deficit reduction

This post is a more complete statement of my conclusions based on the analysis in Parts One and Two of this series. Read below the fold...

In Part One, I asked whether the Carmen Reinhart/Kenneth Rogoff study and book didn’t show that, on average, nations experiencing debt-to-GDP ratios above 90% had negative rates of economic growth? And I said the answer to the question was “no.” But I didn’t explain why that was true. Read below the fold...

OK, austerity has always been about the causality. Read below the fold...

Last week, Reps. Michael Honda, Keith Ellison, Raul Grijalva, Jan Schakowsky, John Conyers, Barbara Lee and Lynn Woolsey stalwarts of the Congressional Progressive Caucus (CPC) begged for mercy from “the Gang of Eight” in a letter.

Here's what they said and my commentary on their “loser liberalism.”

”Thank you for your work - past and present - towards solving one of the greatest policy challenges facing us today: the unsustainable path of our national debt. We appreciate the bipartisan and collaborative spirit with which you've approached your negotiations. . . .”

Thanks vanguard progressives for embracing the major premise of the austerity ideology, namely that the national debt is on an unsustainable path. I'm here to tell you that this idea is false and also terribly harmful to progressive aspirations to end economic stagnation and get everyone, who wants to be, employed at a living wage. You can't win an argument if you start by agreeing with your opponent's false premise. Read below the fold...

The polling since the conventions shows that Democrats are doing better than expected. President Obama now apparently has a clear lead over Mitt Romney. Democratic Party control of the Senate seems likely to survive this election year of many more Democratic rather than Republican Senate seats up for election. And, even in House races, it looks like the Democrats will pick up a number of seats; though whether they can pick up enough seats to take back the House is still an unlikely prospect, and without the House President Obama's second term is likely to be much like his last year and three-quarters, rather than his first two years. Read below the fold...

Alan Grayson's e-mail on Moody's warning that it might reduce the US's AAA rating, suggested that Moody's was either threatening a downgrade because it wants to get the Bush tax cuts for the rich extended, or, alternatively, that “Moody's is living in what Aristophanes called "Cloud Cuckoo Land."” He says this because Moody's is upset about the possibility that the US may go over the so-called “fiscal cliff,” even though if it did, it would theoretically result in $560 Billion of deficit reduction annually, without further legislative changes, and it makes no sense on the surface for a rati Read below the fold...

Bob Woodward's releasing a new book, so we are now seeing articles based on it. A few days back, The Washington Post published the ”Inside story of Obama’s struggle to keep Congress from controlling outcome of debt ceiling crisis.” This account is a pretty downbeat one of how our political leaders and President Obama handled the debt ceiling crisis of the summer of 2011. I want to comment on what for me was the most salient point: that during the crisis, the President had no “Plan B” to get around the debt ceiling beyond negotiating a deal with Congress. Read below the fold...

Who else thinks the President's speech didn't include any plans to create the 29 million full-time jobs for the dis-employed? Please raise your hand!

About jobs he said:

”We can help big factories and small businesses double their exports, and if we choose this path, we can create a million new manufacturing jobs in the next four years.”

Read below the fold...

On Monday, Dean Baker decided that Robert Samuelson needed a lesson in National Income Accounting. Dean said:

”National income really is very basic stuff. It gets taught in every intro econ class. Anyone writing on economics should know it inside out. They should be able to do it blindfolded, with one hand tied behind their back, and standing upside down.

Read below the fold...

Even though I deny that there is a deficit/debt/debt-to-GDP ratio problem, I thought I'd get in on the fun everyone is having this month and offer my own deficit reduction plan. It prescribes 1) Keeping average interest rates at 0.0226; 2) finding a way to increase the growth in nominal GDP from an average annual change ratio of 1.044 (CBO’s assumption about growth) to a more historically (since 1940) typical average annual change ratio of 1.072.; and 3) putting a stop to increasing health care costs by passing Medicare for All immediately. The first two changes would result in deficit reductions in CBO-based projections of $8.3 Trillion from 2011 to 2020. The absolute value of the national debt increases from $9.2 Trillion in 2010 to $10.7 Trillion in 2020, and the debt-to-GDP ratio declines from 69% in 2010 to 37% in 2020. Read below the fold...

As I've blogged many times before, I don't think there is a “fiscal sustainability problem” as the people who are presently deluging us with exhortations to bring the national debt and the debt-to-GDP ratio define it. That's because I define “fiscal sustainability” in a different way than they do, as I've explained in another post. In this one, however, for the sake of argument, I'll accept the deficit hawk/dove notion of “fiscal sustainability” and offer a different and, I think, much better solution to that problem than any of the deficit-reduction Commissions, groups, and individual members of these bodies are proposing to us now. Read below the fold...

Yesterday, R. J. Eskow remarked:

We expected to see an all-out assault on Social Security and progressive taxation in November, and we expected it to come under the banner of "deficit reduction." That was always the plan: Wait until after the election, when a lame-duck Congress could pass the preferred policies with the least political blowback. Then release a flurry of like-minded proposals and supportive editorials to create the illusion of consensus, capped by a coordinated media blitz to pressure the President and Congress into accepting them.

Read below the fold...

Bernie Sanders appeared on Dylan Ratigan's show yesterday talking about Elizabeth Warren's appointment. Towards the end of his interview, he said a few words about his opposition to extending the Bush Tax cuts to the wealthiest Americans. His proposal was to end the tax breaks the high income people, take the $700 Billion freed up, spend $350 Billion on sorely needed infrastructure projects, creating millions of jobs over a 10 year period and taking the other $350 million in savings and applying it to deficit reduction. Read below the fold...

Tuesday night, I thought I'd attend The National Journal's Debate on "Our Fiscal Future" between John Podesta and Douglas Holtz-Eakin with Jim Tankersley moderating at The George Washington University's Marvin Center. I was interested because Podesta is often thought to be on the left-wing of “mainstream” opinion, and also it is said that he is one of the leading possibilities to succeed Rahm Emanuel as the President's Chief of Staff. So, I wanted to see if I could find some glimmer of novelty in the point of view he expressed; some indication that he might bring some new thinking into The White House beyond what Obama has been hearing from say, Austan Goolsbee. Read below the fold...

In my previous three posts analyzing the June 26th AmericaSpeaks Community Conversation event I attended in Falls Church, VA, I presented the steps in the decision process used for the event, and discussed the pre-conference phase and the first four steps. Read below the fold...