When 10 former ex-Chairpersons of the President's Council of Economic Advisors warn of a pending financial crisis, due to the deficit, maybe Congress and the President should pay attention. One of the ten is Christina D. Romer, who served as the chairwoman in the Obama administration, from 2009 to September 2010. However, our Congress is happy to fight over measley $50 billion chump change budget cuts. One blog perfectly labeled this worthwhile effort: "spitting into the ocean".
Op-Ed / Politico.com:
Unsustainable budget threatens nation -- [By 10 Ex-Chairs of the President's Council of Economic Advisors, 6 Republicans and 4 Democrats]
Repeated battles over the 2011 budget are taking attention from a more dire problem—the long-run budget deficit.
Divided government is no excuse for inaction. The bipartisan National Commission on Fiscal Responsibility and Reform, under co-chairmen Erskine Bowles and Alan Simpson, issued a report on the problem in December supported by 11 Democrats and Republicans — a clear majority of the panel’s 18 members.
As former chairmen and chairwomen of the Council of Economic Advisers, who have served in Republican and Democratic administrations, we urge that the Bowles-Simpson report, “The Moment of Truth,” be the starting point of an active legislative process that involves intense negotiations between both parties...
While the actual deficit is likely to shrink over the next few years as the economy continues to recover, the aging of the baby-boom generation and rapidly rising health care costs are likely to create a large and growing gap between spending and revenues. These deficits will take a toll on private investment and economic growth. At some point, bond markets are likely to turn on the United States — leading to a crisis that could dwarf 2008...
David Wessel / NY Times:
Former White House Economists Say Deficit Is 'Severe Threat' -- Ten former chairmen of the White House Council of Economic Advisers called on politicians to get to work soon on reducing the federal budget deficit, saying a plan crafted by fiscal commission appointed by President Barack Obama should be "the starting point" for addressing what they labeled a "severe threat" to the nation's economy...
Andrew Stiles / National Review: The Little Deficit Commission That CouldPhil Izzo / Real Time Economics: Secondary Sources: Unsustainable Deficit, Krugman on Markets, House PricesMyglesias / Yglesias: What Would “Prompt Consideration” Of The Bowles-Simpson Proposal Accomplish?Joan McCarter / Daily Kos: More deficit peacocks pressing for domestic spending cutsCatherine Rampell / Economix: Ex-White House Economists Urge Action on DeficitJohn / Verum Serum: Economic Brain Trust: Unsustainable Debt is Killing UsDave Schuler / The Glittering Eye: Spitting Into the Ocean — To remarkably little fanfare chairmen …Arnold Kling / EconLog: Economic Advice … All ten are former chairs of the President's …New York Times: In Op-Ed, Former White House Economists Urge Deficit Action
Gregory Mankiw / NY Times:
It’s 2026, and the Debt Is Due -- For years, the United States government borrowed on good terms. Investors both at home and abroad were confident that we would honor our debts. They were sure that when the time came, we would do the right thing and bring spending and taxes into line.
But over the last several years, as the ratio of our debt to gross domestic product reached ever-higher levels, investors started getting nervous. They demanded higher interest rates to compensate for the perceived risk. Higher interest rates increased the cost of servicing our debt, adding to the upward pressure on spending. We found ourselves in a vicious circle of rising budget deficits and falling investor confidence...