from Nicholas Wapshott:

Punitive politics: Bigger than Christie

By Nicholas Wapshott
January 13, 2014

There is a “Sopranos” episode where a deal for a beachfront house on the Jersey shore goes awry at the last minute and Tony Soprano decides to punish the reluctant seller for changing his mind. He sends a couple of mobsters in a boat mounted with giant speakers to remind the recalcitrant homeowner of the wonders of the Italian popular songbook played at full volume. When it comes to ingenious punishments, Jersey leads the field.

from MacroScope:

Curious timing for Fed self-doubt on monetary policy

August 30, 2013

If there was ever a time to be worried about whether the Federal Reserve's bond-buying stimulus is having a positive effect on the economy, the last few months were probably not it. Everyone expected government spending cuts and tax increases to push the economic recovery off the proverbial cliff, while the outlook for overseas economies has very quickly gone from rosy to flashing red. But the American expansion has remained the fastest-moving among industrialized laggards, with second quarter gross domestic product revised up sharply to 2.5 percent.

from The Great Debate:

Seeking a smarter approach to the budget

By Senator Roy Blunt
May 30, 2013

Capitol Building in Washington, February 27, 2013. REUTERS/Jason Reed

Sequestration grew out of a political impasse: Republicans refused to raise the government’s borrowing limit in 2011 without starting to bring spending under control, but Democrats refused to make choices about where to cut spending.

from Nicholas Wapshott:

The sequester is just as destructive as we thought

By Nicholas Wapshott
April 23, 2013

Remember the sequester? When seven weeks ago the deadline to find a federal budget compromise came and went, there was much handwringing in Washington. In the event that no agreement was found there were to be cuts to public spending so severe and painful that no one would dare fail to agree. To deter Republicans from holding out, half the immediate spending savings of $85.4 billion was to be found from the defense budget, and, to ensure Democrats would work to find a deal, half from annually funded federal programs. Despite these encouragements to fiscal discipline, the March 1 deadline came and went.

from Nicholas Wapshott:

The North Korean threat in an age of Pentagon cuts

By Nicholas Wapshott
April 11, 2013

It may not feel like it, but we are closer to nuclear war than at any time since the Cuban missile crisis of 1962. The temptation to dismiss the North Korean dictator Kim Jong-un as a cartoonish figure of fun belies the real and present danger his samurai sword rattling presents. A strange time, then, for Defense Secretary Chuck Hagel to set out on the most thorough reappraisal of our defense spending since the end of Vietnam.

from MuniLand:

Sequester is skewed against the poorest citizens

By Cate Long
March 13, 2013

A well known political maxim is that politicians remain in office when they bring home benefits for their constituents. Nothing proves this point more than how the sequester process protects the senior citizen entitlement programs - Medicare and Social Security - while cutting federal spending for the most economically disadvantaged Americans. One of the nation’s most prominent sell-side analysts, Natalie Cohen of Wells Fargo, thinks the effects of these cuts have big consequences, and  eventually could even be socially destabilizing. From Cohen’s recent report:

from Judgement Call:

The fiscal crisis nears – or not

March 12, 2013

Few economists preach spending cuts as a cure for high unemployment. Yet that’s exactly what Congress decided when it imposed, starting March 1, across-the-board spending cuts (the “sequester”). Despite Friday’s mildly upbeat jobs numbers, the economy remains limp, with 15 million or so unemployed individuals who want to work. Federal spending cuts won’t make their plight any better.

from MacroScope:

Another U.S. debt ceiling showdown could roil markets: NY Fed paper

March 7, 2013

After two days of testimony from Federal Reserve Chairman last week in which he decisively criticized Congress’ decision to slash spending arbitrarily in the middle of a fragile economic recovery, a report on money market funds from the New York Fed nails home the point.

from MuniLand:

The sequester disconnect

By Cate Long
March 4, 2013

Last week media was in a frenzy about the effects that federal spending cuts would have on states and cities under sequestration. Last Monday morning, the White House put out information including the graphic above to highlight the implications of spending cuts for the most vulnerable Americans. These are tough numbers, but there is no context provided to understand the magnitude of spending reductions.

from MacroScope:

The real sequester threat: rising political risk in the United States

March 1, 2013

Despite the Obama administration's cataclysmic warnings about the effects of $85 billion in looming spending cuts known as the "sequester," chances are the lights will not go out when they kick in this weekend. Still, the economic impact could be significant. The cutbacks might shave a half percentage point or more from an economy that is forecast to grow around 2 percent this year -- but which only mustered a 0.1 percent increase in annualized fourth quarter GDP. This, at a time when a similar austerity-driven approach has left much of Europe mired in recession.