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Begin New Search Topic Debt Political Geography United States Content Type Policy Brief

1. Should We Worry About Corporate Leverage?

Author:
Şebnem Kalemli-Özcan
Publication Date:
10-2019
Content Type:
Policy Brief
Institution:
Economics for Inclusive Prosperity (EfIP)
Abstract:
There has been a large increase in corporate leverage in many countries since the early 2000s. Figure 1 plots corporate debt to GDP since 2002 for different groups of countries. With the exception of the U.S., both advanced economies and emerging markets have corporate debt exceeding GDP since 2005. U.S. corporate debt is also on an increasing trend. The fastest growth in corporate debt has been observed in emerging markets. A closer look will reveal that China and other fast growing emerging countries in Asia drive most of the increase in corporate debt for the emerging markets.
Topic:
Debt, Economics, Markets, Regulation, Multinational Corporations, and Economic Policy
Political Geography:
United States and Global Focus

2. Income Inequality Developments in the Great Recession

Author:
Tomas Hellebrandt
Publication Date:
01-2014
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The Great Recession, which cost tens of millions of jobs, a collapse of asset values around the world, and threatened the global financial system, has generated renewed concern over the long-standing issue of the fairness of the distribution of wealth and income in many societies. Economic inequality has increased in the United States and many other advanced economies over the past 20 to 30 years. This trend generated less worry in the boom years, when unemployment rates were low and cheap credit enabled consumers to borrow and maintain higher standards of living, masking the impact of growing income disparity on consumption patterns and perceptions of well-being.
Topic:
Debt, Economics, International Trade and Finance, Poverty, Social Stratification, and Financial Crisis
Political Geography:
United States, United Kingdom, Germany, Spain, Italy, and Ireland

3. Why Bail-In Securities Are Fool's Gold

Author:
Avinash D. Persaud
Publication Date:
11-2014
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Bailouts and bail-ins of failing financial institutions have been hotly disputed in the global financial crisis of the last five years. At the height of the crisis, several failing banks were bailed out with taxpayer money so they could service their debts, but as public outrage mounts, policymakers are increasingly looking at bailing in these institutions before using taxpayer funds. Bail-ins, also called haircuts, require the troubled institution's creditors to write off some of the debt or agree to a restructuring of the debt, which reduces their holdings. The public has demanded the imposition of these costs on creditors and bond - holders, arguing that if bad lending as well as bad borrowing went unpunished it would be encouraged. Additionally, the yawning fiscal deficits that have followed bailouts have led to unpopular fiscal retrenchment.
Topic:
Debt, Economics, Markets, Financial Crisis, and Reform
Political Geography:
United States

4. Lehman Died, Bagehot Lives: Why Did the Fed and Treasury Let a Major Wall Street Bank Fail?

Author:
William R. Cline and Joseph E. Gagnon
Publication Date:
09-2013
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Five years after the Federal Reserve and the Treasury allowed the investment bank Lehman Brothers to fail, their actions (or inaction) remain a focus of debate. Some argue that it was an inconsistent policy to have let Lehman fail while making emergency loans to save other large financial institutions in the same time frame. In this Policy Brief we present evidence that the Fed and Treasury had a sound reason to have bailed out other institutions while letting Lehman fail. Simply put, Lehman was insolvent—probably deeply so—whereas the other institutions arguably were solvent. In addition, the other institutions had abundant collateral to pledge, whereas what little collateral Lehman had to pledge was of questionable quality and scattered across many affiliated entities. Thus, federal officials, at least in hindsight, appear to have followed the dictum of Walter Bagehot (cited above), which has guided central banks for almost 150 years.
Topic:
Debt, Economics, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
United States

5. Fixing Mortgage Finance: What to Do with the Federal Housing Administration?

Author:
Mark A. Calabria
Publication Date:
02-2012
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
While Fannie Mae, Freddie Mac, and private subprime lenders have deservedly garnered the bulk of attention and blame for the mortgage crisis, other federal programs also distort our mortgage market and put taxpayers at risk of having to finance massive financial bailouts. The most prominent of these risky agencies is the Federal Housing Administration (FHA).
Topic:
Debt, Economics, Government, and Financial Crisis
Political Geography:
United States

