The Guardian Unlimited: The Deficit Hawks: When Did They Stop Being Wrong About the Economy?

[Tulane Skins Fan]

How dare they! Accountability? Who in government ever heard of such a thing?

Well, apparently some people are admitting they are after a balanced budget (like you), and others are trying to deny it. All I'm saying is a balanced budget is an austere budget, by definition really.

I don't think its the best thing for an economy, personally, but I'm not an expert. Its just based upon loose information gathering.

[BRAVEONAWARPATH]

Click on the link to read the rest.
http://videocafe.crooksandliars.com/...sterity-how-ma

Nobel prize-winning economist Paul Krugman on Monday attempted to give the panelists on MSNBC's Morning Joe a lesson about why austerity and drastic spending cuts were the wrong solution in tough economic times.

"Our track record is actually not bad, we've tended to reduce our debt at least relative to GDP when the economy was strong," Krugman told host Joe Scarborough. "We tend to increase when the economy is week, but that's what you should do. So this is not a hard call. I mean, as long as we have four million people who have been unemployed for more than a year, this is not a time to be worrying about reducing the budget deficit. Give me something that looks more like a normal employment situation and I'll become a deficit hawk, but not now."

"I think we can begin to address our entitlement problems without putting on the brakes, without austerity," Council on Foreign Relations President Richard Haass asserted. "If we don't, what worries me about what people like Paul Krugman and others are recommending is we leave ourselves incredibly vulnerable to higher interest rates, to future Hurricane Sandys, to future wars, to bond markets, that we put ourselves in an incredibly vulnerable position."

"Washington doesn't work that way," Krugman pointed out. "If you spend a lot of your time talking about the debt and the entitlements are the big problem, the message that actually what we need to is promote jobs gets lost. And in fact, we spent the last two and a half years focused entirely on arguing about the long-term deficit and entitlements and doing nothing for employment right now. That balance has got to shift."

Former Pennsylvania Gov. Ed Rendell (D), who co-chairs the corporate-sponsored Fix the Debt campaign, insisted that Krugman's argument "makes no sense" because the Simpson-Bowles deficit-reduction plan "said we can do both," cut the debt and spur the economy.

"So two guys can write a report that calls for all kinds of good stuff and they can't even get their own commission to agree on the report," Krugman laughed. "And you're saying this should be our policy? We need to focus on what is urgent right now, which is creating jobs and getting this economy back to full employment.

[SkinsHokieFan]

Has the United States actually cut spending at all since before Reagan?

The rate of growth of spending has been cut, and that is essentially what sequestration is.

The DoD budget, SSI and Medicare aren't going to go from 2 trillion of the budget to 1.5 trillion

They are going to go from 2 trillion to 2.5 trillion SLOWER then currently budgeted to do so.

That is "austerity" in America

[Tulane Skins Fan]

Has the United States actually cut spending at all since before Reagan?

The rate of growth of spending has been cut, and that is essentially what sequestration is.

The DoD budget, SSI and Medicare aren't going to go from 2 trillion of the budget to 1.5 trillion

They are going to go from 2 trillion to 2.5 trillion SLOWER then currently budgeted to do so.

That is "austerity" in America

You're asking if we've cut spending at all since Reagan.... yet you are ignoring the deal that was just passed a month ago?

A lot of spending has been cut lately.

[HOF44]

Has the United States actually cut spending at all since before Reagan?

The rate of growth of spending has been cut, and that is essentially what sequestration is.

I think a couple years in this administration that spending was lower than the previous year. The problem is with the economy in the tank and tax receipts plummeting the deficit continued to soar.

[Tulane Skins Fan]

I guess the real question is: why do so many people think instituting austerity now is a good idea? What good is that going to promulgate for our economy?

Honest responses please.

[DjTj]

Has the United States actually cut spending at all since before Reagan?

Total federal spending in 2010 ($3.46 Trillion) was lower than in 2009 ($3.52 Trillion)

http://www.forbes.com/sites/rickunga...-barack-obama/

Even the Heritage Foundation's numbers back this up: http://www.heritage.org/research/rep...e-numbers-2012

[Riggo-toni]

Paul Ryan's plan balances the budget in ten years supposedly.

Lots of people are calling for a balanced budget.

"Supposedly"...."calling for a balanced budget"....

Under Ryan's plan, government spending would still be at a higher % of GDP than under Clinton. Ryan also cast the deciding committee vote to prevent Simpson Bowles from reaching the house floor. Nothing of Ryan's plan has taken effect, nor have any of the people claiming they support a balanced budget done anything beyond rhetoric to further said cause. Even the meager sequestration has been put off another 3 months. The only steps taken have been letting the payroll tax cut and the top income rate tax cut expire. Peanuts. Nothing even remotely approaching austerity or even moderate discipline.

[Tulane Skins Fan]

"Supposedly"...."calling for a balanced budget"....

