A premature withdrawal of monetary and fiscal stimulus could pull the rug out from under the nascent recovery. Yes, the mammoth federal budget deficit is both appalling and unsustainable. But this is not the time to shrink it by raising taxes or cutting spending.The precise answer is Alan Blinder, formal Clinton economics guru and member of the Federal Reserve Board, writing the WSJ yesterday, but the practical answer was this:
Almost any economist working in any capacity for the past 40 years.
Bonus tidbit: Here's the best comment from the thread underneath Blinder's idiotic post. The second socialist referred to is probably Paul Krugman.
Blinder is the perfect example of the new paradigm where one socialist gives another socialist a Ph.D. and then they peer review each other's papers. Eventually they gang up, steal a Nobel Prize and present it to themselves for their groundbreaking work.
It would be useful to see this data normalized by US population and/or as a percentage of GDP. I suspect it wouldn't look quite as startling.
ReplyDeleteTrue, it doesn't look nearly as bad as a percent of GDP.
ReplyDeleteIt would still be nice to do something about it well before it gets close to WWII levels, thought.
I would argue that of far greater importance is the content of the budget. There's no indication that any of the transfer payments that make up the lion's share of the deficit will be cut in the near future. Quite to the contrary, we're rushing as fast as we can to increase them.
ReplyDeleteAre you suggesting that when you're on fire, you shouldn't run faster?
ReplyDeleteYa, I've seen that graphic before and its terrifying. It sort of looks like California's budget, and we know how well that's working.
ReplyDeleteSo Tim, the difference between the public and gross debit looks to be approaching a factor of two. How much of a problem is that?
ReplyDeleteOh, probably a pretty darned big problem. If only because the people responsible for setting the budget are likely to delude themselves into thinking that the red line is the one that matters, and ignoring the black line.
ReplyDeletePlease note - I was just providing the graph you asked to see. I never claimed that there was no problem.
I didn't understand the issue as a societal one until I read Robert Samuelson's The Good Life and Its Discontents: The American Dream in the Age of Entitlement. Samuelson suggests that there has been a cultural shift away from earning what you get and shows gallons and gallons of data to prove it. That perspective gives you a different way to look at things as you watch Republicans wreck the place with mountains of debt because "everyone should own their own home" and Democrats simply loot the children of the nation like ravening parasites to pay for handouts today.
ReplyDeleteAgain, while the size of the debt is troubling, of far greater import is where it's going. The process of impoverishing our kids won't be reversed without a decrease in our own standards of living.
What a fantastic title! I'll have to see if our library has it.
ReplyDeleteThere is an issue I think you're overlooking. Part of the problem is systematic. Part of what keeps unemployment under 10% is the fact that we've developed into a high consumption society. As we cut back on over-consumption, there is going to be a significant disruption to the job market. I think of Britain in the 70's. From a politician's perspective letting this happen is suicide. So its really not in their interest to rein in consumption. Frankly we have too many hands out there for a low consumption society. I have no idea how to solve this, but that is how I see the dilemma.