The Debt-Ceiling Debate is Dead! Long Live the Debt! Or, Will ObamaCare Cover What Krugman's Smoking?

So it's looking like what might be called the Great Debt-Ceiling Debate of 2011 is over. For those of us who followed this sort of charade for a living - and most sentient beings - this is a good thing.

Because now we can focus on the actual issue at hand: The actual national debt, or the amount the federal government owes to all its creditors. The LA Times sketches the sketchy details:

The proposed deal would raise the debt ceiling to carry the government into 2013, while providing for at least a dollar-per-dollar exchange of spending cuts. The spending cuts would come in two stages. An initial round would impose more than $900 billion in domestic cuts across the federal government over the next 10 years. But the vast majority of those cuts would fall in future years.

A new congressional committee will also be formed with equal membership from both parties, which would recommend by late November $1.5 trillion in further cuts. Unless those recommendations are adopted, $1.2 trillion in additional cuts would automatically be triggered, starting at the beginning of 2013.

The reports I've seen talk about a whopping $22 billion to $65 billion out of fiscal 2012 spending. Next year's budget has yet to be written, of course, but will surely be no less than the $3.7 trillion or so that we're spending this year. And let's be clear about things: We're getting a definite increase in $900 billion in new debt for the phantom menace of cuts sometime over the next decade. And as Matt Welch and I pointed out in yesterday's NY Post, in this context, cuts means minor reductions in planned increases.

Which is enough to get Paul Krugman to hyperventilate thusly:

There will be big spending cuts, with no increase in revenue. Then a panel will make recommendations for further deficit reduction — and if these recommendations aren’t accepted, there will be more spending cuts....how can American democracy work if whichever party is most prepared to be ruthless, to threaten the nation’s economic security, gets to dictate policy? And the answer is, maybe it can’t.

Me? I'm just hoping whatever Krugman is smoking is covered under Obamacare. As Sen. Rand Paul (R-Ky.) points out in an excellent retort to the deal in the works, this "compromise" adds at least $7 trillion to the national debt over the next decade (because it claims to cut up to $2.5 trillion from a baseline that assumes $10 billion trillion in added debt; whoopee).

In fact, the real reason to be bothered by the whimper with which the debt-ceiling squabble seems to be ending is this: It doesn't address the real issue, which is the debt load of the country. There are many reasons not to take bond-rating agencies such Standard & Poor's seriously as judgers of risk (back in September 2008 at Reason.com, economists David Levy and Sandra Peart did the math on that) but their input deserves to be dealt with if only because they influence what the feds will pay for new debt. And S&P has been very clear that it wants to see a credible $4 trillion debt reduction plan by October.

Which is a month before the November deadline by which Congress will have come up with a maximum of a bit more than $2 trillion in cuts. Do the math on that. And then call your elected officials and make sure that whatever Krugman is smoking is not only covered by Obamacare but gets priority funding when the U.S. is no longer able to borrow endlessly to cover all its outlays.

Luckily, as Reason columnist and Mercatus Center economist Veronique de Rugy has pointed out, there is a proven way to slash deficits . As the work of Harvard economists Alberto Alesina and Silvia Ardagna suggests, the best way to do it is to cut both spending and revenue

As an added bonus, "Their findings suggest that tax cuts are more expansionary than spending increases in the cases of a fiscal stimulus."

Read more here.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Spnge the Dyslexic||

    Balanced Budget is the ONLY way!

  • ||

    Where is my FUCKING ALT-TEXT?!?!?

  • Barack Obama||

    Let me be clear.

    That was part of the balanced compromise.

  • Restoras||

    Alt-Text Contest:

    Answer - Not enough. Not even close.

  • Alt text||

    Creepiest game of peekaboo ever.

  • ||

    "Trillions more of these will solve all our problems."

  • ||

    Liars Poker indeed.

  • Tony||

    I can be had for only a dollar.

  • .||

    You aren't worth even a dollar and a dollar isn't even worth 25 cents anymore.

  • rather||

    You may want to rethink valuing people with a self-titled handle of a '.'

  • .||

    Like yours is any better? BZZT!

  • sarcasmic||

    WTF do these fools pay their mortgage with a credit card?

  • some guy||

    I don't think you're allowed to do that...

    But there's probably special rules for Congresscritters.

  • ||

    Sure you can. You go to the ATM and get a nifty cash advance.

  • these fools||

    What is this "mortgage" of which you speak?

  • Brett L||

    Actually, trading secured debt for Unsecured debt is not crazy but the carrying levels are punitive for normal people who attempt this for a reason.

  • Michael Ejercito||

    WTF do these fools pay their mortgage with a credit card?


    It is convenient so that one would only have to write one check a month (to the credit card company).

  • Mike M.||

    Tony, I mean Paulie, Krugnuts has gone completely around the bend. Get that man a checkup from the neck up, quickly.

  • Mainer||

    Probably completely unfair, and anecdotal, but I've never met a man who physically looked like Krugman that wasn't a pretentious douchebag. Sort of like the way cops shave their heads, bikers are all bushy, that close cropped beard and mustache seems to be the tonsorial choice of the terminally douchey.

  • sarcasmic||

    A well trimmed full beard, in my experience, has always been an indication of a lefty loon.

  • Nancy Pelosi||

    Are you serious?

  • Zeb||

    Just to provide a counter example, my full beard is neatly trimmed at least once or twice a year.

  • Immoral Liberal||

    Original Song Title: "Dude (Looks Like A Lady)"
    Original Performer: Aerosmith
    Parody Song Title: "Krugman (Must Be Crazy)"
    Parody Written by: Immoral Liberal

    (Gaga! Gaga!) Krugman must be crazy!
    (Gaga! Gaga!) Krugman must be crazy!
    (Gaga! Gaga!) Krugman must be crazy!
    (Gaga! Gaga!) Krugman must be crazy!

    Schmoozing at the ancient gray whore;
    His picture looks like slime on the floor.
    Some morons gave the Nobel Prize
    To this false prophet hack for his failures and lies! (All lies!)

    (Gaga! Gaga!)
    (Gaga! Gaga!)

    Witch hunt for some nutjob's crime;
    Blames others for no civility.
    Without irony, in three months' time,
    Says civility's for the scoundrel refugee!

    (Gaga! Gaga!) Krugman must be crazy!
    (Gaga! Gaga!) Krugman must be crazy!
    (Gaga! Gaga!) Krugman must be crazy!
    (Gaga! Gaga!) Krugman must be crazy!

    Should have known this doofus would be trouble
    When he called for a new housing bubble.
    So open your eyes; this guy's just telling lies.
    When he went frothing at the mouth, it should have come as no surprise!

    (Gaga! Gaga!) Krugman must be crazy!
    (Gaga! Gaga!) Krugman must be crazy!
    (Gaga! Gaga!) Krugman must be crazy!
    (Gaga! Gaga!) Krugman must be crazy!

