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The Economist has an interesting article titled "The other exit strategy" in its Sept 12 2009 edition. It advocates the adoption and expansion of independent budget offices by more countries. From the article:

"Countries from Sweden to Chile have rules to limit deficits and enforce transparent budgeting, and independent bodies to assess politicians’ budget decisions. America has the Congressional Budget Office (CBO) and the euro zone has the Stability and Growth Pact (see article). By and large, though, these tools for fiscal credibility have been less well developed, less widely adopted and generally less effective than their monetary equivalents. That must change."

I don't think they are quite the same thing. PBO seems to be designed to call governments out on dumb policies and to support smarter policies being proposed by the opposition. It doesn't have any influence over any fiscal measures, such as government borrowing/GDP, debt/GDP or government spending/GDP, which seems to be the purpose of these other, stronger fiscal watchdogs in a few other countries.

It might not be a bad idea. I'm starting to get fairly concerned about the unfunded health and pension liabilities the federal and provincial governments are faced with given the aging of the boomers and the declining relative size of the workforce. This does not seem to be the time to be adding 5 points to our debt:GDP. If anything, we should probably try to get down to 25 or 20% to free up some borrowing room later.

I think we're at the point where any proposal that calls for anything resembling an independent, non-partisan source for economic policy analysis would be a Good Thing.

And we need more economics bloggers, dammit!

"And we need more economics bloggers, dammit!"

Hey, we're doing our fair share at Western. It's all those other schools that need to catch up. :)

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