Deficit Fever: Loon Tune Time Among the Elite

[Donnachaidh]

http://tpmcafe.talkingpointsmemo.com/2011/04/26/deficit_fever_loon_tune_time_among_the_elite/

We already knew that the folks involved in debating and designing economic policy had a weak understanding of economics, that is why they couldn't see the $8 trillion housing bubble that wrecked the economy, but now it seems that they are breaking their ties to reality altogether. The country is still smoldering in the wreckage of the collapsed housing bubble, but the victims have left the policy debate altogether.

Twenty five million people are unemployed, underemployed or out of the workforce altogether, but that's not on anyone's agenda. Millions of homeowners are underwater in their mortgage and facing the loss of their homes, that's also not on anyone's agenda. Tens of millions of baby boomers are at the edge of retirement and have just lost their life savings. This also is not on anyone's agenda.

Deficit cutting fever is the current craze in the nation's capital. But even here there is little tie to reality. House budget committee chairman Paul Ryan put out a budget that proposes that in 2050 we will be spending less on defense, domestic discretionary and various non-medical entitlements together than we spend on defense today. And most of the punditry praise its seriousness. Meanwhile, the Progressive Caucus, the largest single bloc in Congress, proposes a way to get to a balanced budget by 2021, and it is virtually ignored.

There are certainly grounds to criticize the caucus's budget, since it is not perfect. My list of deficit reducers would include requiring the Fed to hold $3 trillion in debt, as a way to save $1.5 trillion in interest payments over the course of a decade. I would also give Medicare beneficiaries the option to buy into more efficient health care systems in other countries. This would both save money and show people that we can get top quality care for a hell of a lot less money. And I don't buy the need for major deficit reduction in the first place, but if you want a serious effort to balance the budget, here it is.

More at the link --

[fasttense]

1. The last time a Democratic President listened to a bunch of ignorant RepubliCONS

about the budget deficit after a severe downturn in the economy, the economy tumbled and crashed yet again. His name was FDR and he tried to balance the budget after the 1937/1938.

And we are headed straight for that 2nd crash yet again.