    (Economy's turning straight down...)
    Man, we've got a freak here!
    (Who the hell is paying this clown?)
    Screwy, screwy Krugy's lost his head!
    (Krugy should be run out of town...)
    We're up Krugy Creek here!
    (Filled up with the stream of his brown...)
    Pukey dooky loogie Krugy!

    Dude, Krugman must be crazy!
    Oh, crikey, crikey, crikey, crikey!
    Dude, he's freakin' crazy!

    Meow! Woof woof woof woof!

    (Gaga! Gaga!) Krugman must be crazy!
    (Gaga! Gaga!) Krugman must be crazy!
    (Gaga! Gaga!) Krugman must be crazy!
    (Gaga! Gaga!) Krugman must be crazy!
    (Gaga! Gaga!) Krugman must be crazy!
    (Gaga! Gaga!) Krugman must be crazy!
    (Gaga! Gaga!) Krugman must be crazy!
    (Gaga! Gaga!) Krugman must be crazy!

    Dude! Dude! Dude! Krugman must be crazy!
    Dude! Dude! Dude! Krugman must be crazy!
    Dude! Dude! Dude! Krugman must be crazy!
    Dude! Dude! Dude! Krugman must be crazy!
    (Gaga! Gaga!) Ya ya ya yya ya yya ya chit chit yaow!
    (Gaga! Gaga!)
    (Gaga! Gaga!)
    (Gaga! Gaga!)
    (Gaga! Gaga!)
    (Gaga! Gaga!)

  • sarcasmic||

    not bad

  • ||

    Too bad the fat lady hasn't sung that.

  • Spiny Norman||

    ...because it claims to cut up to $2.5 trillion from a baseline that assumes $10 billion in added debt...

    I assume that billion should be trillion.

  • ||

    because it claims to cut up to $2.5 trillion from a baseline that assumes $10 billion in added debt; whoopee

    Is that supposed to be $10 trillion?

  • Mainer||

    trillion, jillion, zillion....like it matters

  • CE||

    Just add some zeroes to the currency.

  • Richard Feynman||

    There are 10^11 stars in the galaxy. That used to be a huge number. But it’s only a hundred billion. It’s less than the national deficit! We used to call them astronomical numbers. Now we should call them economical numbers.

  • ||

    Now we should call them economical numbers.

    "governmental" numbers would make more sense, since economics plays a very insignificant part.

  • Danwgre||

    ^^^^ this

  • Bingo||

    So the debt ceiling has been raised, the cuts aren't really cuts, and the two major groups of idiots in charge of this country have been given official legal status to argue over meaningless shit for the next 10 years or whatever.

    In other words, we're still as financially fucked as we were before this whole nonsense started.

  • Atanarjuat||

    And, IINM, Obama doesn't have to worry about the debt ceiling again this term, so that's a victory of sorts for him.

  • TPTB||

    now we can focus on the actual issue at hand: The actual national debt

    The fuck we will.

  • ||

    Exactly. We won't even put the real debt on the balance sheet, much less "focus" on it.

  • Koan||

    First, no one should have ever expected that real cuts would occur with the present power composition in D.C. An uber-Keynesian President with a Democratic Senate and a majority of pols in the House unwilling to do the difficult business of actual budget cutting never boded well for the real deal. It looks like the last hope that we have of unfucking ourselves comes in 2012. But then, the Congress would have to have quite a few more Tea Party pols in it than it presently has, with a Tea Party president that just won in a Reaganesque landslide. And even then, you'd run into a wall on defense spending. So, the prospects for change are dim, and getting dimmer . . .

  • Mathematics||

    I don't care.

  • Bingo||

    The idea of any fiscal reform coming from the Tea Party whose members carry signs saying "Keep Your Government Hands Off My Medicare!" is completely laughable. And the sacred cow of "defense" spending won't be cut because either party will use it to bludgeon the other as hating our troops or some other nonsense.

  • ||

    The idea of any fiscal reform coming from the Tea Party whose members carry signs saying "Keep Your Government Hands Off My Medicare!" is completely laughable.

    And despite this, polls have demonstrated repeatedly that Tea Party members are significantly more likely to favor Medicare cuts than any other large group of poll respondents, or people who identify as non-Tea Party.

    Yeah, the cuts aren't likely because Medicare is super popular, but it's not like Tea Party types are nearly as hypocritical as you seem to be claiming.

    It's certainly not the case that even a significant fraction of them carried such signs.

    Your comment is as stupid as the claim that people against the war in Iraq were socialists.

  • Bingo||

    How about this: I'll believe that Tea Party-types care about fiscal policy when they actually, you know, enact some fiscal reforms. Because right now their actions are no different than the typical GOP tactic of praising the free market and then enacting legislation that tramples all over the free market.

    Show me some results. If that's a "stupid" stance to have, it's still better than deluding oneself over the meaningless words of a bunch of power-hungry politicians.

  • Zeb||

    How about this: some Tea Partiers are idiots like the one with the Medicare sign and some have a little bit of a clue. Military spending will still be a problem for most of them, though.

  • Bingo||

    What spending ISN'T problematic for them to cut? I haven't heard them speak out about reforming Social Security and Medicare, let alone defense spending or the drug war. The spending they ARE willing to cut is not the spending that is contributing to our problems.

  • ||

    Paul Ryan's plan is as close to a tea party plan that exists.

    And if you don't like Ryan's how about Coburn's. Didn't that chop $9 trillion (while still adding to the deficit over the 10 year period - new math)? There is no tea party but these politicians are two of the most prominent 'tea party friendly' currently in Congress (along with Bachman and Demint).

  • ||

    I don't think the TP is going to save us - but perhaps (and maybe just perhaps) it is a beginning of some reasonable political future.

    Ok, I'm full of it. We're screwed.

  • ||

    Yeah, the cuts aren't likely because Medicare is super popular, but it's not like Tea Party types are nearly as hypocritical as you seem to be claiming.

    Fortunately, we have polling data, and that shows that Tea Partiers support Medicare and Social Security by almost 2:1 margins (62%-33%, 6% "don't know/no answer"). So regardless of who is holding the signs or isn't, the "keep your government out of my Medicare" is a fair description of their political beliefs -- i.e. freebies for me but not for thee.

    That they occasionally appear to favor smaller government is merely rhetorical accident.

  • Joe M||

    Those were Obamacare protestors at the town halls in 2010, who are not necessarily tea partiers.

  • ||

    Bingo is referencing this particular sign because Obama referenced it himself during the first summer of discontent under O.

    Mocking blue haired old ladies with illogical signs > hope and change. If O tells you to get two days out of your Depends you'll go two days and like it.

  • Krugnuts the Magnificent||

    As a child of four can plainly see, the debt has been hermetically sealed.

  • Joe M||

    Did we put the debt in a lock box?

  • CE||

    ...while providing for at least a dollar-per-dollar exchange of spending cuts.

    Except that the new credit line will be used up in two years, and the reductions in planned spending increases will occur over the next 10 years (maybe).

  • In Time of War||

    It's always increase now, cut...later.

    And I don't want to hear any of their crap about automatic cuts. As the deadline looms they'll pass an emergency bill to prevent actually, y'know, cutting anything.

