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TINY LINCOLNS FOR ALL
February 25, 2013 4:33 PM   Subscribe

The original point of the sequester was that it would be terrible and “inflexible,” which would force Congress to choose a less terrible path, but obviously trusting Congress to not pick the most terrible of all available options was something of a gamble. So yes, sure, “flexibility,” but also maybe just “let’s not do this.” Unfortunately, “let’s just not do this” never comes up as an option on any of the shows, which all presented the argument as, on one side, “flexibility,” and on the other side, “a balanced approach,” which means a shitload of unnecessary cuts plus a bit more tax revenue, which sound nice but is still pointless contractionary policy.
Alex Pareene watched the sunday morning shows so you don't have to.
posted by crayz (189 comments total) 14 users marked this as a favorite

 
I'm glad that somebody is watching this and making it available, but I already have politics overload from just reading the headlines that eventually pop up on mefi.
posted by rebent at 4:39 PM on February 25, 2013


Alex often shares my sense of outrage.
posted by newdaddy at 4:46 PM on February 25, 2013 [1 favorite]


This is why I don't watch Sunday Morning Talk Shows. Everyone knows all the good cartoons are on Saturday Mornings.

But seriously, do younger voters even watch Sunday Morning Talk Shows? I know they have a way of defining the political conversation for the rest of the week, but their viewing demographic must be shrinking.
posted by RonButNotStupid at 4:57 PM on February 25, 2013 [1 favorite]


There are a series of navigation buoys in the coastal waters of the United States. A government agency maintains those buoys. These buoys attract birds who shit on the buoys. The shit is a maintenance problem and so each buoy must be regularly cleaned. Laws and regs were developed with state agencies and major users of the waterways to dictate the cleaning schedule. No particular state or region can get preferential shit cleaning. Seasonal items like fishing and the flow of port traffic before holidays had to be considered. Tldr the shit cleaning schedule can't be changed. Yet congress passed a law saying everything has to be cut by about 5.1%. Thus we find ourselves with government officials who are required to leave 5.1% of the shit behind as they clean each buoy.
posted by humanfont at 5:05 PM on February 25, 2013 [12 favorites]


Yet congress passed a law saying everything has to be cut by about 5.1%. Thus we find ourselves with government officials who are required to leave 5.1% of the shit behind as they clean each buoy.

God bless the United States of Americ.
posted by Rhaomi at 5:19 PM on February 25, 2013 [8 favorites]


Charlie Pierce has been doing pretty much the same thing with his weekly What Are The Gobshites Saying These Days?. Plus he is better at the dismissive nickname thing.
posted by benito.strauss at 5:25 PM on February 25, 2013 [9 favorites]


Plus he is better at the dismissive nickname thing.

Tiger Beat on the Potomac is glorious.
posted by Rustic Etruscan at 5:29 PM on February 25, 2013 [5 favorites]


Krugman on the sequester:
There’s a silly debate under way about who bears responsibility for the sequester, which almost everyone now agrees was a really bad idea. The truth is that Republicans and Democrats alike signed on to this idea...
As always, many pundits want to portray the deadlock over the sequester as a situation in which both sides are at fault, and in which both should give ground. But there’s really no symmetry here. A middle-of-the-road solution would presumably involve a mix of spending cuts and tax increases; well, that’s what Democrats are proposing, while Republicans are adamant that it should be cuts only. And given that the proposed Republican cuts would be even worse than those set to happen under the sequester, it’s hard to see why Democrats should negotiate at all, as opposed to just letting the sequester happen.


You guys literally just ran a nationwide referendum on which direction you want to take. You voted for the guy who proposed raising taxes. He needs to have the balls to stand up and say this. Even the wingnuts can't really think they're going to advance their agenda by bringing on the economic apocalypse. Can they, really?
posted by Jakey at 5:31 PM on February 25, 2013


Seriously, their "It's not gonna be so baaaaad" bleating is gonna make them look stupid when it's just that bad.
posted by Rustic Etruscan at 5:32 PM on February 25, 2013 [2 favorites]


Once again: this past political cycle was plagerized from Blazing Saddles.
posted by srboisvert at 5:35 PM on February 25, 2013 [11 favorites]


I watch the Sunday Morning talk shows when it's one on one, but you get a panel of shouting bobble-heads in there and I just want to drown them all regardless of affiliations.
posted by cjorgensen at 5:47 PM on February 25, 2013 [1 favorite]


This debate has absolutely nothing to do with deficit reduction and fiscal responsibility. Some people want to fundamentally dismantle the federal government and other people would prefer not to do so.
posted by zachlipton at 5:53 PM on February 25, 2013 [28 favorites]


Even the wingnuts can't really think they're going to advance their agenda by bringing on the economic apocalypse. Can they, really?

Why not, they thought the same when Newt Gingrich did something similar back in the '90s. They're on a mission and someone has to stand up to the lying muslim socialist who stole the election twice for the lazy liberals who want to destroy America.

If not them, then who?
posted by Brandon Blatcher at 5:56 PM on February 25, 2013 [1 favorite]


Even the wingnuts can't really think they're going to advance their agenda by bringing on the economic apocalypse. Can they, really?

Given that they've so thoroughly gerrymandered their districts that if they don't appear at every moment to be governing from the right flank of Genghis Khan they'll be primaried into an early grave...yeah. They really can. Local politics writ across the GOP caucus means there's a strong perverse incentive to make every single negotiation look like it's the Nord-Ost siege.

Plus, deep in their hearts, they all think Democrats are pussies who, if you punch them hard enough, long enough, will eventually give you their lunch money just to go away.
posted by R. Schlock at 5:56 PM on February 25, 2013 [2 favorites]


Plus, deep in their hearts, they all think Democrats are pussies who, if you punch them hard enough, long enough, will eventually give you their lunch money just to go away.

This isn't the case? The Democrats are a center-right party these days.
posted by Noms_Tiem at 6:05 PM on February 25, 2013 [1 favorite]


....something something shit buoys...

What the fuck are you on about?
posted by odinsdream at 6:23 PM on February 25, 2013 [1 favorite]


My perspective, as an Australian, is that you guys think that you voted for Oprah and that because your country's leadership is sensible and compassionate you will all get a new car when it's time to go home. In fact you guys have elected Jerry Springer. The panelists are repulsive; there are people holding up signs to get the audience to cheer and holler; and the only thing anyone will go home with is a bill for dental surgery.
posted by Joe in Australia at 6:28 PM on February 25, 2013 [5 favorites]


My perspective, as an Australian, is that you guys think that you voted for Oprah and that because your country's leadership is sensible and compassionate you will all get a new car when it's time to go home. In fact you guys have elected Jerry Springer.

So we elected a charismatic moderate Democrat, but we thought we elected a charismatic moderate Democrat?
posted by Charlemagne In Sweatpants at 6:43 PM on February 25, 2013 [6 favorites]



My perspective, as an Australian, is that you guys think that you voted for Oprah and that because your country's leadership is sensible and compassionate you will all get a new car when it's time to go home. In fact you guys have elected Jerry Springer. The panelists are repulsive; there are people holding up signs to get the audience to cheer and holler; and the only thing anyone will go home with is a bill for dental surgery.


You guys get some of our TV down there!?
posted by sendai sleep master at 6:46 PM on February 25, 2013


You guys get some of our TV down there!?

Oprah has toured Australia, and Ellen is coming down soon - they're treated like visits from the Queen, with expats like myself playing the part of the fawning monarchists. Its a bit strange to wake up at 6am and see American morning shows; they're much more professional than Australian ones and they hide their crappy opinions better but they're both horrible.
posted by Charlemagne In Sweatpants at 6:49 PM on February 25, 2013


You voted for the guy who proposed raising taxes. He needs to have the balls to stand up and say this.

Of couse Boehner et al now cleverly claim "Mr. President, you got your tax increase" -- meaning the non-renewal of the Bush tax cuts for income above $400,000.
posted by shivohum at 6:49 PM on February 25, 2013


In fact you guys have elected Jerry Springer.

So we elected a charismatic moderate Democrat, but we thought we elected a charismatic moderate Democrat?
posted by Charlemagne In Sweatpants at 6:43 PM on 2/25
[+] [!]


Yeah, a younger Jerry Springer was once seriously thought of supertalented politically and as the next JFK ( but better, because he wasn't part of an elite political dynasty) ( see Act 1 of this )
posted by Bwithh at 7:04 PM on February 25, 2013 [3 favorites]


The problem with the Sunday Morning Shows (and to a lesser extent most political bloviating) is the need to make everything look balanced. Because if it wasn't balanced everyone would agree and there'd be no need for Sunday Morning Shows to make up your mind for you.

Just imagine what these shows would sound like if they discussed the actual state of affairs without any attempt to spin things. "Republicans are holding the American economy hostage for the third time in six months. Why is that Todd?"

"It's simple, Doug. They want to force the country to follow their agenda."

"That's it for this week! Join us next week when we discuss the arguments for gun control!"
posted by Kevin Street at 7:16 PM on February 25, 2013 [9 favorites]


zachlipton: This debate has absolutely nothing to do with deficit reduction and fiscal responsibility. Some people want to fundamentally dismantle the federal government and other people would prefer not to do so.

The debt is a terribly important issue. It matters. It matters enormously, and it matters right now. We are hooked on debt issuance in the same way that junkies get hooked on meth, and learning to live within our means will be just as unpleasant as any other addiction withdrawal.

That said, you are entirely correct. The right side of Congress is not bargaining in good faith. They're not trying to find a way to get that debt paid down, they are literally and exactly trying to use it as an excuse to break the Federal government permanently. They are throwing virtual monkey wrenches in the gears, and they are doing so deliberately.
posted by Malor at 7:23 PM on February 25, 2013 [2 favorites]


As someone whose career will potentially be impacted by this clusterfuck, this whole thing has been so many different kinds of stupid I lost count awhile back.

I am not actually a government employee (although I hope some will check in and let us know if there any plans in place for them), we're more "quasi-government" but as far as we've been told the company does not have a plan to deal with the sequester yet. They have several options on the table, but it all depends on Just How Bad It's Going To Be. No one seems to know how the axe is going to fall, which programs are getting cut how much, or just about anything else.

We've been told to prepare for the possibility of furloughs, which is scaring everyone. Everyone that I've spoken to at my company seems nervous. And of course the worst part is the waiting, since we won't take action until the government takes action, and that won't happen until Friday. Until then there is basically nothing getting done, because no one knows if their programs are even going to exist in a week.