6. The Freedom Savings Credit: A Practical Step to Build Americans' Household Balance Sheets

Author:
Lisa Mensah, Raymond O'Mara III, Colby Farber, and Robert Weinberger
Publication Date:
02-2012
Content Type:
Policy Brief
Institution:
Aspen Institute
Abstract:
The imbalance of too much debt and not enough assets fuels financial insecurity in many American households. Building Americans' household balance sheets should start with making savings and asset-building incentives more efficient and equitable. Although millions of working Americans currently receive little or no tax incentive to save, modest reforms to our tax code have the potential to dramatically improve their financial futures. The Aspen Institute Initiative on Financial Security (Aspen IFS) proposes the Freedom Savings Credit to create a more equitable and economically efficient savings system that will benefit millions of American households and the nation as a whole.
Topic:
Security, Debt, Economics, and Financial Crisis
Political Geography:
United States and America

7. EIU: Global outlook summary

Publication Date:
06-2012
Content Type:
Policy Brief
Institution:
Economist Intelligence Unit
Abstract:
The global economy remains in precarious shape. Europe's debt crisis rages on, and although the euro appears to have survived its most recent test in the form of the Greek election on June 17th, austerity and financial-market uncertainty are depressing economic activity in Europe and, by extension, in much of the rest of the world. The Economist Intelligence Unit continues to expect global GDP growth to slow in 2012, and while our forecasts for the G3 economies—the US, euro zone and China—are essentially unchanged this month, we have cut our projections for Brazil and India.
Topic:
Debt, Economics, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
United States, China, Europe, India, and Brazil

8. The United States and the Global Future

Author:
Banning Garrett, James B. Steinberg, David Ignatius, and Uri Dadush
Publication Date:
03-2012
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
How will the US economy evolve over the next twenty years and what might be the impact of various US economic scenarios on the global system? Will the United States have a Japan-like decade or two of anemic growth? If so, would this lead the United States to reduce its foreign involvement and commitments, become more protectionist, and focus on its internal problems? Or will the United States solve its fiscal and debt problems, reinvigorate growth and innovation, and return to sustainable economic growth? Would this underpin a renewed commitment to active US global leadership in mobilizing international cooperation to manage security, economic growth, and global challenges?
Topic:
Foreign Policy, Debt, Economics, International Trade and Finance, and Hegemony
Political Geography:
United States and North America

9. Austerity ahead: How will a conservative victory change Spanish politics?

Author:
Teemu Sinkkonen
Publication Date:
11-2011
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
The electoral defeat suffered by the ruling Socialist Party (Partido Socialista Obrero Español, PSOE) in the municipal elections and the prolonged financial crisis has forced Prime Minister Zapatero to call an early general election on 20 November. The Conservative People's Party (Partido Popular, PP) is ahead in the polls by a clear margin and is likely to gain an absolute majority in the parliament. The economic outlook for Spain looks bleak, which means that the new government will have to create new jobs quickly and push through harsh and unpopular reforms, particularly regarding the fiscal and administrative structures. The Indignados protest movement is gaining support, and looks set to challenge the legitimacy of the system and force the future government to produce speedy results. Spain is expected to enhance its role in international politics through pragmatic bilateral relations. In particular, relations with the US seem to be warming up, while Spain can turn to the UK and Poland in the EU for companionship
Topic:
Debt, Democratization, Economics, and Financial Crisis
Political Geography:
United States, United Kingdom, Europe, and Spain

10. Going for Broke: The Budgetary Consequences of Current US Defense Strategy.

Author:
Carl Conetta
Publication Date:
10-2011
Content Type:
Policy Brief
Institution:
Project on Defense Alternatives
Abstract:
The sharp rise in the Pentagon's base budget since 1998 (46% in real terms) is substantially due to strategic choice, not security requirements, per se. It reflects a refusal to set priorities as well as a move away from the traditional goals of military deterrence, containment, and defense to more ambitious ends: threat prevention, command of the commons, and the transformation of the global security environment. The geographic scope of routine US military activity also has expanded.
Topic:
Security, Foreign Policy, Defense Policy, and Debt
Political Geography:
United States

