If Not Now, When?

For a quarter century, the Congress has been under rules imposing a balanced budget. They have been changed and rewritten for years. You can still deficit spend, but you have to call the spending an emergency. So, the government considers virtually every budget item an emergency. There’s always a reason to spend more money. There’s rarely a compelling reason to spend less.

I understand why people think now is a bad time to reduce government spending. Federal money has an effect on the economy. People and businesses use their credit (cards) to pay for things they can’t afford immediately. I used a student loan to buy my first car. That car got me to a job that pays the bills. The problem is that the government rarely uses debt to buy assets, but to meet obligations the current revenue can’t match. That’s the worst kind of debt.

So we fall into this kind of Keynesian spiral. Deficit spending is stimulative, but taking it away can be disruptive. In forty years, we have only had four budgets with surpluses. If we can only average a positive balance one out of every 10 years, we are in serious trouble.

In some ways, I think the push to bring down deficits is psychological. People and businesses in the private sector see their access to credit diminishing. Many are taking it upon themselves to wean off credit whenever possible. They would welcome real stimulus toward them by the government. Instead, they see a trillion dollars go to the banks and a trillion dollars in stimulus go effectively nowhere. This stimulus effect preceded 7% unemployment and concluded with 10% unemployment. If this were the definition of government working for people, it would be fired.

If Gramm-Rudman of 1985 is any indication, the desire for deficit reduction comes once a generation, when government spending it at its height. If the current plan is a bad idea, we need alternatives, not spending without limits. We could tie austerity to GDP, unemployment or corporate profits, if necessary. Right now, the only time something happens is by the will of the people. Even if Keynesians don’t like it, the will of the people is for fiscal accountability.

About 1539days

I'm like a word a day calendar for executive disasters.
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59 Responses to If Not Now, When?

  1. So how does Bill Clinton’s economy fit into this theory?

  2. The will of the people is for jobs. “Fiscal accountability” is a media made “people’s will” – like Obama was. People want the end of the tax cuts for the rich and hands off Social Security and Medicare.

    • 1539days says:

      People always want jobs. Bush maintained 2 years of unemployment rates under 5% before the downturn in 2008. Jobs are something the government is usually pretty bad at affecting.

      I think accountability is something people are very much interested in. We bailed out Wall Street and what did we get? Congress passed the Stimulus and Obamacare which all but the biggest Obots think didn’t do what they were supposed to because they were stupid compromises to get the vote needed to pass them.

      The administration had been making fun of the people at Tea Party’s who said ‘get the government out of my Medicare” as if they weren’t making sense. But they were. Obamacare takes money out of Medicare. The Ryan plan changes the structure of Medicare. Obviously, Medicare can be continued with more tax revenue. The question is who will provide it? Right now, the answer is whomever we’re borrowing money from.

    • Mary says:

      Ouch.

      First law of politics: If it is perceived to be true, then for all intents and purposes, it’s true.

      Stupid choices by Obama.

  3. votermom says:

    Instead, they see a trillion dollars go to the banks and a trillion dollars in stimulus go effectively nowhere.

    Actually, according to the GAO, the government provided 16 trillion dollars in bailouts to the banksters. $16,000,000,000,000.
    It blows my mind.
    http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

    So you are absolutely right, days, we need accountability. This is looting.

    • Mary says:

      You know, for whatever else people may say about Ron Paul, if it hadn’t been for his pushing for an audit of the Fed, the public would never have known about this $16 TRILLION, which went not just to our own banksters, but to banks all over the world.

      Sure, Sanders posted the info on his website, but it was Ron Paul who made the audit happen.

  4. votermom says:

    The weather is gloomy, rainy, and miserable here. No doubt this is a celestial comment on u-no-hu’s bday.

  5. Three Wickets says:

    Looks like we may be heading for another downturn. Austerity is the wrong policy right now, plus it probably won’t play well next year.

    • Mary says:

      I think it will, Three. It’s not that folks are against stimulus or help, it’s that they’re against any stimulus or help written by Obama and his minions—mostly designed to help his own, as in cronyism.

      For example: all this crap about oil company “subsidies,” which aren’t really subsidies , but manufacturing tax credits also used by GE, McDonalds, Microsoft, etc. By singling out just those “evil” oil companies and not acknowleding other companies who use same tax credit, the Obama administration has thrown away all its credibility in demonizing selectively.

      People get this. They’re not stupid.

      • Mary says:

        To simplify that comment:

        If Obama et al were willing to “demonize” the corporate supporters of their own for profits gained by using the same tax credits the oil companies use, they’d have a lot more credibility. Replacing Immelt as the so-called jobs czar might make Obama look credible, but he’ll never do it.

        People don’t TRUST the Obama administration. Bottom line.

    • ralphb says:

      We are almost certainly headed for another downturn. Austerity, or the lack of it, won’t make a hill of beans difference either. Keynesians have blown it with over 40 years of constant deficit spending while never saving in the good times. Government stimulus is a goner.

      We’ve spent 40 years blowing into this bubble and there is a contraction coming sooner or later.