When I interviewed with this company five years ago, it was specifically because it was supposed to be a very secure place to work. My now-manager told me during the interview that the last time they had layoffs was sometime in the 80s. So much for having a safe job.
posted by backseatpilot at 7:25 PM on February 25, 2013 [1 favorite]


My agency (ARS, part of USDA) has told us that furloughs are unlikely. That's good. But I expect that means that everything outside of payroll and benefits will be pretty much gutted. There's just not that much fat where I work. But, hey, we'll do as much more-with-less as we can. I have friends at other agencies (Justice) who already have been notified that they wlll be furloughed.
posted by wintermind at 7:32 PM on February 25, 2013


The debt is a terribly important issue. It matters. It matters enormously, and it matters right now. We are hooked on debt issuance in the same way that junkies get hooked on meth, and learning to live within our means will be just as unpleasant as any other addiction withdrawal.

So basically teh debtz is a big deal because drugs. Got it.
posted by indubitable at 7:54 PM on February 25, 2013 [5 favorites]


No, teh debtz are a big deal because we are dependent on it for routine functioning. This is not healthy; it is extremely destructive, because the debt has to be paid back. However much we make things better right now by borrowing, we make things worse in the long run; we're promising to pay more on Tuesday for a hamburger today. Tuesday will come, and then what are we supposed to do?

We've gotten to the point that even slowing down how quickly we issue government debt will have an enormous impact on the economy. We can't even stop running up the credit cards, so so how are we supposed to pay them back?

They have another word for borrowing without intending to repay, you know.
posted by Malor at 8:21 PM on February 25, 2013 [1 favorite]




when he was just talking about it extemporaneously everyone seemed to grok that those were the only coherent solutions to the problem

FUCKING MAGIC. I don't know why Brill gets flak for this - everyone I've read or talked to has somehow struck upon MEDICARE FOR ALL as an obvious solution (without talking to each other). They're all independent geniuses!

However much we make things better right now by borrowing, we make things worse in the long run

How long is the long run? Got a date for it? Five years? Ten years? Twenty years?
Or is your predictive model unable to produce numbers?
posted by the man of twists and turns at 8:30 PM on February 25, 2013 [3 favorites]


Oh hey, I work for a UARC (you can look that up) and we just lost a contract worth, well, more than a billion dollars, ostensibly as a result of the sequester. Just one data point, but subjectively, that's a pretty big deal.

I'm not giving anybody any financial advice, but my uneducated guess is that this is going to get worse before it gets better.
posted by newdaddy at 8:31 PM on February 25, 2013


How long is the long run? Got a date for it? Five years? Ten years? Twenty years?
Or is your predictive model unable to produce numbers?


It will continue until the other market participants realize the Ponzi scheme is failing, at which point the wheels will come off the cart quite quickly. See: Greece.

Debt has meaning. It has to be paid back. It is not something that you can just freely issue forever without extremely severe consequences. There is no exit strategy that does not involve catastrophic pain.
posted by Malor at 8:36 PM on February 25, 2013 [1 favorite]


Tuesday will come, and then what are we supposed to do?

Print more money, which is the social/legal fiction which allows our society/government to issue promises and then build and maintain a nation capable of paying back those promises. Doing so would not be in the short-term interests of well-off holders of capital, but since they've done such a good job getting their relative numbers down, why should the rest of us give half a damn?
posted by crayz at 8:36 PM on February 25, 2013 [2 favorites]


See: Greece

There are significant fundamental differences between Greece and the US. The one that springs to mind would be a sovereign currency. Can I take your use of "forever" as your inability to state a timeline for debt collapse?
posted by the man of twists and turns at 8:40 PM on February 25, 2013 [11 favorites]


There is no exit strategy that does not involve catastrophic pain.

Will you please stop pretending to understand economics? Or at the very least, provide some sort of explanation for why, despite your constant invocations of Zimbabwean hyperinflation for the last 10 years, US Treasury bonds are selling at practically-zero interest? Where are the bond vigilantes?

Because what you're ostensibly talking about is the real world, and no, it does not appear to function the way that you insist that it does. If you're going to continue to pose as some sort of expert on the matter (or at least as someone whose opinion we need to hear every time this comes up) I'd think it would behoove you to address that. Yes, some sort of falsifiable prediction would be very helpful.
posted by hap_hazard at 8:44 PM on February 25, 2013 [36 favorites]


how are we supposed to pay them back?

Raise taxes on the rich until they are paying 110%.
posted by Ardiril at 8:48 PM on February 25, 2013


Debt has meaning. It has to be paid back. It is not something that you can just freely issue forever without extremely severe consequences. There is no exit strategy that does not involve catastrophic pain.

Debt issued by the federal government is not like debt issued by Mastercard. If you could borrow money for 30 years on 0% interest with no collateral and the ability to print money to pay it back, you'd borrow as much as you possibly could.
posted by empath at 8:50 PM on February 25, 2013 [6 favorites]


[Folks, this is about sequester, let's not make it into "what does Malor think about economics".]
posted by LobsterMitten at 8:53 PM on February 25, 2013


You don't think this sequester is about economics?
posted by Ardiril at 9:04 PM on February 25, 2013 [2 favorites]


Yes it is, but we already know what Malor thinks about economics, from a thousand threads past.
posted by mek at 9:06 PM on February 25, 2013 [1 favorite]


Just as we know what everyone else "thinks about economics, from a thousand threads past".
posted by Ardiril at 9:09 PM on February 25, 2013 [2 favorites]


[Sequester and the linked article offer lots to talk about. The pointed interrogation about Malor's theories on debt is a specific debate we've done to death on the site and there's no reason to do it again here. As ever, metacommentary can go to the contact form, email or MetaTalk.]
posted by LobsterMitten at 9:16 PM on February 25, 2013


The one thing I learn from the Sunday shows is that apparently everybody really, really wants to know what John McCain and Lindsey Graham think about things, since they're on almost every week.
posted by SisterHavana at 10:22 PM on February 25, 2013


What you've learned is that the massive corporations that sponsor those shows want you to hear what McCain and Graham have to say about things.
posted by empath at 10:26 PM on February 25, 2013 [1 favorite]


Somewhat wonderfully, the discussion of Steven Brill’s giant Time piece on healthcare costs turned into a fairly explicit endorsement of lowering the Medicare eligibility age — even dedicated “entitlement” foe Stephen Rattner unexpectedly endorsed this proposal! — which lead Stephanopoulos to point out that by the same logic we should just have single-payer healthcare. (Oddly, Brill’s actual article rejects price-controls and single-payer as solutions but when he was just talking about it extemporaneously everyone seemed to grok that those were the only coherent solutions to the problem.) Oh hey guys, you have all just discovered all the ancient arguments for single-payer that left-liberals have been making since forever, congrats.

I'm laughing. I'm crying. I'm digging my nails into my thighs.
posted by j03 at 11:03 PM on February 25, 2013 [4 favorites]


The best way to handle our debt is to grow our economy and government revenue with expansionary policies that will increase jobs. This will require short term spending and that we cut back on spending when the economy is back on track, but there is no need for that to be a particularly painful process.

I assume there will be a last minute deal on the sequester much like there was for the other manufactured crisis situations. This process is getting really old though. It would be very satisfying to watch the Republicans doom themselves by allowing the cuts to happen, but it would be too damaging to the economy right now.
posted by Drinky Die at 11:55 PM on February 25, 2013


The Hill: As the clock ticks down on any possibility of averting the sequester’s across-the-board spending cuts, a solid 58 percent of respondents in The Hill Poll prioritized cutting America’s debt over maintaining current spending levels on domestic and military programs. This figure is almost double the share of voters, 28 percent, who believed the opposite.
-
Forty-nine percent of respondents said they would support cutting military spending, while just 23 percent said they would support slashing Social Security and Medicare. An overwhelming majority, 69 percent, said they would oppose cuts to social programs.


Oh, and about being tired of this stuff, we are indeed set up to do it again in a month.

CNN: A set of forced budget cuts due to take effect on March 1 isn't the only fiscal headache facing Congress. On March 27, the so-called continuing resolution that funds federal programs runs out and the government could shut down without a new spending agreement.

If I understand correctly, if the sequester goes through passing the continuing resolution as-is again would reverse it, so there would be a major budget fight again with a shutdown threat looming.
posted by Drinky Die at 12:13 AM on February 26, 2013


For the uninitiated the Guardian explains the sequester.
posted by goodnewsfortheinsane at 12:19 AM on February 26, 2013 [1 favorite]


This will require short term spending and that we cut back on spending when the economy is back on track, but there is no need for that to be a particularly painful process.

Well, except for the part where they always say this is the plan and never get around to cutting the spending when the economy is going strong.
posted by Justinian at 12:21 AM on February 26, 2013 [1 favorite]


This will require short term spending and that we cut back on spending when the economy is back on track, but there is no need for that to be a particularly painful process.

When is the last time we seriously cut back on spending when the economy was back on track?
posted by corb at 12:22 AM on February 26, 2013


I am a federal civil servant, and the guidance (such as it is) that has come down the food chain for us is, basically, if the sequester goes forward, a few things happen.

By law, Congress requires 45 days' notification in an instance such as this prior to furloughing federal employees. Thus, if the sequester goes forward on Friday and doesn't get solved, I will by the latter half of April be required to take off one day a week, without pay, until the whole fucking nightmare is fixed, or until 1 October (when the new fiscal year kicks off, at which point we get to do the whole budget dance again).

That's it. A 20% reduction in working hours, with a consequent 20% reduction in pay.*

Younger/newer GS-series civilians living in the DC metro area are going to be absolutely fucked, because housing costs alone in that part of the country will frequently eat up >50% of their income. I can only imagine that there will be attrition in these ranks, and some people will just need to go away.

And that's really the point, isn't it? Gutting the federal bureaucracy, and the consequences to the actual working people who are that bureaucracy? Fuck 'em.

* Benefits are not, as yet, on the table for cuts, so the 20% figure is accurate but imprecise.
posted by Emperor SnooKloze at 12:27 AM on February 26, 2013 [1 favorite]


When is the last time we seriously cut back on spending when the economy was back on track?

The 1990s. We balanced the budget amidst a booming economy.

