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Cat Food Commission Talking Points

Demolitions, anyone?

NOTE Via the odious America Speaks. (This link came to me in the email confirming my attendance at their AstroTurf operation this coming Saturday.)

UPDATE Meanwhile, career "progressives," like every other serious person in Versailles, accept that deficits should be used as a Shock Doctrine tool. (That is, the Ds want to drive to the same place as the Rs, just at 89mph instead of 98mph.) Slate:

The recession is by no means over. But every step toward recovery brings the tough choices of budget balancing that much closer. Even if Orszag's successor doesn't preside over gigantic federal cutbacks, he'll at least have to formulate a game plan. "There's no question that the single biggest issue on the plate of the OMB director is going to be addressing the long-term deficit situation," says Michael Ettlinger, an economic policy expert at the Center for American Progress.

Why aren't "progressives" looking at how the real economy functions, instead of focusing on meaningless financial ratios?

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DCblogger's picture
Submitted by DCblogger on

some of those career progressives linked to our Fiscal Sustainablility event and asked for contributions.

moreoever, FDL has been doing some excellent blogging on the cat food commission and so has Atrios.

letsgetitdone's picture
Submitted by letsgetitdone on

They have been doing some fine blogging over at FDL (haven't been watching Atrios). There was also a good one by RJ Eskow at HuffPo here.

However, most of the work they're doing is oriented toward defending SS. They're not trying to make the case that this is a fantasy problem. I made that case here.

It's important to make it, because unless we do, we can't go on offense, but are relegated to a defensive position which tends towards compromise outcome on SS, that then leads us to a defensive battle on the next attempt of the Petersons to go after some safety net benefit or to prevent the solution of some other real problem on grounds that we're too poor to afford it.

You know all this very well, of course. But just thought I'd say it for the benefit of some of our readers.

madamab's picture
Submitted by madamab on

I could give them a pass on not embracing it.

But not focusing on jobs is an epic fail. You don't have to be an economist to know that there are no jobs.

letsgetitdone's picture
Submitted by letsgetitdone on

at CAF, which was run by Alex Lawson of Social Security Works, the guy who's live-streaming outside of CatFood commission hearings, I saw most people focusing on the danger to SS and very few questioning the general premise the deficit/debt is a problem.

Coming out of the meeting, I knew they'd avoid that argument. Of the thirty or so people at that meeting, most were focused on the narrow job of defending SS. They knew all kinds of facts surrounding SS and were very good at countering specific deficit hawk statements about SS. It was clear they would concentrate on that because opposing the commission on grounds that there is no deficit problem was beyond their competence.

People will focus on what they know in fighting against what they don't like. MMT-like arguments are unfamiliar and strange to them. They have made their careers on detailed policy wonkish knowledge, all within the neo-liberal framework. They have no competence to attack that framework itself.

So, we are seeing a blizzard of blogs attacking specific CF commission arguments on SS and why it should cut, but very few on the silliness of having any commission at all focused on the deficit/debt because that is a fantasy problem. It's "Look over there, it's the out-of-control public debt-to-GDP ratio," and no one to say "Bull Shit, where's your commission on ending this recession in 90 days."

a little night musing's picture
Submitted by a little night ... on

It's "Look over there, it's the out-of-control public debt-to-GDP ratio," and no one to say "Bull Shit, where's your commission on ending this recession in 90 days."

Oh yeah!

Or, also, where's your Commission on Ending the Unemployment Crisis?

Seems like we should be shouting things like this at every opportunity.

And also, I haven't seen this linked here (perhaps I missed it), but via Avedon:

Your ideology failed.

Your opening line:

Your ideology failed.

Oh yes. You are GOING THERE.

YOUR IDEOLOGY FAILED. COMPLETELY. CATASTROPHICALLY. It destroyed the industrial manufacturing base and the crashed the world economy. Trashing the Geneva Accords has wrecked our international reputation. Your racism and sexism are evident to even the most casual onlooker. There is nothing you can say that can twist these failures into grand successes. They are failures.

You’re not done yet.

