Tag Archives: Deficit

My Romney peeps will pull the Romney lever anyway, but . . .

I’m not listening, I’m not listening . . .

. . . do note that Romney’s constant campaign rhetoric has been “Obama promised to cut the debt/deficit in half but instead he’s doubled it (debt/deficit)!”

He uses the terms carelessly and interchangeably. The debt is not the deficit. The deficit is not the debt.

Obama promised to cut the deficit in half. He did. Actually, he said his ‘proposed budget’ would cut the deficit. I can’t even remember if that budget ever passed the House.

But this is just political trivia – there’s not a conscious Romney voter to whom that fact will make a difference.

 

My people might do the right thing for the wrong reason

FOX News reports (yeah, I know) that Pelosi has said she might let all the Bush tax cuts expire if the House Republicans don’t agree to the Obama plan. They say that in the Senate, Democrat Patty Murphy has suggested the same thing.

Obama’s Democratic allies in Congress only want to pass that partial, one-year extension. Republicans only want to pass an extension that continues those rates for everyone. Each side is accusing the other of threatening to trigger tax hikes in 2013.

Right now, both parties want to do the wrong thing. So let’s allow the tick-tocking clock to make the decision for us. Let the damn things expire.

I dearly hope this happens. Letting those cuts expire for everyone – even us little guys – is the best way to bring the deficit under control. We can deal with the tax code and the social security cap later, but for now, letting the taxes revert to 2001 levels might be the least painful way to address our debt.

Now, just to be annoying, Let me add that I actually also believe we should be investing right now in infrastructure – borrowing for that is as cheap as it will ever be.

Let the economists explain if that’s contradictory or not. Borrowing cheaper money today and paying off yesterday’s more expensive debt, which continues compounding at a higher rate, seems to be a good idea.

Meanwhile, let the tax cuts expire. Please.

It doesn’t count cuz it doesn’t cut taxes.

From Think Progress today:

U.S. Receives Record Demand For Its Bonds Under Obama, Helping The Deficit |    Bloomberg News reports that the U.S. government received record demand for its bonds in 2011, “pushing longer-maturity treasuries to their best performance since 1995 in a sign that President Obama may have little difficulty” financing the budget deficit. The European debt crisis is driving investors to buy U.S. assets, allowing the government to get an “all-time high bid-to-cover ratio of 9.07 for $30 billion of four-week bills it auctioned on Dec. 20 even though they pay zero interest.” Despite the GOP’s factually-challenged fear-mongering about the deficit, the high demand for U.S. bonds are “helping to contain borrowing costs and making it cheaper as a percentage of gross domestic product to finance deficits than when the nation last had budget surpluses.”

What the f*ck, just do it Barry

A few terrific debt/deficit editorials /op ed’s from the New York Times yesterday, one of which features this chart. This story from Teresa Tritch is “How the Deficit Got So Big”. Folks who voted for Obama and have been feeling some pain lately, might find some comfort here. Good, short read and she concludes:

A few lessons can be drawn from the numbers. First, the Bush tax cuts have had a huge damaging effect. If all of them expired as scheduled at the end of 2012, future deficits would be cut by about half, to sustainable levels. Second, a healthy budget requires a healthy economy; recessions wreak havoc by reducing tax revenue. Government has to spur demand and create jobs in a deep downturn, even though doing so worsens the deficit in the short run. Third, spending cuts alone will not close the gap. The chronic revenue shortfalls from serial tax cuts are simply too deep to fill with spending cuts alone. Taxes have to go up.

Then there’s this  by Eric Posner and Adrian Vernuele suggesting a Presidential action to resolve the debt ceiling argument unilaterally based on, not the 14th Amendment, but on:

 . . . the necessities of state, and on the president’s role as the ultimate guardian of the constitutional order, charged with taking care that the laws be faithfully executed.

When Abraham Lincoln suspended habeas corpus during the Civil War, he said that it was necessary to violate one law, lest all the laws but one fall into ruin. So too here: the president may need to violate the debt ceiling to prevent a catastrophe — whether a default on the debt or an enormous reduction in federal spending, which would throw the country back into recession.

A deadlocked Congress has become incapable of acting consistently; it commits to entitlements it will not reduce, appropriates funds it does not have, borrows money it cannot repay and then imposes a debt ceiling it will not raise. One of those things must give; in reality, that means that the conflicting laws will have to be reconciled by the only actor who combines the power to act with a willingness to shoulder responsibility — the president.

The phony balanced budget jibber-jabber

Everytime I visit Bruce Bartlett ‘s blog, Capital Gains and Games, I learn such interesting things. Like this:
Next week, House Republicans plan to debate a balanced budget amendment to the Constitution. . .  In fact, it’s just more political theater designed to delight the Tea Party.
Historically, those supporting a balanced budget amendment to the Constitution were only interested in balance per se. That is, requiring that revenues and expenditures be as close to equal as possible. The view was that if the states – almost all of which are required to balance their budgets annually – could do it then so could the federal government.
One problem is that the states don’t really balance their budgets. All have separate operating and capital budgets and only the operating budget is required to be balanced. By contrast, the federal budget lumps together operating and capital expenses, such as roads and buildings that will last for decades. Moreover, the states are notorious for using gimmicks to give the appearance of budget balance even though they run deficits. . . .  If Republicans were really serious about putting a balanced budget amendment into the Constitution they would . . .  held weeks of hearings with such experts and planned many more weeks of floor debate. GOP think tanks would have been urged to hold conferences and publish studies of the proposed amendment.
None of this was done, of course, leaving the inescapable conclusion that this is nothing but a political ploy designed solely to appeal to the GOP’s Tea Party wing. The time wasted debating a balanced budget amendment would be better spent taking care of the House’s long list of unfinished business, such as passing appropriations bills.

Earth to D.C., earth to D.C., earth to .. .

Bruce Bartlett:

It appears that Republicans have walked away from a historic opportunity to reduce the deficit because of their obsessive insistence that not one penny come from higher revenues. Recent polls, however, suggest that the American people are not so obstinate and are more than willing to accept some increase in taxes to reduce the deficit. There is a high degree of consistency in every poll I could find on this topic.
His supporting graphic is not transferable, so you’ll have to go there to see it. He lists 11 polls, mostly from the last three months. On average, 65% of the people said we need to address deficit with a mix of taxes and cuts. An average of 29% said spending cuts alone.
 
Still doing the people’s business alright.