  • SFC B||

    What I think it really cute is how they think this increase will last them more than 2 years. I'm willing to bet money that some "emergency" will happen that will cause a $500b "unexpected" increase in spending.

  • ||

    What you're trying to say is that Congress still lives in a fantasy world, the President wants to remain dictator of that fantasy world, and we are still all screwed once the music stops playing and people realize that somebody stole all the seats.

  • Koan||

    Bingo, you have a good point. I forgot about those wretched signs. However, the Tea Party crowd are the only ones that seem to have entertained at least a glimmer of a thought about some cuts to the budget. I seem them as the first mainstream group that numbers in the millions that is at least broaching the subject of cuts in a serious way. I do hate that Medicare bullshit - which I think was is honestly animated more by Obama-hatred than anything else. Those same Tea Party folk wouldn't have held those signs if the "cuts" were proposed by Rick Perry or Michelle Bachmann - which goes to show you that every political group/party has it's fair share of douches.

  • Bingo||

    At least we'll get to be amused when D's are suddenly concerned about the budget from '12-'16 if Obama loses (which is likely, but not guaranteed).

  • ||

    I think a lot of the blue haired rebelion was caused by the fundamental dishonesty in the pitch. When Obama is saying 'no cuts, just efficiencies' and the media is saying 'no cuts, just efficiencies' but the actual bill has $500 billion of cuts over 10 years - that's going to cause a problem.

    Even Tapper the other day, when recapping the 'grand bargain', made a specific point of saying Medicare cuts were to providers only, not beneficiaries. Even a relatively honest member of the media is peddling the lie that cutting payments to providers doesn't cut services. Seniors that have been dumped by their doctors know that - why doesn't Tapper?

  • CE||

    I made the mistake of tuning in to Fox News this weekend (for the first time in 4 years) to catch an update on the debt limit debate. John McCain was warning that an $800 billion defense cut over 10 years would be disastrous to national defense preparedness. All of the Fox hosts and studio guests were nodding in grave agreement, wondering how the Democrats could risk the safety of the former republic, by cutting defense spending all the way back to 2009 levels.

  • fish||

    I made the mistake of tuning in to Fox News this weekend...

    Bet you never do that again!

  • ||

    Douche bags. Even with an $800 billion reduction in accumulated spending, I guarantee that ten years from now, defense spending will still be more than $1 trillion per year.

  • Rich||

    In Nuevo Dollars?

  • Brett L||

    Dolaros.

  • Zeb||

    Ameros.

  • Chupacabra||

    Puercos.

  • fish||

    Krugeroos

  • Ska||

    Not to be confused with Krugman-Rands.

  • fish||

    Or Krugeroos: the breakfast cereal

  • I Knoyesidu||

    Cajones.

  • mobiustrip||

    Paul Krugman: the Emmanuel Goldstein of Reason dot com.

    No day would be complete without the "two minutes of hate" directed against his image.

  • Hugh Akston||

    Your pointed and erudite defense of Krugnuts' position has convinced me.

  • fish||

    Two minutes my ass....I can hate on Krugnuts for hours on end! It's slackers like yourself who can only muster two minutes.

  • ||

    According to:
    http://hotair.com/archives/201.....-recovery/
    on Friday the previous growth of the GDP over the past year was revised down from 2.5% to 1.6%, almost a percent. And other growth estimates before that were revised down, so that it seems the total downward revision was something in the vicinity of 5%?!? However, I read in Lawrence Lindsey's "The Deficit is Worse than We Think" (June 28, WSJ Opinion) that according to Obama's February 2011 budget, "the ten year budget cost of missing the growth estimate by just one point for one year is $750 Billion." So didn't the downward revision in Friday's government numbers totally swamp all the proposed savings in this bill?

  • Politicians||

    Math is too complicated.

  • ||

    I think it would be much easier to get the public on board with spending reductions, if the issue was described accurately.

    Even those who claim (chuckle) that they want to reduce government spending, insist on saying that they want to "cut" spending. To the average person, this would suggest that we actually spend less money next year than we did this year. Of course this is not the case.

    If the "deficit hawks" (again... chuckle) really wanted to sell their proposals, they would pitch them as plans to give the federal government a smaller raise each year. Nothing needs to be "cut". If they kept spending right where it is, in a few years revenues would catch up with spending.

  • Rich||

    Even those who claim (chuckle) that they want to reduce government spending, insist on saying that they want to "cut" spending.

    It all went downhill after "rate of change" was accepted into the vernacular.

  • Rich||

    Argh. "rate of speed"

  • Red Rocks Rockin||

    There will be big spending cuts, with no increase in revenue.

    This is actually a flat-out lie. Although the debt ceiling raise will supposedly last through the end of 2012, the "debt reduction" measures take place over ten years.

    Guess what expires in 2013? The Bush tax rates and the Obama FICA cut, and both are baked into the CBO calcuations.

    In other words, this deal raises taxes and raises spending--it does not cut a single dime from total year-to-year spending. So why are the Democrats so pissed off again?

  • sarcasmic||

    You don't understand government math.

    If you are a bureaucrat and your budget increases by 5%, but you requested an 8% increase, then that 5% increase represents a 3% decrease.

    You intended to spend 8% more than last year.
    The result is that you will spend 5% more than last year.
    But results don't matter. Intentions matter.
    So that 5% increase is a 3% cut.

  • ||

    But you didn't consider that they make up for it with decreased productivity.
    "We lose 10 cents on every sale, but we make up for it in volume"

  • sarcasmic||

    Why do one ounce gold coins say "Twenty Dollars"?

    Why is that same dollar amount specifically mentioned in the Constitution?

    Is there a connection?

    Was twenty dollars once worth an ounce of gold?

  • Zeb||

    When gold coins were actually used as currency, $20 was an ounce of gold by definition.

  • sarcasmic||

    Congress was given the power to coin money precisely to prevent what the Federal Reserve has done to the dollar.

  • Anonymous Coward||

    A power that they happily ceded to the Treasury Department and the Federal Reserve.

  • sasob||

    No, an ounce of gold was once worth $20. Or at least, that was the official government price at one time - $20 and change - up until 1933 when FDR confiscated all privately held gold at that price and then raised the official price to $35 per ounce for dealings with other countries. Peon citizens were then no longer allowed to own gold, except for numismatics,jewelry, etc.

    A ten dollar coin was called an Eagle and twenty was a Double Eagle. At the time of the writing of the Constitution the government tied the dollar to a certain weight of gold - that is - the dollar was defined as a certain weight of gold (and silver.) Why those specific weights were chosen, I'm not sure. (There are people around here that are more knowledgable about it than I.)

    BTW, it is Troy ounces, not Avoirdupois ounces - 12 to the pound rather than 16 - and the two kinds of pounds are not equal.

  • Brett L||

    IIRC, the name dollar comes from the Spanish piece-of-eight coin name. These were pretty much the coin of the Americas. The Spanish minted them by the millions and shipped them across the Carribean for about 250 years before America formed. And spent them and had them stolen by privateers and pirates and lost them in wrecks. Congress just adopted the prevailing standard.