You can say anything, but we know you’re lying. New Orleans drowned and we saw you let people die. We saw you. We know most of the prisoners at Guantanamo are innocent. We know that you are poisoning the only planet we have because you love money more than your children. We know you hate women, working people, the poor, children, and you see us as serfs and servants. We see you. And we are not going to back down anymore. We have earned the right to grow old with dignity and we will not give it up for your personal enrichment. YOUR IDEOLOGY FAILED AND THERE IS NO FURTHER NEED OF YOUR ADVICE. YOU ARE WRONG ABOUT EVERYTHING. STOP TALKING.

Oh, see the whole post. It's chockfull of great comebacks.

letsgetitdone's picture
Submitted by letsgetitdone on

Hi ALNM,

Just before the quotes above came:

Get this: crazy people have been working to cut Social Security and the rhetoric has reached the stage where a Democratic President agrees. There is no need to cut Social Security. Doing so will not fix the deficit. The point is to fuck the poor and middle class.

If you flinch now, if you take a step back, it will happen. It is time to ditch wonky, splintered arguments and take passion straight to the crazy.

That's right of course. But it gives something away. It implies that "the deficit" is a problem. But they don't even have that right. It's not a problem. It's an effect of the terrible economy they created.

And later on:

Let no point go. Let no lie pass. Let no banker off the sharpened hook. Let no insult go unanswered and no fatuous ass go unmocked. Go. Don’t let ennui become your normal state. Go forth and be a ferocious, mouthy defender of your and your children’s future. Go.

That's terrific. Don't try to grant them a point to be a good person, like the smooth liberals try to do to create a common "we" feeling. Be tough. Be nasty. They're after our bread and butter. We need to make sure they don't get it. And if they create a choice between our bread and butter and theirs, we better make sure it's ours we get every time.

letsgetitdone's picture
Submitted by letsgetitdone on

The charts and graphs came from the Concord coalition. The first chart, not reflected in the narrative says that the public debt-to-GDP ratio has increased from 40% in 2008 to 64% in 2010. They're off by a point. It was closer to 41%, and of course 64% is an estimate. Estimates like that can be a good bit off. For example, in 2009 OMB projected a figure of 59.9% for the ratio. We now know that the actual number, according to CBO is 53.0%. The OMB estimate for the ratio at the end of 2010 was 67.1%, while the CBO estimate, given the actual result in 2009 is 63.2%. I think CBO and OMB both tend to over-estimate the size of the projected deficit, and I wouldn't be surprised to find that the 2010 ratio turns out to be as low as 60%.

Their projections of the of the ratio after 2010, are, in my view, ridiculous. From 2010-2020 they appear to be using CBO numbers. I've criticized those numbers here, here, and here, and made the case that we could just as easily end up with a big surplus in 2020. Whether we do or not hinges on whether we return to historical rates of growth and whether the Government uses its power to control interest rates on Government securities. In any event my alternative projection shows four years of surpluses from 2017-2020, and also shows the ratio falling to 36.5%, as opposed to the 90% projected by CBO.

Beyond 2020, the AmericaSpeaks numbers are just ridiculous, even more of a fairy tale than the CBO numbers. They source the numbers as GAO, 2010. But it really doesn't matter, because economists are very bad at forecasting even 3 years out. Claiming you can project out 30 years to 2040 and base policy on your projections is totally foolish and way beyond economics art or science. Remember, when these birds were projecting surpluses as far as the eye could see at the end of the Clinton Administration? Those projections were proven wrong in a matter of months.

Later, they give these crazy interest cost projections, sourcing GAO, and going out to 2050. The note on the graphic assumes that expiring tax provisions (the Bush Tax cuts) will be extended. However, Obama has already told us he's going to let them expire, so that's one strike against the forecast.

Strike 2, is the hidden assumption that the Federal Government has to sit still for any such increase in interest costs, and that these are driven by the market. The truth, however, is that Federal interest costs are welfare for the rich and for those nations holding USD. The US can cut them to virtually nothing by ceasing to issue long-term debt instruments, and by spending without issuing short-term debt instruments. These moves would result in flooding the banking system with overnight reserves, which, in turn, would have the effect of driving down interest rates on overnight very close to zero. Of course, it would mean the end of this kind of welfare "as we know it." But, hell why not, if it means that interest costs would fall to almost 0 % of GDP. In short, we don't even need strike 3 to dismiss this foolish projection.

