All Deficits and No Jobs Make Homer Something Something

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Erik Kain

Erik writes about video games at Forbes and politics at Mother Jones. He's the contributor of The League though he hasn't written much here lately. He can be found occasionally composing 140 character cultural analysis on Twitter.

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  1. Avatar RTod says:

    best post title everReport

  2. Avatar RTod says:

    I so want to agree with this post, but I have this nagging voice inside my head about this part of it:

    “But really, we should be talking about jobs and growth, not debt and deficits, period.”

    What does this mean, really?Report

    • Avatar E.D. Kain in reply to RTod says:

      The entire debate right now is on how to fix the deficit. Do we raise taxes? Cut spending? Etc. etc. etc.

      But *why* are we talking about the deficit? Why when debt is cheap, jobs are scarce, and we are still in the midst of a very prolonged recovery? It makes no sense. Someone needs to explain how it makes sense.Report

      • Avatar RTod in reply to E.D. Kain says:

        No, I got that. And I agree with all of that part. (If you really want me to address your “how does this make sense” question, I can (predictably) say that the importance of our Team winning has surpassed the importance of good governance.)

        But my question has something to do with a more broad political thingy.

        This notion of politicians working to create jobs… I never get what that actually means, other than “I see you want jobs and I want you to vote for me, so I will promise them.”

        Other than just having the government hire people (which doesn’t seem to be what anyone means when they talk about job growth), what does this actually mean?

        Honestly, I have sat in many meetings with my partners trying to decide if we should open a new position, and many meetings talking about how new legislation will affect something we do. We have never once had a talk that combines those two ideas. I’ve never heard a client say, “well because of this new X the President got passed, we’ve decided to hire on another 3 people.”

        I mean, ever.

        So what does this mean?Report

        • Avatar E.D. Kain in reply to RTod says:

          Perhaps the best government can do is not kill more jobs. Maybe they can’t create any at all, but they can certainly avoid making the sorts of cuts that would leave a lot more people out on the street.Report

        • Avatar E.C. Gach in reply to RTod says:

          Investment in infrastructure for one, would create lots of temporary jobs while at the same time achieving something that will need to be done sooner or later, unless we plan on privatizing all of our roads soon down the line.

          But the best part of a jobs for infrastructure program would be all of the worker capital saved and created during it. Things need to be built. Energy efficiency is the number one way to cut energy consumption and release fewer emmissions. At some point properties will need to be converted, etc.

          The market laying off tons of contruction workers because of a bubble busting is kinda like a fever to fight infection…a solution to be sure, but not one the consequences of which we want to live with. All of the worker capital that is lost, training, knowhow, capacity, etc., despite the fact that it WILL be needed again, is something that should be avoided.

          And then there’s all the industries attached to that, like manufacturing construction equipment, materials research and development, etc.

          If we still consider “infrastructure” to be a public good, it seems an no brainer way for the government to create needed jobs.Report

          • Avatar James K in reply to E.C. Gach says:

            Infrastructure is actually not much good for stimulus (infrastructure can be good in the long run, but that’s a separate issue).

            According to Keynesian theory, there are two things good stimulus spending needs: it must be spent quickly, and must actually get spent (not saved). But infrastructure is slow – there’s a lot of planning and decision-making that has to take place before you can build roads or bridges. Given that it takes time for any spending to start stimulating the economy, if you use infrastructure as the base for stimulus there’s a good chance you won’t get the effect until it’s too late.

            For speed, you can’t beat tax cuts and transfer payments. For tax cuts I’d go with payroll taxes for the US because cutting them makes it cheaper to keep people employed (I’d also suggest cutting consumption taxes if you had them). For transfer payments, expanding unemployment benefits is not a bad idea (which you actually did, yes?).

            I’m agnostic when it comes to fiscal stimulus, but if I were going to do it, that’s what it would look like.Report

            • Avatar Art Deco in reply to James K says:

              In fairness to the Administration’s mavens, they may have thought that the additional household funds from something like suspending Social Security tax collections would have simply been added to people’s real balances. If you look at the Federal Reserve’s statistics, people have been paying down their debts quite assiduously these last four years.

              Martin Feldstein said the thing to have done was to have replaced equipment ruined in Iraq and Afghanistan on a rapid schedule, but that military expenditure was nowhere on the administration’s radar screen, so you got a hodgepodge from Democratic politico’s standing wish lists.Report

            • Avatar Silus Grok in reply to James K says:

              It’s my understanding, James, that stimulus monies that went to infrastructure actually went to “shovel-ready” projects only/primarily.Report

      • Avatar Robert Cheeks in reply to E.D. Kain says:

        I don’t agree that we’re in the middle of a ‘recovery.’ A recovery by definition would include job growth of which there is none or very little. Until there is job growth, which requires a pro-bidness environment, there ain’t gonna be job growth. The reason there’s no job growth is, Barrack Obama um, um, um!Report

        • Avatar E.C. Gach in reply to Robert Cheeks says:

          I always love this chicken and the egg argument. What comes first, the supply or demand? The business or the customer?

