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Reposted by Kimberly Clausing

Joey Fishkin @fishkin.bsky.social · 3d

I thought I'd put the administration's proposed "compact" with universities in context, so I wrote the blog post below.

It's especially for journalists covering this story!

Many details about how the compact itself works and why the administration has retreated to this strategy.

Balkinization: The Art of Replacing the Law with the Deal

A group blog on constitutional law, theory, and politics

balkin.blogspot.com

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Reposted by Kimberly Clausing

NBER @nber.org · 1d

Assessing how the greater reliance of fiscal policy on tariffs will affect the US tax system, from @kclausing.bsky.social and Maurice Obstfeld https://www.nber.org/papers/w34192

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Reposted by Kimberly Clausing

Aaron Sojourner @aaronsojourner.org · 1d

"While maintaining tariff rates at summer 2025 levels would generate large government revenues, such broad tariffs have significant downsides: Efficiency losses would approach one-third of revenues raised..."
@kclausing.bsky.social #EconSky
www.nber.org/papers/w34192

. Tariffs as Fiscal Policy
Kimberly A. Clausing, Maurice Obstfeld #34192

Abstract:
The year 2025 brought a remarkable shift in the role of tariffs in the US economy, as the Trump administration simultaneously escalated the use of broad tariffs and ensured that Congress enacted large income tax cuts. This fiscal switch has important implications for the US tax system. While maintaining tariff rates at summer 2025 levels would generate large government revenues, such broad tariffs have significant downsides: Efficiency losses would approach one-third of revenues raised, the tax system would be less progressive, and there would be serious tax administration concerns. The fiscal shift also has significant macroeconomic implications, although probably not the intended ones. Broad tariffs generate a large negative supply shock, simultaneously raising prices and reducing macroeconomic activity.

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Reposted by Kimberly Clausing

John Bistline @bistline.bsky.social · 6d

Great paper measuring the current costs of climate inaction in the U.S. @kclausing.bsky.social, @knittelmit.bsky.social, and @cwolfram.bsky.social find that wildfire smoke and higher insurance drive household costs more than direct temperature-related effects, both for costs and mortality risks.

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Bobby Kogan @bbkogan.bsky.social · 7d

Happy fiscal new year! Off to a rough start 🥲

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Kimberly Clausing @kclausing.bsky.social · 12d

(7/7) For more on a comparison of relevant climate policy actions for the United States, see this recent work:

papers.ssrn.com/sol3/papers....

ceepr.mit.edu/wp-content/u...

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Kimberly Clausing @kclausing.bsky.social · 12d

(6/7) While costs are relatively modest so far, the costs of climate inaction are likely to rise steeply in the years ahead, illustrating the importance of climate action. Even focusing *solely* on US benefits, many climate policy interventions will have benefits that exceed their costs.

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Kimberly Clausing @kclausing.bsky.social · 12d

(5/7) Further, climate policy *inaction* is regressive, harming poorer counties and households disproportionately. Poorer counties are more exposed to risks such as wildfire particulates, and the higher costs of home insurance and cooling are a larger share of income for poorer households.

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Kimberly Clausing @kclausing.bsky.social · 12d

(4/7) In the United States, natural disasters are far more consequential than heat, for both costs and mortality risks. Increased particulate matter from smoke causes more deaths than heat (as cold deaths fall); home insurance price increases are more important than higher cooling costs.

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Kimberly Clausing @kclausing.bsky.social · 12d

(3/7) When it comes to climate change, “blue” counties and “red” counties suffer similarly, with slightly higher costs for Trump-voting counties in comparison to Harris-voting counties.

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Kimberly Clausing @kclausing.bsky.social · 12d

(2/7) Guided by the literature, we examine several key vectors through which climate inaction affects households. Overall, household damages total nearly $600 by one estimate, and damages reach about $900 for ten percent of households.

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Kimberly Clausing @kclausing.bsky.social · 12d

🧵 (1/7) With @knittelmit.bsky.social and @cwolfram.bsky.social, happy to announce our new paper on “Who Bears the Burden of Climate Inaction?”, just posted for BPEA @brookings.edu.

We find large climate cost impacts that vary by both geography and income.

www.brookings.edu/articles/who...

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Kimberly Clausing @kclausing.bsky.social · 13d

(8/8) Such broad tariffs are also quite challenging for the macroeconomy, as they entail a large negative supply shock. Further, tariffs are likely to harm both the US investment climate and US manufacturing.

For more, read the paper!
www.piie.com/publications...

