Austerity | AEIdeas

Tuesday, May 21, 2013

Credit: Capital Economics

The US has more austerity than Europe. So why is America doing OK?

James Pethokoukis | May 17, 2013, 9:29 am

So which economy in the world is “suffering” most from austerity? As Capital Economics notes, the combination of US tax hikes and spending cuts means that over the next two years the federal budget deficit is expected to fall by … read more >

Pethokoukis, Economics, U.S. Economy

Is austerity really hurting the US economy?

James Pethokoukis | May 9, 2013, 1:11 pm

Two takes on the same message: The New York Times: “Economists See Deficit Emphasis as Impeding Recovery” National Journal: “Who Says Fiscal Policy Is Hurting the Economy? (Almost) Everyone.” 1. This is a tale of two economies. The “G” in … read more >

Economics, International economy

The changing tune of austerity (and why 2023 could bring an encore)

Abby McCloskey | May 9, 2013, 11:07 am

David Wessel had a great piece in the WSJ showing how G-20 leaders have changed their tune on austerity over the last five years: from bad (during the recession), to good (after the recession), to bad again (circa 2012). Thank … read more >

Pethokoukis, Economics, U.S. Economy

The 2 austerity-economic growth charts that Paul Krugman and Steven Rattner will never show you

James Pethokoukis | May 3, 2013, 2:06 pm

Alex Tabarrok has put together his own version of an austerity vs. economic growth chart, using Paul Krugman’s preferred austerity measure, total government expenditure divided by potential GDP (see above chart): Krugman sees “very bad policy” from the decline in … read more >

Pethokoukis, Economics, U.S. Economy

Weak GDP report no excuse to pump-up government

James Pethokoukis | April 26, 2013, 11:43 am

Another big decline in US government spending took its toll on first-quarter output. But the way to accelerate GDP growth is by boosting the private economy, not re-inflating the public sector. The nation’s gross domestic product, adjusted for inflation, grew at an annualized … read more >

Pethokoukis, Economics, U.S. Economy

So is US spending austerity working or not?

James Pethokoukis | April 18, 2013, 8:49 am

From economist Ed Yardeni: There’s no denying that the latest recovery in real GDP has been subpar (Fig. 1). Real GDP has increased only 1.8% on average over the past two years (Fig. 2). However, this average growth rate rises … read more >

Pethokoukis, Economics, U.S. Economy

Now what for Reinhart-Rogoff and the case for austerity?

James Pethokoukis | April 17, 2013, 9:43 am

So, has the US been handed a Get Out of Debt Trap Free card? Some proponents of more fiscal stimulus, mostly on the left, seem to be drawing that conclusion from the so-called debunking of the famous Reinhart-Rogoff study on … read more >

Economics, Monetary Policy, Pethokoukis

Here’s why the US shouldn’t fear ‘austerity’

James Pethokoukis | April 5, 2013, 4:00 pm

As I have said before, the US has stumbled into not-so-terrible economic policy: spending cuts (though I would prefer some of the defense/research discretionary reductions be replaced with entitlement reform) + Fed bond buying. What’s missing is pro-growth fiscal policy … read more >

Pethokoukis

Steven Rattner is wrong. The US has stumbled into the right kind of ‘austerity’

James Pethokoukis | March 1, 2013, 8:42 am

Steven Rattner, in a New York Times blog post, is worried about “balance.” He is concerned that as things stand now, “spending reductions would end up as the overwhelming contributor to our budget deficit reduction effort. If sequestration remains in place, … read more >

Image Credit: motiqua (Flickr) (CC BY 2.0)

Foreign and Defense Policy, Europe and Russia

Latvia as a cautionary tale for Europe

Desmond Lachman | December 27, 2012, 2:48 pm

In a measure of how desperate Brussels has become for success stories in the ongoing European debt crisis, the European Commission holds up tiny Latvia as the poster child for how countries should cope with their external and public finance … read more >

The Uses of Scandal
One of the greatest uses of scandal is to vividly demonstrate what new laws are needed and to create the political conditions to get them enacted. […]
Lean In… to Government?
Sheryl Sandberg's runaway best-selling book Lean In has managed to offend both the Left and the Right. Sandberg touts female hard-headedness, yet also calls for an elaborate government- and employer-supplied support system for women. […]
Are American Voters Racist?
Racial prejudice plays a very small role in American politics, but a highly disciplined sense of self-interest on the part of one group may play a very large role in the way the federal government functions. […]
The Perpetual Passion for Paper
Paper is becoming less important in some respects, but its strengths — prestige, utility, permanence, and security — are more essential than ever. […]