Economy

CHART: How Deficit Cuts Are About To Hurt The Economy

Sahil Kapur | January 31, 2012, 1:08PM

The U.S. economy will suffer over the next few years as a result of fiscal austerity measures including the recent spate of spending cuts, according to the Congressional Budget Office's latest forecast issued Tuesday.

Economic growth and the employment rate will be reduced for many years to come as a result of the August debt limit law's steep $2.4 trillion in spending cuts and expiration of expiring tax provisions including the Bush-era tax cuts, the budget office report concluded.

To illustrate this point, CBO made separate projections pegged to two baselines -- current law, in which the spending cuts and tax increases go into effect, and an alternative fiscal scenario in which these fiscal policy changes are voided.

Without the austerity measures, deficits are higher, but real GDP growth is projected to be as much as 0.8 percent higher this year and up to 2.9 percent higher next year, when the debt limit law's sequestration cuts kick in and the Bush-era tax breaks expire. The baselines even out after a decade but the near term hit to the economy is salient.

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Economy

New Figures Show Economy Improving -- But Still Not Fast Enough

Sahil Kapur | January 27, 2012, 10:10AM

The U.S. economy grew at an annualized rate of 2.8 percent in the last three months of 2011, the Commerce Department announced in an advance estimate Friday. The new figures help quell lingering fears of a double-dip recession, but economists say there remains cause for concern.

"At first glance, it looks good, because it's the 10th straight quarter of economic growth," Chad Stone, chief economist at the Center on Budget and Policy Priorities, told TPM. "But there's an awful lot to be concerned about when you dig into the numbers."

Stone noted that a large part of the gains came from businesses accumulating inventory -- but much of it wasn't sold. "So the excess capacity gap is not shrinking," he said. This, he argued, reflects that the trajectory of aggregate demand -- the more important indicator of economic strength -- remains problematic.

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Income Inequality

CHARTS: What Romney Doesn't Want You Talking About -- Except In 'Quiet Rooms'

Brian Beutler | January 13, 2012, 5:27AM

Mitt Romney

Too bad for Mitt Romney. Turns out income inequality -- that thing he claims has no place in our political debate, or anywhere outside of "quiet rooms" -- will be a central theme of President Obama's re-election message. We know this because one of his top economic advisers essentially claimed as much in a public address at a top DC think tank on Thursday morning.

And the data he brought to the table suggests Democrats will have an easy time making their case.

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Economy

Top White House Economist: Economy Still Vulnerable

Brian Beutler | January 12, 2012, 11:12AM

President Barack Obama

One of the White House's top economists Thursday said recent good economic news is a sign that the economy continues to recover slowly, and suggested it's still susceptible to shocks -- specifically the possibility that Congress will fail to extend the payroll tax cut through the end of the year.

"If you look at the statistics that are coming in, it's clear that they're painting a picture of an economy that is slowly recovering -- slowly but surely recovering," said Council of Economic Advisers chairman Alan Krueger at an event hosted by the Center for American Progress. "I think it's extremely important that we keep that momentum going forward. The steps that I would highlight most importantly are extending the payroll tax cut through the end of the year and extending unemployment insurance benefits. The CBO concluded that of all the measures we've looked at, extending unemployment benefits have the most bang for the buck in terms of supporting demand, raising economic growth and creating jobs."

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Economy

CHART: How The Debt Limit Fight Hurt The Economy, Delayed Recovery

Brian Beutler | January 10, 2012, 11:36AM

House Speaker John Boehner (R-OH) and Houser Majority Leader Eric Cantor (R-VA)

Last week's surprisingly positive jobs report overshadowed another bit of good news for the economy: last November showed the biggest growth in consumer credit in 10 years. Typically that's a sign that consumer confidence is up, banks are willing to lend, and demand is on the rise.

If you look back at recent monthly data, though, you'll see that this particular green shoot should have poked through the ground months ago, but was stymied by the GOP's debt ceiling hostage drama.

Take a look at the evidence:

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Economy

The Rapid Economic Recovery Republicans Are Praying Against

Brian Beutler | January 9, 2012, 5:20AM

President Barack Obama and Vice President Joe Biden

Everything that's supposed to happen in politics this year, and everything that has happened for the last several months, has been premised on the tacit, but seemingly safe assumption: The economy will remain weak for years.

This has underlined Congressional jobs bill theatrics, campaign rhetoric about Obama's record, debates about who's to blame for high unemployment, and which party best represents the interests of the middle class.

But what if that assumption is wrong?

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Payroll Tax Cut

Dems Warn GOP: Don't Strangle Recovery By Screwing With Payroll Tax

Brian Beutler | January 6, 2012, 12:24PM

Rep. Nancy Pelosi (D-CA)

Top Democrats pulled a little stunt Friday morning, when they tried to upend the House's pro forma session to confer about and debate the payroll tax cut.

But in their remarks to the press afterward, they parlayed today's positive jobs figures into a serious political warning to the GOP: Don't threaten the recovery by playing games with the economy. In essence, today's positive economic news raised the stakes of the payroll tax cut fight -- if Republicans can't get their act together and the tax cut lapses, it will muffle the recovery just as it's finally starting to turn economist's heads.

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Mitt Romney

Romney's Claim To Be A Job Creator Hits The Skids

Brian Beutler | January 6, 2012, 5:30AM

Mitt Romney

Mitt Romney's effort to disguise one of his biggest political liabilities has hit a major snag -- one that may force him to abandon his most effective but misleading talking points about his work in the private sector..

Romney makes two different, but implicitly entwined claims: That while working in corporate management he created over 100,000 jobs and that -- by comparison -- Obama his presided over millions of job losses.

This is a false juxtaposition, based on two false claims. And so far, precious few reporters have pressed Romney or his campaign about it. But in the past several days, the veneer of plausibility has begun to peel leaving the candidate highly exposed to backlash from the press.

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