Debt Ceiling: Geithner Won’t Let Us Default
Treasury Secretary Geithner recently warned that the U.S. may default if Congress doesn’t increase the federal debt limit. In this guest commentary at CNN Money, Donald Marron explains how Geithner will make sure that the U.S. does not default on the public debt, even if Congress is slow to increase borrowing authority.
The Budget Process: A Maze Perverted by Trickery
The congressional budget process has been so perverted that it no longer imposes much discipline on fiscal decision-making, comments Rudolph Penner, a former director of the Congressional Budget Office. Penner explains how the situation arose and what to do about it.
Health Care Brawl: All or Nothing Doesn’t Work
The ongoing debate over health reform at times almost appears like a sporting event, with Democrats and Republicans trying to name winners and losers in passing or repealing legislation. But in my Fiscal Times op-ed this week, I explain why, when it comes to health reform, this winner-take-all mentality misses a major point: government programs, whether well designed or poorly designed, need to work within budget constraints. While such constraints inevitably identify losers relative to an open-ended budget (which, like deficits, can hide the losers), they do lead to far better budget and health policy.
Reforming Federal Taxes: Lessons From History : Before the Senate Committee on the Budget
Eugene Steuerle’s testimony before the Senate Committee on the Budget on reforming the tax code.
Cutting Tax Preferences is Key to Tax Reform and Deficit Reduction : Before the Senate Committee on the Budget
Donald Marron’s testimony before the Senate Committee on the Budget on reforming the tax code.
Closing Loopholes Won’t Be Simple
New York Times’ Room for Debate: The United States has one of the world’s highest corporate tax rates, but many large U.S. corporations pay little U.S. tax.Eliminating special interest loopholes could pay for some, but not much reduction in the corporate rate.The main problem is that it is hard for one country to tax entities that transcend national boundaries.A better approach would tax more corporate income at the individual shareholder level.The Presidents Fiscal Commission and the Bipartisan Policy Center both recommend reducing individual and corporate tax rates and taxing capital gains and dividends as ordinary income.
Will It Take a Crisis to Fix Fiscal Policy?
Unless current policies are reformed, the national debt will continue to grow relative to GDP until a sovereign debt crisis, like those in Ireland and Greece, is inevitable. Although the nation is becoming more concerned about spiraling debt and a presidential fiscal commission and other groups have suggested reforms, the president and congressional leaders have been unwilling to recommend specific policy reforms. Consequently, it is becoming more and more likely that policymakers will not undertake necessary reforms until a financial crisis forces their hand. (This paper will appear in the April 2011 issue of Business Economics.)
Committees Tackle the Deficit
The United States faces a dire budget problem, largely the result of the aging of the population and soaring health costs. The president’s National Commission on Fiscal Responsibility and Reform and the Bipartisan Policy Center’s Debt Reduction Task Force both agree that Social Security, Medicare, and Medicaid reforms are necessary, although health costs are the far greater problem. They also recommend restructuring the personal and corporate tax systems. These commissions’ efforts show that reasonable policy packages can get bipartisan support even in an intensely partisan era.
The Sum of All We Are
What allows us to live and thrive in a good society? To grow and progress so much that we consider it a failure to have a few years of negative or low growth? To live in peace, at least within our borders? To enjoy almost endless possibility?
Activist Fiscal Policy
This paper reviews the recent evolution of thinking and evidence regarding the effectiveness of activist fiscal policy. Although fiscal interventions aimed at stimulating and stabilizing the economy have returned to common use, their efficacy remains controversial. This paper reviews the debate about the traditional types of fiscal policy interventions, as well as more targeted policies. It concludes that while there have certainly been some improvements in estimates of the effects of broad-based policies, much of what has been learned recently concerns how such multipliers might vary with respect to economic conditions.