In his eight years as President, Clinton reduced federal spending to 18.2 percent of GDP from 22.1 percent, thanks in large part to a Republican-controlled Congress that forced the issue. Defense spending as a portion of GDP declined by 1.8 points, but non-defense spending dropped by 2.2 points. Clinton and the Republicans in Congress cut spending on domestic discretionary programs as well as entitlement spending through welfare reform.
posted by Drinky Die at 12:27 AM on February 26, 2013 [6 favorites]


But when was the last time we spending cut our way to job growth in the middle of an employment crisis?
posted by Drinky Die at 12:30 AM on February 26, 2013 [8 favorites]


I did watch "This Week" on ABC Sunday morning just because Brill was on to talk about his health care system take down. Anyway, when Brill suggested that the Feds could save lots of money by lowering the eligibility age for Medicare, not increasing it, my head was spinning. It reminded me what having an intellectually honest conversation about how to solve very real problems sounds like. That honest discussion might lead to a conclusion or plan that goes against every knee jerk uninformed assumption we have about how things work, not to mention going against the roughest and stupidest political grain imaginable. And then I was disturbed by our reality....how utterly impossible it is for our political and pundit class to have those conversations today. But I am glad that Brill's very logical conclusion based on his informed and detailed analysis of how things work got about 15 seconds of air time before being casually dismissed by the usual suspects.
posted by Seymour Zamboni at 3:53 AM on February 26, 2013 [3 favorites]


I agree with the consensus that Sunday morning talk shows are pretty worthless and are far too influential inside the beltway, but I am seriously considering registering "Jim “Wrong About Everything and Sort of Crazy But Actually Not That Bad on Politics In Terms of CNBC Figures” Kramer" as a sockpuppet. Although it wouldn't be a very good sockpuppet, since I just outed myself.
posted by TedW at 5:29 AM on February 26, 2013


Gah. Charlie Rose had Steven Rattner on last night to discuss the looming sequestration. The discussion really brought into sharp focus why I so alternately like Rose and loathe Rose. The show can be a shining example of how adults can actually sit together and talk intelligently and calmly about the issues of the day.

On the other hand, there are often shows like last night, where Rose and Rattner kept playing false-equivalency throughout the interview. It was a parade of ridiculous "both sides" finger-pointing, with Rose egging Rattner on, with "Don't the Democrats also...?" type questions.
posted by Thorzdad at 5:49 AM on February 26, 2013


corb: "When is the last time we seriously cut back on spending when the economy was back on track?"

Well, the stimulus helped the economy through the worst of the recession, and ran its course...

Using the power of the federal government doesn't mean starting a new Department of Mini-blinds and Shutters that can never be broken up. Borrowing money for almost free, specifically for stimulative projects (i.e. infrastructure) with a set end date, should be a no brainer. It's borrowing money from the grandparents to send the kid to med school instead of having him work at 7-11.
posted by notsnot at 6:15 AM on February 26, 2013 [3 favorites]


Hey, newdaddy, what was the Utah Amateur Radio Club getting billion dollar contracts for to begin with? (Seriously, good luck and I hope you don't get more budget cuts. Very important work there.)
posted by Cookiebastard at 6:31 AM on February 26, 2013 [1 favorite]


In his eight years as President, Clinton reduced federal spending to 18.2 percent of GDP from 22.1 percent, thanks in large part to a Republican-controlled Congress that forced the issue.

Okay, have to call bullshit on this one. It's the opposite of the GOP screaming about the deficit or the debt in terms of percentages, and it's just as wrong.

The percentage debt/deficit changes, even if the debt or deficit does not change by one dollar, if GDP changes. So, part of that change is booming or busting economy, and if you're trying to measure spending or taxes, doing so against the changing yardstick of GDP is done, well, to lie.

Yes, Clinton reduced federal spending as a percentage, but that's because the economy was booming. In current dollar terms, federal spending went from 1.4T to 1.7T between 1993 and 2000, in terms of constant dollars (in this case, FY2005 dollars) It went from 1.8T to 3T during GWB's presidency, and has goen from 3T to 3.8T in Obama's first term.

In fact, in every year I have been alive, federal spending has increased in constant dollars with the exception of FY2010, the year after TARP/ARA, where it dropped by (just) 80B.

The reason the deficit dropped during Clinton's terms? Federal receipts (read, taxes) increased dramatically, going from 1.1T to 1.9T. The reason that the deficit exploded during GWB's term? Federal receipts *dropped* from 2.0T in FY2000 to 1.8T in 2003. They grew some in 2004, but didn't exceed 2000 until 2005.

Spending grew. Receipts dropped. Receipts dropped against in FY2009 (down to 2.1T from 2.5T) because of The Great Recession, and *have not yet reached that level again* -- but should during 2013 with at least part of the Bush Tax Cuts back in play.

IOW. Spending control helps, but slashing revenue -- like the GOP wants -- is why we have a "debt" problem.

Of course, measuring by constant dollars is palming another card. Why is spending in FY2005 dollars so much higher in 2012 than it was in 1970? Well, one obvious thing is population.

So, left as an exercise to the student. Chart federal receipts and outlays, in constant dollars (removing inflation) per capita (removing population change).

Finally, I see a small silver lining in the stupidity that is the sequester. This may be the only way to actually cut our insane defense budget.
posted by eriko at 6:48 AM on February 26, 2013 [9 favorites]


Alex didn't watch the McLaughlin Group?

WRONG!
posted by Kabanos at 7:11 AM on February 26, 2013


The debt is a terribly important issue. It matters. It matters enormously, and it matters right now. We are hooked on debt issuance in the same way that junkies get hooked on meth, and learning to live within our means will be just as unpleasant as any other addiction withdrawal.

How long have you been here? Since when, actually have we not had a national debt?

Let's try basic finance. We have a simple rule that controls it: the time value of money. This says that a dollar today is worth X more than a dollar in 10 years. In fact, they can calculate that number pretty well.

What does this mean for basic finance? Well, it means that entities with an unlimited lifespan can borrow over time much more than a person can because they can have revenue out a long ways and paying back the dollars in the future is easier than paying them now. And the conclusion this leads us to is that the most economically advantageous position for a country to be in is to have structural debt, to deliberately in debt and to pay off current expenses with it? Don't believe me? Take a single class in corporate finance.

Maybe this explains why almost every modern capitalist country continually runs at a deficit. Financing with debt is the core economic set up of every corporation and government in the world. It is the the most economically efficient way of operating and it saves the taxpayers money.

But Mr. Wizard, if the government borrowed too much wouldn't there be less money for everyone else? Good question, Jimmy. The answer is only if there is enough aggregate demand out there where companies need to borrow a lot of money to meet that demand. So are we in such a situation? Hell no. Demand now is low and this means companies like Apple Computer are sitting on piles of cash that isn't even earning interest! So they don't need to borrow anything.

Indeed, if we were to slash government spending, the government would not be buying stuff and raising aggregate demand, which would result in economic activity and taxation of that activity, solving the debt issue.

Does that mean the sequester would actually make the deficit worse because if aggregate demand went down tax revenues would go down and a wider gap between spending and revenue would open up?

Exactly right, Jimmy. That concludes our lesson for today.
posted by Ironmouth at 7:20 AM on February 26, 2013 [8 favorites]


corb: "When is the last time we seriously cut back on spending when the economy was back on track?"

The 1990s and the end of the stimulus are both great examples. Post WWII, as well.

Now, some might point point out that we have a larger government now than we did in the 80s which was still larger than we had in the 60s. On the other hand, there were 200 millions of Americans in the 60s, 250 million in the 80s, and more than 300 million now. We have added two Frances to our population and yet not added two entire governments of France.
posted by deanc at 7:23 AM on February 26, 2013 [1 favorite]


Does that mean the sequester would actually make the deficit worse because if aggregate demand went down tax revenues would go down and a wider gap between spending and revenue would open up?

This is exactly what is going on in the UK right now as they are heading into a triple dip recession. All their austerity that was supposed to fix the deficit has instead made it worse.

In the same way that government lifespans are effectively infinite, human lifespans are relatively short. The philosophy of austerity is that you trade off short term pain for long term benefits. But it is short term pain for a government's idea of short term. The people suffer in the long term, as their working lives receive an economic blow that they are never going to recover from.
posted by deanc at 7:31 AM on February 26, 2013


Not to mention the possibility that any potential benefits of balancing the budget may be immediately thrown out by the next Republican President for more wars and tax cuts like happened last time. It's pain for no gain at that point.
posted by Drinky Die at 7:46 AM on February 26, 2013


Will you please stop pretending to understand economics? Or at the very least, provide some sort of explanation for why, despite your constant invocations of Zimbabwean hyperinflation for the last 10 years, US Treasury bonds are selling at practically-zero interest? Where are the bond vigilantes?

They've been smothered by three rounds of quantitative easing. Rates wouldn't be anywhere near this low without Fed intervention.
posted by malocchio at 7:47 AM on February 26, 2013


This is exactly what is going on in the UK right now as they are heading into a triple dip recession.

So this part confuses me. How is that there is recent empirical evidence that correlates austerity and recession yet there are still lawmakers that insist austerity is the only way forward? Austerity measures have obviously not helped Spain, Greece, or the UK - why is it still being pursued in the US?
posted by backseatpilot at 7:58 AM on February 26, 2013 [1 favorite]


How is that there is recent empirical evidence that correlates austerity and recession yet there are still lawmakers that insist austerity is the only way forward?

Because they don't really care about the health of the economy. They favor austerity because they oppose the existence of non-military government programs.
posted by dirigibleman at 8:07 AM on February 26, 2013 [5 favorites]


So this part confuses me. How is that there is recent empirical evidence that correlates austerity and recession yet there are still lawmakers that insist austerity is the only way forward? Austerity measures have obviously not helped Spain, Greece, or the UK - why is it still being pursued in the US?

Because the screaming about deficits is a fraud. Republicans really don't care about deficits but they are using the invention of a "debt crisis" as an opportunity for their real agenda, which is cutting taxes for the rich and reducing spending for the poor. That's all they care about. The imaginary debt crisis is the excuse. If you look at it with in that light, their obsession for austerity makes sense.
posted by JackFlash at 8:10 AM on February 26, 2013 [6 favorites]


Austerity measures have obviously not helped Spain, Greece, or the UK - why is it still being pursued in the US?

Aesthetics/ideology. Many in the US find the idea of austerity aesthetically compelling. It implies thrift, cutting back to "just what you need", and general virtue. That and this comes across as an opportunity to dismantle the government.
posted by deanc at 8:12 AM on February 26, 2013 [1 favorite]


They've been smothered by three rounds of quantitative easing. Rates wouldn't be anywhere near this low without Fed intervention

So a couple trillion bucks (!) in deficit spending convinced the (worldwide) masters of the financial universe that there is practically-zero risk to 10-year treasuries?

Not entirely sure whose point that proves.
posted by hap_hazard at 8:26 AM on February 26, 2013 [1 favorite]




TMP: Scores of undocumented immigrants are being released from federal detention facilities thanks to looming sequester cuts expected to go into effect at the end of the week.
posted by Drinky Die at 8:54 AM on February 26, 2013


Is there anywhere that easily shows the final result of this deal that was struck, if we consider the original bill + sequester + everything in between that was a direct result to be a single deal? Because it seems like (if memory serves) the original bill was unpopular as well, and only able to pass because the sequester would force congress to fix everything later...or something. I guess this all goes back to the summer of 2011? It's been so long I've lost track of how many things have been passed in order to "kick the can down the road" for the last 20 odd months or whatever it's been.
posted by jermsplan at 9:02 AM on February 26, 2013


people up early on Sundays but not at church for whatever reason

Possibly because, like my mom, they went to 6:30am mass. I grew up watching these shows after church! And acquired the horrible horrible habit of arguing with the TV (or radio) from mom. They'd say something totally ridiculous, and mom would start kvetching as if she were talking to whomever, and I catch myself doing the same thing to NPR now.

