Lunchtime Must-Read: Jared Bernstein: Where Do the Fiscal Headwinds Come From?

Jared Bernstein: Where Do the Fiscal Headwinds Come From?: “Richard Kogan and William Chen shows that relative to projections that were made in 2010, spending reductions…

[have] generated deficit savings of $2.5 trillion over the current 10-year budget window (2015 to 2024).  Adding in the associated reduced interest payments of about $650 billion amounts to $3.2 trillion in deficit savings from spending cuts. Revenue added about $950 billion and technical and economic changes added savings of about $840 billion…. $5 trillion in savings over the budget window relative to the 2010 baseline… 77 percent of the savings that come from policy changes… are from spending cuts…. Neither of these developments should be seen as… great achievements.  The stimulus response to the Great Recession was too short-lived, and many of the program cuts… have been thoughtless slash-and-burn…. And from the perspective of the macroeconomy… [are] the source of the fiscal headwinds that have consistently held back the recovery.