Fiscal Policy

Recently, Japan and Korea have begun to express deep concerns about the “ability of the United States to address profound problems in its political and economic system.”

If you’ve been fretting about faltering math education and falling test scores here in the United States, you should be worried based on this campaign season of Republican math.  When it comes to the American military, the leading Republican presidential candidates evidently only learned to add and multiply, never subtract or divide.

Today, CBO released its latest budget projections for the next ten years, again showing the appearance of a declining debt trajectory. These projections based on current law, however, do not incorporate the costs of current policies that lawmakers have extended many times in the past and are likely to do so again, such as the annual “patch” of the Alternative Minimum Tax.

On Feb. 29 the World Bank announced that the proportion of the planet’s population living in absolute poverty -- on less than $1.25 a day -- had halved from 1990 to 2010. That rate of poverty reduction is unprecedented, driven by rapid rates of economic growth in poor countries from China to Ghana.

Should Barack Obama win reelection this fall, he’ll almost immediately face one of the biggest issues of his second term: the looming expiration of the Bush tax cuts. George W. Bush originally passed the tax breaks in two quick bursts—slashing income taxes in 2001, and lowering taxes on investment income in 2003. Then, just before these cuts were set to expire on Jan. 1, 2011, Obama struck a deal with congressional Republicans to extend them for two more years.

After 30 years of greed being good and rising tides lifting all boats, inequality -- or "class warfare," if you prefer -- is back on the political agenda.

The United States faces a number of serious fiscal and economic challenges. Federal budget deficits are projected for the foreseeable future, the economy remains weak, Social Security faces long-term financing concerns, health care spending is growing faster than the economy, tax policy is at a major crossroads, and our national debt continues to rise. Inattention to the ballooning national debt threatens to undermine the economy and our competitiveness, and could lead to a serious fiscal crisis.

On Monday, the White House released its FY 2013 budget. Our major findings include:

In this episode of The Sidebar, the weekly podcast from the New America Foundation that looks at what's in and what's underlying the news.

Justin King, Noam Sheiber, and Marc Goldwein discuss President Obama's budget proposal and Rick Santorum's surge in the Republican Primaries. Pamela Chan hosts.