"Mooooom, George Will can't hear you."

(Which: goddamn. That was 20-30 years ago. George Will is still on TV.)
posted by epersonae at 9:06 AM on February 26, 2013 [2 favorites]


Seriously, their "It's not gonna be so baaaaad" bleating is gonna make them look stupid when it's just that bad.

I disagree. The same crowd has been predicting economic growth from austerity and doom from anything resembling stimulus for *years*, and it keeps on not happening, and no one in the so-called "liberal media" -- except Paul Krugman -- seems to motice.
posted by Gelatin at 9:19 AM on February 26, 2013


Come to think of it, looking at the media today, you'd think being mindbogglingly wrong about the Iraq war was a resume point and not a stake through the heart of one's credibility. Oh, look, John McCain is on TV yammering about Benghazi!
posted by Gelatin at 9:22 AM on February 26, 2013 [1 favorite]


What you've learned is that the massive corporations that sponsor those shows want you to hear what McCain and Graham have to say about things.

Fixed.
posted by Gelatin at 9:32 AM on February 26, 2013 [1 favorite]


So this part confuses me. How is that there is recent empirical evidence that correlates austerity and recession yet there are still lawmakers that insist austerity is the only way forward? Austerity measures have obviously not helped Spain, Greece, or the UK - why is it still being pursued in the US?

Because true austerity has not been tried in any of these countries.

The honest belief of many that favor austerity (even myself) is that it would in fact provoke a recession - but that after the recession, the economy that would emerge would be a more honest one and one that is more stable and better able to withstand small shocks.

It's kind of like the idea of freezing someone's credit when they still have more bills than income. In the short term, it will really hurt - they won't be able to use credit to pay their bills anymore, and some of those bills won't be paid, and they won't be able to have the same standard of living. But once the worst is past, they do better, because they've had to learn to budget and spend within their means, not their desires.

So the idea is that austerity would hurt - there are a lot of people heavily dependent on government programs that would be getting cut. And it would lower the standard of living for many of them. But as things evened out, they would learn to adjust to a standard of living where they did not receive those government programs - and the government spending would not be so crazy.

Everyone knows the recession will come. But for some, there's a difference between a healthy recession and an unhealthy one.
posted by corb at 9:36 AM on February 26, 2013


Can't we try true communism first? I really believe it will work out. We should try it before people try to adjust to a standard of living where they can't feed themselves or see a doctor or go to college.
posted by Drinky Die at 9:41 AM on February 26, 2013 [4 favorites]


So a couple trillion bucks (!) in deficit spending convinced the (worldwide) masters of the financial universe that there is practically-zero risk to 10-year treasuries?

Well, plenty of these "masters" have been warning about a bond bubble.
posted by malocchio at 9:59 AM on February 26, 2013


So the idea is that austerity would hurt - there are a lot of people heavily dependent on government programs that would be getting cut. And it would lower the standard of living for many of them. But as things evened out, they would learn to adjust to a standard of living where they did not receive those government programs - and the government spending would not be so crazy.

"Got that grandma? Sorry you can't get your medicine this year, you may die, but if you survive, you get a pat on the back for learning to adjust to a different standard of living! You hero, you!"

Seriously, this is patent nonsense: the argument being offered is one where the core assumption is that personal finance is analogous to the finances of the largest entity ever known.
posted by MisantropicPainforest at 10:11 AM on February 26, 2013 [8 favorites]


Which is literally the argument heard multiple times a week from the best and brightest in the conservative leadership.
posted by TwoWordReview at 10:39 AM on February 26, 2013


as things evened out,

Let's forget about the "this would kill people!" argument for the moment. That's not necessarily fair (true though it may be). How about the fact that for lots of people, things would never even out. The rest of their natural lives (10,20,30 years) would be spent in this "suffering" period. Sure, they would die knowing, "well, in 100 years, the revolution will be complete, and my descendants would be living in anarcho-capitalistic paradise!" But that's not really pleasant. We can see what the "eat your peas" philosophy of governance is doing in the UK-- a bunch of rich people deciding that the poor and middle class need to suffer for "their own good."

, they would learn to adjust to a standard of living where they did not receive those government programs

"Those government programs" serve the same purpose as do our roads and public utility infrastructure-- they are the little things that keep people and money flowing smoothly to create that little thing we know as "modernity." It's that huge set of things that allows us to live the way we do without having to make 1000 decisions every day just to make sure we don't get metaphorically hit by a bus and that people can take out 30 year mortgages and start savings and investment accounts knowing that the economy will be there tomorrow.
posted by deanc at 10:43 AM on February 26, 2013 [1 favorite]


Will you please stop pretending to understand economics? Or at the very least, provide some sort of explanation for why, despite your constant invocations of Zimbabwean hyperinflation for the last 10 years, US Treasury bonds are selling at practically-zero interest? Where are the bond vigilantes?

They've been smothered by three rounds of quantitative easing. Rates wouldn't be anywhere near this low without Fed intervention.


Hilarious. Exactly the opposite of what has happened. Quantitative easing makes debt less valuable because the currency its being paid back in is worth less than it was before. QE would therefore be expected to raise interest rates if demand was not an issue.

The austerity governments are losing growth. That's why their bonds are trading more expensively--austerity lessens aggregate demand and increases deficits because less economic activity is occurring, so less taxation revenue is available. Seriously, your position makes zero economic sense.
posted by Ironmouth at 10:47 AM on February 26, 2013 [1 favorite]


In the short term, it will really hurt - they won't be able to use credit to pay their bills anymore, and some of those bills won't be paid, and they won't be able to have the same standard of living

How noble of you to volunteer others to suffer on your behalf.
posted by empath at 10:47 AM on February 26, 2013 [1 favorite]


How noble of you to volunteer others to suffer on your behalf.

But isn't that what everyone does? Everyone volunteers others to suffer for their ideals. Some volunteer the rich, some the poor; some city and some rural. But every single person who has a political philosophy and wants to impose it on others is volunteering others to suffer.

The argument that will often be made is "But X suffering is way worse than Y suffering." However, when you're quibbling over degrees of suffering, you are /still admitting that you cause suffering/.
posted by corb at 10:59 AM on February 26, 2013


So the idea is that austerity would hurt - there are a lot of people heavily dependent on government programs that would be getting cut. And it would lower the standard of living for many of them. But as things evened out, they would learn to adjust to a standard of living where they did not receive those government programs - and the government spending would not be so crazy.

What does "learn to adjust" mean in this case? Who are the "people heavily dependent on government programs? I read that and think of things like WIC or LIHEAP -- I'm not really sure how people can 'adjust' to having insufficient money to feed their children or heat their homes other than by not feeding their children or going without heat.

I'm trying to not be uncharitable -- I could also read this as saying, for example, that since defense contractors are heavily dependent on government programs, cutting defense contracts as part of an austerity scheme would lower their standard of living, and they should just deal with that; maybe that's the sort of thing you're talking about. But it's hard, in context of many American politicians arguing for cuts to things like Medicare, to read "lower the standard of living" for "people heavily dependent on government programs," as contrasted with the credit card metaphor, as anything other than 'we should make the poor poorer, because they're to blame for being poor.'

Which may or may be what you mean -- I don't want to put words in your mouth -- but I am honestly curious who is supposed to do the adjusting here.
posted by cjelli at 11:00 AM on February 26, 2013 [1 favorite]


The argument that will often be made is "But X suffering is way worse than Y suffering." However, when you're quibbling over degrees of suffering, you are /still admitting that you cause suffering/.

I don't know if making the American wealthy very slightly less wealthy can really be considered causing them to suffer.
posted by Drinky Die at 11:01 AM on February 26, 2013 [4 favorites]


Because true austerity has not been tried in any of these countries.

The honest belief of many that favor austerity (even myself) is that it would in fact provoke a recession - but that after the recession, the economy that would emerge would be a more honest one and one that is more stable and better able to withstand small shocks.

It's kind of like the idea of freezing someone's credit when they still have more bills than income. In the short term, it will really hurt - they won't be able to use credit to pay their bills anymore, and some of those bills won't be paid, and they won't be able to have the same standard of living. But once the worst is past, they do better, because they've had to learn to budget and spend within their means, not their desires.

So the idea is that austerity would hurt - there are a lot of people heavily dependent on government programs that would be getting cut. And it would lower the standard of living for many of them. But as things evened out, they would learn to adjust to a standard of living where they did not receive those government programs - and the government spending would not be so crazy.


This is plain ol' magical thinking. First, there is no such thing as a "more honest" economy. There is only an economy. Anthropomorphizing just confuses things and means nothing. Only if you're some sort of Austrian economy fetishist can you really believe in an "honest" economy.

Second, this magical idea is that somehow our government debt is caused by entitlement spending because people are "hooked" on freebies. Hardly. First, anyone who thinks that rampant poverty helps an economy ought to go back to Zimbabwe and look closely. Second, look at the numbers. 2012 had $716 billion in defense outlays and $484 in medicare spending. And that medicare spending went right back into the economy because people who are alive buy things and contribute to aggregate demand. You buy a tank, you pay contractors one time and that's it. The tank then sits there and consumes government resources.

Third, money spent on helping people who are poor goes back into the economy. They buy things companies must produce. Those companies and their shareholders pay taxes on that. And guess who gets the profits? You do if you hold even a single share of any corporation.

Basically, GOP economics is about righteousness--the Calvinistic feeling that one is better than others because they are of the "Elect" and will go to heaven and the poor will go to hell. It isn't about economics, because it ignores basic facts about our country.

Fortunately for the country 65% of citizens don't agree with these views.
posted by Ironmouth at 11:06 AM on February 26, 2013 [5 favorites]


How noble of you to volunteer others to suffer on your behalf.
They are not wealthy, therefore irresponsible, takers, therefore we will crush them until they learn a lesson, once and for all. Surely once there is less money spent on education, and science, employment, and other opportunity granting institutions of government, then they will be able to buy their boots with which to pull on the straps.

there are a lot of people heavily dependent on government programs that would be getting cut. But as things evened out, they would learn to adjust to a standard of living where they did not receive those government programs

Many of them millionaires. They, as described, will adjust to a slightly lowered standard of living. "Volunteering the rich", as is being done today is not volunteering to eat them, just to cut their benefits a minuscule amount. A marginal cut to the rich is not the same as the across the board, multilayered cuts (health, welfare, care access, employment, education) so often proposed "for" the poor.

