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The Job-Killing Camp-Hatch Proposal to Reduce Long-Term Unemployment Benefits

May 11, 2011

My colleague Michael Leachman explains why the proposal by House Ways and Means Committee Chairman Dave Camp and the Senate Finance Committee’s ranking Republican, Orrin Hatch, to let states use federal emergency unemployment insurance (UI) funding to pay off loans rather than provide payments to unemployed workers is bad UI policy. It’s also bad economic policy, because it will take purchasing power out of the economy and put a drag on an economic recovery still struggling to gain traction.

Today’s Jobs Report in Pictures

May 6, 2011

Today's employment report provides mixed signals on the jobs market. The survey of employers shows they added jobs at a solid pace in April. Yet the jobs deficit created by the recession remains very large and, even more discouraging, the survey of households shows that unemployment is still high and too many people remain on the sidelines rather than returning to the labor force believing they can find work.

The Craziness of the Debt Limit Debate

May 2, 2011

Matt Miller, evoking this scene from the 1980 movie The Shining, contemplated writing a column consisting of the following sentence repeated 30 times: “The House Republican budget adds $6 trillion to the debt in the next decade yet the GOP is balking at raising the debt limit.” The real situation is even crazier.

Let’s Focus on the Right Debt Measure

April 29, 2011

In recent congressional testimony on the country’s fiscal state of affairs, former U.S. Comptroller General David Walker rightly noted the long-term budget challenges facing U.S. policymakers. But he unnecessarily muddied this critical issue with a misguided focus on a seriously flawed measure of the nation’s debt and inappropriately alarmist comparisons between the United States and other countries, including Greece, with economic and budgetary situations quite different from ours.

Austerity Bites

April 28, 2011

U.S. economic growth slowed to an annual rate of 1.8 percent in the first quarter of 2011, according to new Commerce Department data. Declines in federal and local government purchases of goods and services subtracted 1.1 percentage points from the growth rate (see chart). Consumer spending, investment spending, and net exports all decelerated, making smaller contributions to growth in Gross Domestic Product than in the previous quarter.

The Debt Limit Distraction

April 20, 2011

Congress will likely waste considerable time posturing over the debt limit before taking the necessary step of raising it. That’s why EconoSpeak’s Barkley Rosser recommends abolishing the debt limit altogether. Rosser says he may be the first to publicly call for such action, but anyone reading between the lines would find a longstanding kindred sentiment at the Congressional Budget Office.

Ryan Plan Would Weaken Automatic Response to Economic Downturns

April 8, 2011

We explained recently that House Budget Committee Chairman Paul Ryan’s budget gets the lion’s share of its savings by cutting programs that help low- and moderate-income Americans. The adverse human and social consequences of such an approach are the paramount concern. But these cuts would also make the economy more vulnerable to shocks by weakening the “automatic stabilizers” — increases in federal spending (and reductions in federal taxes) that occur automatically when the economy weakens — that reduce the severity of economic downturns.

Heritage’s Rosy View of Ryan Budget

April 5, 2011

Ryan Avent beat me to the punch in calling out the Heritage Foundation’s analysis of how House Budget Committee Chairman Paul Ryan’s budget would affect the economy. I’m with Avent: Heritage’s unemployment projection is so bizarre as to call into question the whole exercise.

Today's Jobs Report In Pictures

April 1, 2011

Today’s employment report shows that the economy is creating jobs at a solid pace. But it also reminds us that without even stronger job growth, it will take years to erase the large jobs deficit created by the 2007-2009 recession and lower the unemployment rate to an acceptable level. Immediate sharp cuts in government spending of the kind that some policymakers are seeking will make it even harder to restore a healthy job market.

Spend Less, Grow Less, Slow the Economy

March 29, 2011

The Joint Economic Committee Republican (JEC-R) study “Spend Less, Owe Less, Grow the Economy,” which we critiqued last week, has attracted the attention of Paul Krugman and Ezra Klein. They are incredulous — as were we — at the Republican JEC claim that sharply reducing government spending and laying off government workers are critical for creating jobs in today’s economy.