In discussing a country's solvency, we are talking about long-term debt projections rather than short-term stimulus programs.
One of the most interesting facts here is that the current debt projections without sequestration are lower than the debt projections with sequestration were when it was originally designed.
Nick Kounis, economist at ABN Amro, said: "The IMF's report on Greek debt makes grim reading but its growth assumptions are too optimistic, hence debt projections are too low".
AS Debt projections Photograph: /Treasury Updated at 1.46pm GMT 1.38pm GMT Estate agents say that imposing capital gains tax on overseas property investors will be "an irritation" rather than a deterrent.
However, as I understand the story — and my understanding isn't perfect — the error doesn't make very much difference to the long-term debt projections, which is what we are talking about here.
Slashing spending for earmarks, foreign aid and other unpopular appropriations would amount to "a sparrow's belch in the midst of a typhoon," relative to the debt projections, he said.
Mr. Obama's version would apply to domestic and military spending but not to tax provisions or to fast-growing entitlement programs, including Medicare and Medicaid, that are driving the debt projections.
Just the other day they were sure that they were being wise and serious by talking in apocalyptic terms about the looming danger of debt; then they woke up to find deficits down, medium-term debt projections looking distinctly not scary, and the research that supposedly showed that terrible things happen when debt crosses 90 percent of GDP debunked.
To the extent that there ever was an economic justification for this brinksmanship — the claim that we were on the verge of a debt crisis, the claim that slashing spending would boost the economy — that justification has collapsed in the face of declining debt projections and overwhelming evidence that austerity has large negative impacts in a slump.
The most prominent example, Gramm-Rudman-Hollings, was an act of desperation at a time of mounting deficits, partisan paralysis over solutions and a desire for political cover to raise the debt limit — a time much like today, except debt projections are much larger and political divisions arguably wider.