Meanwhile, normal humans will, in the most terminal cases, die, find their untreated diseases progressed to terminal states, go from precipitously poised on the poverty line, to being homeless... families booted out, more foreclosures, more bankruptcies, more instability... these are not "costless" collapses, driving demands for more police and more "civil stabilization" spending. It costs more to do clean-up from disasters year after year, rather than investing in advace in preparedness.
Think of the costs to society supporting masses of leg amputee's from trench foot. Many costs, many hidden. Now, yes the sensationalist can say "we can save $$ today, by giving less boots, less socks, less water to clean feet, less time to take boots off"... but they are not giving you the full burden to society.

The idea that people will not fight a government that is still unequal, but is paternalistically "helping them [at some unknown future point] to 'improve'... by needlessly throwing them into failure, is wrong.
Because true austerity has not been tried in any of these countries.
Shall we consider "why" this is so? Is it possible that the unrest and violence, and destruction of decades of building of civil societies can be undone in a very short period of time, unrest drives extremists, there are still extremists across Europe (and in America), and the possiblity that these groups could rise in states without a civil society is great. Look at the neo-Nazi groups taking the role of "policing" in Greece, when police could not be payed.

It sounds like you are proposing "the upside of down", opportunity through catastrophe, adversity and challenge. But without any real changes to the structure of the system, the values on which it is based, the inputs or outputs.
Equality for all; remember, some are more equal. Yes, the world is full of suffering, when any can be mitigated it is a good, some good comes with costs to others. Life and death/health, are greater goods than "marginal wealth gains above $250 000".
posted by infinite intimation at 11:07 AM on February 26, 2013 [2 favorites]


Which may or may be what you mean -- I don't want to put words in your mouth -- but I am honestly curious who is supposed to do the adjusting here.

It honestly does mean everyone. So yes, defense contractors would take a big hit, also people who take subsidies to heat their homes. Also some artistic endeavours. A lot of these things would be noble and awesome - but we simply cannot pay for them without artificially inflating the bubble of demand. We cannot keep printing free money.

I'm not really sure how people can 'adjust' to having insufficient money to feed their children or heat their homes other than by not feeding their children or going without heat.

To address this: I think that right now, the average American has a really skewed (especially when compared to the rest of the world) idea of how much space they absolutely need. Some of this is in fact enforced by the government - such as, for example, CPS allowing you to room only so many children in the same room and no opposite-gender in the same room. But the idea of the "nuclear family" that has to live separately from everyone else is a really false one. I think it may have been reinforced by frontier homesteading, but I think it screws us more than it helps us.

So if you have one extended family living together rather than three separate ones, it is cheaper to live. If you have people continuing to live with their parents, it is cheaper to live for everyone. Eventually a house can be owned, which makes it cheaper still. But we have this cultural ideal that extended families are to be avoided at all costs - which loses us a lot of supports that people had previously, such as free babysitting in order to go out to work. (The amount of money working women spend on childcare is nightmarish.)

Anyway, so the adjustment would need to require fundamentally different ways of dealing with problems. I'm not saying I have the answers, but I'm saying it's not impossible, and doesn't require everyone to die in order to accomplish it.

I don't know if making the American wealthy very slightly less wealthy can really be considered causing them to suffer.

Your not thinking it does not make it true. And your not thinking it is dehumanizing them - assuming they don't have agency and feelings and an ability to be hurt.
posted by corb at 11:13 AM on February 26, 2013


How noble of you to volunteer others to suffer on your behalf.

But isn't that what everyone does? Everyone volunteers others to suffer for their ideals. Some volunteer the rich, some the poor; some city and some rural. But every single person who has a political philosophy and wants to impose it on others is volunteering others to suffer.

The argument that will often be made is "But X suffering is way worse than Y suffering." However, when you're quibbling over degrees of suffering, you are /still admitting that you cause suffering/.


As if the rich are not helped by entitlement spending that keeps aggregate demand up. News flash--if the rich were not helped by the system it wouldn't exist this way.
posted by Ironmouth at 11:18 AM on February 26, 2013 [1 favorite]


corb,

When someone's net worth drops from 10 million dollars to 9 million dollars, they are worse off, but they are in no way suffering. This is not the case when grandma's meds are cut.
posted by MisantropicPainforest at 11:23 AM on February 26, 2013 [4 favorites]


So yes, defense contractors would take a big hit, also people who take subsidies to heat their homes. Also some artistic endeavours. A lot of these things would be noble and awesome - but we simply cannot pay for them without artificially inflating the bubble of demand.

Ugh, stop freezing to death you idiots, your body's need for heat is an artificial demand created by government spending.
posted by Drinky Die at 11:27 AM on February 26, 2013


Your not thinking it does not make it true. And your not thinking it is dehumanizing them - assuming they don't have agency and feelings and an ability to be hurt.

I'm sure their feelings will be hurt by being made slightly less wealthy but still among the richest demographic on the planet Earth, but I'm still going to tax them so people don't freeze.
posted by Drinky Die at 11:30 AM on February 26, 2013 [1 favorite]


So yes, defense contractors would take a big hit, also people who take subsidies to heat their homes

Didn't we go through this already how, outside of your political beliefs, you don't think that one kind of "suffering" is worse than any other, so that the people dying of heat stroke in an amazon warehouse aren't being asked any more in sacrifice than a corporate lawyer to have to accede to a 39% marginal rate on his income vs. 36%? I mean well and good, but that is, to put it mildly, a rather fringe view.
posted by deanc at 11:35 AM on February 26, 2013


A lot of these things would be noble and awesome - but we simply cannot pay for them without artificially inflating the bubble of demand. We cannot keep printing free money.

there is no "artificial" here. Just saying your preferred economic set up is "natural" and the one you don't like is "artificial" does not make it so. It is all artificial because it is all made by man.

If this is so true about "printing money" then why haven't the bond vigilantes destroyed Treasuries? and why are the austerity countries of Europe not the preferred destination of bond investors?

Its all made up. This fantasy of a "natural" or "real" economy and a "fake" one. Things the bond holders tell you and you choose to believe. They are advantaged by a deflated currency like we have now--the rest of us are not.
posted by Ironmouth at 11:35 AM on February 26, 2013


Your not thinking it does not make it true. And your not thinking it is dehumanizing them - assuming they don't have agency and feelings and an ability to be hurt.

"The rich have feelings, just like you and I.
If you insist their taxes rise, they'll cry."
posted by Rustic Etruscan at 11:41 AM on February 26, 2013


They've been smothered by three rounds of quantitative easing. Rates wouldn't be anywhere near this low without Fed intervention.

Hilarious. Exactly the opposite of what has happened.


Wouldn't the exact opposite be if QE led to higher interest rates?
posted by malocchio at 11:52 AM on February 26, 2013


They've been smothered by three rounds of quantitative easing. Rates wouldn't be anywhere near this low without Fed intervention.

Hilarious. Exactly the opposite of what has happened.

Wouldn't the exact opposite be if QE led to higher interest rates?


Where's the higher interest rates? We're at historic lows. The facts are the exact opposite of your theory. Why do you fight the facts so hard? Since there is low aggregate demand, there is little demand for loans, hence interest rates remain low. So does revenue. Apple is sitting on a titanic pile of cash because they can't sell as much as they can make.

Hence the need to inflate a deflated currency. So people can pay back the debt with cheaper currency. Sorry if bond holders take the hit, but someone has to and they are the ones with the most value to take the haircut. It will open up demand again. Which is what we need. If there wasn't a crisis of demand, your ideas would make sense. Of course we wouldn't have the problem then, would we.
posted by Ironmouth at 12:02 PM on February 26, 2013




Where's the higher interest rates? We're at historic lows. The facts are the exact opposite of your theory.

I'm well aware that rates are at historic lows and I don't understand why you think that I believe differently. My argument is simply that this is (at least partially) due to Fed intervention; it is their stated goal of continued QE.
posted by malocchio at 12:26 PM on February 26, 2013


Where's the higher interest rates? We're at historic lows. The facts are the exact opposite of your theory.

I'm well aware that rates are at historic lows and I don't understand why you think that I believe differently. My argument is simply that this is (at least partially) due to Fed intervention; it is their stated goal of continued QE.


Where was that stated? I have never seen "keeping interest rates low" as a goal stated by any person in the Fed.
posted by Ironmouth at 12:31 PM on February 26, 2013


interest rates are low because there is no demand for money to build new plants or service businesses. This is because aggregate demand is low. Inflating the currency increases demand by giving people more value in their pocket.
posted by Ironmouth at 12:33 PM on February 26, 2013


My argument is simply that this is (at least partially) due to Fed intervention; it is their stated goal of continued QE.

How does inflating the currency make interest rates lower? It usually increases them.
posted by Ironmouth at 12:40 PM on February 26, 2013


Where was that stated? I have never seen "keeping interest rates low" as a goal stated by any person in the Fed.

From 2010
From 2011
From Today

This has been the stated policy of the Fed since the height of the real estate bubble.
posted by dry white toast at 12:45 PM on February 26, 2013 [1 favorite]


Didn't we go through this already how, outside of your political beliefs, you don't think that one kind of "suffering" is worse than any other, so that the people dying of heat stroke in an amazon warehouse aren't being asked any more in sacrifice than a corporate lawyer to have to accede to a 39% marginal rate on his income vs. 36%? I mean well and good, but that is, to put it mildly, a rather fringe view.

This isn't exactly accurate - it's more that I don't think any one person can quantify or even really understand another person's suffering. You can always feel how much you, personally, are suffering, but without living it, it is impossible to know how much pain someone else is in. You cannot know the terrain of people's inner lives. You are only really good at understanding your own. This is not really a fringe position at all.

It is really, really easy to think of someone that you've decided to think is a bad person, and say, "They won't suffer." The corporate lawyer - you've written him off already, because you think it's just and right that he pay 1/3 of his income to strangers while others pay none, because he's rich and thus deserves it, right? Maybe that guy is constantly crunching the numbers, staying awake sleepless nights trying to figure out how to pay for all of his kid's education, or his mom's cancer treatment. Maybe he grabs every paper eagerly to see what the tax rates will be for the next year, because his daughter just got engaged and he's only got a year to pay for the wedding. You don't know.And you can't know.

So I guess what I'm asking is, can you have empathy even for people that you disagree with, or think have everything?
posted by corb at 12:58 PM on February 26, 2013


I have never seen "keeping interest rates low" as a goal stated by any person in the Fed.

Then I don't know why I'm wasting my time with you.
posted by malocchio at 1:00 PM on February 26, 2013 [1 favorite]


In his eight years as President, Clinton reduced federal spending to 18.2 percent of GDP from 22.1 percent, thanks in large part to a Republican-controlled Congress that forced the issue.

That's a lovely narrative. However, in addition to erico's thorough breakdown of federal spending and taxation levels, the Clinton administration coincided with huge economic growth. GDP soared (sorry for the lack of numbers), so it was easy for federal spending to shrink as a portion of GDP.

