Economic and Fiscal Outlook Peter R. Orszag Citigroup

Recoveries tend to be sluggish following financial crises – In 2007, private sector borrowing was 28% of GDP; in 2009 it was -17% of GDP – The peak unemployment rate is reached from three to ten years after the crisis Housing is a key transmission mechanism – Median housing prices are 15 to 20% lower in the decade after a crisis compared to pre-crisis levels – Feedback loop: weak economy  weak housing  weak economy Political Polarization in the United States – Not caused by gerrymandering – Inertia does not lead to good outcomes (fiscal, climate, etc.) – Learn to function with gridlock

Components of Growth

Employment-Population Ratio

Medicare Spending Per Beneficiary by HRR, 2006