  • ||

    The name 'dollar' has nothing to do with the Spanish.

    The name dollar derives from the German 'thaler', the word for 'dale', meaning valley.


    The name dates from the year 1517, when the Counts of Schlick directed a large coinage of the already familiar silver " gulden groschen " in Joachimsthai (i.e. St. James's Dale) in Bohemia, whence the coins came to be known as Joachimsthaler, or simply thaler, the coin of the Dale. In 1566, at the Convention of Augsburg, the thaler was adopted as an imperial coin, under the name of "reichs-thaler," or "rix-dollar."

    http://books.google.com/books?.....&dq=dollar thaler&pg=PA626#v=onepage&q=dollar thaler&f=false

  • ||

    I believe - correct me if I'm wrong - that when gold was turned in (turning into the vast pile at Ft. Know) the Government bought it at $35, not $20, when peeps turned it in? If not, it was even bigger ripoff than I thought.

  • ||

    Here are the exact definitions of coins as put out by Congress in the Coinage Act of April 2, 1792.


    Sec. 9. And be it further enacted, That there shall be from time to time struck and coined at the said mint coins of gold, silver and copper of the following denominations, values and descriptions, viz.:

    Eagles — each to be of the value of ten dollars or units, and to contain two hundred and forty-seven grains and four-eighths of a grain of pure, or two hundred and seventy grains of standard gold.

    Half eagles — each to be of the value of five dollars, and to contain one hundred and twenty three grains and six-eighths of a grain of pure, or one hundred and thiny-flve grains of standard gold.

    Quarter Eagles — each to be of the value of two dollars and a half dollar, and to contain sixty-one grains and seven-eighths of a grain of pure, or sixty-seven grains and four-eighths of a grain of standard gold.

    Dollars or units — each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four-sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver.

    Half Dollars — each to be of half the value of the dollar or unit, and to contain one hundred and eighty five grains and ten-sixteenth parts of a grain of pure, or two hundred and eight grains of standard silver.

    Quarter Dollars — each to be of one-fourth the value of the dollar or unit, and to contain ninety-two grains and thirteen-sixteenth parts of a grain of pure, or one hundred and four grains of standard silver.

    Dimes — each to be of the value of one-tenth of a dollar or unit, and to contain thirty seven grains and two-sixteenth parts of a grain of pure, or forty-one grains and three-fifth parts of a grain of standard silver,

    Half Dimes — each to be of the value of one-twentieth of a dollar, and to contain eighteen grains and nine-sixteenth parts of a grain of pure, or twenty grains and four-fifth parts of a grain of standard silver.

    Cents — each to be of the value of the one hundredth part of a dollar, and to contain eleven pennyweights of copper.1

    Half Cents — each to be of the value of half a cent, and to contain five pennyweights and half a pennyweight of copper.

    http://books.google.com/books?.....&dq=dollar grains&pg=RA4-PA2#v=onepage&q=dollar grains&f=false

  • sasob||

    And this from a Wikipedia article:

    At 480 grains, the troy ounce is heavier than the avoirdupois ounce, which weighs 437.5 grains. A grain is 64.79891 milligrams (mg); hence one troy ounce is 31.1034768 grams (g) (exact by definition), about 10 percent more than the avoirdupois ounce, which is 28.349523125 g (exact).[1][2]

  • sasob||

    And here is another good Wikipedia article about US gold coins which gives the gold content information.

  • ||

    Screw this. Go metric.

  • Neu Mejican||

    The concept of a "debt ceiling" allowed this debate to be about something other than the issues at hand. It creates political theatre, which hardens positions and make workable solutions to reducing deficits less, rather than more likely.

    First order of business should be to repeal the "debt" limit permanently. If you want to have some "spending" cap to help reign in the congress, then you would want it to be a "pay-go" law, or a "deficit" limit of some type.

    My 2 cents.

    Buncha maroons.

  • Trespassers W||

    A deficit limit? That's like saying if you're going to drive off a cliff, you should at least stay below the speed limit.

  • Neu Mejican||

    Depends upon the details of the rule. There is nothing wrong with carrying a certain amount of debt in the short term.

  • cynical||

    Sure, and Congress can decide what that amount is. Oh wait, that would be a debt ceiling.

  • alan||

    Depends upon the details of the rule. There is nothing wrong with carrying a certain amount of debt in the short term.

    The current projection after this 'cut' is now at, what? I'll have to double check, but guessing based on current growth, spending after this deal will be about 44 trillion dollars in ten years. The problem here is that the GDP is considered in the Washington mindset as a homogenous entity. There is not enough growth in the private economy that can yield a taxable source of revenue. What do you do? Liquidate capital goods in a clearing sell across the entire private sector? Game over.

  • alan||

    can yield a taxable source of revenue that can cover that much spending.

  • Neu Mejican||

    If you focus on accrued debt, rather than the budget in front of you (which includes that debt and the resulting interest and principle payments needed), you are less likely to get to a fiscally responsible budget. The debt ceiling hasn't done anything to stop deficit spending.

    If there is going to be a rule that works (even in theory) it would need to be aimed at the annual budget process...not the accrued debt. The way the current set up works is that Congress says to the executive..."Spend X dollars on X programs." But then says "Don't spend any more than Y dollars (currently smaller than X)." It is a useless rule, designed to fail. Designed to create useless political theatre.

  • ||

    Isn't that what politics is all about? It was same with Bush tax-cuts, you see the same gimmicks with IPAB already built-in, look at the Pressler Amendment with Pakistan and its nukes (way back when). All theater. Its just which show attracts the crowds on political Broadway, so the Money Shot naturally is going to get the big crowds almost by 'default' (pun intended!).

  • Libertarians||

    If we're winning, why is the national debt headed to $17 trillion?

  • Brandon||

    Because it was headed to 20 trillion?

  • fish||

    Hit that brick wall at 125 mph as to 140 mph.

  • ||

    Let try eighteen trirrion, then I call in asset, start buying round-eye rear-estate, big corporation for cheap-cheap! Tee-hee-hee-hee!

  • Brian D||

    From Krugman's article:

    "We currently have a deeply depressed economy. We will almost certainly continue to have a depressed economy all through next year. And we will probably have a depressed economy through 2013 as well, if not beyond.

    Is Paulie tacitly admitting to the failure of Keynesian economics here, or does he just not realize he is?

  • Bingo||

    Just think of how much worse off we would be if we didn't have Keynesian demigods like him in charge!

  • Slap the Enlightened!||

    Keynesians? I'd like someone to point out just one practical benefit accrued from *any* economist. Mostly they seem to be good for designing political systems that, to date, have all failed miserably. Maybe we should ask the astrologers to weigh in.....

  • Brett L||

    They aren't clogging streets as beggars and don't steal chickens in the country?

