Tag Archives: deficit hawks

Beware of Policies and Legislation Based on the Generational Accounting Scam

The Peter G. Peterson Foundation (PGPF) and its allied army of associated deficit hawks want the Congressional Budget Office (CBO), the General Accountability Office (GAO), and the Office of Management and Budget (OMB) to do fiscal gap accounting and generational accounting on an annual basis and, upon request by Congress, to use these accounting methods to evaluate major proposed changes in fiscal legislation. Generational Accounting is an invalid long-range projection method that doesn’t take into account inflation, the projected value of the Government’s capability to issue fiat currency and reserves in the amounts needed to fulfill Congressional appropriations, and re-pay its debts, the projected non-Government assets corresponding to government liabilities, the likely economic impacts of Government spending, surpluses, and deficits, the impact of accumulating errors on projections, and the biases inherent in pessimistic AND contradictory assumptions. It is a green eye shade method that ignores both economic and political reality.

If you want America to end deficit terrorism and austerity, and to have the fiscal policy space it needs to begin to restore the American Dream, then you need to defeat proposed policies or legislation which puts building blocks in place to bias fiscal policy towards austerity and the economic decline it will surely produce for ourselves, our children, and for their children. Proposed policies and legislation of this kind must be defeated for the following seven reasons. Continue reading

Paul Krugman Still Believes That “the debt” Can Be a Problem for the U.S.

The deficit is now down to under 3% of GDP, and in contemplating that fact, Paul Krugman asks why the deficit hawks aren’t celebrating the precipitous fall from nearly 10% of GDP a few years ago. He then explains that:

Far from celebrating the deficit’s decline, the usual suspects — fiscal-scold think tanks, inside-the-Beltway pundits — seem annoyed by the news. It’s a “false victory,” they declare. “Trillion dollar deficits are coming back,” they warn. And they’re furious with President Obama for saying that it’s time to get past “mindless austerity” and “manufactured crises.” He’s declaring mission accomplished, they say, when he should be making another push for entitlement reform.

All of which demonstrates a truth that has been apparent for a while, if you have been paying close attention: Deficit scolds actually love big budget deficits, and hate it when those deficits get smaller. Why? Because fears of a fiscal crisis — fears that they feed assiduously — are their best hope of getting what they really want: big cuts in social programs.

Continue reading

Dear Dr. Krugman: Please Let Me Explain

By Joe Firestone

Paul Krugman can’t explain why the deficit issue has suddenly dropped off the agenda. He says:

. . . quite suddenly the whole thing has dropped off the agenda.

You could say that this reflects the dwindling of the deficit — but that’s old news; anyone doing the math saw this coming quite a while ago. Or you could mention the failure of the often-predicted financial crisis to arrive — but after so many years of being wrong, why should a few months more have caused the deficit scolds to disappear in a puff of smoke?

Why indeed are they so quiet? Could it be because the deficit hawks have succeeded in getting the short-term result they want, which is a likely deficit too small to sustain the private savings and import desires of most Americans, and also because the political climate is such right now that they cannot make progress on their longer term entitlement-cutting program until after the coming elections have resolved the issue of whether there will be strong resistance to such a campaign if they renew it? Let’s look at the budget outlook first.

Continue reading

In Search of Sin

By Glenn Stehle

When Stephanie Kelton spoke of orthodox economics and its “one size fits all perspective” in her recent lecture at the Fields Institute, it got me to thinking that when it comes to deficit hawks, they really know how to do sin right.   And like all good religious fundamentalists, proportionality never enters the picture.  One sin takes precedence over all others, others becoming unimportant in the ardor to root out the one true evil.

Continue reading

Blinder Leading the Blind

By Dan Kervick

The establishment’s debt and deficit hawks have taken flight once again, this time to launch a counterassault against Paul Krugman’s sensible and increasingly successful campaign to get people to stop clutching their pearls over the federal budget situation, and to focus attention on more pressing matters of high unemployment and economic stagnation.  Joe Scarborough, Ezra Klein and the Washington Post editorial board are among those springing into action on behalf of deficit worry, and against the dangerous movement of calmness and sobriety breaking out all over.  One thing that becomes more apparent as this debate unfolds is that the budget warriors frequently confuse broader public policy challenges that happen to have a budgetary component with narrower problems related to size of the budget deficit itself.  A recent Atlantic piece by Alan Blinder unfortunately contributes to that confusion.

Continue reading

Pete Peterson and the Deficit Hawks Teach Lawmakers Deep Fiscal Irresponsibility

By Michael Hoexter, Ph.D.

We have come to accept in the Orwellian world of mass communication and media spin that pressure groups and political organizations name themselves in ways that contradict their actual mission.  Continue reading

CNBC’s Quick uses Clinton to aim at Krugman, but shoots herself in the foot

By William K. Black
(Crossposted at Benzinga.com)

Becky Quick is a television co-host of a business entertainment program on CNBC.  She has written a column stating that Paul Krugman’s “claim that there is no fiscal crisis isn’t just laughable, it’s downright dangerous.”  She argues that the “only problem” with Krugman’s conclusion was:  “It is hard to find anyone who actually agrees with him.”  She is furious that Krugman concluded that the Bowles-Simpson austerity plan is “a really bad plan.”

Continue reading

Neoliberalism Kills: Part Two

By Joe Firestone

During Part One of this series,  I approached the end of my post with this paragraph.

Apart from the political opposition from the insurance companies that Medicare for All would have engendered, I think the main justification for abandoning Medicare for All and switching to the PO and eventually the PO-less ACA, was actually neoliberalism. The President, his main advisers, the Democratic leaders in Congress, and most progressives working for Washington progressive organizations were steeped in neoliberal doctrine. They viewed the Bush tax cuts and the two Wars as unpaid for. The ARRA stimulus Act was similarly unpaid for and added to deficit spending and to the debt-subject-to-the-limit. They believed and most believe today that the Federal Government can have solvency problems if the debt-to-GDP ratio increases too much, and interest rates on the national debt are driven up by the bond vigilantes.

Continue reading

Deficit Hawks (Obama, Romney, Bowles, Boehner) Plan to Shrink YOUR Economy – Part 2

By Michael Hoexter

Shrinking “Their” Economy Shrinks Yours

The word “economy” comes from the Greek “oikos” meaning “hearth” or “household”.  Everybody has a household economy that looks slightly different from that of their neighbors.  However, because of the nature of a monetary economy, household economies are linked quite tightly together and trends that effect one household start to have effects in other households soon or over the longer term.  While within the same economy some households can prosper while others do not, generally there is a movement in tandem for some obvious reasons related to how society and the monetary system work. Continue reading

Deficit Hawks (Obama, Romney, Bowles, Boehner) Plan to Shrink YOUR Economy – Part 1

By Michael Hoexter

Most of the US political class has been infected with the “mind virus” of austerity that suggests to them that either virtue or necessity consists of cutting government spending and government programs.  Under the influence of this “folk economics” with no evidentiary support, the equivalent of economic superstition, politicians seem prepared to slash vital supports to the economy despite the ability of monetarily sovereign governments, like the US federal government, to afford continued spending on current and even expanded government programs.  Continue reading