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.

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Misconceptions: “Medicare is Going Bust”

Lately it has become fashionable among political pundits to declare that the US Presidential election has devolved into a negative slug fest in which both Obama and Romney are equally culpable, lying and distorting and refusing to accept fundamental realities. This is a sort of professional centrism–taking it as an article of faith that both sides are equally to blame. The trouble is that this centrism doesn’t reflect reality and consequently, in order to maintain it, these “centrists” have resorted accepting blatantly false claims from the American political right. Chief among these is the claim that “Medicare is going bust” and that Paul Ryan’s proposal to turn Medicare into a voucher system is some kind of bold, serious solution. Today I set out to examine and refute that claim.

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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.

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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.

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Debunking Metaphors: “Government is like a Business”

“Government is like a business”. You’ve heard the metaphor before. In order to make it easier for a lay person to understand a complex political issue, pundits and politicians will try to relate it to something familiar, and one of the most frequently chosen metaphors is the business or household. Mitt Romney’s candidacy for US President is predicated on the notion that, because he has successfully run businesses, he can successfully run the government.

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