  • Bingo||

    Is that a good thing? The $30k-odd per year they'd be making in welfare benefits would be a lot less than the $100k+ salaries we pay them via taxes, and they wouldn't be in a position to actually implement their great schemes.

    Just sayin'.

  • sarcasmic||

    You mean that if you remove money from the economy through taxation and borrowing, then return that money to the economy minus the cost of processing it, that that doesn't have a more stimulative effect than if you left things alone?

    You can't be serious!

  • alan||

    Keynesian policy reminds me of a scene from a druggie movie whose title escapes me. A girl who needed cash fast sells speedy diet pills as ecstasy. She tells her customers, 'this is really good stuff, but you'll need to smoke A LOT of pot to get the full effect.'

    Keynesian policy is good policy but you have to spend A LOT of dough to get the full effect.

    In other words, the fact you have to raise an impossible sum of money to get any results should be the first clue to the fact it doesn't work. Leninism would have got temporarily positive results with Krugman levels of money thrown at it! What do you do next Krugnuts when your ridiculous debt ratios create a productivity trap? More spending? Having to raise over 4 trillion to get 800 billion in growth not enough to convince you of the diminishing returns of your policy, or was the 'kick start' just assumed without any underlying empirical proof provided?

  • alan||

    'Go', that was the movie. Remembered the moment I hit submit.

  • sarcasmic||

    [sarcasm off]
    It still defies common sense.

    That money has to come from somewhere.
    All that government spending represents money that was not used for something else.
    The money acquired through taxation could have been spent instead, generating economic activity.
    The borrowed money represents money that could have been invested in a wealth creating enterprise, but was invested in bonds instead.

    Removing all that money from the economy and returning it based upon political whims is not going to jump start the economy, because before the money can be spent by government it must first be removed.

    Keynesian policy puts all the emphasis on step two, while completely ignoring the consequences of step one.

  • ||

    Noes. It was a bad stimulus. Like a bad clam it tasted good but settled poorly. Nobody eats clams for awhile after getting a bad one.

  • ||

    Is Paulie tacitly admitting to the failure of Keynesian economics here, or does he just not realize he is?

    'Course not.

    1) If the economy recovers, take credit!
    2) If not, the stimulus wasn't big enough!

    The problem with Keynesianist horse hockey is that it is ultimately unfalsifiable.

  • alan||

    Off Topic

    Wow. Friedman was one of my earliest libertarian, free market influences (earliest, as a wee little nine year old reader -- Heinlein), but this, if true, is beyond contemptible:

    http://www.lewrockwell.com/blog/

    How great to have had historian Ronald Hamowy as a distinguished visiting faculty member at Mises University last week. We did a fascinating and moving podcast about his teacher F.A. Hayek, and his close friends Murray Rothbard and Burt Blumert.

    In his graduate seminar, reports David Gordan, Ronald confirmed that it was indeed Milton Friedman who blocked Hayek from the Chicago economics faculty. As a result of the Miltonian blackball, Hayek had to take an unpaid position at the university, and eventually returned to Austria. His American salary was paid by the heroic Volcker Fund, but there was no pension and certainly no tenure.

    Very disheartened. I was defending Friedman in a chat with my brother yesterday (effectiveness of monetarist policy in context of stifling 1970s early 80's inflation). He sees this, he'll be rubbing my face in it.

  • NJ||

    It that is true, fuck uncle Milton

  • Rev. Blue Moon||

    Somebody with a better reputation than the Rockwellians would have to confirm that for me to believe it.

  • ||

    I have heard that story, and do not know if it is true. But it is not contemptible. Take off Rockwell's vision blinders and consider it in context. A the time American economics was all about the math. Solely the math. The fact that it was people who were economic actors was quite distressing to many economists who wished they could deal with pure mathematics. Then along comes Hayek who completely eschewed the math.

    Accepting him into the economics department would be like accepting a creationist into the biology department.

    This is no different from Lew Rockwell himself condemning the entire Econ department at GMU for not being 100% pure priorist Rothbardians.

  • alan||

    Hayek was recognized by his contemporaries, including Keynes as a giant in the field. It is ridiculous to even consider that there was no room for him in the department based on a trend.

    Before making that assertion, you need to check to see how every other member of the economics faculty of the time fell in line with this scheme. If there was even one Marxist, or old timey Fischerite, or German school protectionist, etc. with only one tenth of Hayek's reputation than your point is not valid.

  • Restoras||

    +1

  • alan||

    This is no different from Lew Rockwell himself condemning the entire Econ department at GMU for not being 100% pure priorist Rothbardians.

    I'll give you a partial credit there. Partial because the senseless attack on Rothbard by GMU staffers recently was an initiative they undertook. They were clearly itching for a fight. Austrians have seen that sort of cred building bullshit far too many times to take it seriously.

    Some credit because it is stupid to condemn the entire school that is far above par in the field for the actions of a mere pair. I was under the impression Rockwell was on excellent terms with Walter Williams. Why alienate a friend?

    Also, Take off Rockwell's vision blinders and consider it in context. Don't accuse me of shit. My relationship with Rockwell is complicated to say the least. Think of Quicksilver and Xavier for an apt analogy.

  • CrackertyAssCracker||

    Sort of like when you say then entire Mises institute is too "ideological and dogmatic"?

    What was too ideological and/or dogmatic about Time and Money by Roger Garrison?

  • ||

    At this point, I'm for what ever brings down nations credit rating the fastest.

    It's more clear than ever that our congress bitches could care less about federal spending. It's time to blow the whole damn thing up.

    Screw national politics. Focus on state and local government, so when the shit finally hits the fan, maybe your state will be positioned to tell the feds to fuck off, and walk away from the union.

  • ||

    Anybody see Krugman on Christiane Amanpour's roundtable yesterday, specifically when he was being introduced as 'Pulitzer-Prize winning author Paul Krugman'? He looked like a nervous and embarrassed mouth-breathing chimpanzee. It looked like a farcical bit SNL would do, with an award-laden imbecile child seated next to an awardless but mature, dignified, nose-breathing adult, i.e. George Will. I felt sorry for Paul Krugman.

  • The Ghost of George Orwell||

    OssianSweet loved Big Brother.

  • fish||

    I felt sorry for Paul Krugman.

    You'll get past that.

  • Mike M.||

    I'm about ninety percent certain that he has either paranoid schizophrenia or is a manic depressive.

  • fish||

    You left out the "delusions of grandeur" part.

  • Mainer||

    Delusions of Adequacy.

    That's what Mrs Krugman told me.

  • fish||

    Well from her perspective I'm sure it is regrettably..."delusions of mediocrity"!

  • Mainer||

    Wasn't Mediocrites a greek philosopher ?

  • ||

    The article is spot on. Remember though without purging extreme enviromentilists from the government policy apparatus all those "extra dollars" historically used for investmnet at home will be sent elswhere. Then what?

  • Via Althouse||

    Ezra Klein's piece this morning is headlined: "Democrats will lose now. But they can win later." The next thing you see is a chart depicting "Tax increases over 10 years if Congress passes..." various proposals (or nothing). He begins:

    Democrats are going to lose this one. The first stage of the emerging deal doesn’t include revenue, doesn’t include stimulus, and lets Republicans pocket a trillion dollars or more in cuts without offering anything to Democrats in return.

