Posts tagged ‘Government spending’

Dec 26

Believe it or Not, We’ve Now Got a Better Chance for Serious Policy Reform

Robin Anderson (Economist, Principal Global Investors) also contributed to this post.

With all the back and forth these days in the United States between Democrats and Republicans over the fiscal cliff, it’s hard to see any positives in what appears to be overly partisan wrangling; however, I would propose to you that, right now, we have a better chance for serious policy reform than we’ve had in recent history.

Now, I’m not saying that credible long-term tax and spending policy is the most likely outcome from these fiscal cliff negotiations, but I do believe that we now have an increased possibility of serious discussions that could set U.S. fiscal policy on the right path. Read more

Sep 20

Fiscal Cliff or More of a Fiscal Pothole?

Based on all the heated partisan talk of the so-called “fiscal cliff,” you could be forgiven for thinking that this precipice of tax-hike-and-spending-cut doom was a five mile drop straight to the bread lines for the majority of American taxpayers and businesses. Ezra Klein and his staff over at Wonkblog (check out posts from Ezra Klein and Suzy Khimm for details) have done a good job of getting across the alternate (and maybe more realistic) idea of a “fiscal slope.” If you’re feeling really nerdy, check out the original paper Ezra and Co. cited from the Center on Budget and Policy Priorities. The basic idea is that the U.S. economy won’t drop into free fall come January or February of 2013. The expiration of the Bush era tax cuts won’t start having an effect until people file their 2013 taxes – sometime between January and April of 2014. The spending cuts don’t all come at once either. They’re spaced gradually over 2013 and the following years. So, not a sheer economic drop – more like a 45-degree hillside. It’d still be bad and the U.S. economy would probably wind up in recession, but it’s not falling into an abyss at 1,000 miles an hour.