Tuesday, August 14, 2012

David Stockman, the Reagan budget director who jumped ship in 1985, has a brilliant op-ed in today's NY Times. He rightly perceives that one cannot just anathematize Ryan and get back to the big spending, which in my candid opinion is all that Obama has to offer. Instead the matter of the budget and the debt must be addressed holistically. Yes, entitlements need to be capped, but the absurdly bloated expense of the military must also be drastically reduced, which Ryan refuses even to consider because it is a Republican sacred cow and foreign interventions have become their obsession. Stockman also sees the need for very serious scrutiny of the Federal Reserve and banks, including restoration of Glass-Stegall. He only falls down on the need for tax increases, claiming that means testing of entitlements (a very bad idea) will solve the problem.

He is right about the main thing, though: we cannot just keep wildly spending money and fideistically assume that everything will turn out right. http://www.nytimes.com/2012/08/14/opinion/paul-ryans-fairy-tale-budget-plan.html?_r=2


Blogger Burk said...

Yes we can!

Just kidding. But the fact is that there is no problem being presented by current government borrowing. Stockman et al. have been wringing their hands for how many years? Decades? And this after he was the most profligate spender and got the ball rolling in the first place?

Anyhow, if government borrowing were a problem, you would be seeing inflation, as it spends in excess of income (taxes). Where is the inflation? Many have feared it, and predicted it. But it doesn't happen. That is because borrowing is a good thing at the moment, keeping us out of a depression.

We can cut spending when we have to , or raise taxes. But one problem at a time.. unemployment is the problem now.

Keep in mind that all this scare-mongering about problems that are not problems right now are one thing- class war. A way to ignore the current problem of unemployment and damaging inequality, while focussing on ways to screw the poor and middle class in the future by taking away their services and giving more money to the rich.

1:09 PM  

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