    Pocket? There's nothing to pocket! All we're getting is a trillion less in overspending. The debt piles up at an alarming rate all the time. Holding back one trillion over the next 10 years isn't much (seen in proportion to the vast spending).

    But, in the mind of Ezra, that nonexistent money goes to Republicans, and Democrats deserve something in return: taxing and spending. (Otherwise known as: revenue and stimulus.) That's the Democratic Party brand — as spun by Ezra Klein.

    http://althouse.blogspot.com/2.....on-as.html

  • SIV||

    Ann Althouse? LOL!

    KM-W made her cry.

  • Via Althouse||

    Ezra Klein's piece this morning is headlined: "Democrats will lose now. But they can win later." The next thing you see is a chart depicting "Tax increases over 10 years if Congress passes..." various proposals (or nothing). He begins:

    Democrats are going to lose this one. The first stage of the emerging deal doesn’t include revenue, doesn’t include stimulus, and lets Republicans pocket a trillion dollars or more in cuts without offering anything to Democrats in return.

    Pocket? There's nothing to pocket! All we're getting is a trillion less in overspending. The debt piles up at an alarming rate all the time. Holding back one trillion over the next 10 years isn't much (seen in proportion to the vast spending).

    But, in the mind of Ezra, that nonexistent money goes to Republicans, and Democrats deserve something in return: taxing and spending. (Otherwise known as: revenue and stimulus.) That's the Democratic Party brand — as spun by Ezra Klein.

    http://althouse.blogspot.com/2.....on-as.html

  • SIV||

    Ann Althouse? LOL!

    KM-W made her cry.

  • Via Althouse||

    Ezra Klein's piece this morning is headlined: "Democrats will lose now. But they can win later." The next thing you see is a chart depicting "Tax increases over 10 years if Congress passes..." various proposals (or nothing). He begins:

    Democrats are going to lose this one. The first stage of the emerging deal doesn’t include revenue, doesn’t include stimulus, and lets Republicans pocket a trillion dollars or more in cuts without offering anything to Democrats in return.

    Pocket? There's nothing to pocket! All we're getting is a trillion less in overspending. The debt piles up at an alarming rate all the time. Holding back one trillion over the next 10 years isn't much (seen in proportion to the vast spending).

    But, in the mind of Ezra, that nonexistent money goes to Republicans, and Democrats deserve something in return: taxing and spending. (Otherwise known as: revenue and stimulus.) That's the Democratic Party brand — as spun by Ezra Klein.

    http://althouse.blogspot.com/2.....on-as.html

  • Gibby||

    No way I triple-posted this. No way.

  • ||

    Let's take a shot at partisan scoring here:

    (1) Debt ceiling raised until after the 2012 elections - big win for Obama (and a big loss for Repubs, because that's a zero sum game).

    (2) "Cuts" backloaded - big loss for Repubs (at least those who actually give a shit about fiscal sanity).

    (3) No changes to tax policy - ObamaCare tax increases untouched, expiration of Bush/Obama tax breaks untouched = big tax increases a'coming. Big win for Democrats.

    (4) "Fallback" cuts focussed more on Repub priorities (defense/security) than Dem (program spending and redistribution).

    I'm having a hard time seeing this as anything but a net loss for Repubs, and a net win for Dems.

  • T||

    I'm having a hard time seeing it as anything other than kicking the can down the road past 2012.

  • ||

    The Republicans somehow think avoiding an immediate tax increase is a win, even though the Bush tax rates were extended at the end of 2010. One would have thought that settled the issue, but it did not. So the big "win" for Boehner was to preserve the "win" on tax rates from back in late 2010. In other words, he won absolutely nothing.

  • Brett L||

    Isolating the tax packages puts Dems on record as voting to raise everyone's taxes. The point of that exercise was not to give them "compromise" cover.

  • sarcasmic||

    In any compromise between good and evil, it is only evil that can profit.
    -Ayn Rand

    Or to put it another way, in any compromise with statists, it is only statists who will profit.

    Not that there's much of a difference between evil and statism.

  • Mike M.||

    Compromising is what got us into the sorry state that we're in. We're compromising the country right down the crapper.

  • sarcasmic||

    Now you're getting it!

  • Paul||

    Compromising is what got us into the sorry state that we're in. We're compromising the country right down the crapper.

    Negative, we've compromised the country down the crapper more slowly than the Democrats initially wanted it to go.

    We're winning!

  • Brett L||

    Eh. I think the marginalization of Harry Reid is complete and Obama's lost Peggy Noonan. Obama burned through most or all of his trust capital. Who will ever believe he is negotiating in good faith again? I'm not sure he understands quite how important it is. You can tell the rubes anything you want, but you can't change the terms just before the final handshake.

    I think part 3 is just the way politics works. Taxes won't go up tomorrow, and the partisans on the left are taking this as a loss.

  • Paul||

    Eh. I think the marginalization of Harry Reid is complete and Obama's lost Peggy Noonan. Obama burned through most or all of his trust capital. Who will ever believe he is negotiating in good faith again?

    Again, I can't wait until the 2012 navel-gazing from Peggy Noonan et. al. with articles titled, "Why I'm voting for Obama".

    It means nothing. Liberal anger at their leaders in the middle of a term means absolutely nothing.

    And I've heard the "stay home" theory and I don't buy it.

  • ||

    once the hate-machine gets rolling, the good little progressives will be lining up to pull the dem levers once again.

    (and the same for the other side).

  • ||

    This is called a party's 'base'. You know what else makes a good base? Concrete (ht Edith Bunker).

  • SFC B||

    As pointed out above, doesn't the revised downward GDP numbers eat any debt reduction and eat into the new debt limit?

  • ||

    Yeah, it should. Don't know how CBO adjusts its projections to reflect current GDP, though.

  • ||

    I woke up this morning to screaming liberals on the clock radio bemoaning the end of the world.

    I'm having problems figuring out, if anything, actually got cut...

  • NoVAHockey||

    Likewise -- increased spending at a slower rate is somehow a loss for them?

  • ||

    Yes. We will not rest until we have full control over all wealth. Don't worry, we will use this control to promote fairness and equity.

  • cynical||

    Can't promote both.

  • alan||

    Ezra Klein is a silly little boy playing at grown up. Being a silly little boy, he has no ability to discern mediating factors that lie at the heart of the matter. Being a silly little boy, his partisan prattle embarrasses him not at all.

  • Ezra||

    How am I a silly little boy? I post things on the internets.

  • Paul||

    And as Matt Welch and I pointed out in yesterday's NY Post, in this context, cuts means minor reductions in planned increases.

    So it's 1994 all over again. The more things change...

  • ||

    So, whose economic opinion should I listen to? Mr. Nick G., English major and Ph.D. English literature from SUNY Buffalo guy, or Mr. Paul K., Economics major and Economics Ph.D. from MIT and Nobel prize winner?

