For years now we have been listening to republican politicians and their eager media cheerleaders yak on about how we are robbing future generations with our profligate government spending. This canard is hammered into our conciousness whenever we see one of those deficit “doomsday clocks” ticking off how many trillions of dollars our kids will have to pay to get out of the debt hole we created. Paul Krugman takes on that argument today and he makes total sense. If we have a deficit problem in this country it’s a deficit of leadership and sound economic policy, not dollars…
Cheating Our Children
Paul Krugman | NYTimes | 29 Mar 13
So, about that fiscal crisis — the one that would, any day now, turn us into Greece. Greece, I tell you: Never mind.
Over the past few weeks, there has been a remarkable change of position among the deficit scolds who have dominated economic policy debate for more than three years. It’s as if someone sent out a memo saying that the Chicken Little act, with its repeated warnings of a U.S. debt crisis that keeps not happening, has outlived its usefulness. Suddenly, the argument has changed: It’s not about the crisis next month; it’s about the long run, about not cheating our children. The deficit, we’re told, is really a moral issue.
There’s just one problem: The new argument is as bad as the old one. Yes, we are cheating our children, but the deficit has nothing to do with it.
This morning I was listening to Diane Rhem conduct a discussion on the economy. One of her guests worked for the American Interprise Institute (the organization that spawned the neocon ‘revolution’ of the Bush years) and Bain Capital, of Mitt Romney fame. During the discussion her conservative guest unleashed the standard right-wing diatribe about how deficits are ruining the country, how we’re mortgaging our kids future and guaranteeing them a life of penury trying to pay back all the trillions being spent by Barack Obama. What disturbed me about the discussion wasn’t this fellow’s distortions and outright lies. It was Rhem’s failure to nail him for perpetrating such nonsense. By acceding to her producers and their myth of ‘balanced reporting’ she allowed this man’s distortions to be broadcast as fact. This, of course, is the nature of propaganda. It always sounds plausible to the uninformed. For that reason I offer Paul Krugman’s article today to provide my own ‘balance’…
Dwindling Deficit Disorder
Paul Krugman | NYTimes | 11 Mar 13
For three years and more, policy debate in Washington has been dominated by warnings about the dangers of budget deficits. A few lonely economists have tried from the beginning to point out that this fixation is all wrong, that deficit spending is actually appropriate in a depressed economy. But even though the deficit scolds have been wrong about everything so far — where are the soaring interest rates we were promised? — protests that we are having the wrong conversation have consistently fallen on deaf ears.
What’s really remarkable at this point, however, is the persistence of the deficit fixation in the face of rapidly changing facts. People still talk as if the deficit were exploding, as if the United States budget were on an unsustainable path; in fact, the deficit is falling more rapidly than it has for generations, it is already down to sustainable levels, and it is too small given the state of the economy.
My brother-in-law, with whom I enjoy heated political ‘conversations’, knows that I am sympathetic to a liberal point of view. I was therefore surprised that he sent me a video today which looks at income inequity in America, a subject of repeated and vociferous debate between us. After viewing the video I realised that he sent it because the data and conclusions it presents are so staggeringly amazing that it falls outside the realm of normal political debate. Looking at this doesn’t arouse anger, so much as eye-blinking astonishment…
An interesting commentary on the value of a free markets and trade, particularly as they relates to war and peace. There is a never ending debate about economic expansion versus retrenchment and protectionism. The thoughts shared here illuminate a facet of that question that is often overlooked…
The Value of Free Trade
Rabbi Johnathan Sacks | YouTube | 23 Jan 13
________________________________________________________________________________ Jonathan Sacks is the Chief Rabbi of the United Hebrew Congregations of the Commonwealth, the largest synagogue body in the UK.
The other day I was listening to Neal Conan’s ‘Talk of the Nation’ on NPR. His guest was engaged in a rant about profligate spending by the Obama administration. Her view, totally unanswered or disputed by the ever-’neutral’ Conan, was that all our fiscal problems stem from Democratic social spending. This political meme has been spread by right wing agitators for years and it is a pernicious lie which masks the true history of government spending in recent decades as shown in the two graphs below. Note: the increase shown in the first two years of the Obama administration reflects the financial stimulous program needed to avert the total collapse of the US economy at the end of Bush’s second term…
Government Spending is Down in the Obama Era
Kevin Drum | MotherJones.com | 22 Jan 13
The chart below has been making the rounds today, so I thought I’d colorize it and annotate it to drive home its point a little more clearly. Republicans like to say we have a spending problem, not a taxing problem, but the evidence doesn’t back that up. Total government spending didn’t go up much during the Clinton era, and it’s actually declined during the Obama era. In the last two decades, it’s only gone up significantly during the Bush era, the same era in which taxes were cut dramatically.
What we have isn’t a spending problem. That’s under control. What we have is a problem with Republicans not wanting to pay the bills they themselves were largely responsible for running up.
A brief tutorial on deficit economics from Dr. Krugman. Given the subject of his article today I thought it might be useful to show what a trillion dollars actually looks like (see graphic below). Lot of money—until you compare it with America’s economy. From Wikipedia… “The economy of the United States is the world’s largest national economy and the world’s second largest overall economy, the GDP of the EU being approximately $2 trillion larger. Its nominal GDP was estimated to be over $15 trillion in 2011, approximately a quarter of nominal global GDP. Its GDP at purchasing power parity is the largest in the world, approximately a fifth of global GDP at purchasing power parity. The U.S. is one of the world’s wealthiest nations, with abundant natural resources, a well-developed infrastructure, and high productivity. It has the world’s sixth-highest per capita GDP (PPP). The U.S. is the world’s third-largest producer of oil and second-largest producer of natural gas. It is the largest trading nation in the world. Its four largest export trading partners are as of 2011: Canada, China, Mexico and Japan.”
That Terrible Trillion
Paul Krugman | NYTimes | 17 Dec 12
As you might imagine, I find myself in a lot of discussions about U.S. fiscal policy, and the budget deficit in particular. And there’s one thing I can count on in these discussions: At some point someone will announce, in dire tones, that we have a ONE TRILLION DOLLAR deficit.
In the ongoing battle of the budget, President Obama has done something very cruel. Declaring that this time he won’t negotiate with himself, he has refused to lay out a proposal reflecting what he thinks Republicans want. Instead, he has demanded that Republicans themselves say, explicitly, what they want. And guess what: They can’t or won’t do it.
Paul Krugman’s article today talks about the fundamental mindset of today’s republican party. Today the republican party stands for one thing—making rich people richer by fleecing the middle class and disenfranchising the poor. As George H. W. Bush so famously said about Saddam Hussein, “This will not stand.” Nor, I predict, will the republican party as it is currently known…
Disdain for Workers
Paul Krugman | NYTimes | 20 Sept 12
By now everyone knows how Mitt Romney, speaking to donors in Boca Raton, washed his hands of almost half the country — the 47 percent who don’t pay income taxes — declaring, “My job is not to worry about those people. I’ll never convince them that they should take personal responsibility and care for their lives.” By now, also, many people are aware that the great bulk of the 47 percent are hardly moochers; most are working families who pay payroll taxes, and elderly or disabled Americans make up a majority of the rest.