          I’m pretty sure we have a rather pro-business environment right now, at least that’s what company profit margins tell me.

          What we DO need, is a pro-worker environment (since workers = consumers, i.e. the buyers of business’ products).Report

  3. Avatar Koz says:

    “Nobody has convincingly explained how closing the deficit gap will result in increased rates of growth.”

    We’re past that Erik. That was the debate we should have been having in 2009, but we didn’t because we got PPACA instead, which you supported, let’s recall.

    This is about preserving economic civilization. Anybody who plans to be alive in 15 years and somehow isn’t subsisting on grass and tree bark at that time will have the Republican party to thank.Report

    • Avatar E.D. Kain in reply to Koz says:

      I love that you can make entirely unsubstantiated claims such as this as glibly as you do. But really, you’re going to have to work much, much harder if you want to convince people who son’t share your world view. Please try again.Report

      • Avatar Koz in reply to E.D. Kain says:

        It’s marginally complicated but not horrifically so. The public debt profile of America (or any other nation) can’t be interpreted as a snapshot without bearing in mind the cost (and default contingencies) of continuous debt service.

        That’s why people care so much about debt ratios, even if nobody knows exactly where the point of no return is. We may able to work our way out of outside debt of 150% of GDP, but we’ve got no shot of servicing 5x GDP. Then we’ll be the 21st century version of Argentina.

        When push comes to shove, Argentina gets money from the IMF and World Bank and the rest of it. Who do we get money from? Nobody.

        And what exactly do you think you’ll eat if there’s no food at Albertson’s?Report

        • Avatar E.C. Gach in reply to Koz says:

          We’re at 90% of GDP now…so is that near or far from your %15o benchmark that we may or may not be able to work ourselves out of?

          And what would your plan be, roughly speaking, for stablizing the debt i.e. stopping it from increasing here on out?Report

          • Avatar Koz in reply to E.C. Gach says:

            If there were no Democrats I’d be borrowing the hell out of everything I could find at the longest duration I could fund at say 3% over 30 years ‘cuz I don’t expect that to last till the end of time.

            Then I’d be cutting all government expenditures we could plausibly cut.

            Then, I’d be cutting the regulatory overhang over job creation. (PPACA is the worst offender here, though there are many others).Report

        • Avatar North in reply to Koz says:

          But that’s pure hyperbole Koz. America isn’t even in the position of say Ireland, Spain or Italy with its debt profile let alone Greece to say nothing of Argentina.
          Hell, end the wars, sunset the tax cuts and adopt any of the cuts in spending that’re currently being booted around in DC and the country’s finances would drop right back off the radar of anyone who wasn’t Grover Nordquist or a gold bug.

          It really isn’t that dire a situation. As some have wryly noted: “Only America has the luxury of indulging in a financial chrisis they aren’t actually being forced to have.”Report

          • Avatar Koz in reply to North says:

            No it’s really not. You’ve seen the difficulty with getting spending cuts out of the Demo’s without them trying to raise revenue like Albanian border guards. There is no tax regime that adds $50T or $100T over any plausible time frame.

            If we can discipline ourselves to accept reductions in spending when appropriate we can probably handle our other problems. Otherwise we can’t.Report

            • Avatar North in reply to Koz says:

              And once again, Koz, you go traipsing off into size of government land. Revenue increases also shrink the size of deficits.

              But setting aside the quite relevant question as to whether it’s appropriate for revenues to be kept at 1940’s era lows There remains the bemusing fact that your assertion is not only false on merits but also false in pure fact since Harry Reid has proposed a bill (endorsed by Obama and Pelosi) that is all spending cuts and debt ceiling increases with no tax increases at all. Meanwhile the GOP is gibbering in the corner about constitutional amendments and turning on Boehner like a pack of starving hyenas.
              I mean come on Koz, the financial facts and political facts are all pretty clearly laid out and they just don’t fit your narrative.Report

              • Avatar Koz in reply to North says:

                “Reid has proposed a bill (endorsed by Obama and Pelosi) that is all spending cuts and debt ceiling increases with no tax increases at all.”

                Well yeah, two whole days ago. If they’d done that two months ago, or even ten days ago, we’d be in a lot different situation than we are. Btw, it’s not exactly clear how many votes Harry Reid has for his plan in the Senate. If he wants to fight for a debt limit increase through Election Day, he’d better have a lot.

                Btw, you should check this out (you can ignore the snark therein). Again, John Boehner had a good day. If the conventional wisdom is right, and the Boehner plan passes tomorrow, there’s no starch in the talking points that the Repubs are obstructionist. They will have proven their capability of cutting a deal.

