US

US Fiscal Risks

Question A:

If the United States fails to make scheduled interest or principal payments on government debt securities, even as an unintended consequence of political brinksmanship, US families and businesses are likely to suffer severe economic harm.

Responses weighted by each expert's confidence

Question B:

With or without a default, current uncertainty over future taxing and spending policies of the US government is likely to depress private investment and hiring by enough to reduce GDP growth by at least a quarter of a percentage point over the next 12 months.

Responses weighted by each expert's confidence

Question A Participant Responses

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Agree
4
Bio/Vote History
Alesina
Alberto Alesina
Harvard Did Not Answer Bio/Vote History
Altonji
Joseph Altonji
Yale
Agree
4
Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
Agree
5
Bio/Vote History
Autor
David Autor
MIT
Agree
6
Bio/Vote History
Baicker
Katherine Baicker
University of Chicago
Agree
3
Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Agree
4
Bio/Vote History
Chetty
Raj Chetty
Harvard
Strongly Agree
5
Bio/Vote History
Chevalier
Judith Chevalier
Yale Did Not Answer Bio/Vote History
Currie
Janet Currie
Princeton
Strongly Agree
10
Bio/Vote History
Cutler
David Cutler
Harvard
Strongly Agree
10
Bio/Vote History
Deaton
Angus Deaton
Princeton
Strongly Agree
9
Bio/Vote History
Duffie
Darrell Duffie
Stanford
Strongly Agree
2
Bio/Vote History
Treasury markets are directly affected, raising US and other borrowing costs. Recipients of federal payments impaired, with a multiplier
Edlin
Aaron Edlin
Berkeley
Agree
1
Bio/Vote History
Hard to know consequences of something this unprecedented
Eichengreen
Barry Eichengreen
Berkeley
Agree
5
Bio/Vote History
"Severe" is uncertain, but "harm" will be significant. Extent of financial disruptions are hard to predict. Length of default will matter.
Fair
Ray Fair
Yale
Uncertain
5
Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale
Disagree
6
Bio/Vote History
Unlikely, if they pay a week later.
Goolsbee
Austan Goolsbee
Chicago Did Not Answer Bio/Vote History
Greenstone
Michael Greenstone
University of Chicago
Agree
6
Bio/Vote History
This is unknown, of course, but there seems to be decent probabilities on bad stuff happening. It would be a self-inflicted wound.
Hall
Robert Hall
Stanford Did Not Answer Bio/Vote History
Holmström
Bengt Holmström
MIT
Agree
7
Bio/Vote History
Hoxby
Caroline Hoxby
Stanford
No Opinion
Bio/Vote History
Poor question. The federal govt could make its interest payments on current debt even if the debt ceiling were not raised.
Judd
Kenneth Judd
Stanford
Uncertain
7
Bio/Vote History
Don't know the effect on the market's long-run trust in the US. It may tolerate a few defaults, but don't know how many. Default is risky.
Kashyap
Anil Kashyap
Chicago Booth
Strongly Agree
9
Bio/Vote History
this would put our status as reserve currency in play; there would probably be forced selling. All bad.
Klenow
Pete Klenow
Stanford
Agree
5
Bio/Vote History
Levin
Jonathan Levin
Stanford
Agree
3
Bio/Vote History
Maskin
Eric Maskin
Harvard
Agree
7
Bio/Vote History
Nordhaus
William Nordhaus
Yale
Strongly Agree
9
Bio/Vote History
Obstfeld
Maurice Obstfeld
Berkeley
Strongly Agree
9
Bio/Vote History
Saez
Emmanuel Saez
Berkeley
Agree
4
Bio/Vote History
Scheinkman
José Scheinkman
Columbia University
Agree
7
Bio/Vote History
Schmalensee
Richard Schmalensee
MIT
Strongly Agree
7
Bio/Vote History
Shin
Hyun Song Shin
Princeton Did Not Answer Bio/Vote History
Stokey
Nancy Stokey
University of Chicago
Strongly Agree
8
Bio/Vote History
Financial turmoil and a higher interest rate on the huge debt will harm everyone.
Thaler
Richard Thaler
Chicago Booth
Strongly Agree
10
Bio/Vote History
Giving away the status of "risk free" to make a political point is the height of stupidity.
Udry
Christopher Udry
Northwestern
Strongly Agree
7
Bio/Vote History

