The only things that I remember about the movie Coyote Ugly are: (1) it was an awful movie; (2) it featured some rather attractive young women; and (3) one of them loved to scream “at least it doesn’t suck”. Max Sawicky seems to say the same thing about the U.S. economy:
Whatever its merits, the elimination of the public debt that was in sight in 2000 has been dashed. But how bad off are we? I think the liberal case for hysteria weakens every day. It’s not because the economy is doing especially well. Now there are some good signs and bad ones. I would summarize by saying although the record for the past four years is awful, the current macro situation does not suck, relatively speaking. (Next week we’ll talk about an entirely different way of thinking about the labor market.) I would say the same about the deficit. There is no deficit or debt crisis.
Max has it about right as far as the state of the economy but the main theme of his post is whether we have a fiscal crisis. OK, fiscal policy does not suck to the point that markets are spooked that the Federal government is about to default on its obligations. And I agree with Max’s premise:
More important is Redistribution in Everything, including tomorrow’s tax system. Underlying the attack on economic equality is the most fundamental question — the ability of the working class to distance itself from subsistance levels of consumption.
So should we not worry about the continuing large Federal deficits? I liken the deficits to having an embezzler in a bank. Yes, the vaults will not be empty in the morning but to allow the embezzler to continue makes the owner of the bank poorer every day.
Then again, those of us that are 50 years or older are not the ones that will pay the price for Bush’s fiscal irresponsibility. It’s those young Republicans (and yes Democrats) that will foot the bill for the rich old crowd getting current tax breaks. And yet, Bush keeps selling his embezzlement schemes are reforms designed to help the youngsters. The next time you see a young Republican – just think “you can fool some of the people all of the time”.