                About tax receipts, that’s an issue with low growth as much as the tax regime. People have personal deduction, capital loss carry-forwards and the rest of it.

                In fact that’s a useful illustration of my other point. You have to learn to appreciate that (like everything else in the world) our control of economic events and the path of economic data is limited. We can cut our way to fiscal stability. It’s not clear that there’s any other viable path.Report

              • Avatar North in reply to Koz says:

                I have heard that Boehner has had some luck in herding his cats which is excellent news. But how on earth does this represent deal making?

                Also, we can cut our way to fiscal stability but it’s not clear of another path? How about combination cutting and revenue increases? Or how about not precipitating a financial crisis just to impose contractionary government policy on an economy just barely emerging from a recession?

                I honestly don’t see how any of this makes sense unless viewed through your partisan lens that asserts anything the right does is inherently good.Report

              • Avatar Koz in reply to North says:

                “I have heard that Boehner has had some luck in herding his cats which is excellent news. But how on earth does this represent deal making?”

                Because this demonstrates Boehner’s credibility with the Tea Party bloc of Republicans and his ability to move forward. Anybody who wants anything else has to demonstrate that they also have a credible path to passage. Otherwise, they are left in the untenable position of trying to explain that, even if default is really bad, the one plausible path to avoid it is somehow unacceptable.

                For the other players, it’s not exactly clear who can deliver how many votes. But again, once the Boehner plan clears the House, all votes in the House and Senate are in play.

                Fwiw, if I got to pick between the Boehner plan and the Reid plan, I’d take the Reid plan. But, either one is ok and frankly a better outcome that we could reasonably expect. I forget who exactly, but one wit once said that the US does the right thing in the end, but only after exhausting all the alternatives.

                Wrt the rest of it, there’s nothing that libs have shown where any combination of cuts and revenue increases is a better guarantee of fiscal stability than plain cuts. Let’s remember what we have control over and what we don’t North. People aren’t making any money they don’t owe any taxes. That’s not an issue with the tax code it’s an issue with the economy.

                Also, let’s not forget, the American people get a vote here too. And it’s pretty clear you’re on the wrong side of this. The American people will accept tax hikes, they are demanding expenditure cuts.

                The libs-Demos haven’t made any persuasive case to the American people why we should have tax hikes (frankly they haven’t tried that hard) and in fact the only basic reason why they want them is our team doesn’t.Report

              • Avatar North in reply to Koz says:

                Oh okay so it proved Boehner can negotiate with people on his own side who supposedly share his ideologies; not that he can negotiate with his opponents or compromise in any ways that the government was designed run on. Gotcha.

                No one is making any money so there’s nothing to tax. I’m a connoisseur of hyperbole but I have to take my hat off to that one, it’s a knee slapper.

                Also, the fact that all the polls indicate that a significant majority of Americans favor a combination of tax increases and spending cuts indicates that the Obama et all with their requests for small amounts of revenue increases to go along with the large spending cuts they’re conceding to are on the wrong side of the argument? No wonder he’s enjoying a twenty to thirty point lead on the GOP on all of the issues around the debt ceiling.

                I’ve always wondered but forgot to ask, are you a Laffer acolyte?Report

              • Avatar Koz in reply to Koz says:

                “..not that he can negotiate with his opponents or compromise in any ways that the government was designed run on.”

                Sure it does. Let’s stipulate that we ought to raise the debt ceiling. Then, we have to figure out a path for a debt ceiling increase to go. If we get through the House vote today, Boehner has a path. It’s not clear if Harry Reid has a path. If Harry Reid can get his plan through the Senate, then the opposition of Demo Senators to the Boehner plan has credibility. Otherwise they’ve got to suck it up and deal.

                Again, either one is fine w/me. Of the two of them I’d rather have the Reid plan.

                And if you don’t understand the nature of tax receipts dropping in a slow economy you’re in worse shape than I thought.

                Obama’s losing the message war North. You can see this by what all the polls are saying and the actors are doing.

                I think you’re missing what I wrote before: the American people will accept tax increases but they are demanding expenditure cuts. The Demo’s have got no traction for why they have to be there. Among other things, their talking points don’t necessarily make sense: if the tax hikes are as small as the Demo’s say, why do we need them?Report

              • Avatar Stillwater in reply to Koz says:

                if the tax hikes are as small as the Demo’s say, why do we need them?

                Because increasing revenue pays down the debt/lowers the deficit, which is ostensibly the main policy goal of the TP/GOP?

                Really Koz, you have to concede something to the Democrats here.Report

              • Avatar Koz in reply to Koz says:

                Not at all. It’s funny how you libs like to get exasperated at the intransigence of the TPer’s ‘cuz so many of your arguments are mirror images.

                The depths of our fiscal problems are such that we have to make progress toward fiscal stability. We’re not in a position to eat all of it at once. Among other things, the political actors don’t have enough trust from the American people to make a deal of that nature stick.

