Skip to main content

The Deficit Scolds Revealed as Obvious Frauds

By

Visit NBCNews.com for breaking news, world news, and news about the economy
I was watching some Up with Chris this morning (update: posted above) and Hayes about came unglued making the point that few in Washington seems to get—that the problem with the fiscal slope (the set of tax increases and spending cuts set to take effect automatically next year) is that it will make the federal deficit too small. And yet we have the same parade of rattling deficit scolds who have been gravely intoning about how immoral it is to leave such a debt load to our children suddenly up in arms about this fiscal slope. Consider this throwaway line from Andrew Sullivan:
We are facing automatic massive tax hikes and huge, crude spending cuts starting January 1 if we cannot get a bipartisan deal on Bowles-Simpson lines (of course there is room for tweaking and bargaining). A failure to get that kind of deal would tip the US and the world into a new global depression.
Every single thing about this is wrong or misleading. First, it's true that the fiscal slope's massive dose of austerity would probably cause a recession, but they will take effect only gradually. There is plenty of time to get a deal before the cumulative impact on aggregate demand would be noticeable, and the extra taxes collected could even be rebated to restore consumer spending. Sullivan's implication that there are bone-crunching effects starting January 1 is wrong.

But more importantly, Bowles-Simpson is in no universe a solution to the problem of the fiscal slope. We could simply return to the status quo ante, ignoring this Ahab quest for a Grand Bipartisan Bargain altogether, and the problem would be averted. Proposing Bowles-Simpson (remember, allegedly a deficit reduction plan) as a solution for the fiscal slope is like saying, "There will be a famine, so therefore we must stop growing so much food." The only conceivable reason for it would be to entice Republicans—but remember, the president holds all the cards after January 1st.

As Matt Yglesias points out, the GOP has no leverage here and things will likely play out as Obama desires. Dems get a bit more revenue, and the House gets to vote for tax cuts after they've gone up. In fact, the NYT today has a story about how John Boehner has been bluntly warning his caucus they're going to have to swallow some painful votes.

But this moment has starkly revealed the fiscal scolds for what they are: a bunch of frauds. Not Sullivan, I think, he seems more just muddled by a weird crush on the Bowles-Simpson plan, but nearly all of the rest. Read this incredibly duplicitous letter from a bunch of CEOs sounding the alarm about this issue. What's their recommended solution? Why, tax reform which just coincidentally includes lower rates for everyone.

Nobody cares about the deficit, least of all the people who whine about it constantly. Their preferences have been revealed.

UPDATE: Paul Krugman has more, including an amazing catch from a deficit scold org saying we should only cut "low priority" spending. Wonder what that means...
[Cross-posted from Political Animal.]
Labels:

Comments

Post a Comment

Popular posts from this blog

Why Did Reality Winner Leak to the Intercept?

By
So Reality Winner, former NSA contractor, is in federal prison for leaking classified information — for five years and three months, the longest sentence of any whistleblower in history. She gave documents on how Russia had attempted to hack vendors of election machinery and software to The Intercept , which completely bungled basic security procedures (according to a recent New York Times piece from Ben Smith, the main fault lay with Matthew Cole and Richard Esposito ), leading to her capture within hours. Winner recently contracted COVID-19 in prison, and is reportedly suffering some lingering aftereffects. Glenn Greenwald has been furiously denying that he had anything at all to do with the Winner clusterfuck, and I recently got in an argument with him about it on Twitter. I read a New York story about Winner, which clearly implies that she was listening to the Intercepted podcast of March 22, 2017 , where Greenwald and Jeremy Scahill expressed skepticism about Russia actually b
Post a Comment
Read more

Varanus albigularis albigularis

By
That is the Latin name for the white-throated monitor lizard , a large reptile native to southern Africa that can grow up to two meters long (see pictures of one at the Oakland Zoo here ). In Setswana, it's called a "gopane." I saw one of these in my village yesterday on the way back from my run. Some kids from school found it in the riverbed and tortured it to death, stabbing out its eyes, cutting off its tail, and gutting it which finally killed it. It seemed to be a female as there were a bunch of round white things I can only imagine were eggs amongst the guts. I only arrived after it was already dead, but they described what had happened with much hilarity and re-enactment. When I asked why they killed it, they said it was because it would eat their chickens and eggs, which is probably true, and because it sucks blood from people, which is completely ridiculous. It might bite a person, but not unless threatened. It seems roughly the same as killing wolves that
4 comments
Read more

The Conversational Downsides of Twitter's Structure

By
Over the past couple years, as I've had a steady writing job and ascended from "utter nobody" to "D-list pundit," I find it harder and harder to have discussions online. Twitter is the only social network I like and where I talk to people the most, but as your number of followers increases, the user experience becomes steadily more hostile to conversation. Here's my theory as to why this happens. First is Twitter's powerful tendency to create cliques and groupthink. Back in forum and blog comment section days, people would more often hang out in places where a certain interest or baseline understanding could be assumed. (Now, there were often epic fights, cliques, and gratuitous cruelty on forums too, particularly the joke or insult variety, but in my experience it was also much easier to just have a reasonable conversation.) On Twitter, people rather naturally form those same communities of like interest, but are trapped in the same space with differe
2 comments
Read more