Oh, and he also raised taxes on the top 1%.

So to summarize, during the time you cite, the following circumstances were extant:

-huge economic expansion
-taxes went up for the very rich
-the federal budget was balanced

How many of those things do you think a GOP Congress should get credit for?

Pretty depressing to think how starkly things have changed in 15 years.
posted by dry white toast at 1:01 PM on February 26, 2013


corb,

If a well remunerated corporate lawyer (you know, the ones makes 500k+ a year) cannot manage their money well enough to pay for their kid's education because of a small uptick in marginal tax rates, then I have little sympathy for them and can also confidently say they aren't suffering.

Now, the people who will die because of austerity, or have their sole income be diminished, or have their access to medical care removed because of austerity, they will suffer.
posted by MisantropicPainforest at 1:07 PM on February 26, 2013 [1 favorite]


It is really, really easy to think of someone that you've decided to think is a bad person, and say, "They won't suffer." The corporate lawyer - you've written him off already, because you think it's just and right that he pay 1/3 of his income to strangers while others pay none, because he's rich and thus deserves it, right?

I don't think the corporate lawyer is a bad person for the crime of being a well-paid corporate lawyer, and thus deserves to have his taxes raised. I believe that if he whines that his life is so awful and his suffering is horrible, worse than everyone else's, because his taxes are slightly raised, then I will believe that he is a bad person. Or at the very least, a very, very stupid person.

But that's the way I was raised. There was serious suffering that went on in my family and many other families that we were close to. To raise hue and cry over small increases in the marginal tax rate in order to support the amenities of civilization, particularly after a period of excessively low taxes, would mark one as someone too ignorant and morally incompetent to understand suffering.

As I said, your view is, philosophically, a deep and strange fringe that really does not merit any kind of acknowledgment or discussion while the rest of us try to maintain a civilized society. There is more regarding, frankly, your small-minded and mundane view of the purpose and dignity of man, but that is a longer and out-of-scope discussion.
posted by deanc at 1:17 PM on February 26, 2013 [2 favorites]


The tail end of this thread make for some pretty informative reading.

I totally understand if people "removed from recent activity" before then, though.
posted by the man of twists and turns at 1:17 PM on February 26, 2013 [2 favorites]




The goal of quantitative easing isn't to increase or decrease interest rates. A central bank engages in quantitative easing because it wants to increase the money supply, but its normal methods of doing so by lowering interest rates will not work because the effective interest rate is already zero.

Neither QE nor interest rates necessarily have anything to do with the bond vigilante hypothesis, which is that bond traders will short a government's bonds because they believe loose monetary/fiscal policy will harm the ability of a government to repay its debt.
posted by kithrater at 2:05 PM on February 26, 2013


corb, I say this with respect, but your argument is a complete house of cards. A sleepy exhalation knocks it down.

Austerity has nothing, nothing to do with the budget of the federal government. Or a growing economy. As I noted above, the budget of the US Federal Government was balanced as recently as 15 years ago, thanks to a mix of factors, including a strong economy AND higher taxes on the top 1% (and higher taxes across the board then we see today). Were there cutbacks in some areas? Sure. Welfare comes to mind. But as erico spelled out, overall spending went up. Who can say if people were complaining about home-heating subsidies then, but I'm guessing not.

So, we had higher federal spending, higher taxes, a balanced budget AND a strong economy. We can debate the correlation and causation between all those things over many a thread, certainly. But none of those things scream "austerity" to me.

But I get the feeling you also see a smaller government overall as a good end in itself. Smaller government, lower taxes, the whole thing. Now, here's where your concept truly collapses...

Firstly, others have already noted upthread the myriad ways in which federal spending and transfers (programs like Unemployment and Medicaid) gets plowed back into the economy, further supporting growth. That's not a "fake" economy. That's means private sector jobs in the retail and health care industries (to name just two), and greater economic competitiveness for American companies competing in a global market (in the World Economic Forum's Global Competitiveness report, low taxes and small government aren't considered a factor in a country's competitiveness). All of very real importance to the private sector economy.

And finally, why are lower taxes better? Who benefits? History suggest the richest benefit the most. This is particularly true of the last 12 years. This period has also demonstrated that the rich don't then use those savings to reinvest in the economy (which, in any case, doesn't generate nearly the economic stimulus that spending and transfers do). They use it to make themselves richer.

So, when we get down to the essentials, what I take from your argument is that government should get smaller, and SOME people (in reality, middle and lower income people) should "adjust" to living less comfortable lives so that OTHER people (those who get the biggest tax break as a result of a smaller government) can have more comfortable lives.

Austerity is a fiction that steers the benefits economic growth towards to the top of the socio-economic ladder.
posted by dry white toast at 2:10 PM on February 26, 2013 [3 favorites]


What Is Sequestration, and What Does It Mean For Me?

I am really intrigued by the writing in to law that a significant portion of the sequestration must be achieved by a uniform percentage reduction of all non-mandatory programs, projects and activities. It's a very cunning way for everyone to avoid responsibility for individual cuts while still getting the savings that are supposedly needed. It is also an inefficient way of achieving savings.

It's almost as if the purpose of the exercise wasn’t to actually save money effectively but create an arena to battle over political points, with the side effect of diminishing the credibility of the executive and legislature.

Firstly, others have already noted upthread the myriad ways in which federal spending and transfers (programs like Unemployment and Medicaid) gets plowed back into the economy, further supporting growth.

This ludicrous position is supported by those arch anti-capitalist extremists, the IMF. I think they label it the fiscal multiplier, or some other Marxist nonsense.
posted by kithrater at 2:24 PM on February 26, 2013


In his eight years as President, Clinton reduced federal spending to 18.2 percent of GDP from 22.1 percent, thanks in large part to a Republican-controlled Congress that forced the issue.

If GDP skyrockets faster than federal spending, that will happen.
posted by Ironmouth at 2:45 PM on February 26, 2013


The goal of quantitative easing isn't to increase or decrease interest rates. A central bank engages in quantitative easing because it wants to increase the money supply, but its normal methods of doing so by lowering interest rates will not work because the effective interest rate is already zero.

See, now that's a fair point. But it's kind of a distinction without a difference to me, and Bernanke repeatedly and specifically mentions the need to keep interest rates low. From his remarks last August (emphasis mine):

"As you know, the Federal Reserve took strong easing measures during the financial crisis and recession, cutting its target for the federal funds rate--the traditional tool of monetary policy--to nearly zero by the end of 2008. Since that time, we have provided additional accommodation through two nontraditional policy tools aimed at putting downward pressure on longer-term interest rates: asset purchases that reduce the supply of longer-term securities outstanding in the market, and communication about the future path of monetary policy.

Most recently, after the September FOMC meeting, we announced that the Federal Reserve would purchase additional agency mortgage-backed securities (MBS) and continue with the program to extend the maturity of our Treasury holdings. These additional asset purchases should put downward pressure on longer-term interest rates and make broader financial conditions more accommodative. Moreover, our purchases of MBS, by bringing down mortgage rates, provide support directly to housing and thereby help mitigate some of the headwinds facing that sector. In announcing this decision, we also indicated that we would continue purchasing MBS, undertake additional purchases of longer-term securities, and employ our other policy tools until we judge that the outlook for the labor market has improved substantially in a context of price stability. "
posted by malocchio at 2:47 PM on February 26, 2013


Where was that stated? I have never seen "keeping interest rates low" as a goal stated by any person in the Fed.

From 2010
From 2011
From Today

This has been the stated policy of the Fed since the height of the real estate bubble.


But isn't QE supposed to cause inflation and interest rates to go up? If inflation sets in, lenders will increase rates so that they are getting paid the same value for their money as before. I don't get how QE reduces interest rates.
posted by Ironmouth at 2:49 PM on February 26, 2013


Yes, keep asking that. It's hilarious.
posted by malocchio at 2:51 PM on February 26, 2013


Ok, so by buying MBS, mortgage rates are kept low. But are mortages such a huge part of the borrowing that they drive down the cost of all borrowing substantially?

In my mind, the reason interest rates are so low is that capacity outstrips demand substantially, creating little need to borrow on the part of producers.

The situation is exactly the reverse of how the GOP has it--keep taxes low so "job creators" will have the money to "create jobs." Except that jobs are created when demand outsrips capacity and employers need more workers (and plant) to meet that demand. We have low demand because of the overhang from mortgage debt--underwater mortgagees are servicing debt and can't consume as much as before.

In such a situation, one needs easy money policy to stimulate borrowing and spending and most importantly to pay off debt with cheaper dollars, reducing the overhang.
posted by Ironmouth at 2:57 PM on February 26, 2013


This ludicrous position is supported by those arch anti-capitalist extremists, the IMF. I think they label it the fiscal multiplier, or some other Marxist nonsense.

Believe John Maynard Keynes was that guy. Not an arch capitalist.
posted by Ironmouth at 3:08 PM on February 26, 2013


60 Percent of the Way to Simpson-Bowles!

And in three years instead of ten. Yay?
posted by Kevin Street at 3:18 PM on February 26, 2013


I have friends who are all for cutting spending like there's no tomorrow. And then it's announced that Defense is part of that and oh crap those that work as civilians at Army Depots are crying the blues. How can Obama do this to us? Why does he want the US to fail?

So yes, the wingnuts are getting what they want, a problem that Obama gets the blame for. Of course he's not up for election ever again so I am not sure that they timed it quite right.
posted by 922257033c4a0f3cecdbd819a46d626999d1af4a at 4:27 PM on February 26, 2013


But it's kind of a distinction without a difference to me, and Bernanke repeatedly and specifically mentions the need to keep interest rates low.

Yes, Federal Reserve asset purchases help drive down interest rates. These are the Open Market Operations. These are not quite the same as Quantitative Easing. QE and OMO are the exact same process(the Fed is purchasing assets), but are used for different reasons. The Fed uses OMO to help achieve the target interest rate. The Fed uses QE to create additional liquidity when it cannot lower the target interest rate. In that speech, Bernanke is really announcing a modification to OMO, that those purchases will now focus more on longer-term assets to provide a continual downwards pressure on interest rates. Not the same thing as QE.

I don't get how QE reduces interest rates.

QE doesn't reduce interest rates, because central banks use QE when they can't reduce interest rates further. As for how OMO reduces interest rates, here's a footnote to Bernanke's speech:
One way in which our asset purchases affect the economy is through the so-called portfolio balance channel. Because different classes of financial assets are not perfect substitutes in investors' portfolios, changes in the supplies of various assets available to private investors may affect the prices and yields of those assets. Thus, the Federal Reserve's purchases of Treasury securities, for example, should raise the prices and lower the yields of those securities; moreover, as investors rebalance their portfolios by replacing the Treasury securities sold to the Federal Reserve with other assets, the prices of those other assets should rise and their yields decline as well. An increase in our asset purchases may also act as a signal that we intend to pursue a persistently more accommodative policy stance than previously thought, thereby lowering investors' expectations for the future path of the federal funds rate and putting additional downward pressure on longer-term interest rates.
posted by kithrater at 4:46 PM on February 26, 2013


The Fed uses OMO to help achieve the target interest rate.

