No my point is not that cutting govt spending will magically create growth. It clearly won't. My point is we have become careless with our ability to use the debt markets to finance our huge deficits which seemingly have no real goal other than sustaining the status quo until we are forced to figure something else out (holy run-on sentence!). Our federal govt is just simply living too far beyond its means. Fair point about how efficiency can be judged. My point was more to how we have a culture of inefficiently throwing money at things because we have a lot of money to throw around. Education, healthcare, and defense are some prime examples off the top of my head. Well an inflexible balanced budget amendment may not be the way to go, but clearly something has to be changed. I would hope our representatives would have foresight to plan ahead, but they don't.
I didn't see anything in there about adjusting retirement ages or indexing them to our life expectancy or something dynamic.
er, if by dynamic you mean drastic. Did you see how it balances the budget ten years before the Republican plan? It's not in there because the simple truth is that you don't need to cut vast amounts of spending on social services, and aid to the poor, to balance the budget. There are many drivers of the deficit, so many that you can pick and choose which ones to tackle. A over-funded prison system that has exploded with non-violent prisoners. A military so overwhelmingly powerful that it strains the budget more than it strains the enemy. A flawed tax system. Subsidies originally intended for average Americans that are now just going to big corporations and distorting the market.
Uh, if we're worried about the ability to borrow cheaply debt markets, shouldn't we listen to the markets themselves - in which borrowing costs remain at historic lows (though they're of course rising, due to GOP nose cutting/face spite-ing) This is the Krugman routine about the invisible bond vigilantes and their imaginary attack on borrowing costs. You have to wait till borrowing costs show some indication of rising before you can cite that as an indication that spending needs to be immediately retrenched in an era of weak demand....a great way to raise your borrowing costs, however, is to shoot yourself in the foot by forcing the country to the brink of default for poltical gain. Borrowing is a confidence game, hence susceptible to lots of self-fulfilling prophecies if you want to get into them, which Republicans are obviously quite eager to do despite the incredible amount of damage it will cuase.
I have no idea what correlation this has to a BBA. Deficit spending and runaway deficit spending are two different things. In an attempt to stop the latter, you're preventing the former - which is why I said it's a horrible solution. Yes, it does. It indicates that the party of "fiscal responsibility" went on a tax cutting and spending spree. And that was followed by a total economic meltdown. There are plenty of alternatives to a BBA to get the deficit under control. You can put in automatic tax increases and benefits cuts if debt levels go beyond certain numbers. You can require a long-term balanced budget (for example, 10 year projections have to be balanced, rather than annual budgets) that will eliminate permanent deficits. etc. But the plain old BBA is a dumb, dumb idea. It's like a 5th grader's solution to a calculus problem.
Republican Sen. John McCain today railed against conservatives who stand in opposition to House Speaker John Boehner's plan to raise the debt ceiling and reduce the deficit. He called their insistence on passing a balanced budget amendment "worse than foolish" and "bizarro." http://www.cbsnews.com/8301-503544_162-20084416-503544.html
That's a terrible analogy because rich pay the same or less taxes on the same money. They pay 10 percent for the 8500 dollars of their money, 15 percent for the portion between 8500 and 34,500 and so on. The rich however get more deductions, and pay only 15 percent on capital gains. Since the really rich make most of their money on capital gains, they actually pay a lower tax rate, which is why Buffet says he pays a lower percent than his secretary. A better analogy would be paying higher sales taxes on luxury goods like a rolls royce.
Krugman's Point I feel like Basso has gotten this thread off topic and the rest of you followed him down the rabbit hole. The idea that the centrist solution is the optimal solution is the problem here. The media portrayal of the debt crisis talks - that both sides are equally to blame and both sides are putting out equally legitimate options is also to blame for this. But this is part of a larger problem that has existed for many years now - it's a problem with the American electorate. People seem to clamor for the title of moderate or centrist thinking that the moral high ground and optimal policy solutions lie in the center. The media does not do its job to disabuse them of this view. Politicians on both aisles realize that this fetishism of centrism holds so much sway with the electorate that they also try to claim the center, even as they move toward the poles. The media will automatically portray the center as some illusory middle point between the two dominant parties. As the tea-party drags the Republican party to the right, the center shifts to the right, even if the Democrats don't make any movement to the left. The media refuses to call a spade a spade and spreads the word that what 4 years ago would have been far right of center is the new center and the electorate marches to the beat of a new drum. Krugman is right, the problem is the cult of centrism and the fetishism of the center.
Batman, you are right with regard to the current situation. The Republican party is moving more towards the right, while the Democrats seem to be more or less staying put in their slightly "left of center" position. But I was speaking or meant to speak in general terms, because I feel that Krugman's point is meant to apply to media coverage of politics in general. Politicians as they move toward a pole will continue to try and paint their position as keeping with the center? Do you think that this general point rings false? Do you think that a politician will get on the air and say my policy is "bat-**** libertarian," or my policy is "bringing socialism back"? I think the answer is no - they will stress the centrist bona fides of their policy.
There are three groups. Group A says 2+2=4 Group C says 2+2=6 Group B wants to be centrist, so it says 2+2=5. Orientation has nothing to do with truth.
Of course most politicians call themselves centrists. I don't disagree with that and I don't think Krugman would either. Krugman, and I, would disagree vehemently with the idea that the current Democratic party, and in fact going back to the days of the DLC which resulted in Clinton's election, is generally left of center. They aren't and they haven't been for nearly 20 years. Clinton ushered in a new politics for the Democratic party, a center-right politics which was extraordinarily pro-business and pro-corporations. Though Dems in Congress back then were center-left (as you incorrectly say they are today) and were therefore resistant to Clinton's rather extreme movement of the party to the other side of the center, they eventually came along. The left of center Democrats holding national office now are a very small group. You could count the ones in the Senate on two hands, meaning they are tremendously outnumbered by right-center Democrats. And their leader, President Obama, is absolutely right of center. That is why I reacted so strongly to your characterization of each party as moving toward its pole. That is absolutely true of the GOP. In the Democratic party, the pole or anything anywhere near it is anathema, for the simple reason that Republicans are so incredibly intransigent that they have let themselves be pushed there. The statement I bolded when quoting your earlier was patently false and it is one of the major fallacies that Krugman eloquently explains in his piece. The policies that are now regarded to be extreme left (for example health care) were directly lifted from such noted lefties as Bob Dole, George Bush I and Ronald Reagan. So I guess maybe you can understand how frustrating it is to hear people say that Democrats are presently left of anything.