                So that’s why we go part way and then touch base. We don’t want taxes. Your team doesn’t want entitlement cuts or policy changes to PPACA. Therefore let’s cut some random crap here and there, draw a line under it and come back later. That’s what the Reid plan (and the Boehner plan) does.

                There will be plenty of opportunity later to advocate tax increases just as we’re not forgoing the desire to repeal PPACA.Report

              • Avatar Stillwater in reply to Koz says:

                Still no concession, I see. Not on the merits – that people disagree wrt what the real issues are or how to solve them – or on the substance – that it’s Demo intransigence that’s stalling progress here.

                Wrt the rest of it, there’s nothing that libs have shown where any combination of cuts and revenue increases is a better guarantee of fiscal stability than plain cuts.

                Then you’re not reading widely enough. Liberals have offered plenty of solutions to resolving our current budget issues. no one has offered a politically viable solution for Medicare liabilities – the only one offered is to dismantle it, but manymany conservatives oppose that proposal.

                I understand that you’re arguing your pov here, but when you attribute that view to conservatives generally, I think you’re making a mistake. And certainly when you say Democrats haven’t offered solutions to the debt-deficit problem, you’re being disingenuous.Report

              • Avatar North in reply to Koz says:

                Perhaps we’re looking at different polls because last I heard the majority of respondents felt that any deficit deal should include both tax increases and spending cuts.
                Now I’m well aware that incomes are down in a recession but if you open up that can of worms then you’re right back to E.D. asking why we’re arguing about contractionary fiscal policy in the midst of a slow recovery (at best). If GOP demands for spending cuts (which do hurt the economy) are acceptable at this stage then Demo demands for revenue increases would be similarly legit.
                As for why there should be some revenue on the deal, there’s no reason there shouldn’t’ be. If the TP/GOP cares about the deficit (which they claim but very few believe) then revenues, especially revenues gained from eliminating distortionary loop holes would be very helpful towards that goal. Not to mention it’d help a lot to securing buy in from Democrats who still control the Senate and the Presidency.
                I’m interested in why you think Harry Reid doesn’t have a path? There’s been no vocal opposition from his own Senators and if GOP Senators put procedural holds or filibuster his bill then the public image of the GOP of being utter lunatics on this issue will be pretty much cast in stone. Frankly I’d think the nail biter remains in the house though it’s looking much more likely that the bill will pass now thank goodness.Report

              • Avatar Koz in reply to Koz says:

                “I’m interested in why you think Harry Reid doesn’t have a path? There’s been no vocal opposition from his own Senators and if GOP Senators put procedural holds or filibuster his bill then the public image of the GOP of being utter lunatics on this issue will be pretty much cast in stone.”

                Oh I think Sen Reid might have a path, I’ll even say that I hope he does. But to prove it, he’s got to do what Speaker Boehner is doing. Hold a vote and demonstrate that he has the cards to negotiate on behalf of his own caucus.

                If he does this and then says there are no Demo votes for the Boehner plan in the Senate, it will be difficult for Boehner to pursue his own plan. Then either the House will pick up the Reid plan directly, or more likely, Boehner and Reid will hammer out a compromise between them.

                Btw, it’s important to realize this lunatics in stone business is only your opinion. Where the President still hasn’t shown his cards, where it took Reid till this Monday to come out in favor of the Reid plan, where the Demo’s in the Senate haven’t put together a budget plan in years (and unanimously rejected President Obama’s sacrificial lamb), the GOP looks sober and restrained by comparison.Report

              • Avatar Koz in reply to Koz says:

                “Now I’m well aware that incomes are down in a recession but if you open up that can of worms then you’re right back to E.D. asking why we’re arguing about contractionary fiscal policy in the midst of a slow recovery (at best).”

                For the same reason I answered Erik before. We’re past the stimulus window. We have to do what we have to preserve economic civilization.

                If we want to help unemployment let’s get rid of PPACA and the rest of the regulatory headwind (or at least as much as the Dems are willing to).Report

              • Avatar Koz in reply to Koz says:

                “Perhaps we’re looking at different polls because last I heard the majority of respondents felt that any deficit deal should include both tax increases and spending cuts.”

                This is an important point. The measure of public response to political events includes but is not limited to opinion polls. There’s also energy activism, enthusiasm, relative preferences, etc which aren’t exactly visible but are often clear enough by inference.

                Here, there’s just simply no energy from the American people that they have to have tax hikes. Nobody is wearing funny triangular hats reading the Declaration of Independence in public or anything else. If the Demo’s want tax hikes bad enough let ’em convince the American people that they have to have them.Report

              • Avatar Koz in reply to Koz says:

                “As for why there should be some revenue on the deal, there’s no reason there shouldn’t’ be.”

                ‘Cuz we’re the Republicans who represent the hopes for prosperity in America and we say there shouldn’t.