Isn't it different when they're buying MBS instead of treasuries, though? Or do they only buy them from reserve banks?
posted by malocchio at 4:57 PM on February 26, 2013


Well, as that footnote explains, Bernanke appears to think it doesn't matter what kind of financial asset is being purchased - the portfolio balance channel is supposed to take care of this. Of course, not everyone agrees with that link of thinking.
posted by kithrater at 5:11 PM on February 26, 2013


But isn't QE supposed to cause inflation and interest rates to go up?

Ah, I see where your confusion is coming from -- it is the distinction between nominal interest rates and real interest rates. Nominal rates are the rate you pay on a loan. The real rate is the nominal rate minus inflation because you pay back your loan with inflated money.

Currently nominal interest rates are zero. The Fed realizes that current conditions actually merit a negative interest rate in order to encourage investment. You can't push the nominal rate below zero. But you can add inflation and that inflation subtracts from the nominal rate to produce a negative real interest rate.

So the Fed goal is to produce negative real rates by increasing inflation, that is, a reduction in real interest rates.
posted by JackFlash at 5:46 PM on February 26, 2013 [1 favorite]


Austerity measures have obviously not helped Spain, Greece, or the UK - why is it still being pursued in the US?

>Because true austerity has not been tried in any of these countries.


Would you like to elaborate on what you mean by 'true austerity'? Honest question.
posted by ersatz at 5:49 PM on February 26, 2013


Nominal rates are the rate you pay on a loan. The real rate is the nominal rate minus inflation because you pay back your loan with inflated money.

What's to stop banks from raising rates to account for that? I admit that I'm thinking of the first couple years of Reagan's first term, when inflation drove up interest rates.
posted by Ironmouth at 7:48 AM on February 27, 2013


What's to stop banks from raising rates to account for that? I admit that I'm thinking of the first couple years of Reagan's first term, when inflation drove up interest rates.

Nominal rates are driven by supply and demand. The Fed has influence because it controls the money supply. As long as the Fed maintains an accommodative monetary policy and demand for investment is low, nominal rates won't go up, at least at first. There are more people wanting to save money then there are people who want to borrow it, so rates remain low. Meanwhile, inflation lowers the real borrowing rate for investment and hopefully that will spur recovery.

Hopefully, eventually rates will go up because increasing investment and a growing economy lowers the excess supply of savings as the economy recovers. Rising rates would be a good sign of recovery.

In the early 80s, even though there was high inflation, interest rates really went up only when Paul Volcker stepped in at the Federal Reserve and cut off the money supply.
posted by JackFlash at 8:20 AM on February 27, 2013


Would you like to elaborate on what you mean by 'true austerity'? Honest question.

True austerity would be cutting nonessentials to the degree needed to put things back on track, without paying attention to what the voters might think about it. Making a principled stand, understanding you would never get re-elected, and cutting down to bare necessities.
posted by corb at 8:22 AM on February 27, 2013


Name the nonessentials.
posted by Drinky Die at 8:27 AM on February 27, 2013


It would depend on the country and the situation. Every country spends money in different ways.
posted by corb at 8:49 AM on February 27, 2013


Would you like to elaborate on what you mean by 'true austerity'? Honest question.

True austerity would be cutting nonessentials to the degree needed to put things back on track, without paying attention to what the voters might think about it. Making a principled stand, understanding you would never get re-elected, and cutting down to bare necessities.


Here's the problem with your way of presenting your argument, Corb. I understand you have policy preferences. But you always put "natural" or "true" or "nonessential" as an adjective in front of those preferences without backing them up. It ends up being a cheap way to try and say you are right.

But there is no shining Platonic "true" economy of which our "false" economy is but a pale shadow. There is only the actual economy. And there is no stated reason in your arguments why your particular policy is better than others. What you consider a non-essential (food or medical care) others consider quite essential. What you consider "true" (some lower amount of government spending) others think isn't the best thing for a modern economy.

Why is it better, then, to first address debt and second address growth in your opinion? Because the way it looks to many economists, growth is at the core of our current deficit issues. If there were more economic activity, tax revenue would be higher, reducing the need for debt. Indeed if you reduce government spending and its contribution to aggregate demand, you end up reducing tax revenue because fewer producers are selling to the government and fewer people are spending money on consumer goods with funds from the government. Hence, you make the deficit and the need to borrow worse.
posted by Ironmouth at 10:00 AM on February 27, 2013 [3 favorites]


It would depend on the country and the situation. Every country spends money in different ways.

Let's try the United States of America, present day situation.
posted by Drinky Die at 10:24 AM on February 27, 2013


Just FYI for everyone, since it blew my mind, the deficit that everyone's so worried about that they're willing to destroy the economy to fix it is already going down faster than it has in generations. I further foresee that this fact will change absolutely nothing about the debate going on about federal spending.
posted by Copronymus at 2:53 PM on February 27, 2013 [2 favorites]


I further foresee that this fact will change absolutely nothing about the debate going on about federal spending.

That's because it isn't about spending. Its about one party beginning to die because it staked all on controlling one section of the electorate and then that section aged and began to pass. They are left with very little but the South now.
posted by Ironmouth at 6:42 PM on February 27, 2013


True austerity would be cutting nonessentials to the degree needed to put things back on track, without paying attention to what the voters might think about it. Making a principled stand, understanding you would never get re-elected, and cutting down to bare necessities.

Thanks. I'd like to make two points about 'essentials': If spending $1 in the arts creates $2 of gross added value (here or here) where GDP=GAV +taxes - subsidies i.e. it increases the GDP, isn't cutting down to bare necessities economically self-defeating? A further complicating factor is that often it is essentials that are cut: youth unemployment in Spain and Greece is 60% (overall unemployment is 26%) and the latter has seen oil prices (think heating+transportation) double while the minimum wage and minimum pensions have been cut. Poverty has skyrocketed and the deficit has been reduced by 7.5% (8.1% in 2012 from 15.6% in 2009). You can see why your claim that no true austerity has been tried is controversial.

(and wrong: austerity: This is a period of adverse economic conditions where the government cuts its spending or increases taxes in order to reduce its budget deficit.)
posted by ersatz at 4:01 AM on February 28, 2013


But isn't that what everyone does? Everyone volunteers others to suffer for their ideals. Some volunteer the rich, some the poor; some city and some rural. But every single person who has a political philosophy and wants to impose it on others is volunteering others to suffer.

Raising taxes on the wealthy isn't causing suffering, it's causing inconvenience. Cutting people off of health insurance and food assistance is directly causing suffering and possibly even death.

I'm sure you can see the difference.
posted by empath at 4:04 AM on February 28, 2013 [2 favorites]


So a sideshow to all the sequester stuff, Bob Woodward accused a senior official at the White House of threatening him, saying, "You will regret doing this" in regards to some of his reporting on the genesis of the sequester. The full e-mails have come out and, well, he kind of looks like an asshole for trying to sell it that way to me. It seems pretty clear it's an exceedingly polite conversation and the regret would be for getting the facts wrong.

Politico: From Gene Sperling to Bob Woodward on Feb. 22, 2013
Bob:

I apologize for raising my voice in our conversation today. My bad. I do understand your problems with a couple of our statements in the fall — but feel on the other hand that you focus on a few specific trees that gives a very wrong perception of the forest. But perhaps we will just not see eye to eye here.

But I do truly believe you should rethink your comment about saying saying that Potus asking for revenues is moving the goal post. I know you may not believe this, but as a friend, I think you will regret staking out that claim. The idea that the sequester was to force both sides to go back to try at a big or grand barain with a mix of entitlements and revenues (even if there were serious disagreements on composition) was part of the DNA of the thing from the start. It was an accepted part of the understanding — from the start. Really. It was assumed by the Rs on the Supercommittee that came right after: it was assumed in the November-December 2012 negotiations. There may have been big disagreements over rates and ratios — but that it was supposed to be replaced by entitlements and revenues of some form is not controversial. (Indeed, the discretionary savings amount from the Boehner-Obama negotiations were locked in in BCA: the sequester was just designed to force all back to table on entitlements and revenues.)

I agree there are more than one side to our first disagreement, but again think this latter issue is diffferent. Not out to argue and argue on this latter point. Just my sincere advice. Your call obviously.
My apologies again for raising my voice on the call with you. Feel bad about that and truly apologize.
Gene

From Woodward to Sperling on Feb. 23, 2013

Gene: You do not ever have to apologize to me. You get wound up because you are making your points and you believe them. This is all part of a serious discussion. I for one welcome a little heat; there should more given the importance. I also welcome your personal advice. I am listening. I know you lived all this. My partial advantage is that I talked extensively with all involved. I am traveling and will try to reach you after 3 pm today. Best, Bob


Woodward has also referred to Obama's decision to hold an aircraft carrier in port because of the budget cuts "madness" despite the defense cuts being legally mandated. I guess if the President does it, it's not illegal.
posted by Drinky Die at 6:06 AM on February 28, 2013


HuffPo: Americans are of two minds on the federal budget: Large majorities say they want Congress to cut spending and reduce the deficit, but equally large majorities oppose the specific cuts necessary to make a meaningful dent. The latter attitudes seem to be more potent, though for the moment at least, American are not following the debate with rapt attention.

Americans are convinced that there is a ton of hidden waste out there and the programs they support are not the problem. There just isn't that much waste, it's a pretty lean and efficient government for what it achieves.
posted by Drinky Die at 8:01 AM on February 28, 2013


So a sideshow to all the sequester stuff, Bob Woodward accused a senior official at the White House of threatening him, saying, "You will regret doing this" in regards to some of his reporting on the genesis of the sequester. The full e-mails have come out and, well, he kind of looks like an asshole for trying to sell it that way to me. It seems pretty clear it's an exceedingly polite conversation and the regret would be for getting the facts wrong.

Woodward runs to Bernstein's house in the middle of the night and turns up the stereo. Classical music plays. Bernstein is confused. Woodward starts to write on a reporter's note pad. Giving up he turns to the typewriter. He types: "We may be in danger." "I got a polite E-mail."
posted by Ironmouth at 9:10 AM on February 28, 2013 [4 favorites]


Should we start a new thread for the sequester actually happening or keep going with this one?
posted by empath at 4:54 AM on March 1, 2013


I'd give it a little time, there is a metting in a few hours between the White House and Congressional leaders that should begin to show us where the story is heading.
posted by Drinky Die at 4:56 AM on March 1, 2013


Stupid 5 minute edit window.
posted by Drinky Die at 5:47 AM on March 1, 2013


Krugman: Disastrous Predictions And Predictable Disasters
Predictions are how you judge between models. If the world delivers results that are very much at odds with what your framework says should have happened, you’re supposed to reconsider your framework — as I did, for example, after I was wrong about interest rates in 2003.