  • ||

    the guy who doesn't have his head up his ass.

  • alan||

    Argument from authority. You would think by now it would be classified as a logical fallacy. Funny how even the ancient Greeks skipped over that one.

  • ||

    AUTHORITEH!!!

  • Restoras||

    Why don't you read up on the topic and come to some of your own conclusions?

  • cynical||

    Nobel prize winner in something other than this macro policy shit, you mean.

  • Tncm||

    Nobel prize winner in something other than this macro policy shit, you mean.

    Didn't Paul Krugman win the Nobel Prize for, ironically enough, his studies into free trade where he actually used methodological individualism to reach some of his conclusions?

  • Tncm||

    So, whose economic opinion should I listen to? Mr. Nick G., English major and Ph.D. English literature from SUNY Buffalo guy, or Mr. Paul K., Economics major and Economics Ph.D. from MIT and Nobel prize winner?

    You could try listening to the one who has the correct opinion and not make judgements based purely on who has the most shiny medals and expensive degrees.

    Off-topic, but tax decreases having a multiplier effect is just as ridiculous as claiming that spending has a multiplier effect.

  • ||

    Except there are some studies that indicate the contrary. The IMF, maybe? You could check Megan McArdle's blog; she had a post on this recently.

    Leaving money in productive hands > relocating that money to less productive uses.

  • Tncm||

    Except there are some studies that indicate the contrary.

    Spare me the methodological positivism. You won't scare me off by waving studies in my face.

    Leaving money in productive hands > relocating that money to less productive uses.

    Except that has nothing to do with the multiplier effect. If you really want to play ball with Keynesians than technically both aggregate demand and total output increase when government spends money as opposed to consumers, since governments almost always spend money as opposed to saving it and generally ignore capital consumption.

    For the record, I'm an Austrian. And I'm afraid I'll have to bow out on debating today because I have a splitting migraine, but if you'd like I can find where The Failure of the "New Economics" Hazlitt directly disproves both the marginal propensity to consume and the multiplier effect.

  • Brian||

    More expansionary doesn't necessarily mean multiplier greater than 1. If stimulus spending ends up reducing private spending than its effective multiplier is less than 1. Tax cuts could just have a number closer to unity. Perhaps you meant that nothing can have a multiplier greater than 1?

  • Tncm||

    More expansionary doesn't necessarily mean multiplier greater than 1. If stimulus spending ends up reducing private spending than its effective multiplier is less than 1. Tax cuts could just have a number closer to unity. Perhaps you meant that nothing can have a multiplier greater than 1?

    I think we may be talking past each other.

    The Keynesian multiplier is based on the marginal propensity to consume, an ex post facto theory based on statistics on how much the average consumer spends as opposed to saves. I believe Keynes said that consumers spent 90% of what they earned, so if government spends X amount of money then that will generate an elevated level of demand that will spread across the economy until it is all absorbed in savings (as .1 is multiplied into 1 repeatedly, for example, it gradually becomes smaller until it is effectively 0).

    So if MPC=1 then the multiplier effect is essentially infinite and a dollar of spending will magic a utopia's worth of resources into the economy.

    There are algebraic and theoretical problems with the multiplier effect and the marginal propensity to consume that were exposed by Hazlitt and other economists, but I'll be honest and say that I've forgotten them. If you wish to continue this dialogue please let me know, and I'll try and look up the exact excerpts from Hazlitt's book-length critique of Keynes (The Failure of the "New Economics", which is available free on the Mises Institute if you're curious).

    So to answer your question I'd have to say that the multiplier isn't equal to anything because the multiplier doesn't exist.

  • Brian||

    I was referring to the more simplistic measure of X dollars in government spending produces a resulting alpha*X rise in GDP. I'm sure there is plenty of complexity that goes into determining (more like guessing) what that alpha is, but that is beyond my level of knowledge. Given this definition, I stand by my previous statements.

  • Tncm||

    I was referring to the more simplistic measure of X dollars in government spending produces a resulting alpha*X rise in GDP. I'm sure there is plenty of complexity that goes into determining (more like guessing) what that alpha is, but that is beyond my level of knowledge. Given this definition, I stand by my previous statements.

    Then I would respond by saying that GDP is a bunk statistic for measuring economic growth because A) it can't differentiate between broken and unbroken windows, and B) it is only possible for it to rise if inflation is occurring.

  • ||

    Well, you certainly wouldn't want to apply your own brain power.

    Better do what your "betters" tell you.

  • ||

    Krugman can't get the White House to return his calls. The Jacket would never call the White House. Based on these two data points, it's likely that the President, a Democrat President, prefers Gillespie's analysis to Krugman's.

    Only a racist would cross the President, RKMO, and you're not a racist, are you?

  • ||

    It's like this: Engineer E, Ph.D. in Aeronautical Engineering from Caltech, tells me I'm safe in flying on airplanes designed by a firm he recommends, Unknowntome Inc. On the other hand, Nick G. here, English major and English Ph.D. guy, turns a clever phrase by asking me online if Obamacare would cover what Engineer E is smoking, and insists I should instead fly on Don'tknowthemeither Inc. designed planes?

    Whose plane should I get on?

  • ||

    Two economists, both with Ph.D's from MIT or whatever other school you wet yourself over, take an opposite stance on a specific position. Only one can be right. Who do I believe?

  • cynical||

    Actually, it's more like your engineer is a civil engineer, and Nick just slept in a holiday inn.

  • Yesman||

    Nice strawman but you still get an "F".

  • Brett L||

    Not Professor Langley's. Me, I'd rather ride with those bike mechanics.

  • ||

    You are assuming an economy is like an airplane, something designed and built by humans. It's not. It's used by humans, but no more "designed" by us than language is. Thus people who want to do a major redesign compared to what happens naturally in a free market economy are usually, in a fundamental sense, wrong. Krugman is like a linguist who wants to replace English with Esperanto. He may have some points about the problems with English, but in major ways he doesn't understand what he's talking about.

  • RKMO||

    ...and let me clarify, by plane, I mean penis.

  • ||

    The sexier one......and that is of course Krugman.

  • ||

    Whatever happened to Barfman?

  • ||

    Ruptured esophagus?

  • Mainer||

  • ||

    The solution is simple. Freedom.
    Dissolve the entire government.
    There is nothing a free people cannot provide for themselves that government does and when free people do it we each get to choose what we want to happen with our wallets. Forget Democracy, screw a Republic, Anarchy NOW!

  • fish||

    Forget Democracy, screw a Republic, Anarchy NOW!

    Yeah. Get back to me when you manage this.

  • lsjogren||

    All rational people involved in this debt ceiling negotiation acknowledge that this is only a FIRST STEP toward bringing our deficit spending under control.

  • Michael Ejercito||

    As Sen. Rand Paul (R-Ky.) points out in an excellent retort to the deal in the works, this "compromise" adds at least $7 trillion to the national debt over the next decade (because it claims to cut up to $2.5 trillion from a baseline that assumes $10 billion in added debt; whoopee).