                “If the TP/GOP cares about the deficit (which they claim but very few believe) then revenues, especially revenues gained from eliminating distortionary loop holes would be very helpful towards that goal. Not to mention it’d help a lot to securing buy in from Democrats who still control the Senate and the Presidency.”

                The answer to this is just what I wrote before. There’s going to be more than one go-round of budget cuts. Work that angle for the next round, draw a line under this one.Report

              • Avatar Koz in reply to Koz says:

                “Liberals have offered plenty of solutions to resolving our current budget issues.”

                I don’t know what you’re thinking of here, but whatever they are they have no credibility.

                We know this from the contentiousness of the debt ceiling, the “Catfood Commission” bullshit, the response to the Ryan plan, the CR’s and the rest of it. Whatever plans there are, none of the major Demo officeholders are in any way committed to them. This is something I don’t think either you or North have appreciated.Report

              • Avatar Art Deco in reply to Koz says:

                Just in case no one has pointed this out (MEGO): federal tax collections as a ratio of gross domestic product currently stand at 0.149. This is a fifty-year low. The society as a whole can afford a tax increase. There are always distributional questions, of course.Report

        • Avatar Kim in reply to Koz says:

          50x debt. that’s iceland for you. 5x debt could be serviced, I’m pretty sure. 50x? 10x? ya, those be scary.Report

    • Avatar Jesse Ewiak in reply to Koz says:

      Have you just given up and decided to make the most hyperbolic statements possible? Really, grass and tree bark? Even the most wack-a-loon conservatives admit Social Security won’t go bankrupt (and by bankrupt, I mean only pay 75% of promised benefits) until 2026.Report

    • Avatar Koz in reply to Koz says:

      And let’s also note, that there is no way the government as it’s presently constituted can possibly create jobs at $50K per. Check any stimulus package data for this.

      In an ideal world, they probably should. But this would require substantially less compensation for public sector employees at various levels and they (and probably you) would resist this.

      Compared to others in the American Right, I don’t think “stimulus” is a dirty word. But the Administration’s moves on this score have been really bad precisely because they did not stimulate (in addition to the money they cost).Report

      • Avatar Mark Thompson in reply to Koz says:

        For the record, I suspect there is more than a little truth to this, the sentence in your first post about crediting Republicans in 15 years notwithstanding.

        The 2009 stimulus package made no sense in terms of how it was targeted. I think the jury is still out on PPACA’s effect on the deficit and economy as a whole.

        I don’t think the role of Republicans in setting the stage for this mess can be underestimated, but I also don’t see where the money for additional (hopefully better targeted) stimulus might come from.Report

        • Let the record also reflect that I am coming to Koz’ defense here. In other news, I have confirmed that the Buffalo Bills will go to the Super Bowl this year and the Pittsburgh Pirates will will win their division (oh, wait….that actually might happen!).Report

        • Avatar Koz in reply to Mark Thompson says:

          Thanks Mark.

          “The 2009 stimulus package made no sense in terms of how it was targeted. I think the jury is still out on PPACA’s effect on the deficit and economy as a whole.”

          Hmmmm. I think the jury’s been very clear on this (and getting clearer). One significant meta-electoral job for conservatives and Republicans over the next year or so is getting the libs to come to grips with their moral culpability for creating unemployment through their support for PPACA.Report

          • Avatar Mark Thompson in reply to Koz says:

            Oh, I’m on record as repeatedly arguing that PPACA was a bad bill that doubled down on the system’s underlying problems and won’t do a heck of a lot of good at addressing the problems it doesn’t make worse. But in terms of its net effects on the deficit and the economy, I think it’s too early to say for certain (especially on the deficit side of things).Report

            • Avatar Koz in reply to Mark Thompson says:

              The fiscal impact is bad, but the effect on employment is worse and by now is clear enough that anybody operating in good faith needs to come to grips with it.

              And it’s not just wonk stuff either. There’s plenty of business owner who’ve gone on record as saying they won’t hire because of PPACA (or they won’t hire without a waiver from PPACA which is a separate scandal).Report

    • Avatar North in reply to Koz says:

      Tsk Koz, you were doing so well too.Report

    • Avatar Barry in reply to Koz says:

      Koz: “This is about preserving economic civilization. Anybody who plans to be alive in 15 years and somehow isn’t subsisting on grass and tree bark at that time will have the Republican party to thank.”

      Piling on with E.D., this is down to Bob Cheek’s level of insanely high magnitude with insanely zero proof.Report

  4. Avatar Mike Schilling says:

    Jobs? Growth? Nonsense! We should be talking about whether a Norwegian terrorist proves that we’re not spending enough on defense!Report

  5. Avatar Jaybird says:

    One troop in Afghanistan costs $1 million a year. Let’s put that into our domestic economy and create twenty jobs at $50,000 a year a piece.