11. The Pentagon's New Mission Set: A Sustainable Choice?

Author:
Carl Conetta
Publication Date:
10-2011
Content Type:
Policy Brief
Institution:
Project on Defense Alternatives
Abstract:
Today, the United States enjoys an abundance of military power, but it is a uniquely expensive asset. During the past 20 years we have sought new ways to put this asset to work. Reviewing the change in the Pentagon's mission set, several broad trends are discernible: Mission objectives have grown much more ambitious, generally. The geographic scope for intensive US military efforts has widened significantly. Across the globe, the focus of US military action and investment has become less discriminate and more sweeping or comprehensive. Missions that put US “boots on the ground” in foreign nations in either a direct action, advisory, or capacity- building role have grown much more prominent. US policy continues to emphasize multinational approaches to addressing security issues, however the trend has been for the United States to play an ever more prominent role as the convener, governor, and quartermaster of joint action.
Topic:
Security, Defense Policy, and Debt
Political Geography:
United States

12. Strategic Adjustment to Sustain the Force: A survey of current proposals.

Author:
Charles Knight
Publication Date:
10-2011
Content Type:
Policy Brief
Institution:
Project on Defense Alternatives
Abstract:
The essential challenge in the art of strategy is how to achieve objectives within the demanding reality of resource constraints. Agile strategists must always be prepared for changing resource conditions and quickly adapt accordingly.
Topic:
Security, Defense Policy, and Debt
Political Geography:
United States

13. Pentagon cuts in context: No reason for "doomsday" hysteria

Author:
Carl Conetta
Publication Date:
10-2011
Content Type:
Policy Brief
Institution:
Project on Defense Alternatives
Abstract:
Recent Obama administration defense budget requests and proposals all fall within a narrow range of possible expenditures for the 2013-2023 period. All have kept the Pentagon's base budget above Cold War spending peaks. The President's 13 April proposal is no exception. It is a modest step that, at best, aims to retract future budget plans by 6.5 percent or $400 billion. The resulting average annual Pentagon base budget f or 2013-2023 would be close to today's level in real terms. The President's slice into non-security discretionary spending plans is audacious by comparison, reversing the proportionately suggested by his Fiscal Commission, and increasing the proportion of discretionary spending allocated to the Pentagon. The President's proposed new constraints on Pentagon budget growth hardly risk America's role in the world, as some contend, and by themselves do not necessitate a strategic review. Still, the President's launch of a such a review is a welcome development. It can help return America' s military posture to a reasonable and sustainable footing – provided that it elicits broad debate, solicits alternative viewpoints, and reaches beyond a $400 billion crease in the Pentagon's future budget plans.
Topic:
Defense Policy, Cold War, and Debt
Political Geography:
United States and America

14. Continuing Resolution: Congress Goes Easy on DoD Rebalances Budget in Pentagon's Favor

Publication Date:
03-2011
Content Type:
Policy Brief
Institution:
Project on Defense Alternatives
Abstract:
The struggle over a full-year Continuing Resolution (CR) shows that both houses of congress are “going light” on DoD, pointing toward a discretionary budget balanced more heavily in favor of the Pentagon. Within the so-called “security basket,” International Affairs is set to be the big loser. Setting aside war costs, the Pentagon budget constitutes about 50% of discretionary spending. The Pentagon accounted for an even greater proportion of the rise in discretionary spending during the past ten years of debt accumulation. Nonetheless, both the House and Senate efforts to cut spending for FY-2011 allocate much less than 50% of the pain to DoD's base expenditures. The House allocates only 15% of its proposed cuts to DoD. The Senate, about 38%.
Topic:
Security, Defense Policy, and Debt
Political Geography:
United States

15. The Pentagon and Deficit Reduction: FY-2012 Budget Retains Exceptional Level of Defense Spending

Publication Date:
03-2011
Content Type:
Policy Brief
Institution:
Project on Defense Alternatives
Abstract:
President Obama's 2012 budget plan maps out a future of steady increases for the National Defense account (apart from war costs, which the budget presumes will decline). The budget sets the base or peacetime portion of national defense to rise from $551.9 billion in 2010 to $637.6 billion in 2016 - a boost of about 15.5%. This increase exceeds the expected rate of inflation by about seven-tenths of a percent per year.
Topic:
Security, Defense Policy, and Debt
Political Geography:
United States

