Fiscal policy delusions
My hat tip to Diane at Economistmom and her essay on the scrambling in Congress around the Bush tax cuts:
… In other words, let’s try to avoid doing something with the Bush tax cuts that seems totally crazy given what we say our fiscal policy goals are for both adequately supporting the (still fragile) short-term economy and better encouraging economic growth by reducing the deficit over the longer term.
The fiscal policymaking in this town seems totally schizophrenic right now. What a juxtaposition to have President Obama’s deficit-reduction commission release its final report while the Administration “negotiates” with Congress on whether all of the Bush tax cuts, or just most of them, should be permanently extended (and deficit financed). The media has been reporting that whether the bulk of the Bush tax cuts will be extended or not is not the issue–it is whether the upper-bracket ones benefitting only the rich will be included as well, and what constitutes “rich.”
I think most Americans who are paying attention to today’s fiscal policy news are probably shaking their heads and/or cussing and/or laughing in a dark-humor sort of way. It seems both ridiculous and tragic that our leaders can proclaim their intent to get our fiscal house in order out of one side of their mouths, while arguing to keep (forever) their favorite piece of the fiscally-reckless and economically-ineffective Bush tax cuts out the other. They are so busy screaming at each other from their (sticky, embedded) corners that they can’t see the common ground between them.
Hey! It’s a bloody argument about accounting and everybody gets to make up the “generally accepted principles”… because there aren’t any. The Commerce Department brought in an expedient but essentially purposeless national income accounting system in 1947.
In 1950, Keyserling and Nitze devised a plan to pump up that national income through massive arms spending and then “siphoning off” revenues from the engorged GNP to pay for the arms thus establishing the fiscal perpetual motion machine. Reagan’s supply-side voodoo economics ramped up the pump-and-siphon swindle and added a few auxiliary shell games to make the inflation disappear (it’s alright ma, it’s just invisible [pssst — they stuffed it up their assets]). Greenspan and his bubbling bubbles of exuberance poured great gobs of fat on the fire. Swindle on top of swindle on top of swindle.
The only question these folks ask is: “how do we swindle ourselves out of the mess this time?” There’s not a single one of them, from Obama to Boehner to Simpson and back who wants to know what the damn problem is, let alone how to fix it. They’re all just scrambling for different bundles of swindles. But it is all swindles.
1947 – 2008. This is the same sort of fiduciary meltdown that happened to the Soviet accounting system in the 1980s. If you remember how that ended, you know where the U.S. is headed. But on the brighter side, all this would have come unglued nine years ago if it hadn’t been for those terrorists.
Well Dan i would want to wait until I heard Diane’s position on taxing “carried interest”, i.e. compensation for hedge fund billionaires., as well as her position on means testing ‘lucky duckies’ who have retirement income over $30k.
Because two guys named Dale and Bruce got pretty much summarily booted from Economist Mom after we pointed out it was a fully funded/official website of the Concord Coalition. Which is to say Peter G Peterson’s first run at killing Social Security.
Diane said me and Dale were rude. GUILTY!!! Because when it comes to Social Security Ms. D Lim Rogers is just Andrew Biggs in a skirt. (And both BTW the pleasantest people on the planet, they just don’t appreciate Coberly and Webb near their carpets).
Short version: Diane works for Pete. Doesn’t make her a bad person, even the Gambinos deserve competent counsel, but you don’t want to ignore who is cutting the checks.
Yes. But loved the cartoon.
Bruce Webb – “Because two guys named Dale and Bruce got pretty much summarily booted from Economist Mom after we pointed out it was a fully funded/official website of the Concord Coalition. Which is to say Peter G Peterson’s first run at killing Social Security.
Diane said me and Dale were rude. GUILTY!!! Because when it comes to Social Security Ms. D Lim Rogers is just Andrew Biggs in a skirt. (And both BTW the pleasantest people on the planet, they just don’t appreciate Coberly and Webb near their carpets).”
Diane operates a transparent blog with regard to her current employment. All of that information is posted at the top header of her blog. Moreover, her contact information specifically advises readers to contact Diane via her Concord Coalition email address. Further, Diane has acknowledge her employment in a number of main posts at her blog. Diane has a disclaimer statement at the top header which explains: “The views expressed on this blog are those of Diane Lim Rogers and should not be construed as representing any official position of The Concord Coalition.”