    Has this idea (that a reduction in growth in spending is a cut) been used before?

  • Draco||

    Watching people fret about how "the debt" is bad and is going to destroy us would be amusing if it weren't so sad. Your debt (as an individual) might destroy you (financially, through bankruptcy or having your legs broken by a loan shark), but the debt of a sovereign issuer of fiat currency is good for it and its people, not bad!

    As Warren Mosler put it this weekend:

    "And so yes, your deficits of recent years have added that many dollars to global dollar income and savings, to the penny. Just ask anyone at the CBO. It is no coincidence that savings goes up every time the deficit goes up - It’s the same dollars that you deficit spend that necessarily become our dollar savings."

    The government can never, ever run out of money. Repeat it to yourself. Turn it into a mantra. Whatever you have to do.

    Every dollar added to deficit (preferably via tax cuts) is another dollar of net financial assets injected into the economy, with the biggest downside risk being inflation, and inflation isn't a threat when unemployment is 10-16% and there is excess capacity everywhere.

    The problem with our economy is lack of aggregate demand - not that our debt is "too big."

  • Shut Up, Draco!||

    Shut up and eat your Satan sandwich, leftard.

  • ||

    that's true, if you ignore the rest of the world. and i thought liberal were so "continental." dude, you're not smart, and you're guilty of wishful thinking. every dollar borrowed is a drain on aggregate demand. every dollar printed is a drag on the currency. you can spew all you want, but just because you're a progressive and you're sure you went to a "good school", you don't get to change the laws of economics and mathematics. arrogance notwithstanding, and i'm sure you have a ton of it. based on your analysis, maybe you should go live in Nigeria.....

  • marperl||

    Sell the U.S. to highest bidder:

    The Chinese are lining up for a potential purchase of the former superpower known as the United States of America. "For them, it's a good deal/bad deal move," noted Jeri Gentry, an international prognosticator and ice cream enthusiast. "Buying the U.S. would certainly allow for an extension of Chinese power and prestige, as well as access to lucrative coal reserves, amber waves of grain, and hundreds of donut stores. On the other hand, the Chinese would immediately become responsible for the billions of dollars in loans they have made to the U.S. Ouch!"

    More debt ceiling solutions are at Thinking Out Loud, http://marperl.blogspot.com/20.....tions.html

  • ||

    Paul Krugman can bite my shiny metal ass.

  • ||

    This was just a stone in the road for the Dems.

    But a very important stone.

    2012 will be a whole different ballgame.

    This stone will either lead to Dems cutting, or a rewind of their antics in 2009. That's what lit up millions of citizens, and it will just light them up again.

    2012 new Senate and new Pres.

  • ||

    "As Sen. Rand Paul (R-Ky.) points out in an excellent retort to the deal in the works, this "compromise" adds at least $7 trillion to the national debt over the next decade "

    Rand Paul also claims that inflation is 10%. So using his inflation number and population growth of 1% of a year and real GDP growth of 2% a year, nominal GDP will be 50 trillion in ten years. If it adds 7 trillion to the national debt, then the debt as a % of GDP will fall from 100% of GDP to 43% of GDP.

    Here is the video:
    http://youtu.be/xCzhjbzrTpA
    @1:50 "if you include the price of gas and the price of food in the CPI, it would be 10% or higher"

    (of course the price of gas and food are included in the headline CPI but no need to bother Rand with details).

  • ||

    It's funny how basic math gets past these imbeciles in Washington.

    As others noted, the money has to first be "earned" by someone, before the government takes it. These morons in Washington don't seem to understand this basic tenet.

    This deal doesn't freeze or walk back spending - it still grows Washington's bloated parasitic body on the nation.

    And what do we have? Liberal/progressives calling a good chunk of the nation names, like "terrorists."

    Wow. . they won't even call the fort hood shooter a terrorist, but they'll call their fellow americans "terrorists" for wanting to downsize a parasitic Washington.

    And note, not a single liberal talks about the monster of all parasites in the room - Obamacare - and what it's doing to our economy.

    Meanwhile, Obama vomits more "tax the rich" consistently whining about what someone else has. . . .obsessed with taking what someone else has earned.

    We've fallen down a rabbit hole in this nation - where the liberals cannot control their mouths, nor their spending - and any time someone wants to get the federal parasite downsized off their backs, they shriek and scream like banshies.

    Meanwhile - Obama's administration is now suing Alabama over their new immigration law. . . .

    Seems the liberals can't tolerate anything that the voters want that goes against what they want. . . .

  • ||

    One actual point about debt. Ever since modern economics started analyzing the effect of debt, borrowing money overall has had a net positive return.
    But for the first time since such analyses were conducted, it is not making a postive return:
    http://research.stlouisfed.org/fred2/series/MULT

    Make loans to people who can't pay them back, and than bail out the people who follow such a business model, and yes - we will get poorer every year.

  • ||

    The liberals see a light. they think it's a light at the end of a tunnel, but it is, alas, a train.

  • ||

    krugman is a vile, silver-spooned, arrogant, elitist little piece of tripe. i'd love to come across him on the street in NYC one day.... anyway, it's great that you're calling him out, on his over-educated idiocy and general smarmy tool-ness. but in reality, he should be ignored, the only treatment actually befitting a man of his "character." as for the debt, anybody with a credit card knows what happens when the minimum payment gets too high for you to handle. because the Treasury can print money, that doesn't change that basic equation. the rest of the world isn't fooled.....

  • ||

    Some of you guys might want to read this analysis by the IMF of Alesina and Ardagna's conclusions before you start celebrating. Check out page 29.

    http://www.imf.org/external/pu.....p11158.pdf

  • Tony||

    I am not as *smart* as these economists or politicians, but if we can cut out and end corporate welfare; farm, pharmaceutical and oil subsidies; cut taxes; cut spending; get rid of the Departments of Education, and Interior, reduce the size of the Dept. of Homeland Security, and Dept of Defense a little, we would be okay.

    Again, I am not as smart as Harvard, Yale educated politicians, lawyers or economists. And oh by the way, enact the Balanced Budget Amendment...because God knows that every single of these politicians for the most part will love to spend our money without any regards for the "American people" that these idiots constantly refer to when they vote to spend our money.

  • Tony||

    Hell, for that matter: I can't even chin up to Steve Smith's bar, intelligence-wise.

  • jonnison||

    So, instead of crashing the ship-of-state into the tarmac at a 90 degree angle, we have saved the planet as we know it by reducing the angle to 70 degrees? Yep, whoopee.
    (Please, quit the personal attacks. It just looks small-minded and Lord knows, we don't need any smaller minds.)

  • reverse phone lookup||

    nice place

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Progressive Puritans: From e-cigs to sex classifieds, the once transgressive left wants to criminalize fun.
  • Port Authoritarians: Chris Christie’s Bridgegate scandal
  • The Menace of Secret Government: Obama’s proposed intelligence reforms don’t safeguard civil liberties

SUBSCRIBE

advertisement