16. What Can and Cannot Be Done about Rating Agencies

Author:
Nicolas Véron
Publication Date:
11-2011
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Credit Rating Agencies (CRAs) are prominent participants in the assessment of credit risk by financial markets. They determine and publish credit ratings, which represent the CRA's opinions on issuers' relative probability of default. The market for credit ratings is currently dominated in most western countries by three players: n Standard Poor's (S) is a division of the McGraw- Hill Companies, a US-based media group whose ownership is dispersed (the largest shareholder is Capital Group, with 12 percent of shares); n Moody's Corporation is an autonomous US-based listed company with dispersed ownership (the largest shareholder is Berkshire Hathaway, with 12.5 percent of shares); n Fitch Ratings is a division of the Fitch Group which is jointly owned by Fimalac, a Paris-based listed investment vehicle (60 percent of shares), and the US-based Hearst Corporation (40 percent of shares).
Topic:
Debt, Economics, Globalization, International Trade and Finance, and Markets
Political Geography:
United States

17. The EU's Response to the Financial Crisis: A mid-term review

Author:
Karel Lannoo
Publication Date:
04-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Two years after the London G-20, CEPS Chief Executive Karel Lannoo finds that the EU is well advanced in delivering on the commitments made for the 2013 target date. Important steps have been taken on the institutional side, and regulatory changes are moving ahead. On some issues, in fact, such as remuneration, the EU has made even greater headway than the US. But certain key sensitive matters remain, such as bank resolution or structural changes.
Topic:
Debt, Economics, Global Recession, Monetary Policy, and Financial Crisis
Political Geography:
United States, Europe, and London

18. US Lessons for the Eurozone: Restoring Confidence through Transparency

Author:
Julie Chon
Publication Date:
12-2011
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
When it comes to resolving financial crises, size matters, but so does transparency. In both the US and European crises, the drive for size—firing off enough public funds to plug the hole in the financial system—has proven to be self-defeating as markets raise ever higher, unrealistic, and inappropriate expectations for government policy. This strategy addresses some of the economics and none of the politics of crisis management. The race to meet the size test distracts policymakers from addressing the real impediment to restoring investor and public confidence: the inherent uncertainty and lack of transparency associated with extraordinary government actions in times of crisis. The absence of transparent decision-making inflicts a costly blow to the credibility of policymakers because markets and citizens cannot see or believe what leaders are doing to stabilize the financial system.
Topic:
Debt, Economics, International Trade and Finance, and Financial Crisis
Political Geography:
United States and Europe

19. US Interests and the International Monetary Fund

Author:
C. Randall Henning
Publication Date:
06-2009
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The United States Congress is now considering whether to raise US commitments to the International Monetary Fund (IMF). A positive decision would ratify President Obama's pledge in early April, taken with the other leaders of the G-20, to bolster the IMF as part of their cooperative response to the global economic crisis. The package of measures advanced by the G-20 leaders would triple the resources available to the Fund to $750 billion and would greatly reinforce its role in the international financial system. However, the IMF remains a controversial institution and congressional support cannot be taken for granted.
Topic:
Debt, Monetary Policy, and Financial Crisis
Political Geography:
United States

20. Icon or Omen? Dubai's Debt Problem and the Gulf

Author:
Simon Henderson
Publication Date:
12-2009
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
Late on November 25, just before the start of the Islamic Eid festival and, coincidentally, Thanksgiving in the United States, Dubai's flagship investment company Dubai World announced that it would be requesting a six-month delay on paying its debts. Within hours, Dubai's reputation was being rewritten, and its ambition to be a financial center, building on its historic reputation as a focal point for regional trade, was being recast. Uncertainty continued on November 30, when the Dubai government said that it would not guarantee Dubai World's debt. In any event, the larger story has been the nervousness of world financial markets, which are now also evincing worry about the debt of countries like Greece or Ireland. Within the Middle East, the focus is on the extent of support that Dubai will receive from Abu Dhabi, the neighboring -- and richer -- member sheikhdom of the United Arab Emirates (UAE), whether other city-states like Bahrain and Qatar are also at risk, and whether Dubai's links with Iran will change as a result of its financial situation.
Topic:
Debt, Economics, and Financial Crisis
Political Geography:
United States, Iran, Middle East, Arabia, Bahrain, Dubai, and Abu Dhabi