Diane detailed her employment background on May 3rd, 2008 at the ‘About EconomistMom.com’ header. She states: “So if you read my opening post, you’ll know the story of how I ended up at The Concord Coalition. I just started here on April 28, 2008. You can read the official explanation of what is/who is The Concord Coalition on the Concord website: http://www.concordcoalition.org, but basically Concord is a group of people devoted to the cause of fiscal responsibility. We are a small group but cover big territory–working a “grassroots” advocacy strategy to encourage thoughtful, fiscally-responsible policies “from the ground up.”
Diane states in her opening post of May 11th, 2008, ‘Related to my official duties on my new job, today I launch a blog using my dual credentials as a Ph.D. economist and a mom. EconomistMom.comis a place where analytical rigor meets a mother’s intuition.”
Daine hid nothing about her employment or the relationship of the blog, including her contact information.
Kindly tell the AB readership when you were supposedly “pretty much summarily booted from Economist Mom after we pointed out it was a fully funded/official website of the Concord Coalition”? Then explain when were the last times that you and coberly posted at EconomistMom on issues related to Social Security.
You have made serious claims against Diane Lim Rogers in the operation of her blog. You should either substantiate those claims or withdraw them.
I think you should tilt with the sandwichman.
I am waiting for him to tackle U.S. trade policy.
Before spencer has his normal Jobs article, unemployment has grown to 9.8%.
bruce didn’t say Diane hid her connections. he just pointed out what they are and what that means.
me, i am kind of simple minded and i keep hoping the concord coalition and people like economist mom will wake up to the fact that the simple way to control deficits is to pay our bills. but sandwichman is right, they are still looking for the swindle that makes it come out all right for them even if it means granny has to spend her golden years scrubbing toilets in the executive suite.
Any one want to comment on just letting the cuts expire?
I hope they keep screwing around, fight to the death, and let all of them expire.
It’s an embarrassment that the Congress didn’t clear this issue from the table months ago. How are families and businesses supposed to plan ahead if the Government is dragging its feet on something this important? It’s crazy.
The problem with only eliminating the tax breaks for upper income earners is that leaves a shortfall of about $3.2 trillion over 10 years as compared to eliminating all of the Bush II era tax cuts. That indicates that the $3.2 trillion hole will have to be filled with other revenues or further program cuts. And that’s just for next 10 years. Meanwhile, we’re still headed for interest payment obligations in FY2020 in excess of $900 billion, and that projection is not based on a large surge in interest rates.
Yeah, I know…I’m heartless on the deficit issues. Well, I would rather save the nation than watch it crumble away. We have to turn the ship or that looming iceberg will sink us.
“Diane operates a transparent blog with regard to her current employment.”
Well sorta. If you track it from the very initial post:
http://economistmom.com/2008/05/premierepost/ which opened:
“The day after our au pair had been committed to a psychiatric facility, I walked into my staff director’s office and told him I had to leave Capitol Hill”
and couple that with her ‘about’ page:
“with the hope that this blog will be part of a newly effective, “grassroots” movement involving ordinary American parents and grandparents, encouraging our policymakers to “do the right (fiscal) thing” for the sake of our children and grandchildren.”
You MIGHT have NOT figured that this “ordinary parent” was not exactly just a mid-level employee putting down some thoughts on economics as they relate to families. And the following has me scratching my head:
So, faced with my own personal and professional wake-up calls, I accepted an invitation from The Concord Coalition to join its staff as chief economist and reunite with the Fiscal Wake-Up Tour.
Yep in the interest of being a ‘Mom’ as well as an ‘Economist’ Diane walked from Capitol Hill into a gig as chief economist for a billionaire. Cause that is so much more ‘family friendly’. Because nothing spells meatloaf Friday like re-joining a round the country ‘Fiscal Wake-Up Tour”.
But it is all okay:
DisclaimerAugust 1st, 2008 . by economistmom
The views expressed on this blog are those of Diane Lim Rogers and should not be construed as representing any official position of The Concord Coalition.
