quoting George P. Shultz via The Florida Times-Union
When the nation falls into a recession — which is inevitable — there are typically two ways to ease the pain. One way is to use government spending to stimulate the economy. That usually means building up debt. But what if the nation’s debt is already at levels not seen since World War II?
interview with John F. Cogan via 760 KFMB
Hoover Institution fellow John Cogan discusses the problems with our federal budget deficits and why our government needs to get entitlement spending under control.
quoting John H. Cochrane via Bloomberg
The U.S. appears to face a future of large, chronic federal budget deficits. Is that because taxes are too low or because spending is too high?
Brian Riedl, E21
In the Washington Post, a distinguished group of liberal economists argues that entitlements are not chiefly to blame for the coming deluge of debt. Specifically, Martin Neil Baily, Jason Furman, Alan Krueger, Laura D’Andrea Tyson and Janet Yellen – all former Democratic chairs of the White House Council of Economic Advisers – dispute a group of Hoover Institution economists who had earlier shown that long-term deficits are determined by escalating entitlement program costs. Read more here....
Emily Top, E21
President Trump’s new executive order aims to reduce poverty by encouraging able-bodied adult welfare recipients to move into the labor force. A similar initiative in the United Kingdom over the past five years has been successful in raising labor force participation.
The new executive order, signed on April 10, directs federal agencies to review and adjust their public assistance programs. The Trump administration wants the federal agencies to reduce the waivers, exemptions, and exceptions for public assistance programs as well as encourage work requirements for these programs. Additionally, the executive order aims to promote flexibility for state and local governments to meet the needs of their residents. Read more here....
Brian Riedl, National Review
In the past year, Congress has cut taxes, increased spending, and refused to address the coming bankruptcy of Social Security and Medicare. The non-partisan Congressional Budget Office (CBO) has finally added up the tab.
In 2018, Washington will spend $32,000 per household — on the way to $52,000 per household within a decade (are you getting your money’s worth?). Of course, taxes are not close to those levels. That is where the deficit comes in. Read more here....
mentioning Hoover Institution via New York Post
A Congressional Budget Office study “indisputably proves that Social Security and Medicare’s shortfalls overwhelmingly cause the coming long-term debt.
Charles Blahous, E21
An impassioned argument has broken out during the last few weeks over the federal budget. It was precipitated by an op-ed piece in the Washington Post by five prominent economists from the Hoover Institution, warning of a coming debt crisis and pointing the finger of blame at runaway federal entitlement spending. A riposte appeared in the Post soon after from several prominent left-of-center economists, headlined “Don’t Blame Entitlements” and highlighting the role of tax cuts in worsening federal deficits. Read more here....
By EPPC Hertog Fellow Yuval Levin
National Review Online
A new Congressional Budget Office report nicely summarizes what should be obvious to all: the Republican Congress and president do not seem to care about deficits or debt, and are not only failing to take steps to address the government’s poor fiscal situation but are taking steps likely to worsen it some. Read More
James C. Capretta | Real Clear PolicyJames Capretta argues that the Congressional Budget Office’s budget forecast signals that the country is now close to the cliff’s edge and that any number of different events could trigger a US debt crisis. Capretta discusses a few of the proposed solutions, such as the balanced-budget amendment to the Constitution in the House and the active consideration for a bill to cut spending this year, but only for annual appropriated accounts, not entitlement programs. Capretta argues that the federal budget is heavily weighted toward entitlement spending, and if Congress were serious about taking action on the budget, they would offer a plan to reform entitlements and thus begin to lower federal spending over the next two decades.
The congressional budget process: A brief primer
James C. Capretta | AEI Economic PerspectivesJames Capretta discusses what the role of the budget request is, what the congressional budget looks like in theory, what it looks like in reality, and several other key features of the congressional budget process. Capretta argues that the current process was written for a time when appropriations spending was dominant; it does not work as well with so much of the federal budget devoted to spending that occurs automatically on entitlement programs. Further, he concludes that the current process does not facilitate executive-legislative agreement on budgetary aggregates, which is an important reason for instability and uncertainty in federal finances.
by John H. Cochrane via Grumpy Economist
"A coming debt crisis in the US?" warns a Deutsche Bank report* by Quinn Brody and Torsten Slok.