Tariffs as Fiscal Policy

The year 2025 brought a remarkable shift in the role of tariffs in the US economy, as the Trump administration simultaneously escalated the use of broad tariffs and ensured that Congress enacted large...

www.piie.com

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Kimberly Clausing @kclausing.bsky.social · 13d

(7/8) Together with the OBBBA, this fiscal switch of lower income tax revenues, higher tariff revenues, and spending cuts targeting poorer Americans will leave most Americans with lower after-tax incomes.

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Kimberly Clausing @kclausing.bsky.social · 13d

(6/8) In terms of progressivity, tariffs are far less progressive than the income tax; they harm poor and middle-class Americans more than rich Americans for the simple reason that they fall on consumption, not savings, and savings rates increase with income.

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Kimberly Clausing @kclausing.bsky.social · 13d

(5/8) In terms of efficiency, tariffs perform poorly relative to other tax instruments, for reasons discussed at length in the paper. At current levels, efficiency losses approach one third of revenue raised.

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Kimberly Clausing @kclausing.bsky.social · 13d

(4/8) Once accounting for mechanical offsets, our revenue findings are compatible with recent 10-year estimates of tariff revenues, but readers should note these studies are not strictly comparable, and exemptions and evasion might reduce revenues further.

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Kimberly Clausing @kclausing.bsky.social · 13d

(3/8) In terms of revenue, we calculate tariff “Laffer curves” under multiple modeling assumptions, finding that tariff revenues peak at a level far short of what it would take to replace (or even dramatically reduce) income tax revenues.

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Kimberly Clausing @kclausing.bsky.social · 13d

(2/8) While tariffs have long been employed for various narrow aims, their use in today’s US economy is far more significant. Tariffs are a tax. In our paper, we evaluate the use of tariffs by broad tax policy criteria: revenue, efficiency, progressivity, and tax administration.

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Kimberly Clausing @kclausing.bsky.social · 13d

🧵 (1/8) My new working paper with Maurice Obstfeld, “Tariffs as Fiscal Policy”, was just posted today @piie.com. Within, we evaluate the new role that tariffs are playing in the US economy.

www.piie.com/publications...

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Kimberly Clausing @kclausing.bsky.social · 18d

Lovely piece on the importance of conversation across political divides.

wapo.st/4gAmDHg

Column | A dying man said he found the key to happiness. Science backs him up.

Ted Pellegatta was a MAGA supporter beloved by liberals in Sperryville, Virginia, whose friends transcended political allegiances.

wapo.st

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Reposted by Kimberly Clausing

Brendan Duke @brendanvduke.bsky.social · 19d

The Trump Administration’s continued efforts to break the 2025 funding deal reached in March are seriously undermining efforts to reach a funding agreement for 2026 because lawmakers need to know if they reach a deal, it will be kept. 🧵

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Kimberly Clausing @kclausing.bsky.social · 20d

With international efforts more difficult than ever, it is essential that willing jurisdictions buttress climate cooperation.

A big shout out re. this new & important report, from a team led by @cwolfram.bsky.social. I was honored to be part of the working group.

Read her thread, then the report!

Catherine Wolfram @cwolfram.bsky.social · 21d

I'm delighted to announce the release of the Flagship Report of the Global Climate Policy Project at Harvard and MIT Working Group on Climate Coalitions on "Building a Climate Coalition: Aligning Carbon Pricing, Trade, and Development."

ceepr.link/3VmgC7g

A 🧵 on what we do/find:

ceepr.link

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Reposted by Kimberly Clausing

Scott Lincicome @scottlincicome.bsky.social · 24d

"Lesotho Sends Trade Delegation to US to Plead for Lower Tariffs" www.bloomberg.com/news/article...
The country ranks 167th in gdp per capita (PPP); has 40% of its population living in poverty; and has 24-28% unemployment.

Shameful stuff.

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Ezra Klein @ezrakleinbot.bsky.social · 26d

Tweet from Ezra:

In the last few years we've seen:

- The plot to kidnap Gretchen Whitmer
- The Storming of the Capitol and pipe bombs left at the RNC and DNC
- The break-in to kidnap Nancy Pelosi and the brutal on Paul Pelosi
- Multiple assassination attempts against Trump
- The assassination of Minnesota House Speaker Melissa Hortman and her husband and the shooting of on State Senator John Hoffman and his wife
- Luigi Mangione's assassination of Brian Thompson
- The assassination of Charlie Kirk

Political violence is contagious. It is spreading. It is not confined to one side or belief system. It should terrify us all.

The foundation of a free society is the ability to participate in it without fear of violence. Political violence is always an attack against us all. You have to be so blind not to see that.

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