Throughout the hoopla of the Leadership Spill that wasn’t I was struck by how parlous politics in Australia had become. Then I wandered over to one of my regularly-read blogs, the ever-engaging Ezra Klein on The Washington Post, who highlighted the endemic nature of intransigence in the budget-making process in the US. His broad contention, reinforced by the likes of Jonathan Chait in New York Magazine, is that no matter what President Obama offers in terms of compromise on the budget, it will be met by the same obstinate response from Congressional Republicans to demand more concessions on spending in exchange for any further increases in tax revenue.
As I wrote back in December, everyone understood the need for a deal to be made between President Obama and Congress to avoid going over the ‘fiscal cliff.’ That is, to come to an agreement that would avert the scheduled expirations of a host of tax cuts and reductions in spending on programs like defence and social welfare benefits.
But when it comes to negotiations between this President and his Republican counterparts in Congress, anything can and did happen. Over the course of the roughly two months between the President’s re-election and the final deal being signed on January 2 (technically, after going over the cliff), we saw offers and counteroffers made, concessions made on both sides, and much sniping across the partisan divide.
Irrespective of the details of the fiscal cliff deal, in light of the way both sides conducted their policymaking negotiations, how might one best describe the decision making process on an issue of global economic significance?
No one ever said being President of the United States was an easy job, and that has certainly been the case for the newly re-elected, President Obama. After a bitterly fought re-election over Republican nominee, Fmr. Gov. Mitt Romney, he was literally back to work the next day, beginning the negotiating to avert the Fiscal Cliff.
As I wrote in my article for ESSA’s Equilibrium about this topic, the Fiscal Cliff will involve the expiration of numerous tax cuts, unemployment benefits and across-the-board discretionary spending cuts; a scenario many economists fear will significantly inhibit economic growth in 2013, the exact opposite of what the American economy needs as it slowly emerges out of a sluggish economy recovery and into a more sustained period of economic growth.
How things change. In my last article on the Presidential Election, from the United States, I suggested that the election hadn’t really engaged the voting public, with the coverage at the time focusing on the missteps within Mitt Romney’s campaign and the support the President was receiving in public polling.
But with the Republican’s exceptional performance in the first Presidential Debate and the President’s seeming disinterest the election was thrown back into tossup status.
As Chris continues his travels across the United States, he reflects on his cross-country journey observing how the world’s leading economy is such a contrasting display of economic highs and lows.
If I’ve learnt anything during my two-week visit to the United States it’s that this a country of unparalleled contrasts.
There’s the powerful marriage of individuality and a sense of community, unlike anywhere else on earth.
As Chris travels the United States, he gives his perspective on the latest happenings on the Presidential Campaign and asks, does the data matter all that much?
I have been in the United States for the last week, travelling across the country from Los Angeles to where I am now, in the nation’s capital (with stays in San Francisco and Chicago along the way), and the most lasting impression I have is that this Presidential Election campaign hasn’t taken off.
The word is in from the students – ESSA’s inaugural Q&A was a resounding success. Featuring some of the University’s most famed economists (Max Corden and Neville Norman) and some of the nation’s leading economic commentators (George Megalogenis, Stephen Koukoulas, Stephen Long and James Paterson), it was an event, from my perspective, full of high-spirited discussion and insightful analysis about where Australia is as a country and as a world-leading economy.
In my first article as a writer for ESSA, I wrote about how the unemployment rate was going to have a significant impact on President Obama’s re-election chances.
In the 2 months since that article was written there have been some significant developments in the US economy and in the political sphere as we approach the Presidential Election.
There will be a lot of people tuning into Wayne Swan’s budget speech on Tuesday night, and not just from within Australia. Provided that the Treasurer delivers a much-hyped budget surplus (despite a softening in tax revenues due to the global slowdown), he will be able to claim that Australia is one of the first developed economies around the world to emerge from the threat of the Global Financial Crisis.
Last year in the United States, amidst an indifferent recovery, a politically motivated near-default on its vast debt, and the beginnings of the Occupy Wall Street movement, Warren Buffett wrote an op-ed in The New York Times last August highlighting how he paid a lower effective tax rate than his secretary.