Econintersect Analysis Blog
Tag Archives: federal budget
by Guest Author Menzie Chinn
The cost of the Iraq War has reached almost trillion dollars – at least $805.6 billion as of the end of September, not including debt service and additional reset costs; around $940 billion including interest payments.
As the US economy faces the prospects of stagnant growth or recession, it is of interest to see why the scope for fiscal policy is so circumscribed — that is, why is the debt level so high given that in the last year of the Clinton Administration we were paying down debt? Figure 1 depicts part of the answer (other parts, here). Continue reading
The WSJ and Philadelphia Fed surveys of economists were released a couple of weeks ago. It’s of interest to consider what they imply for the macro outlook, and additionally, how they believe inflation will evolve as a function of other variables. As these economists are, on average, a fairly conservative group, it may surprise some that about 50% felt that federal budget cuts would hurt the economy over the next two years. Continue reading