    What seems to be more likely is that one $50,000 job will be created with that $1 million with the rest of the money going to shore up pension accounts, budget shortfalls, and “overhead” and people are going to say that 20 jobs were “created or saved”.Report

  6. Avatar North says:

    E.D. my own take is that we’re embroiled in this contractionary chatter because Obama did some really bad politics, some piss poor communicating, we have a sticky ugly beast of a financial induced recession to climb out of and as a consequence of those items we got a House that’s absolutely wacked in the noggins with supply sider economics and burning dreams of contracting the size of the government mid-recovery.
    Now if the recovery was well under way some contracting could be good.
    The main hope at the moment is that whatever cuts are enacted are back loaded so they come into force later down the road once the recovery has some legs.Report

    • Avatar Robert Cheeks in reply to North says:

      OMG, Northie we can’t put more money into this clown’s hands and the cuts must be up front and immediate or they’ll never happen because you can’t trust Democrats. You haven’t drunk that much kool-aide!
      Barry’s screwed the country real bad. Bidness doesn’t trust him worse than they didn’t trust the old commie, FDR, and won’t warm to his commie programs (other than that GE clown who’s moving jobs to China…I won’t buy anymore GE stuff). There will be no recovery until a GOPer is elected.
      Barry’s moving us toward Third World status and I’ma thinkin’ that was his objective in the first place. Hey, we’ll be sneakin’ across the border to get jobs in Canada! I hope won’t support Canadian immigration reform.Report

  7. Avatar E.C. Gach says:

    It’s the old people’s faults.Report

  8. We can cut spending significantly by ending the wars and beginning a withdrawal from all military bases. We can increase revenues by establishing a free market and removing all barriers to energy production and farming and reducing taxes to consumption taxes, but these are radical ideas, and we should never do anything radical.

    I also propose that the welfare state be transferred to private sector insurance arrangements and private sector assistant organizations for the truly needy. While we’re at it, we should transfer education to the private sector and persuade American businesses to subsidize poor children.

    I will email my plan to all the represenatives — they just haven’t thought about these things, obviously. If anyone here wants to sign onto my plan, just email me.Report

    • Avatar E.D. Kain in reply to Mike Farmer says:

      I like parts of your plan. Let’s decrease spending on the wars and let’s establish a free market and remove as many market barriers as possible. I’m with you here.

      Welfare state transferred to private sector strikes me as a much more difficult venture with much less likely returns.Report

      • Avatar Stillwater in reply to E.D. Kain says:

        Btw, Koz, Here’s something interesting: Boehner admits that the TPers want more than the current deal includes and are willing to force a shut-down.

        http://thinkprogress.org/economy/2011/07/27/280754/boehner-gop-want-chaos-debt-ceiling/

        So, 1) where is that leadership we were talking about yesterday? Isn’t this proof (if anything is) that the Teaparty is driving the House bus?

        2) Isn’t it crystal clear at this point that the Teaparty is completely insane? That they are willing to extort their power and destroy the country in order to save it?Report

        • Avatar Stillwater in reply to Stillwater says:

          whoops! that got linked in the wrong spot. It’s for Koz.Report

        • Avatar Koz in reply to Stillwater says:

          No, check Jennifer Rubin (or NRO or other sources). Boehner had a good day. The Tea Party is rallying around the Speaker, at least to the extent of voting for the Boehner plan.

          The problem is, that’s not the only hurdle to a deal. The good news is, it’s probably the most important one. If the Boehner plan clears the House tomorrow, I think we’ll get a resolution fairly soon. (I just wish we were at t minus ten days instead of t minus four).

          The thing to bear in mind is, once the Boehner plan clears, all the votes in the House and all the votes in the Senate come into play. If Harry Reid wants to fight for his plan, he has to show he’s got either 50 (or 60) votes for it in the Senate. There will be an incentive for Demo’s to vote in favor or else Boehner becomes the working template by default.Report

      • Avatar Mike Farmer in reply to E.D. Kain says:

        Erik, I agree it would be difficult, but, for one thing, the welfare safety net is no longer “safe”. In the political world, within the State, entitlements are teetering on collapse. At the state level, especially, it’s precaurious. But from a moral/community/spiritual position, people should help people, and I believe the returns would be tremendous. It will change the national mindset of dependence into responsibility, where people who succeed and enjoy a free market are responsible to those least able to succeed or even survive. We are a charitable nation/people. If challenged to fund organizations in the private sector, we’ll respond. Innovation and creativity are likely through private sector efforts, and there are many people who are naturally geared toward the helping professions. Government programs tend to dampen the spirits of these natural helpers causing them to become cynical and burnt-out. I envision private sector helping organizations blooming in a thousand different forms as specialization proliferates — from job-training to caring for the poor and disabled to comprehensive insurance arrangements which are purchased at the birth of a child and follows them throughout their lives to retirement plans to healthcare solutions. The creativty of the American people is practically boundless, and once givers start following their favorite helping organization, with the aid of the internet, they can follow the results of their charitable giving, thus take pride in outcomes of which they can persoanl knowledge, rather than the way it is now turned over to State and forgotten. No one really knows how their tax dollars are being used in State programs. Plus, competition for funds will create a focus on results and efficiency, so that waste and fruad don’t creep into the systems. Each private organization would want to advertise quality, so likely a ceritfication process will develope whereby private organizations like Joint Commision will be used voluntarily by private assistance organizations to get a seal of approval and establish public trust. I could go on and on, but I think this is the next great innovation which can relieve us of the great burden of the welfare state.Report