And the fact is that a more or less Keynesian framework — a framework that says that austerity in a depressed economy is a terrible idea — has yielded pretty good predictions through the crisis, while the anti-Keynesian stories that became the conventional wisdom in Brussels and Frankfurt have delivered an awesome record of predictive failure.
posted by the man of twists and turns at 7:31 AM on March 1, 2013




TPM: House Speaker John Boehner (R-OH) gave brief remarks after a meeting Friday at the White House on the looming automatic spending cuts, telling reporters that new revenue is off the table.

"Let's make it clear that the President got his tax hikes on Jan. 1," Boehner said. "This discussion about revenue, in my view, is over. It's about taking on the spending problem here in Washington."

posted by Drinky Die at 8:33 AM on March 1, 2013


Entertaining press conference. Obama openly mocking the idea he can do anything about Republicans refusing any revenue. He totally lost me when he referred to not being able to use a "Jedi Mind Meld". Smooth move, piss off both Trek and Wars fans.
posted by Drinky Die at 9:01 AM on March 1, 2013 [1 favorite]


He totally lost me when he referred to not being able to use a "Jedi Mind Meld". Smooth move, piss off both Trek and Wars fans.

Alternatively, he's really into the Young Jedi Knights series and the more recent Timothy Zahn stuff.

Let's hope it was just a mistake.
posted by Copronymus at 10:40 AM on March 1, 2013 [1 favorite]


I blame J.J. Abrams.
posted by Drinky Die at 11:05 AM on March 1, 2013 [3 favorites]


He totally lost me when he referred to not being able to use a "Jedi Mind Meld". Smooth move, piss off both Trek and Wars fans.

Boing Boing is on it. (Includes NSFW graphic)
posted by fuse theorem at 11:23 AM on March 1, 2013




Smooth move, piss off both Trek and Wars fans.

Good lord, that is completely unimportant.
posted by Ironmouth at 8:37 PM on March 1, 2013


The Problem with Bob Woodward
posted by Artw at 11:19 PM on March 1, 2013




MIT Center for Civic Media: Obama Was Right About the Jedi Mind Meld (And Metaphysics)

First off, everybody knows you don't count the EU. What the hell are they teaching at MIT these days? Second, it's telling that nowhere in the EU is the Jedi Meld called "The Jedi Mind Meld" so even if it was an EU reference Obama still got it wrong. No, the apologists on this very serious matter are desperately flailing for excuses and they just aren't cutting it. We can only hope there is not too long of a delay before the impeachment proceedings begin.
posted by Drinky Die at 7:14 AM on March 2, 2013


A Graphic Guide to the Sequester (courtesy ProPublica)
posted by spamandkimchi at 3:57 PM on March 2, 2013


Why Obama can’t make a deal with Republicans

(Goes a little beyond "because they are motherfuckers, which would probably be my answer. And to be honest that's still the tl;dr of the situation when it comes down to it.)
posted by Artw at 4:10 PM on March 2, 2013 [1 favorite]


Pretty much, yeah. You could give them all the details on what you want to cut from spending but as long as there is any revenue balance they won't get on board without a gun to their head. They don't mind the sequester cuts, which was a major miscalculation from Obama.
posted by Drinky Die at 4:20 PM on March 2, 2013


Anything other than treating them as pure obstacle seems like a miscalculation - there is no cliff they will not race off.
posted by Artw at 4:29 PM on March 2, 2013


There is no point in getting upset at the current lack of a deal, neither side was going to make a deal at this time. The actual deadline is the end of March when congress must pass a continuing resolution to keep funding the government. Democrats and Republicans both think the sequester going into effect will give them leverage in the CR negotiations. Get ready for Biden and McConnell to cut a deal after each side makes a dramatic show to its own base. I hate that we have been reduced to politics as theater.
posted by humanfont at 5:47 PM on March 2, 2013


I don't know where you are getting the idea Democrats are happy with this. All I see is Democrats talking about how terrible the cuts are and Republicans cheering on Boehner for letting them happen.
posted by Drinky Die at 5:59 PM on March 2, 2013


The Democratic politicians love the politics. They are kicking the shit out of the Republicans on this. The longer it goes on, the worse the Republcan look. They don't like what it is doing to the country, but they love what it is doing to the Republicans.
posted by humanfont at 6:53 PM on March 2, 2013


Well okay, I still have no idea where you are getting that impression so I think we should leave it there. They just gave up spending cuts they didn't want and made Boehner's position more secure with the base going into the next battle. Look forward to watching the next round of Beltway Idiocy to see how it plays out.
posted by Drinky Die at 7:04 PM on March 2, 2013


They don't like what it is doing to the country, but they love what it is doing to the Republicans.

So it comes down to which they love more, their party or their country?
posted by benito.strauss at 7:07 PM on March 2, 2013 [1 favorite]


hahahaha Artw, thanks for that link. This mirrors my conversations with right-wing colleagues and family members. Let's go back to the euphemism of the election and call them "low information citizens."
posted by the man of twists and turns at 4:55 PM on March 3, 2013


The low information goes all the way to the top. America seriously needs to kick the shit out of these guys in 2014 if they haven't successfully turned it into a Mad Max style wilderness.
posted by Artw at 5:04 PM on March 3, 2013


It has nothing to do with a choice of party or country. The Republican proposal is cut less defense and more from social programs to "fix" the sequester. From the Democrats perspective about what is best for the country that is a significantly worse outcome than the status quo.
posted by humanfont at 5:11 PM on March 3, 2013


The Republican proposal is cut less defense and more from social programs to "fix" the sequester. From the Democrats perspective about what is best for the country that is a significantly worse outcome than the status quo.

The Republicans don't want to cut any social programs other than Obamacare. They know they will be wiped out electorally. But they have to seem to be for cuts they don't want, for purposes of pleasing their primary electorate. That's why we have the current ridiculous Kabuki theater going on where the GOP 'demands' something called "entitlement cuts" while proposing not a single cut and also 'demand' that Obama "lead" on this and just tell us what he would cut so then they can go hide under his skirts while entitlement cuts are passed. They cannot under any circumstance be seen as the party introducing those cuts.

Its gotten so bad that now even dumbasses like the Post editorial pages stick to the centrist entitlement cut dream and tell us how Obama holds all the cards but should help his opponents out by providing the cover.

Fuck that. He should split the GOP in half.
posted by Ironmouth at 8:02 PM on March 3, 2013 [2 favorites]


I think Republicans would be happy cutting eligibility for Medicaid. They're just never going to get the votes for it.
posted by corb at 9:46 PM on March 3, 2013


Obama and the Republicans agree that we need entitlement cuts, the only difference is one of degree and if they should be balanced with new revenue.
posted by Drinky Die at 4:38 AM on March 4, 2013


Curious, Drinky Die - I haven't seen this. What entitlement cuts is Obama talking about?
posted by corb at 5:43 AM on March 4, 2013


Check out the link twist and turns posted above for some specific stuff on the table.

As a more general matter, the entire point of the sequester from the White House perspective was to force what has become known as a "Grand Bargain" to address the deficit with combined serious spending cuts and new revenue. The lack of such a deal is why it's hard for me to understad the suggestion that Democrats are particularly happy right now. They didn't get what they wanted from helping to create this situation. Obama stated directly during the campaign the sequester cuts would never happen.
posted by Drinky Die at 5:52 AM on March 4, 2013


Obama and the Republicans agree that we need entitlement cuts, the only difference is one of degree and if they should be balanced with new revenue.

Obama just wants to cut to providers and doesn't want benefit cuts.
posted by Ironmouth at 11:23 AM on March 4, 2013


Well, to the degree you can reform entitlements without benefit cuts I'm sure they are going to make an effort.
posted by Drinky Die at 1:42 PM on March 4, 2013


Obama just wants to cut to providers and doesn't want benefit cuts.

Obama's proposal also includes reducing the indexation of social security benefits.
posted by kithrater at 1:44 PM on March 4, 2013 [1 favorite]


Screaming Goat Version Of Obama's Dire Sequester Warning
Although frankly his warning's vastly overblown direness makes me like sequestration even more.
posted by jeffburdges at 4:03 PM on March 4, 2013




The Deficit Gamble
The historical behavior of interest rates and growth rates in U.S. data suggests that the government can, with a high probability, run temporary budget deficits and then roll over the resulting government debt forever. The purpose of this paper is to document this finding and to examine its implications. Using a standard overlapping-generations model of capital accumulation, we show that whenever a perpetual rollover of debt succeeds, policy can make every generation better off. This conclusion does not imply that deficits are good policy, for an attempt to roll over debt forever might fail. But the adverse effects of deficits, rather than being inevitable, occur with only a small probability.
posted by the man of twists and turns at 12:44 PM on March 5, 2013 [1 favorite]


Jon Stewart Destroys ‘F**king Incompetent’ Congress For Allowing Sequester Cuts To Go Through

If only.
posted by Artw at 12:48 PM on March 5, 2013


more on "low-information citizens":
GOP Budget Divide: Don't Know vs. Don't Care
The Republican Party’s public stance on the budget wars is that President Obama is to blame for refusing to support cuts to retirement programs. Now, it’s sort of a tricky stance to maintain because Obama has publicly declared his willingness to cut spending on retirement programs and even outlined his position. The interesting split within the Republican Party is between those Republicans who understand this fact but choose not to acknowledge it, those who don’t understand it, and those who don’t really care.
posted by the man of twists and turns at 12:48 PM on March 5, 2013 [2 favorites]




Artw, I have a solution for you.

Step 1: Every member of congress agrees to wear an explosive collar that will only explode if Congress doesn't reach a new budget deal. Nobody wants to die, so they certainly reach a budget deal before the collars explode.

Step 2: Midterm elections.
posted by Joe in Australia at 4:17 PM on March 5, 2013


Why do we want them to reach a deal? All that matters economically is the velocity of money. Sequestration is mostly money for government contractors. So higher velocity than say Wall St. handouts, but still slow compared with social programs. Yet, any deal requires cuts in social programs like social security. It's best for the economy if they just sit on their asses.
posted by jeffburdges at 2:32 AM on March 6, 2013






I just found out yesterday that all travel for our US programs has been suspended. That includes uniformed, civilians, and contractors. We have a bunch of design reviews coming up over the next couple months that have had to be canceled because of this.
posted by backseatpilot at 5:04 PM on March 14, 2013


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