Governance

22 Items

Blog Post - Views on the Economy and the World

Biden Avoids Mistake of Insufficient Fiscal Stimulus

| Mar. 29, 2021

It has been a year since the US and the world went into recession.  Because of its origins in the sudden pandemic, it was possible to reliably discern the advent of the recession before it was reflected in any of the standard economic statistics, which is rare.  (I hope it shocks no one to learn that economists can’t normally predict recessions.)

By the end of the second quarter of 2020, US GDP had fallen 11 %. This record plunge took the US economy from a level that is estimated to have been 1.0% above potential output at the end of 2019, to a level 10 % below potential in mid-2020.  Potential output is the level of GDP that is produced when unemployment is at its so-called natural rate, the capital stock is operating at the capacity for which it was designed, buildings have their normal occupancy rates, etc.

Copies of President Donald Trump's fiscal 2018 federal budget are laid out ready for distribution on Capitol Hill on May 23, 2017 (AP Photo/Pablo Martinez Monsivais).

AP Photo/Pablo Martinez Monsivais

Analysis & Opinions - The Washington Post

How Aging, Inequality and China Make the U.S. Government Likely to Get Larger

| Sep. 12, 2017

Speaking at an event organized by Robert Greenstein, president of the Center for Budget and Policy Priorities, I argued last week that unless our values have changed profoundly in an anti-government direction, the balance of pressures from economic change will lead to an expansion of the federal budget relative to gross domestic product. This was also the conclusion of a paper released by Paul Van de Water of the center. Excellent summaries were provided by Al Hunt and David Leonhardt.