Once we do that, their notion that interest costs will rise for consumers and in the private sector is also shot. Why? Because federal borrowing isn't going to drive up rates, and anyway, the Fed itself can set interest rates where it wants to. With overnight rates going down to zero, the Fed prime rate is unlikely to be higher than that unless we're having inflation. But the Petersons aren't projecting that, are they?

Next they've got some CBO and GAO scary projections on rising health care costs. Of course, we here know that those are BS, because all we have to do to lower such costs by a third is to pass HR 676 and implement inside of year. Then with no private insurance companies involved in health care anymore, the Federal Government can immediately slow costs in the system as a whole by restricting cost increases to the general rate of inflation. The Docs and hospitals will scream, of course. But what can they? Go to Canada? Hah!

CMike's picture
Submitted by CMike on

What is the importance of whether the "public debt-to-GDP ratio has increased from 40% in 2008" or from an amount closer to 41%?

In case it is important, the CBO says the federal debt held by the public in 2008 was 40.2%. (See table F-2 in this 13 page pdf.)

The OMB says it was 40.2% of GDP that year. (See table 7-1 in this [*warning*] 368 page pdf.)

This thread has headed off in odd directions. The problem with the video is that, in order to sell the "Scary in the Out Years" scenario, it assumes government health care costs will continue to grow faster than GDP indefinitely. If any large ticket item grows faster than GDP, of course, it ends up all by itself equaling and then surpassing the minimum of 18% of GDP the federal government has spent annually since 1967. Takes longer, but that's true of a small ticket item too.

Freeze the video at 3:27 and you'll see the alternative assumptions of faster than GDP growth rates 2.5% or 1% for government health care costs. At the 2.5% rate, Medicare and Medicaid costs as a percentage of GDP would double in less than 29 years, quadruple in less than sixty. Unsustainable, d'uh.

The key to controlling the federal debt therefore, assuming GDP regains a 2.5% growth rate -- soon,* is addressing the drivers of rising government health care costs which Matt Yglesias recently, to much derision around here, suggested are "the incomes of doctors, the profits of medical device makers, the profits of pharmaceutical firms, [and] the incomes of hospitals." (There is, by the way, an obvious reason private insurance isn't listed among his drivers of rising government heath care costs.)

As to whether future demographics are the problem, take a look at this graph.

*In my opinion, returning the economy to a 2.5% real growth rate is likely to be much more difficult to achieve than either Paul Krugman or the MMT-ers think. We're not going to have the luxury going forward that we had in the post-WWII era of cheap oil and plausible deniability as to the consequences of environmental degradation.

gqmartinez's picture
Submitted by gqmartinez on

Every now and then Fox News will say something that makes sense and actually is true. Same with most of the Village media outlets. But on the whole they are part of the problem. That some of the proggers occasionally throw a bone to truth and liberal policies should not take away from their general reinforcement of the status quo. They are very much part of the problem, one or two good posts aside.

Maybe its easy for me to blow off the proggers because I never had any emotional or intellectual attachment to them. Way back in 2006 I was worried about progger witch hunts so I didn't invest much time in them. They were vile back then as much as they were during the primary, if you want to be honest. The only difference between 2006 and 2008 was that their behavior was directed at people who were supposed to be allies. Go on, read the invective back then. A lot of it was good, but a lot was straight up 2 minutes hate even then. You'll probably even notice a tendency toward "conversionism" back then and pack mentality as well.

coyotecreek's picture
Submitted by coyotecreek on

That's going to be the frame under which all of the recommendations for cuts will be made.

Alan Simpson made use of that term over and over and over again to rationalize why we "lesser folks" will just have to bite the bullet to make up for the IOUs that are in the SS Surplus fund.

letsgetitdone's picture
Submitted by letsgetitdone on

for arguments about solvency. Lots of blogs about that here. Of course, there's lots of stuff on it here, here, and here, also Warren Mosler has a specific hint relating to the upcoming meetings here. See also Warren's attempt to explain that the Government is unconstrained in its capability to spend to Fox bozos, here.

DCblogger's picture
Submitted by DCblogger on

do we have that Billy Mitchell graphic that shows that surpluses are always followed by deep depressions?

also graphs that refute other allegations on that video?

DCblogger's picture
Submitted by DCblogger on

it was a long single graph showing deficits since the time of G Washington