Sneaking up on the US government, slowly but surely, is the fiscal cliff–the agreement congress made to cut spending across the board in many sensitive areas if a bipartisan deficit reduction plan could not be agreed to. This was a bad idea from the outset, but you wouldn’t know it from listening to the Democratic Party, and that’s both a problem, and the topic of today’s post.
Tag: Debt
Stimulus vs. Austerity: USA
I keep seeing a certain political sentiment expressed. It goes a little something like this, from James Pethokoukis of the New York Post:
So what’s the problem with the Obama recovery? Why is it the weakest since the Great Depression?
Maybe it’s the Obama policies, like a stunning disregard for the trillion-dollar deficits that are likely already a dead weight on growth. Or maybe it’s the Obama guarantee of more tax hikes and regulation that makes US business too worried to hire and invest.
But it’s not too late to start shrinking unproductive government, cut debt and reduce penalties on work and investment — just like in those recoveries that we used to know.
Then there are the political cartoons, things like this:
Here’s the structure of the idea:
- The economic recovery has been insufficiently strong
- Therefore, we should do the opposite of what Obama has done
- Ergo, vote Romney/Ryan 2012
The first point is correct, the other two points are simplistic and anti-intellectual, and I intend to illustrate both how and why.
Republicans, The Germans, and Creditor Ethics
The republicans and the Germans have a lot in common right now. Ordinarily, comparing an American political party to the industrious Germans would be quite the positive thing, but right now the republicans and the Germans do not have industriousness in common–what they have in common is the hypocrisy of the creditor ethos.
Continue reading “Republicans, The Germans, and Creditor Ethics”
The Immense Obstinacy of Ed DeMarco
There’s an important fight going on in the Federal Housing Finance Agency that you may not have heard about. Actually, you might not even have heard of the FHFA. They’re the guys who oversee Fannie Mae and Freddie Mac, the state-run mortgage buying businesses. Here’s the trouble–Fannie and Freddie possess a lot of mortgages for which the owners of these mortgages are “underwater”. Not that there’s been any flooding, of course.
Paul Ryan’s Magical Fantasy Budget
So Mitt Romney has chosen Paul Ryan to be his running mate in the US Presidential election. It is a very telling choice. As regular readers will know, Mitt Romney proposed a tax policy that was more or less mathematically impossible without inflicting severe tax penalties on the bottom 95% of tax payers. It just so happens that Paul Ryan is guilty of precisely the same magical thinking. Let’s explore.
Benjamin Studebaker 