Congress depends on where you stand.
CNN Money | Fiscal cliff deal stops many tax hikes, but leaves big issues pending
The fiscal cliff compromise approved by the House late Tuesday will mute much but not all of the negative economic impact of going over the cliff.
Washington Post | ‘Fiscal cliff’ deal falls short under three economic theories
Economists generally offer three theories for what’s hampering the still-sluggish U.S. economy: the Keynesian theory, which would like to see lower taxes or more government spending; the spending/debt theory, which would like to see both of those reined in; and the uncertainty theory. Under none of them can the deal to avert the “fiscal cliff” be considered an economic success.
Blogs
CATO | Grading the Fiscal Cliff Deal: Terrible, but Could Be Worse
The faux drama in Washington is finally over. The misfits in Washington reached a deal on the fiscal cliff.
CATO | Congress Ducks the Debt Problem Again
That’s why fiscal conservatives should look very skeptically at the “fiscal cliff” and “grand bargain” proposals, most of which promise to cut spending some day—not this year, not next year, but swear to God some time in the next 10 years.
Economist | How much is too much?
The popularity of austerity policies has waned over the past several years thanks to evidence that it may have been counterproductive. But many are still worried by the fact that, relative to national income, government debt is now larger in many countries than at any point since WWII. Moreover, for most nations, government debt is projected to grow relative to income for years to come.
WSJ | Academic Economists React: Shortfalls of Fiscal Cliff Deal
The deal appears to offer no entitlement reforms, no tax reform, and higher marginal tax rates. After all the public discussion over the past couple years of what a good fiscal reform would like, it is hard to imagine a deal that would be less responsive to the ideas of bipartisan policy wonks. –Greg Mankiw
