More About Chad Stone

Chad Stone

Chad Stone is Chief Economist at the Center on Budget and Policy Priorities, where he specializes in the economic analysis of budget and policy issues. You can follow him on Twitter @ChadCBPP.

Full bio and recent public appearances | Research archive at

Ryan Budget a Path to Adversity for Millions — and Maybe for the Economy Too

April 9, 2014 at 9:49 am

In my latest US News & World Report post, I reprise CBPP analysis showing that House Budget Committee Chairman Paul Ryan’s “Path to Prosperity” budget is, in fact, as CBPP President Robert Greenstein described it, a path to adversity for tens of millions of Americans.  I then discuss why it also could be a path to adversity for the economy as a whole.

Ryan can balance his budget within ten years with help from an analysis he requested from the Congressional Budget Office (CBO), which shows that the aggressive deficit-reduction path he outlines in his budget — while it would initially slow economic growth and reduce the actual deficit reduction achieved — would eventually encourage somewhat more growth and additional deficit reduction.

CBO’s analysis reflects mainstream economic thinking about deficit reduction’s effects on the economy:  it hurts by further reducing demand for goods and services when the economy is weak, but it helps by increasing national saving and investment when the economy is strong.  As I point out, CBO includes important caveats about the limitations of this analysis,

…stating, “The projections do not represent a cost estimate for legislation or an analysis of the effects of any specific policies.” Nor, did the budget office consider “whether the specified paths are consistent with the policy proposals or budget numbers that Chairman Ryan released.” And, finally, CBO emphasized that such estimates of budgetary and economic projections “are highly uncertain.”

In my post, I add a further consideration:

But what if the short-run negative effects of budget austerity are larger than CBO assumes, the economy’s underlying ability to sustain an ongoing recovery is weaker than CBO projects, and the economic effects from further delaying the recovery (such as suppressed business investment and worse long-term unemployment) have persistent adverse effects on the economy’s longer-term growth potential?

Former Treasury Secretary Lawrence Summers made a compelling case for each of these propositions at a recent CBPP conference on “The Path to Full Employment.” As Summers argues, “lack of demand creates, over time, lack of supply.” That effect is not in reflected in CBO’s analysis of the Ryan plan — and it’s not yet broadly embraced among economists. But if Summers is right, Ryan’s aggressive deficit-reduction plan would not only weaken the economy in the short term but also sap its longer-term growth potential and revenue-generating capacity.

That would defeat the whole purpose of Ryan’s exercise in austerity.

Click here to read the full US News post.

Today’s Jobs Report in Pictures

April 4, 2014 at 9:39 am

Today’s solid jobs report shows a labor market that continues to improve gradually, but that remains far from healed. With the share of the population with a job stuck at recession levels and long-term unemployment still very high, it’s too soon for the Federal Reserve to begin raising interest rates — and it’s well past time for lawmakers to restore emergency federal unemployment insurance benefits that expired in December.

Below are some charts to show how the new figures look in historical context.  Click here for my full statement with further analysis.

Mapping the Impact of the Senate Deal on Jobless Benefits

March 18, 2014 at 5:13 pm

A top priority when Congress returns to work next week should be for the Senate to pass the bipartisan deal worked out last week to restore Emergency Unemployment Compensation (EUC) benefits, and for the House to then get on board as well.  These two maps show the big difference that the deal would make for unemployed workers.  (For updated data on unemployment rates in each state, click here.)

Time to Get on Board Senate’s Unemployment Insurance Deal

March 14, 2014 at 12:56 pm

My latest post for U.S. News & World Report’s Economic Intelligence blog explains why policymakers should quickly enact the Senate’s bipartisan deal to restore Emergency Unemployment Compensation (EUC) benefits.  Here’s an excerpt:

There comes a point, as the economy improves and jobs are more plentiful, when policymakers should let EUC expire.  But, we’re not there yet….

Most tellingly, long-term unemployment remains much higher than at any previous time when policymakers allowed emergency UI to expire (see chart).  The economic case for restoring EUC until the job market is more robust remains strong.  The long-term unemployed face greater difficulties than other jobseekers.  Long spells of unemployment erode their job skills.  Worse, employers seem more reluctant to hire the long-term unemployed than other jobseekers with similar qualifications.

In the face of these obstacles, emergency jobless benefits keep many long-term unemployed looking for work rather than dropping out of the labor force.  They generate additional consumer spending that supports the recovery.  And, as a an emergency program that ends when the emergency passes, EUC does not compromise future deficit reduction efforts the way, say, lawmakers’ routine extension of expiring tax provisions without offsetting the costs does.

See the full post here.

Today’s Jobs Report in Pictures

March 7, 2014 at 9:30 am

Today’s jobs report marks the fourth anniversary of the start of the private-sector jobs recovery. Unfortunately, overall job creation (private plus government jobs) over that period has averaged just 168,000 a month — well below the 200,000 to 300,000 jobs a month that a robust jobs recovery would generate. As a result, payroll employment has not yet topped its December 2007 pre-recession peak, and unemployment remains too high — especially among the long-term unemployed, whose numbers swelled by 203,000 in February. With the job market still so far from full strength, lawmakers should act quickly to restore retroactively emergency federal jobless benefits, which they allowed to expire in December.

Below are some charts to show how the new figures look in historical context. Click here for my full statement with further analysis.