Simon Johnson says it so I don’t have to
Simon Johnson says it so I don’t have to:
Paul Ryan is not a fiscal conservative…
This is further confirmed by the following:
1. Paul Ryan’s main short-term suggestion in his FT piece today is: Cut taxes. Anywhere else in the world you would be laughed out of the room for suggesting this as the first step towards bringing a government’s fiscal house to order.
2. For concrete proposals on spending cuts, Mr. Ryan refers us to the Republican “Pledge to America“. But that Pledge has no such detail on anything that would make a first-order difference, i.e., add all their proposals together and it wouldn’t even make a noticeable dent in the government debt path. If a politician can’t summarize his main suggestions in an op ed, there are no real suggestions.
3. Mr. Ryan is right to bring up the need to make small adjustments to Social Security; this has been done before and makes sense. But the major budget buster in the CBO baseline, as you get out to 2030, is Medicare. What exactly is Mr. Ryan proposing in terms of controlling those costs? On current demographic and technology projections – with the existing cost structure – even if you cut benefits substantially, Medicare becomes unaffordable. Who will be squeezed over time – beneficiaries, providers, or payers – and how exactly? This will be a tough and emotional conversation – the lobbies here are almost as powerful as banks – but Mr. Ryan is not even starting us in the right direction.
…
It is up to the Obama administration to explain clearly and widely why Mr. Ryan’s proposals do not deal with the first order problems that have increased government debt dramatically in the past decade and that threaten future fiscal stability. Let us hope the White House has learned from the midterms that there are dire electoral consequences when the president shrinks from directly confronting misleading ideas.
“Let us hope the White House has learned from the midterms that there are dire electoral consequences when the president shrinks from directly confronting misleading ideas.”
Based on Obama’s 60 Minutes interview, you can for get the hope. He’s learned little.
What I heard on Sunday’s talk circuit was: “We don’t have a revenue problem. We have a spending problem.” So which problem do you think Ryan and the republicans are going to attack first?
Johnson appears to be setting a rhetorical trap to get republicans into a discussion over the entitlement spending issue. But, that is an issue about to be addressed by the Obama “cat food” commission. Not a republican issue at this point.
It’s time for me to refer to the Bush deficit strategy. The chart below shows the actual and projected results of the Bush spending/budget strategy just before we went into the bubble bursting economic tail spin.
With this knowledge in my hip pocket, I repeatedly ask for the Bush policies that caused the huge deficit problem? He clearly was on a path to balance the budget in the same time frame that Clinton did, while lowering taxes and fighting two wars. BDS was so strong that Dems, along with their MSM allies, could not admit where we were clearly headed.
Economic growth with controlled spending below that rate of gfroth is the greatest part of the the answer to solving this deficit problem, and Dem/Obama policies have been directly opposite to promoting that needed growth.
Obama does not get it! Most Dems, especially those here at AB, don’t get it. The make up of the stimulus bill, the trend to regulate, the verbal attacks/congressional investigations of business, and consistent anti-business attitude have exacerbated, deepening and lengthening, the recession. Thank heavens the American voters get it!
Dan, or any moderator, would you please make the “click-on” version of the graph larger so that it is readable?
First problem: I don’t think there was a Bush deficit strategy. Second problem: If there was a BDS and it was so great, why did the GOP have to come up with a rebranding campaign (you might have heard of it, it was called Tea Parties Inc) to sell it to these voters who “got it”? Asked another way, if dubya was doing such a great job as you assert why didn’t they harness his immense competence and popularity in their winning campaign this year? I mean the guy has a book out and everything, but did he get harnessed into helping out the TPI freshmen? I didn’t catch that.
AS said: “…why did the GOP have to come up with a rebranding campaign (you might have heard of it, it was called Tea Parties Inc) to sell it to these voters who “got it”?”
I think you misremember the early days of the TP when it was unclears to which if any party they would align.
For those who may want to see a larger version of the chart, it, along with the accompanying article, is here: http://www.optimist123.com/optimist/page/19/
AS said: “…why did the GOP have to come up with a rebranding campaign (you might have heard of it, it was called Tea Parties Inc) to sell it to these voters who “got it”?”
I think you misremember the early days of the TP when it was unclear as to which if any party they would align.
For those who may want to see a larger version of the chart, it, along with the accompanying article, is here: http://www.optimist123.com/optimist/page/19/
Ah yes those early days of the TPI insurrection when it was just about letting voters be comfortable with their overt racism….
How far those little green shoots of John Birch Society thinking have come since then! How proud you and the Koch brothers must be.
Ah yes those early days of the tea party insurrection when it was just about letting voters be comfortable with their overt racism….
How far those little green shoots of John Birch Society thinking have come since then! How proud you and Rupert and Ailes must be.
Well lets try this
The problem with the overall argument is that you would have to isolate the revenue effects from the asset inflation associated with the bubble. If the revenue trend line assumed constant increases in receipts from capital gains on real estate then you could well argue that the intersection was wholly illusory to begin with. Just as some people argue that the economic gains in Clinton’s second term were based mostly on a runup in tech stocks and subsequent capital gains that were never actually sustainable (leading many people, even commenters here, to blame the 2001 recession on Clinton).
What is good for the goose is good for the gander. In 2006 my company had solid plans that would have had us finishing our six story lake front headquarters about now. With a corner office reserved for our Property Development Manager, i.e. me. Well some funny things happened between the cup and the lip, our revenue forecasts started out looking like that Bush chart but ended up in a way different place. Trend lines are not in themselves data.
The Tea Party’s got their formal start with Santelli’s rant about ‘those people’, who would never have gotten mortgages if it were not for Barney Frank and the CRA, getting mortgage relief from Obama. The idea that there was some possibility of them joining hands with ACORN, the NAACP, and Nancy Pelosi for a rousing chorus of Kumbaya is pure fantasy. It was clear from the beginning that the Tea Partiers were the same 26% who stuck it out with Bush until the end.
Bruce, there is no problem: “…isolate the revenue effects from the asset inflation associated with the bubble.” Tthis was a simple comparison of revenue versus expenditures. If the bubble had not burst, or had it been delayed for another 15-18 months, we would have had the Clinton “balanced” budget “surplus”.
If you remember I was blogging this in 06 and 07, but BDS prevented y’all from admitting it was even happening. Growth is the answer, and not the constant attacking of business which causes them uncertainty. Uncertainty causes them to delay growth, as you have learned. Uncertainty can cause businesses to go Gault, just like families and individuals.