Yep. Apropos of nothing the second comment on that first post was by non-crazy Stan Collender (well now) while the third was by the non-lamented late AB pest Patrick R Sullivan while no 16 points back to Angry Bear! (Maybe MG put his thumb on the scale).
Much as MG
will hate to hear this: I agree with him entirely.
NOT rescinding ALL of the tax cuts during this “deficit emergency” is the reason we have a deficit. Everyone thinks they can get what they want out of government and the tooth fairy will pay for it.
Or, when they are being “responsible” they think granny should pay for it by working deep into old age.
This is the kind of mindless stupidity and greed that brings down empires. And it’s bipartisan.
But here’s a clue for you all. You can cut Social Security and Medicare and welfare, and the debt will continue to grow. Because it is driven by greed and not by any particular policy or program.
You can see it in the earnest and heartfelt arguments for tax code that “incentivizes” work and investment… meaning don’t tax the people who have money.
greed, by the way, is not normal acquisitiveness, it is grasping for money beyond reason or decency. you can usually tell the difference if you are not a victim of the disease yourself.
I like meatloaf!
I think you’re being realistic. It’s the best course of action at this stage.
D.C. is loaded with crazies. It must be in the water.
Someplace cold will now freeze over. I’m also in favor of letting them all expire and I’ll definitely take a hit over it.
But MG is correct that the settling the issue one way or another may be more important for the recovery than what the final decision is. The uncertainty is whats killing everyone.
Islam will change
To let all the tax cuts expire, takes courage, conviction other than “I want a piece of the pie too”! Until somehow, the present mind set is exposed for what it reall is, I don’t believe anything will get done, short of the mass middleclass population calling for & implimenting a mass recall of the fools on the hill.
That said, everytime I hear the politicians say “think of the debt that the “grandkids” are inherriting, I wish I could slap them accross the face in public, for all to see. Public shame might help, but then they outlawed the public stocks as abusive.
Unless change comes from within, we seem to be doomed to becoming a could have been a great country, like we started out to be. I wonder, what is accomplished with all this back & forth between the comments, other than keeping it confined to the blogs?
The uncertainty trope is crap. Nobody knows the future and every bet involves contingency. Businesses will hire when they don’t have enough servers to deliver hamburgers to the service window, the idea that these decisions rest on magical calculators figuring whether 6% of wages one way or another is ridiculous special pleading.
Who exactly was making the ‘uncertainty’ argument a year ago? Nobody. It is just the talking point du jour.
Sometimes it seems that the Economic Right is just an answer to the age old question: “Why do Dogs lick their Balls?” Only to insist that it is actually the Left doing the auto-fellatio.
‘Uncertainty’? REALLY? Isn’t the Efficient Market Hypothesis supposed to take care of all that? Where the eff is your ‘Magic of Markets’ now that we need it?
Pulled pork fo’ me.
“Kindly tell the AB readership when you were supposedly “pretty much summarily booted from Economist Mom after we pointed out it was a fully funded/official website of the Concord Coalition”? Then explain when were the last times that you and coberly posted at EconomistMom on issues related to Social Security.”
MG you are the only blog commenter I know who actually would track every post and comment ever put up complete with time stamp. And expect everyone else to do the same instead of relying on something we call ‘memory’. But as they say you can’t spell ‘analyst’ without ‘anal’.
Coberly (and Arne) http://economistmom.com/2010/08/social-security-a-small-problem-that-still-grows-bigger-over-time/
Me. See comment 6 and 9 (the latter referencing Angry Bear)
Or this one: http://economistmom.com/2008/06/safe-is-considered-code-for-destroy/’
with Diane’s reply:
comment number 5 by: economistmomJune 29th, 2008 at 11:25 am
Bruce Webb had wrote:
“..few Blue Dogs or Economic Conservatives work themselves up much about pallets of hundred dollar bills going missing in Iraq. There seems to be some selective outrage going on when it comes to waste, fraud and abuse.”
Just in defense of the Blue Dogs, I think it’s pretty obvious they are pretty darn outraged about how much money we’ve been spending in Iraq–whether it’s money gone missing due to true fraud or money spent for legitimate causes (such as veterans benefits) that they feel should still be paid for rather than deficit financed.