      • WMCB says:

        We’ve spent 40 years blowing into this bubble and there is a contraction coming sooner or later.

        Yep. A contraction WILL happen. It has too. There is too much leverage for it not to. No country in history has carried as much debt as we are headed for without a financial collapse. The only question is will it be a somewhat controlled contraction, with govt trying to minimize the effects on the most vulnerable, or will it be a massive hit-the-debt-wall contraction, forced on us all at once by the math and the bond markets.

        We need to prioritize, and we need to do it NOW. Figure out what govt functions and spending are absolutely essential. There is no way out of this without pain. None. And BOTH parties did it.

        • ralphb says:

          Yes we need to prioritize. I was thinking the other day that one way to start would be to look at all the cabinet depts, like energy and education, created during the Carter Admin and close them down. Most people, if any, wouldn’t miss them since their purpose seems to be getting in the way of progress anyway.

        • WMCB says:

          Yes, ralph. People moan about the getting rid of the DOE, various depts, etc, but if it comes down to a choice between having all that and saving Medicare and SS? They’ll say axe it all. Same with arts, etc – nice to have but it needs to go away in a crisis.

          I may love sending my kids to summer camp and music lessons, and those are valid, worthy, and life-enriching things. But if times are hard, and the priority is clothes and food on the table, the swimming lessons go away first.

        • ralphb says:

          That’s a great analogy. I think too many people have not yet internalized that government spending was “their” money. Far too large a group is now receiving subsidy checks of one kind or the other from Uncle Sugar as well.

          The US government is now mostly a check dispenser and health insurer with a large standing military.

        • Mary says:

          Prioritizing, indeed.

          For instance, Obama insisted on protecting some of the leftover unspent Stimulus money for high speed rail.
          And yet, he put SS/Medicare on the table for cuts.

          Now, high speed rail may be next cool thing, but cutting SS/Medicare to do it is ridiculous.

          He shoulda had MY grandmother: No, honey. You do your HAVE-TO’s before you do your WANT-To’s.

  6. yttik says:

    The problem with government spending and deficits is that we the little people, small businesses and the working class, know perfectly well that at some point they’re going to be sending us the bill. Forget corporations and “the wealthy,” that’s a myth that they can be forced to pick up the tab. It isn’t going to happen, that’s human nature and the reality of government. This country, like many other countries, was actually build on the backs of slaves and indentured servants, not “the wealthy” and “corporations.” No matter what rhetoric we hear or how many campaign promises we get, deep down people know that when it comes to government spending, at some point we’re going to be footing the bill.

    This is a big piece of the uncertainty that is paralyzing the economy right now. People are afraid of what’s coming down the pike next. They’ve already raised taxes. We have increased taxes at every level of government already happening in order to try and balance state and country budgets.Obamacare is another huge fear, there are numerous taxes and fees written in there. The cost of goods is a big fear because of the debt, nobody knows how much things are going to cost next year. Nobody knows if we’re going to experience hyper inflation. Nobody knows what interest rates are going to do. Without some predictability, without some confidence in our leadership, nobody is going to bet money on anything. The odds are not appealing.

  7. ralphb says:

    From LI Keep this quote handy a nece quote from Obama’s debt deal speech.

    The first part of this agreement will cut about $1 trillion in spending over the next 10 years — cuts that both parties had agreed to early on in this process. The result would be the lowest level of annual domestic spending since Dwight Eisenhower was President — but at a level that still allows us to make job-creating investments in things like education and research. We also made sure that these cuts wouldn’t happen so abruptly that they’d be a drag on a fragile economy.

    Enron adviser, hack, and shill Krugman has already started blaming the coming slower economy on the debt deal.

    • yttik says:

      There is a possibility that the economy will start to improve the closer we get to 2012. Not because of anything the Gov has done, but because people will start to feel hopeful that we could be getting new leadership. At that point, Obama will take credit for this budget deal and claim that the cuts were his idea all along. I don’t think it will work, but it will be kind of entertaining to watch.

  8. ralphb says:

    Shamelessly stolen from JohnWSmart’s. Sen Marco Rubio, the best 14 minutes I’ve heard about the debt limit etc.

    • votermom says:

      I’m betting he’s the VP candidate next year.

      • ralphb says:

        For sheer power and speaking from convictions, the Dems don’t have anyone who can touch Rubio. He’s really good!

        His interactions with Kerry showed what politically posturing asshats the Dems were in the debt ceiling debate. Kerry should have kept his mouth shut.

        • DeniseVB says:

          Kerry’s got nerve after trying to skip out on the MA taxes for his yacht last year, not to mention having it built in New Zealand instead of a struggling New England yacht building company.

          Not that there’s anything wrong with that, it’s what the wealthy people do. It’s just the hypocrisy that keeps floating to the top in the Congressional toilets.

        • ralphb says:

          When it comes to the hypocrisy race, Kerry never gets less than an honorable mention no matter who’s in the competition and frequently is the big winner. I hate that mealy mouthed prick.

    • WMCB says:

      Rubio scares the Dems to death. I’ve been saying since his senate race that he will be the VP pick.

