James Pethokoukis

Is Elmendorf’s CBO too pessimistic or is Orszag’s OMB too optimistic?

April 12, 2010

White House budget chief Peter Orszag thinks his old colleagues at the Congressional Budget Office are being too pessimistic over the potential budget savings of healthcare reform (via The Hill):

Bernanke’s strange comments on U.S. deficits

April 8, 2010

Cato’s Mike Cannon thinks Ben Bernanke’s comments on budget deficits should have come weeks ago. And he thinks he knows why they did not (excerpts):

How America might get a VAT of its own

April 6, 2010

When will the other chaussure drop? Now that America has gone French (and German and British) with universal healthcare, expect Washington to eventually propose a European-style, value-added consumption tax to pay for it — as well as the rest of the historic rise in federal spending. But U.S. voters are in a severe anti-tax mood. It might take another financial crisis to give politicians the will and hubris to ignore them.

Waste, fraud and abuse at Social Security

March 30, 2010

The super-insightful Andrew Biggs looks how the Crist-Rubio debate dealt with Social Security — and finds laughable the former’s comments about restoring the system’s long-term solvency by rooting out waste, fraud and abuse:

The risks of a deficit commission

March 25, 2010

We now know the makeup of President Obama’s bipartisan deficit commission. There are 10 Ds and 8 Rs with 14 votes needed to approve a recommendation As I go down the membership list, I see a lot of folks who are likely believers in the new Washington Consensus — significant spending cuts won’t help so big tax hikes are necessary. Of course, study after study shows big tax hikes are a terrible way to bring deficits under control. They kill growth which makes balancing the budget even harder since revenues are deflated.

Iraq debt almost as safe as California’s

March 24, 2010

Wow (from the Boston Globe):

Iraq is now considered a safer bet than Argentina, Venezuela, Pakistan, and Dubai — and is nearly on par with the State of California, according to Bloomberg statistics on credit default swaps, which are considered a raw indicator of default risk.

Health reform is faith-based deficit reduction

March 23, 2010

Healthcare reformers in Washington are asking America’s creditors to take a leap of faith. The plan is supposed to cut future budget shortfalls. But it depends on politicians following through on cuts and taxes, a deficit commission imposing additional discipline, and untested reforms working as expected. Owners of U.S. government debt shouldn’t bank on it.

Paul Ryan’s budget roadmap is flummoxing Washington

March 10, 2010

Washington doesn’t know how to handle Rep. Paul Ryan’s outline for how to balance the budget without raising taxes. House Majority Leader Steny Hoyer says the Wisconsin Republican’s plan is “unsustainable.” (Well, it makes Big Government unsustainable.) And an analysis from the Tax Vox blog takes issue with his revenue estimates.

California Screaming

March 10, 2010

Here are some fun facts about California’s fiscal situation, in light of state college students protesting a 32 percent tuition hike (via WSJ):