We're in the news again! Anyone want to play a game of "let's cut the national pension system's budget by 30% or it will be forced to cut its budget by 30%?"
Wednesday, March 23, 2011
Another new inductee:
Christy Romer in Vanderbilt, by Brad DeLong: Soon she too will join the Order of the Shrill:
Former top economist: Economic inaction ‘shameful’: President Obama’s former top economic advisor sharply criticized the federal government for failing to take more aggressive action against unemployment.
I frankly don’t understand why policy makers aren’t more worried about the suffering of real families. I think there are tools we have tools we have that we can use, and I think it’s shameful that we’re not using them...
“We need to realize that there is still a lot of devastation out there,” Romer said, calling the 8.9% unemployment rate "an absolute crisis."
If I have a complaint about policy these days, it’s that we’re not doing enough. That goes all the way up to the Federal Reserve, [which] could be taking more aggressive action. It goes to the Congress and the Administration – there are fiscal policy actions they could be taking. And don’t tell me you can’t [take those actions] because of the deificit because I think there are fiscally responsible ways...
Romer suggested that extending the payroll tax break to the employer side of the payroll tax could spur the economy; she suggested that Congress simultaneously pass a comprehensive, long-term plan for reducing the deficit.
Posted by mark on 3/23/2011
Monday, March 21, 2011
Brad DeLong inducts a new member:
Guns and butter: About that deficit: MARK THOMA has an appropriately succint post up today which reads in its entirety (and I hope he'll forgive my quoting the whole thing):
We have enough money to pay for military action in Libya, but not for job creation?
It's hard not to be cynical about government policymaking.... [B]oth Republicans and Democrats are committed to cutting the government's budget in the current fiscal year... threaten programmes with positive economic returns.... [F]ew party leaders are seriously discussing new spending on programmes with positive economic returns. America has substantial infrastructure needs—current spending is inadequate to simply maintain critical infrastructure at its current state of repair—and yet the odds of passing a new transportation law to replace the one that was scheduled to expire in 2009 but which has since been extended repeatedly, well, they're close to zero. Why? No one can agree on a way to fund new infrastructure spending.
Libya poses no threat to America. It's far from clear that American intervention will yield positive outcomes for Libyans. And yet here America goes, launching massively expensive sorties....
[M]uch of official Washington—Democratic and Republican leaders, along with policy intellectuals and op-ed pages—has acted as though an immediate fiscal crunch loomed. This was never true. American debt levels may be an issue by the end of the decade, but they aren't now, and deficits are forecast to fall sharply for the next few years. Bond yields have rarely been lower. The fiscal problem is long-term, not short-term. And yet dire fiscal scenarios have been used to sell painful short-term cuts, some of which were necessary but could have been accomplished later, many of which weren't necessary at all. Americans have been told, by the president of the United States and his chief Republican antagonists, that in hard times the government, like households, must tighten its belt. And then along comes Libya to put the lie to all of these assertions.
The really, really troubling thing about this is that Washington will almost certainly ignore the inconsistency. I doubt any pundits will take the opportunity to observe that Washington leaders apparently don't actually believe that America faces immediate fiscal constraints (as it does not)...
He is, of course, completely correct.
Ph'nglui mglw'nafh Ryan Avent R'lyeh wgah'nagl fhtagn!!
Posted by mark on 3/21/2011