      His personal story is compelling. His love for the dream of America is palpable and genuine. He is hard-hitting, but never rude or snide or insulting. He is very gifted, not in “soaring oratory” like some say Obama was, but in explaining complex ideas in simple everyday terms. Or as my granny used to say, “he puts the hay down where the goats can get it.”

  9. votermom says:

    From moononpluto at h144, CA Dem progs pass resolution to explore primary challenge to Obama.
    http://www.sfgate.com/cgi-bin/blogs/nov05election/detail?entry_id=94646&tsp=1

    Eh, not holding my breath on this.

  10. votermom says:

    I am getting this feeling of dread that something awful is about to happen.

    I hope it’s just some passing noxious miasma from u-no-hu’s bday that is giving me this vibe.

    • ralphb says:

      I’ve felt that way since May, 2008. Maybe it’s just a passing phase?

    • Mary says:

      This may be part of it:

      By passing the debt deal (ie, more spending money), the nation’s borrowing now exceeds 100% of GDP.

      Moody’s says that a downgrade is coming unless it’s corrected; they want 73% by 2015.

      Exceeds 100% of GDP. That’s Greece-like territory.

  11. votermom says:

    OT: Flipping CDS lefties piss me off. Even now, even with those who are disgusted with Obama, the song is still “well, Hillary would have been just as bad.”
    Asshats.

    • ralphb says:

      I hate that to and those CDS people are everywhere.

      • votermom says:

        I guess part of it is trying to soothe their own consciences for voting for saurOn.

        • ralphb says:

          Probably just the last excuse. I also see lots of “Obama may be terrible but think how much worse if it were a Republican”. As far as I am concerned, that is another total BS excuse.

    • yttik says:

      Yeah well, Hillary would not have been “just as bad.”: Hillary would have actually listened and negotiated with Republicans and we’d probably all be enjoying our universal health care right now.

  12. ralphb says:

    Hope they are wrong about this. Italy ‘to default’ but Spain may ‘just’ escape

    Debt-laden Italy is likely to default, but Spain might just avoid it, according to the British think tank, the Centre for Economics and Business Research.

    With the countries weighed down by debt, the think tank modelled “good” and “bad” economic scenarios for both.

    It found that Italy will not avoid default unless it sees an unlikely big jump in economic growth.

    However, it said, “there is a real chance that Spain may avoid default”.

  13. ralphb says:

    Six GOP senators want deficit committee to meet in public

    Six Republican senators on Wednesday called on Senate leaders to ensure that a new congressional deficit-reduction committee meets in public and before television cameras.

    The 12-member super committee, comprised of an equal number of Democratic and Republican lawmakers, was created by the debt-limit legislation signed into law Tuesday, and is responsible for identifying $1.2 trillion in spending cuts by Thanksgiving. But the law doesn’t require the committee’s meetings to be open to the public.
    […]

    The senators are co-sponsors of a bill Heller introduced Tuesday that would require meetings of the committee to be transparent and open to the public.

    Earlier Wednesday, Rep. Vern Buchanan (R-Fla.) issued a statement urging congressional leaders to make the meetings public.

    “This is a pivotal point in our nation’s history,” Buchanan said. “The critical decisions made by the joint committee should be conducted under the watchful eye of the American people.”

    A common sense idea like this has almost no chance of happening in the current Beltway culture.

    • yttik says:

      A few weeks ago, I actually thought that somebody should take congress into a room…and only they come out. No I’m kidding, I meant that we should take away the TV cameras and the audience so these guys stop campaigning for just a few darn days and actually get some work done. The entire debt deal had nothing to do with the interests of the American people, it was all about campaigning and trying to make the other side look bad. I don’t want secret, backroom deals, but this 24/7 news cycle just provides an endless opportunity to campaign, not based on what you’ve actually accomplished, but on nothing but words and talking points.

      We don’t really want “the American people” to be like a referee, like Obama’s threats to “take this to the people,” because that’s almost like tattling to mommy and daddy, and in the end, what, something like 77% of the people thought congress was acting like spoiled children? We aren’t referees in petty squabbles, we’re actually your employers. People want congresscritters to act like adults.

      • Mary says:

        Apparently his “I’ll take it to the people” didn’t work.

        New Quinnipiac Florida poll shows that Independent voters there gave Obama a 33%/61% approve/disapprove rating AFTER the debt deal.

        That’s down from a 45/47 split in May, before the “deal.”

        New Gallup has him down to 42/49 today.

  14. ralphb says:

    Frome the El Paso Times, this could put “Operation Fast and Furious” in a whole other ball park.

    Documents: Feds allegedly allowed Sinaloa cartel to move cocaine into U.S. for information

    U.S. federal agents allegedly allowed the Sinaloa drug cartel to traffic several tons of cocaine into the United States in exchange for information about rival cartels, according to court documents filed in a U.S. federal court.

  15. Mary says:

    Jake Tapper re The One’s “new” focus on jobs:

    “Still, the President says he’s now focusing like a LASER on job creation—-by our count, the 7th such “pivot” since the beginning of his presidency.”

    (Snort)

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