... there are many–among both policy makers and the general public–who are convinced that one of our short-term priorities must be reducing government spending....
This is nothing short of insanity. There is absolutely no question that moves to try to balance the budget will meet with the same success as they did in 1937, when they served to raise unemployment from 14% to 19%. I have already written on this topic many times and so will limit myself to making only three points today:
Forbes — Pragmatic Economics
Why Balancing The Budget Means Economic Catastrophe
John T. Harvey | Professor of Economics, Texas Christian University
It doesn't hurt to repeat this point ad nauseam, since it hasn't sunk in nationwide ...
ReplyDeletebut it would help to disseminate that message to more places than just repetitively at this particular blog
We're spinning our wheels?
74% of Americans support Balanced Budget amendment
ReplyDeleteThis comment has been removed by the author.
ReplyDeletebecause 100% of them don't understand the semantics, that "Balanced Fed Budget" = Neutered Fiat
ReplyDeleteplus, ~329 + 9/10ths millions of them don't read Mike Norman Economics blog ... unfortunately
It'll be like the financial debt bubble
ReplyDeleteThose who say it is a bad thing won't get listened to until disaster strikes.
Let them 'balance the budget' and then when the US goes into a deep recession you strike.
Look how much of a disaster has happened in Europe and only now are we getting people in politics who are gently suggesting that perhaps things have gone too far.
To change public opinion requires a high magnitude disaster. So probably the best approach is to quietly encourage the idiots to ram the train into the buffers as fast as they can.
"Let them 'balance the budget' and then when the US goes into a deep recession you strike."
ReplyDeleteThey'll blame it on the Fed or on government regulation.
or 'uncompetitive' workers.
ReplyDelete"They'll blame it on the Fed or on government regulation"
ReplyDeleteUndoubtedly.
But you have to be clever with the politics and let them dig their own graves - preferably by instituting clever counter-laws such as no bailout clauses in the balanced budget amendments.
That way when the spending strike hits, the corporate sources of income die as well.
There is no doubt in my mind whatsoever that we will get a balanced budget amendment.
ReplyDeleteThe end in view of balanced budget types is to undermine the welfare state and convert it to a market state by making social spending impossible fiscally. Social spending will be relegated to voluntary spending through charity.
ReplyDeleteAny balanced budget amendment proposal that is viable will contain a provision that excepts military spending. Bank on it.
Spot on, Tom.
ReplyDeleteR's already control most state governments, if they take White House in 2016 and keep control of Congress, a balanced budget amendment could happen.
Geez, the USA deficit is the only thing keeping the world economy afloat right now.
ReplyDeleteIf it happens we will have an other full-scale war in less than a year from that date.
World going to shiiit
Some people see the "Warning: Do Not Touch" sign on the electric fence and don't touch it. Others can only learn not to touch it by ignoring the sign and getting fried.
ReplyDeleteSuch an amendment outright rejects basic Keynesian economics. Would it be based on easily tricked/ manipulated cash accounting? What's the recourse for failure to comply to a balanced budget requirement? What if the President fails to submit a proposed balanced budget? What if actual spending doesn't align with actual revenue? Is there even a possible judicial remedy? Would immediate tax increases be in order? Or an immediate order of slash and burn spending cuts? From what programs? (In alignment with TH's comment, last question is of course rhetorical.)
ReplyDeleteRight. "Everyone" is for a balance budget amendment in principle, but the devil is in the details. That's when things will get interesting.
ReplyDeleteEveryone is for illogical nonsense, in principle?
ReplyDeleteHow did we get to this? We've brainwashed our own population into a dunce corner.
The Founders must be appalled (if watching), esp John Adams
"All the perplexities, confusion and distress in America arise, not from defects in their Constitution or Confederation, not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit and circulation." John Adams
http://www.brainyquote.com/quotes/quotes/j/johnadams164125.html