lie ahead. although there is still time to make them, delay will sharply increase the pain of adjustment. the time to act is now. in my view, the problem is not principally one of economics or fiscal policy ; it is one of governance. the real threat to the fiscal standing of the united states is that of inaction caused by a long period of political polarization and dysfunction. that would be a self - inflicted wound. and that is a problem that can ’ t be derived from the traditional fiscal metrics. we may have more room than other economies around the globe, but i do not intend to project any sense of complacency around this topic. the authors ’ basic message seems just right to me : we don ’ t know where the tipping point is ; wherever it is, we are clearly getting closer to it, and the costs of misestimating its location are enormous and one - sided. the benefits to long - term fiscal consolidation – conducted at the right pace, and without jeopardizing the near - term economic recovery – would be substantial. balance sheet losses and remittances the authors ’ work on federal reserve income and remittances to the treasury overlaps with a paper published last month by federal reserve board staff members seth carpenter, jane ihrig, beth klee, daniel quinn, and alexander boote. 9 both papers provide a basis for public discussion of these matters, which is a highly positive development. some of the assets this is the alternative baseline scenario presented in adler, akabas, and collins, “ key takeaways, ” in note 6. see seth b. carpenter, jane e. ihrig, elizabeth c. klee, daniel w. quinn, and alexander h. boote ( 2013 ), “ the federal reserve ’ s balance sheet and earnings : a primer and projections, ” finance and economics discussion series 2013 – 01 ( washington : board of governors of the federal reserve system, january ). bis central bankers ’ speeches acquired through the federal reserve ’ s large - scale asset purchases ( lsaps ) may be sold at a loss, and it is important to be transparent about this possibility. thus far, the federal reserve ’ s asset purchases have greatly increased our income and remittances to the treasury. indeed, remittances have run at an annual level of about $ 80 billion from 2010 to 2012. both papers show that remittances are likely to decline substantially

. haircutting the subordinated debt in slovenian banks attracted a lot of public attention and even anger in recent months in slovenia. why was it necessary to perform this haircut in slovenia, but not, for instance, in ireland or other countries? this is not specific to slovenia. europe has learned the lessons from the past crises and has adopted a principle of responsibility for investors in bank bonds. all investors who put their money in these bonds have to know that they will be part of the effort if anything bad bis central bankers ’ speeches happens because bonds are an investment, not a deposit. these are the bail - in rules that have been decided by the european authorities and are intended to protect taxpayers, who should not be responsible for the situation of banks. when saving a bank, taxpayers should come last, with shareholders coming first, followed by bond owners. this distribution of responsibilities is now clear. this is not a decision of the ecb, it is a decision of the european council and the commission, but one that we support. true, but the decision is very recent and people didn ’ t know before that something like that could happen at all. slovenia is not the first case. it has already happened in spain, for instance. but it ’ s a change in the regime, with the aim that taxpayers and depositors are better protected and are not liable for the errors committed by banks. the bank asset management company ( bamc ) was set up last year in slovenia and is now being criticised for not being transparent enough. what should be the first priorities and challenges for the bamc? the bamc had a good start. it has built up expertise and human capital, started operating and has already been receiving a first batch of bad loans. it now needs to continue its work and to receive the next instalment of bad assets, subject to the authorisation by the european commission. secondly, it needs to continue building up the institution itself so that it is credible and independent. it is not only about restructuring the banking sector but also about making the slovenian economy function better. bad loans are loans to the economy. for this reason, the bamc should take decisions that are in the interest of slovenian taxpayers and of the slovenian people. it should keep resisting vested interests. for this purpose it has to be independent and in this way it will best protect the interests of taxpayers and workers in slovenia. the good news is that moody ’ s has just increased the ratings of the recently recap