Sham Crises Created By Congress Have Cost The US Nearly 1 Million Jobs

Wednesday, October 16, 2013

Sham Crises Created By Congress Have Cost The US Nearly 1 Million Jobs

Money to Burn by Victor Dubreuil 1893 oil on canvas PD
Private collection
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Business Insider

Joe Weisenthal Oct. 15, 2013, 5:53 AM

A new study put together by Macroeconomic Advisors tallies the impact of all the sham "fiscal crises" created by Washington since the financial crisis. These include the various debt ceiling, government shutdown, and fiscal cliff standoffs, none of which were necessary, and all of which had a role in slowing the economy.
Here's the press release (via Morning Money).

Report Finds that Fiscal Policy Uncertainty
has Resulted in 900,000 American Jobs Lost

Ongoing Brinksmanship and Failure to
Raise Debt Ceiling Could Cause Another Recession

NEW YORK — As Congressional leaders and the President discuss a potential temporary solution to the current fights over the government shutdown and the debt ceiling, the repeated cycle of lurching from crisis to crisis has significant costs to the U.S. economy, according to a new report released today.

The macroeconomic analysis, "The Cost of Crisis-Driven Fiscal Policy," quantifies the negative economic impact of governing by crisis, and examines the effects of Washington’s actions — and inactions — including events such as sequestration, the government shutdown, and brinksmanship over the debt ceiling.

The report concludes that crisis-driven government and the resulting fiscal policy uncertainty has directly harmed the American economy by increasing the unemployment rate by 0.6%, or the equivalent of 900,000 jobs. "The Cost of Crisis-Driven Fiscal Policy" was prepared by Joel Prakken of Macroeconomic Advisers, LLC, a leading independent research firm, for the Peter G. Peterson Foundation.

Michael A. Peterson, President and COO of the Peter G. Peterson Foundation, said: "This report makes clear that self-created fiscal crises have significant costs to our economy and to American families. These partisan battles not only threaten our fragile economic recovery, but they have not resulted in any comprehensive solution to our real fiscal challenge, stabilizing our long-term debt."

"Partisan divided government has failed to address our long-term fiscal challenges sensibly, instead encouraging policy that is short-sighted, arbitrary, and driven by calendar-based crises," said Prakken of Macroeconomic Advisers. "Based on this report's findings, we can assert confidently that the crisis-driven fiscal policies of the last several years have damaged our still-struggling economy. One can only hope that our policymakers will implement more sensible policy in the future."

The entire report is available here.

Additional top-level findings include:

Crisis cost? Lost jobs and maybe another recession

Staff reports CNBC.com

Oct. 14, 2013 at 1:35 PM ET

Even as Congressional leaders and the president discuss a potential temporary solution to the current stalemate over the government shutdown and the debt ceiling, the repeated cycle of lurching from crisis to crisis has significant and real costs to the U.S. economy.
A new report, prepared by Macroeconomic Advisers, LLC for the Peter G. Peterson Foundation, examines the cost of crisis-driven fiscal policy over the past few years by looking at indicators including GDP growth, the unemployment rate and the corporate credit spread. The paper considers recent policy and political battles including the sequester, the government shutdown and brinksmanship on the debt ceiling.

Read More Here

Full Report (PDF)

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