Hello Ledger reader,Happy August recess! In lieu of the traditional Ledger, this month I will be sending you a small selection of articles from recent years. The topics are chosen to help you prep for September, when the debt limit,grand bargains, and decision about the next Federal Reserve chairman will come into focus.As always, you can find all of our research at www.aei.org or on Twitter @aeiecon. Please let me know if
you have any questions.Enjoy,AbbyAugust Briefing #4: The debt-limit deal slowed spending, kind of (AEI Economics Ledger)
AEI’s top research on the debt limit
Flashback to the 2011 debt-limit showdown:
Kevin Hassett: “While administration officials would likethe public to believe that political gamesmanship is unprecedented and irresponsible, the opposite is true.Debt-limit debates are commonplace and can be political theater at its finest.” Alex Brill: “It would be
short-sighted of legislators to fail to take the opportunity to reform this tool so as to keep themselves andtheir successors focused on the right fiscal metric: ensuring that our government's public debt is held to asustainable level.”
John Makin:“Despite much partisan discord andcontinued bluster about ‘unsustainable’ deficits, Congress and the president actually have managed toput US fiscal policy on a sustainable path, with a stable to falling debt-to-GDP ratio.”Mark Thiessen:“In
2010, the government spent $3.457 trillion, while this year  it is on track to spend $3.455 trillion.Wait, that’s
. Finally, that runaway train has been slowed, stopped and put into reverse. In 2013,“spending is projected to be down by about 5 percent from 2010, accounting for inflation,” The Postreported. That is not an insignificant achievement.”
But our debt problems are far from fixed.
Glenn Hubbard and Tim Kane:“America’s high and risingnational debt threatens our economic health through higher future taxes, crowding out importantgovernment services, or both.” Michael Strain:“Our real and serious debt problem will be driven not by
the next decade’s budgetary spending, but by projected spending on entitlements stretching beyond2023.” John Makin:“The bad news is that the economy may slow sharply enough to prevent any more
agreements, such as on tax and entitlement reform, that would put America on a path to long-term fiscalhealth.” Alan Viard and Michael Strain:“Policies to reduce the long-run deficit should be agreed upon
and enacted as soon as possible, to be implemented over a period after the economy recovers from theGreat Recession.”Follow us at @AEIeconRead more from the American Enterprise Institute economic policy team at www.aei.org.