Yeah, RDan. I do–Let them all the tax cuts expire. Nothing will happen because the people who think that taxes and spending are too high will still think that taxes and spending are too high. And, the people who think that the government should follow a Keynesian spending curve will still be ignored. So, no change politically except for a new cast of players. NancyO
Norman, only a great country can afford to fool around like this. The people who actually do the work of the government are generally competent and are managing to keep things going. Meanwhile, those crazed politicians on the Hill who are making the most noise are going through some sort of acute mid-life crisis. It will all probably just go away because politicians have short attention spans.
The people here, though, have long attention spans and will take careful note of what these fools do next. This blog actually gets a surprisingly large amount of hits. Y’all end up being quoted in interesting places and get kicked off only the most discerning blogs. Signs of the times. It’s worth putting your thoughts into words, Norman. Jefferson and Adams would have loved to have the ability to communicate like this. We have this tool and should use it. We can’t share or change opinion if we don’t express it. NancyO
My prediction is since we have federal unemployment insurance running out in parallel with tax cuts expiring, DC being what it is in the mastery of compromise, will combine a tax cut extension bill and a unemployment extension bill. Congress will pass it with a 100% yeah vote and Obama will sign it 6 times. Once for each major news network, then CNN, then Fox, and finally on the Stewart show. CNBC will cover all the signings. The DOW hits 16000. The Fed pre announces QE3 and the 10 year Treasury hits 2%.
16,000 eh? I need to call my broker. The one I fired…
Angry Bear was rocking and rolling today. Like old times. Good show, everyone!
So, where’s the OPEN THREAD, Boss? We didn’t have one Wednesday…
Yeah, it was great to see so many ABers participating today. Pretty friendly exchanges. All good.
War Eagle! 4 pm ET Saturday. CBS. They had better win!
I believe that this is your last comment at EconomistMom on any of her Social Security related posts.
Note what she said to Jack in reference to her comment policy. She doesn’t ban participants.
Yes, Deficit Hawks CAN Have Their Cake and Eat It, Too
January 10th, 2010 . by economistmom
Bruce and Jack commented.
EconomistMom clarification of posting at her blog: “Jack: Your comments were not immediately posted because I had not had a chance to “approve” them over the weekend. Because of earlier “spam” episodes where my spam blocker failed, several months ago I set up a new screening process so that comments are only posted immediately if the commenter has previously had a comment approved on my site. But I do not “censor” comments that are negative toward me or my employer, the Concord Coalition, as you can see from “bobbyp”’s comments that I just “approved” (even if I do not agree with them). Thanks for posting/participating! –Diane”
comment number 12 by: Bruce Webb
January 16th, 2010 at 6:15 pm
Prior to that comment, you apparently hadn’t participated since September 2008:
Baselines Matter (Yep, Even More Than Lipstick)
September 11th, 2008 . by economistmom
Expire they must for a cleaner budget balance. And while they’re being rational maybe they could cease and desist from the middle eastern war effort. How much does that save? There needs to be more market competition in the pharmaceutical industry and health insurers need to be held to account for where all the premium money is going. While sanity is being aired in public how about correcting the carried interest BS in those tax codes. An income of $500 million and you don’t pay any taxes? Huh???
Before you call your broker, I should clarify that my DOW 16000 and 2% 10 year Treasuries prediction is tongue in cheek.
On the other hand, after watching the power of Extend & Pretend and Mass Delusion for the last decade (or longer if we throw in the Dot.com era), I can’t rule out the possibility completely.
I’m more confident we get unemployment insurance and tax breaks for everyone sometime before Christmas.
And if Obama misses the chance to do a multiple signing rollout in the mass media as I prescribe, then he surely needs to replace his press secretary.
MG I never said I was banned. You overinterpreted or underread the words “pretty much booted”. Diane made it clear that Social Security advocates attacking Concord’s position were not welcome.
So like any polite guest at any house party ever I absented myself. Unlike you who stick around like a fricking lamprey.
Too late. If this doesn’t work out, you’re toast, buddy.