        • Avatar patrick in reply to Mike Farmer says:

          > We are a charitable nation/people. If challenged
          > to fund organizations in the private sector, we’ll
          > respond.

          Yeah, we do great when challenged. For a few weeks.

          I don’t share your optimism that this is sustainable. I know too many people who work for non-profits and finding funds is nothing resembling a picnic.Report

          • Avatar Mike Farmer in reply to patrick says:

            It’s this kind of facile dismissal from within the present system that lacks vision and contributes to dependence on the State.Report

            • Avatar patrick in reply to Mike Farmer says:

              I didn’t say the State was any better, Mike. Don’t put words in my mouth, sir 🙂

              The dismissal isn’t facile, but feel free to dish out some dukes and show me under-educated, I’m well aware that this isn’t my area of expertise.

              First, I’m pretty sanguine that you’re not going to be able to provide me with sufficient credible counterexamples from recent history (but go ahead, I’m game to hear ’em). Second, “dismantle the welfare state and charity will take up the demand” is a nice plan. If it works.

              What’s the exit strategy if it doesn’t fishing work? Just one example: all the crazy people who were let out of the mental hospitals in California in the 80s are still on the street (or in jail), dude. Now, the crazy hospital network may have had it’s own problems, but it’s a clear cut case of “the State isn’t going to do this any more, somebody else will take care of it.”

              And the State is largely taking care of it, still, only now in the ER and the prison system.Report

              • Avatar Art Deco in reply to patrick says:

                The Urban Institute estimated ca. 1990 that there were about 600,000 homeless in this country. Given the increase in population in the intervening years, that would amount to about 730,000 today. The figure commonly bruited about twenty years ago had it that about half the homeless might have been candidates for the asylum, so you would have 365,000 people. The thing is, in 1955 about 850,000 people were residents of asylums, or 0.5% of the population. That would be about 1.5 million people today. Discharge from institutions generally did not lead to chronic homelessness.Report

            • Avatar Barry in reply to Mike Farmer says:

              No, it’s people who look back at history, and see what happened, and understand *why* government safety nets were started.

              Mike, the reason I’m ragging on you, and why you’re getting no sympathy, is that you just spout off old rhetoric and reheated soundbites, with no apparent understanding or concern for what actually happens.Report

    • Avatar Robert Cheeks in reply to Mike Farmer says:

      Mike, you’re onto something here!
      Brilliant stuff!Report

    • Avatar Barry in reply to Mike Farmer says:

      Mike Farmer: “I also propose that the welfare state be transferred to private sector insurance arrangements and private sector assistant organizations for the truly needy. While we’re at it, we should transfer education to the private sector and persuade American businesses to subsidize poor children.”

      It amazes me that the USA never runs out of people preaching this, no matter how badly business screws things up.Report

      • Avatar E.D. Kain in reply to Barry says:

        Yeah, as James K rightly noted in his excellent liberal/libertarian post the other day – how does the market clear for welfare? I don’t see it happening. We obviously should encourage charity, but if you want more of something – subsidize it!Report

        • Avatar Mike Farmer in reply to E.D. Kain says:

          Oh ye of no vision. It will eventually have to happen — then you will see how it happens. If you don’t trust people, then you will never believe it’s possible. This has more to do with a certain sense of life and faith in a free market in a country with a history such as America’s history, more so than a detailed five year plan like technocrats love to develope.

          But, yeah, people are selfish, callous, stingy and mean-spirited, so it will probably never work — and American companies are run by evil slave-masters. Oh well, it was a good idea. I’m sure the welfare state is the way to go, given the impossibility of the private sector ever tackling such a huge problem. You guys have cleared my head — thanks.Report

          • Avatar Barry in reply to Mike Farmer says:

            Mike, vacuous rhetoric and insults to others are no substitute for facts. They work well for the Tea Party on Fox News, but we’re not on Fox News.Report

            • Avatar Mike Farmer in reply to Barry says:

              What are the facts, Barry? And I’m assuming that you mean no insult, and that your comments regarding the Tea Party and Fox News weren’t vacuous. Good job.