Question B Participant Responses

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Uncertain
3
Bio/Vote History
Alesina
Alberto Alesina
Harvard Did Not Answer Bio/Vote History
Altonji
Joseph Altonji
Yale
Agree
5
Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
Agree
5
Bio/Vote History
Autor
David Autor
MIT
No Opinion
Bio/Vote History
Baicker
Katherine Baicker
University of Chicago
Uncertain
2
Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Agree
4
Bio/Vote History
Chetty
Raj Chetty
Harvard
Uncertain
5
Bio/Vote History
Chevalier
Judith Chevalier
Yale Did Not Answer Bio/Vote History
Currie
Janet Currie
Princeton
Agree
7
Bio/Vote History
Cutler
David Cutler
Harvard
Uncertain
1
Bio/Vote History
Deaton
Angus Deaton
Princeton
Disagree
5
Bio/Vote History
Duffie
Darrell Duffie
Stanford
Uncertain
2
Bio/Vote History
I don't have a way to estimate the magnitude of the loss. It is significant, but could be on either side of the indicated amount.
Edlin
Aaron Edlin
Berkeley
Disagree
2
Bio/Vote History
Eichengreen
Barry Eichengreen
Berkeley
Uncertain
5
Bio/Vote History
Fair
Ray Fair
Yale
Uncertain
5
Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale
No Opinion
Bio/Vote History
Stock market has not gone down, so it seems that people are not too worried yet.
Goolsbee
Austan Goolsbee
Chicago Did Not Answer Bio/Vote History
Greenstone
Michael Greenstone
University of Chicago
Uncertain
4
Bio/Vote History
I'm confident that the uncertainty is not increasing GDP but the magnitude of the loss is very very difficult to estimate.
Hall
Robert Hall
Stanford Did Not Answer Bio/Vote History
Holmström
Bengt Holmström
MIT
Agree
7
Bio/Vote History
Hoxby
Caroline Hoxby
Stanford
Uncertain
7
Bio/Vote History
Odd q! Paying for entitlement prgm liabilities over LT a big problem for econ grwth but ST effects of ST uncertainty not easily quantified.
Judd
Kenneth Judd
Stanford
Agree
7
Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
Agree
3
Bio/Vote History
magnitude is unsure but the direction is surely correct and my guess is that the magnitude is above 0.25.
Klenow
Pete Klenow
Stanford
Uncertain
5
Bio/Vote History
Levin
Jonathan Levin
Stanford
Uncertain
5
Bio/Vote History
Maskin
Eric Maskin
Harvard
No Opinion
Bio/Vote History
Nordhaus
William Nordhaus
Yale
Agree
5
Bio/Vote History
Close call about how much, but 1/4 point seems a reasonable central guess assuming debt limit resolved before D-day and shutdown < 2 weeks
Obstfeld
Maurice Obstfeld
Berkeley
Agree
7
Bio/Vote History
Saez
Emmanuel Saez
Berkeley
Uncertain
3
Bio/Vote History
Scheinkman
José Scheinkman
Columbia University
Uncertain
5
Bio/Vote History
Schmalensee
Richard Schmalensee
MIT
Agree
2
Bio/Vote History
The sign is clear, but the magnitude is a much harder call.
Shin
Hyun Song Shin
Princeton Did Not Answer Bio/Vote History
Stokey
Nancy Stokey
University of Chicago
Agree
8
Bio/Vote History
A comprehensive tax/entitlement reform, one that would fix US fiscal problems for the next forty years, would be a great "stimulus package."
Thaler
Richard Thaler
Chicago Booth
No Opinion
Bio/Vote History
Ain't got no tea leaves.
Udry
Christopher Udry
Northwestern
Uncertain
5
Bio/Vote History