Under Ryan's plan, government spending would still be at a higher % of GDP than under Clinton. Ryan also cast the deciding committee vote to prevent Simpson Bowles from reaching the house floor. Nothing of Ryan's plan has taken effect, nor have any of the people claiming they support a balanced budget done anything beyond rhetoric to further said cause. Even the meager sequestration has been put off another 3 months. The only steps taken have been letting the payroll tax cut and the top income rate tax cut expire. Peanuts. Nothing even remotely approaching austerity or even moderate discipline.

I don't know why we're arguing about this. Ryan hasn't come out with his budget yet, but he says its going to balance the budget in 10 years. Those are the reports from his office.

Tons and tons of people are calling for a balanced budget, and most of them on the right are calling for it through spending cuts alone. Is that not true?

[SkinsHokieFan]

You're asking if we've cut spending at all since Reagan.... yet you are ignoring the deal that was just passed a month ago?

A lot of spending has been cut lately.

That deal cut the rate of growth of spending, not spending itself.

Total federal spending in 2010 ($3.46 Trillion) was lower than in 2009 ($3.52 Trillion)

http://www.forbes.com/sites/rickunga...-barack-obama/

Even the Heritage Foundation's numbers back this up: http://www.heritage.org/research/rep...e-numbers-2012

So in theory we are spending 600 billion less per year in 2010 then we did in 2009.

According to Heritage it appears that much of it was temporary spending (excluding stimulus money) which makes sense.

Overall the point still stands, the trend is pointed upwards and we'll be at 4 T dollar budgets by the end of the President's term

---------- Post added January-29th-2013 at 02:38 PM ----------

I don't know why we're arguing about this. Ryan hasn't come out with his budget yet, but he says its going to balance the budget in 10 years. Those are the reports from his office.

Tons and tons of people are calling for a balanced budget, and most of them on the right are calling for it through spending cuts alone. Is that not true?

The point being "calling" for a balanced budget in 10 years and actually making spending cuts are 2 different things.

Austerity measures to our entitlement programs, SSI, Medicare, Medicaid, and I'll add DOD have NOT occurred in the United States budget since President Obama came into office

[Larry]

Has the United States actually cut spending at all since before Reagan?

The rate of growth of spending has been cut, and that is essentially what sequestration is.

The DoD budget, SSI and Medicare aren't going to go from 2 trillion of the budget to 1.5 trillion

They are going to go from 2 trillion to 2.5 trillion SLOWER then currently budgeted to do so.

That is "austerity" in America

And your point is?

That any action which does not result in total federal spending going down, in nominal dollars, isn't "austerity"?

[SkinsHokieFan]

And your point is?

That any action which does not result in total federal spending going down, in nominal dollars, isn't "austerity"?

Essentially, yes.

Spending as a % of GDP and in nominal dollars continues to trend upwards.

If spending as a % of GDP starts to fall as a result of actual spending cuts (as opposed to the 90's when it was economic growth) then that will be London like austerity.

[Tulane Skins Fan]

The point being "calling" for a balanced budget in 10 years and actually making spending cuts are 2 different things.

Austerity measures to our entitlement programs, SSI, Medicare, Medicaid, and I'll add DOD have NOT occurred in the United States budget since President Obama came into office

Now, I really don't get your point. So, you don't want austerity, you want someone calling for austerity?

That's true that austerity to our entitlement programs has not happened since Obama. That's not the same thing as saying we haven't cut any spending. We've cut a lot of spending.

Sounds like you're moving the goalposts.

[SkinsHokieFan]

Now, I really don't get your point. So, you don't want austerity, you want someone calling for austerity?

No, the point is austerity has not occurred in America. The "deficit hawks" haven't "won" anything this side of the Atlantic

[Wrong Direction]

Its not good to have a balanced budget, or a government budget in the black.

It's probably not good to have 12 hours of sex with 12 of the world's finest models. That could kill a man, but it's a problem I'd deal with when I have to, and it's one that I'll never have to deal with.

Balancing the budget pretty much fits the definition of austerity.

I disagree. Per Wikipedia Austerity:

refers to a policy of deficit-cutting by lowering spending via a reduction in the amount of benefits and public services provided

http://en.wikipedia.org/wiki/Austerity

The reduction in benefits is key. If we were talking about austerity, we'd be talking about lowering the maximum Social Security payment from 2012 to 2013, or making Medicare beneficiaries pay a 30% copayment as opposed to a 20% copayment in 2012-2013.

The policy proposals on the table now are largely not austerity. They're simply changing the definition of growth in out years of those programs.

Some exceptions:
1. Raising the social security tax back to historical levels could be considered austerity.
2. Indeed, raising any taxes could be considered austerity.
3. Changing the eligibility requirements for food stamps or welfare in a way that reduces people on the doles could be considered austerity.

#'3 gets into technicalities. Similarly, cutting thousands of fraudulent providers out of Medicare could be considered austerity, but we'd all be in favor of that.

Finally, when Clinton ran annual surpluses, it wasn't terrible for the economy. I'm not sure why you think it's such a terrible thing. Yes, I'd rather be able to cut taxes to balance the budget rather than have the government take too much money, but we're so far from that point that it really seems like a diversion more than a meaningful substantive concern at this point.