              Seriously, Barry, the reason I can’t take many of you seriously is precisely because of what you are doing here — demonizing the Tea party and Fox, then associating anyone with whom you disagree with the demons. I was making a point that the dismissal of private sector assistance to the needy is based on the idea that people in the private sector will not respond. What are the facts which back this dismissal. All the evidence points to people being charitable and giving when challenged to do so — just look at the crises in America or in other parts of the world– when tragedy happens, people respond with an outpouring of generosity and charity that is the envy of the world.Report

              • The power of American charity has not been tapped into fully since the New Deal. Now, in the 21st century, the time is ripe to transfer the welfare state to the private sector — Tocqueville realized this characteristic of Americans a long time ago. But it had to do with our spirit which developed during the years of creating a nation — along the line the State took over, and I believe this prematurely stopped something natural in our progress that would today be very powerful — more powerful and helpful than the welfare state. People have a need to find purpose and express a certain part of themselves which has to do with the our spiritual side, and the State has frustrated this need and expression.Report

  9. Avatar mac says:

    This is the heart of Naimi Klein’s disaster capitalism model: arrange that some large financial sector be onthe rocks (e.g. an entire government in a liquidity trap.) Force it into bankruptcy proceedings, at which point it must disgorge assests at firesale prices.

    In this case, the “Trap” is the debt limit. What is not so clear is qui bono: The top 1% will get a potentially huge break, but it’s not at all clear that the top 1% actually want that break right now.
    In any case, the current argument for austerity is a strange mixture of self-interest and ideology.Report

  10. Avatar Barry says:

    “In this case, the “Trap” is the debt limit. What is not so clear is qui bono: The top 1% will get a potentially huge break, but it’s not at all clear that the top 1% actually want that break right now.”

    I’d guess that a that level (and especially the top 0.1%), they’re used to getting almost all, and figure that ‘all’ is now something that they’re entitled to.

    In addition, when the argument is on the grounds of how much the rest of us should be screwed, and how much the elites should be helped, the likely results will be favorable to the elites.Report

  11. Avatar St.John McCloskey says:

    We should be running deficits during a recession. We should be running deficits when there is little to no inflation. We should be running deficits when unemployment is at nearly 10%. We should be running deficits when consumer demand has dropped off a cliff. We should be running deficits when structural changes to the economy are following one of the worst bubble-bursts in decades.

    We should not be arguing over who has the best deficit-reduction strategy.

    THANK YOU. =)Report

  12. Avatar wardsmith says:

    Read the book called “The Dollar Crisis” by Richard Duncan. Have someone post an affinity link on it at Amazon.com so this site gets bucks if you buy it. Once you understand what the author of the book says about the dollar (and he wrote it a longish time ago 2003 updated 2005) you’ll begin to understand why the debt is important. The problem with our politicians and their captive economists is that they keep thinking they can operate in some kind of vacuum. They can’t. The dollar as we know it underpins the majority of the world’s economy because we have reliably followed a system where the government could NOT print money willy nilly (ala Zimbabwe) but through a Federal Reserve system of banks. The Fed used to be almost totally independent of the government, but no more. As our debt piles up, the dollar as the world’s reserve currency deteriorates. THAT is why this is important.

    In all too many ways, the international monetary system is an elaborate house of cards. Unfortunately the table on which that house of cards rests (and the majority of the cards in play) are American dollars. Upset that and the whole thing comes tumbling down.

    Unfortunately for your argument Mr. Kain, the Japanese tried (and miserably failed) in following your advice. Now they have national debt over 200% of their GDP and a shaky financial system indeed. Their only ace in the hole is about $1.5 Trillion in American dollars and Treasuries on their books. If our dollar tumbles, Japan soon follows. Think about the 15 million bbls of oil we purchase every day with petrodollars on the world market. What happens to us when no one wants to sell us valuable oil for worthless dollars?

    This isn’t really about the debt (although the politicians want us to think it is), but about the dollar.Report

    • Avatar Pendulum in reply to wardsmith says:

      A brilliant and educational response.Report

    • Avatar Barry in reply to wardsmith says:

      Please note that Treasury rates are under 3%. The specter of galloping hyperinflation has been predicted for decades, by right-wingers and goldbugs, and should be respected accordingly.Report

      • Avatar wardsmith in reply to Barry says:

        @Barry, Please note that “Treasury rates are artificially under 3%”. Once the Fed began using “quantitative easing” all bets were off. Even before that, under TARP banks were arm-wrestled into continuously purchasing Treasuries as a so-called “safe” investment with money they were borrowing from the Fed at essentially zero interest. Therefore the Treasury “auctions” were anything but. Treasuries are not finding their true market price because there is not a true market, but one where every “vendor” has his thumbs on the scale.

        I own a single $5 gold piece my mother gave me. Gold isn’t at $1500+ per ounce because everyone likes how it glitters. Its price is being bid up (in more real auctions) because of fear, uncertainty and doubt. Our politicians are doing nothing to alleviate that, quite the reverse in fact.Report

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