US

Fiscal Cliff

If the fiscal changes that are planned under current US law take place next year — including Bush era tax cuts expiring, Medicare payment rates to doctors being cut, the AMT applying to many more taxpayers, and automatic cuts in defense and non-defense discretionary spending kicking in — then US real GDP growth in 2013 will be lower than it would be under the CBO's alternative fiscal scenario, in which the above changes do not occur.

Responses weighted by each expert's confidence

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT Did Not Answer Bio/Vote History
Alesina
Alberto Alesina
Harvard
Agree
8
Bio/Vote History
Altonji
Joseph Altonji
Yale
Strongly Agree
8
Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
Agree
6
Bio/Vote History
Autor
David Autor
MIT
Agree
6
Bio/Vote History
Nevertheless, I'd rather go over the 'fiscal cliff' than renew our irresponsible and unsustainable spend-don't-tax policies.
Baicker
Katherine Baicker
University of Chicago
Agree
5
Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
No Opinion
Bio/Vote History
Chetty
Raj Chetty
Harvard Did Not Answer Bio/Vote History
Chevalier
Judith Chevalier
Yale
Agree
2
Bio/Vote History
This is the debate. On net, I am still on the Keynesian side.
Currie
Janet Currie
Princeton
Agree
6
Bio/Vote History
Cutler
David Cutler
Harvard
Strongly Agree
7
Bio/Vote History
Deaton
Angus Deaton
Princeton
Strongly Agree
8
Bio/Vote History
Duffie
Darrell Duffie
Stanford
Agree
2
Bio/Vote History
These measures could lower growth in 2013; the alternative has projected deficits of 5.3% (vs 1.4%) for many years; that's not good either!
Edlin
Aaron Edlin
Berkeley
Strongly Agree
8
Bio/Vote History
Eichengreen
Barry Eichengreen
Berkeley
Agree
7
Bio/Vote History
Fair
Ray Fair
Yale
Strongly Agree
7
Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale
Agree
6
Bio/Vote History
Lower spending and higher taxes imply slower growth. But alternative scenario would lead to higher deficit.
Goldin
Claudia Goldin
Harvard
Disagree
2
Bio/Vote History
Goolsbee
Austan Goolsbee
Chicago
Strongly Agree
10
Bio/Vote History
you've got to be kidding me. of course it would be lower.
Greenstone
Michael Greenstone
University of Chicago
Agree
7
Bio/Vote History
Hall
Robert Hall
Stanford
Strongly Agree
8
Bio/Vote History
All macro models agree that lower product demand and higher taxes reduce current output and employment.
Holmström
Bengt Holmström
MIT Did Not Answer Bio/Vote History
Hoxby
Caroline Hoxby
Stanford
Uncertain
5
Bio/Vote History
Some of the policies listed are anti-growth, some pro-growth, so it's hard to evaluate them succinctly as a package.
Judd
Kenneth Judd
Stanford Did Not Answer Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
Strongly Agree
10
Bio/Vote History
Short run contraction for sure. But long run costs of NOT acting are growing; entitlement reform and some revenue increases are needed.
Klenow
Pete Klenow
Stanford
Agree
8
Bio/Vote History
Presuming it does not have a big effect on either (1) expected fiscal policy in future years, or (2) unconventional monetary policy.
-see background information here
Lazear
Edward Lazear
Stanford
Agree
7
Bio/Vote History
Most of the action is on the tax side as CBO documents. See my WSJ op-ed on May 18, 2012 about this.
-see background information here
Levin
Jonathan Levin
Stanford Did Not Answer Bio/Vote History
Maskin
Eric Maskin
Harvard
Agree
7
Bio/Vote History
Nordhaus
William Nordhaus
Yale
Strongly Agree
10
Bio/Vote History
Obstfeld
Maurice Obstfeld
Berkeley
Strongly Agree
10
Bio/Vote History
Saez
Emmanuel Saez
Berkeley
Strongly Agree
6
Bio/Vote History
Scheinkman
José Scheinkman
Columbia University
Agree
6
Bio/Vote History
Schmalensee
Richard Schmalensee
MIT
Agree
8
Bio/Vote History
Shin
Hyun Song Shin
Princeton
Agree
7
Bio/Vote History
Stock
James Stock
Harvard Did Not Answer Bio/Vote History
Stokey
Nancy Stokey
University of Chicago
Uncertain
1
Bio/Vote History
If all these changes do kick in at the end of 2012, it is hard to imagine they would be left in place for all of 2013. So then what?
Thaler
Richard Thaler
Chicago Booth
Strongly Agree
8
Bio/Vote History
No brainer.
Udry
Christopher Udry
Northwestern
Agree
2
Bio/Vote History
Zingales
Luigi Zingales
Chicago Booth
Uncertain
1
Bio/Vote History
The worst aspect is the perduring uncertainty on what will happen