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Something you will not like at all

By Owen Paine on Thursday June 9, 2011 07:39 PM

"Stimulus is sugar."
-- T Geithner
That's the trumping citation from Mammon's gospel according to Timmy G. It has the same curt beauty as that over-certified line of Marie A's: "Qu'ils mangent de la brioche." Contemporary paraphrase:
Geithner to jobless: "No cake for you!"
Busy Timmy's bon mot comes from a sweet tale of the treasury sec's triumph over his rivals in the Administration, macronautics-wise. Maybe it's even worth the short read it involves. Suffice it to say when Barry looks in the midnight mirror he sees the tight-assed gleam of this fucking Romulan from Wall Street, and that may be even worse then seeing... gadzooks... Larry Ziffle.

In an oddly related development, our other plump friend, Braless Brad Delong, excerpts this from the ever-miasmic Mike Konczal. It's on "The Importance of Deficit Cutting to Liberal Economists":

"A lot of people seem surprised the Democrats have implicitly prioritized deficit cutting over job creation and full employment. It’s an explicit goal for Republicans, so that isn’t a surprise. But why are Democratic, liberal types not worried enough about the demand shortfall and so much more worried about deficits? It might be helpful to see what a prominent, liberal macroeconomist would say about the state of the world going into the recession...
Konczal then quotes Christina Romer to support his case:
One of the most striking facts about macropolicy is that we have progressed amazingly... In my opinion, better policy, particularly on the part of the Federal Reserve, is directly responsible for the low inflation and the virtual disappearance of the business cycle in the last 25 years... What stops this story from being a good morality play is... a remarkable lack of progress in long-run fiscal policy. In this area, the legacy of 1960s beliefs is still very much with us and may threaten the long-run stability of the American economy... The consequences of persistent deficits may only be felt over a very long horizon... Perhaps over a wide range, deficits and the cumulative public debt really do have little impact on the economy. But, at some point, the debt burden reaches a level that threatens the confidence of investors. Such a meltdown and a sudden stop of lending would unquestionably have enormous real consequences..."
Don't dashing Brad come clopping and jouncing to fair Chrissy's rescue:
"Let me note that Christina Romer has not prioritized deficit cutting over job creation and full employment. And let me note that Christina Romer is correct: in the long run, either the government raises enough revenue to keep its deficit small enough that the debt-to-GDP ratio does not explode, or the market will do something to the economy and the government -- and that something is something that we will not like at all. To pretend that bringing the long-run spending and long-run taxing plans of the government into rough balance is not an essential task of economic policy is to work to end economic prosperity, and to end social democracy as well."
The pig ant has spoken!

But it's all nonsense. If anyone wants a full look at so-called the "peak federal debt ratio" and the sudden catastrophic loss of market confidence that Porker Delong here waves a puggy paw at, then I'll be glad to provide it. Let this stand for now:

There is no stinking "peak debt to GDP ratio", and there's no way the debt to GDP ratio can "explode"; and this threat of the market or gubmint doing something "we will not like at all" is a mere raw-head-and-bloody-bones illusory bogeyman.

Nor is fiscal balance an essential task; nor if imbalance persists, is there any necessary end to "prosperity" or -- God save us -- "social democracy".

Comments (5)

Al Schumann:

I'll bet the "peak federal debt ratio" bears a startling resemblance to the Lump of Labor fallacy/canard.



they are all part of the trick of the head
virtual road blocks
that make liberation not happenable
till birnam wood comes to dunsinane

well at some fuckin point
this too
will be slain
by a rising mass brute
from its mother society
untimely ripped


clearly time for the late
robert eisner to slide
in from 1988

Why Not a Bigger Budget Deficit?


add on quote by way of
cool cat boo bird
m spike whitney

at clownpunch


""There was a definite split among the economics team about whether we should push for more fiscal stimulus, or switch our focus to the deficit. A number of us tried to make the case that more action was desperately needed and would be effective. Normally, meetings with the President were very friendly and free-wheeling. He likes to hear both sides of an issue argued passionately. But, about the fourth time we had the same argument over more stimulus in front of him, he had clearly had enough. As luck would have it, the next day, a reporter asked him if he ever lost his temper. He replied, “Yes, I let my economics team have it just yesterday.”...("Christina Romer looks back — and forward", Washington Post)"

btw mike thinks there's a swivel in policy under way

policy swivel mike ?
or the usual waether vaning chitter chat
from the top limb of the tree
we'll see what we see

the bit by our potus:

"(Obama) ‘“And as long as there are some folks out there who are unemployed, looking for work, then every morning when I wake up, I’m going to be thinking about how we can get them back to work."

my my ...continuing

"Some of the steps that we took during the lame duck session, the payroll tax, the extension of unemployment insurance, the investment in — or the tax breaks for business investment in plants and equipment — all those things have helped."

okay ...and yet here we are barry

"And one of the things that I’m going to be interested in exploring with the members of both parties in Congress is how do we continue some of these policies to make sure that we get this recovery up and running in a robust way.’"

i take that as evidence we may get extensions of transfer largesse by uncle
the payroll tax holiday further extended benefits

--- note the safety net on over time
has become a sudden death cliff hanger--

this in exchange for more corporate give aways
"the tax breaks for business investment in plants and equipment "and maybe "a cut in the employer side of the payroll tax"

hey maybe those drubbed over souls
in plus 99 week unemployment mode
might get some dramatic relief
imagine that !!!
my son in laws movement of choice
in the past year or so


"..I'd be willing to add $100 billion to the deficit, if we spent the money on productive things, like taking kids from the ghetto and turning them into productive citizens,"
eisner in link

juan :
eisner was a hyper goo goo
god bless him

but so far as selling hyper beveridge
full employment fiscal deficits go

the above
is strictly wrong way corrigan stuff

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