Categories:
Politics and Economics
A reader requests that I update the One-Party State Watch. This story about the success of Google’s $1.8 million political fundraising dinner serves the purpose.
Another reader asks me what my benchmarks would be for taking the Tea Party seriously. I take it seriously, regardless, but my benchmark for anyone in Congress is whether they can produce an honest budget. That means a budget that is not labeled as “unsustainable” by the Congressional Budget Office. On the Republican side, Paul Ryan meets my standard for seriousness, but he seems to have little or no support. On the Democratic side, I have not heard about anyone in Congress who has proposed budget path that is sustainable as scored by CBO.
Other requests?
READER COMMENTS
mlb
Oct 29 2010 at 12:14pm
Another request: So much of the monetarist call to debase the USD stems from the improvement in the economy during the Great Depression after the USD was devalued vs gold.
You don’t seem as convinced that printing money is the answer. How do you argue against this historical precedent. I have my ideas but would be curious to hear yours.
Robert Bell
Oct 29 2010 at 1:36pm
Did Paul Ryan’s roadmap actually get fully scored by CBO? I had only heard of a preliminary version which (I think) apparently didn’t fully integrate projected revenues and employment?
Doc Merlin
Oct 29 2010 at 2:45pm
Well, Paul Ryan will likely be Chair of the Budget committee (he is ranking member now), so I think his plan will likely make it to a house vote.
Mr. Econotarian
Oct 29 2010 at 3:22pm
The whole Google WiFi capture thing is BS. If anything, this is an example of foreign governments using “privacy laws” to try to cripple an American company.
If you want your radio transmissions private, then encrypt them.
Robert Bell
Oct 29 2010 at 3:56pm
Also Arnold:
“That means a budget that is not labeled as “unsustainable” by the Congressional Budget Office”
Presumably CBO uses models roughly in line with what you have termed “hydraulic macro”, so do you have confidence in what they say? Personally I would assume a “sustainable” rating by CBO is probably necessary, but not sufficient.
Doc Merlin: That’s true, although such plans would likely be different than the roadmap.
Lord
Oct 29 2010 at 4:56pm
The tea party isn’t about deficits though, just spending. One shouldn’t confuse rhetoric for substance.
David C
Oct 29 2010 at 6:48pm
The CBO doesn’t score revenues. Paul Ryan’s plan included tax cuts, which made the overall plan less sustainable. Right now, the closest thing to a sustainable budget is Obama’s, which is to say, not even close. I’m guessing that not one of the Tea Party candidates about to be elected into office will be able to produce a sustainable budget either. If that happens, will you stop taking them seriously too?
http://www.cbpp.org/cms/index.cfm?fa=view&id=3114
http://ctj.org/pdf/ryanplan2010.pdf
derp
Oct 29 2010 at 8:17pm
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Chris Koresko
Oct 29 2010 at 8:33pm
Lord: “The tea party isn’t about deficits though, just spending. One shouldn’t confuse rhetoric for substance.”
I’d have expected most economists to say that spending is more substantial, in terms of it impact on the long-term health of the economy, than the balance of the budget. Are you assuming the opposite?
Lord
Oct 29 2010 at 10:50pm
Not the amount of spending but the direction.
Ano
Oct 30 2010 at 12:50pm
Ryan’s plan was not scored by the CBO. The plan that was scored by the CBO is not being proposed by Ryan.
Ryan’s plan includes both spending controls and tax cuts. A plan that involved Ryan’s spending cuts but not his tax cuts was scored by the CBO, and was indeed judged sustainable. He didn’t have them include the tax cuts for some sort of procedural reason (something along the lines of “the joint committee on taxation didn’t have time to do the analysis”).
I can see why Mr. Kling is encouraged by the massive spending cuts proposed by Ryan, but the jury is still out. By all indications, his huge spending cuts and huge tax cuts, when scored together by the CBO, will not be sustainable.
Doc Merlin
Oct 31 2010 at 3:39pm
“I can see why Mr. Kling is encouraged by the massive spending cuts proposed by Ryan, but the jury is still out. By all indications, his huge spending cuts and huge tax cuts, when scored together by the CBO, will not be sustainable.”
I disagree with the characterization of Ryan’s cuts as massive. They are fairly small.
MernaMoose
Nov 1 2010 at 12:26am
I agree Doc, but if Ryan’s proposed cuts were massive do you think his name would still be in politics?
Ano
Nov 1 2010 at 8:54am
Doc Merlin and MernaMoose:
You say Ryan’s proposed spending cuts are “fairly small.” Fine; “small” is in the eye of the beholder. But it is clear that Ryan’s spending cuts are about the same size as the projected deficit going forward (since his spending cuts balance the budget without raising taxes as far as I remember).
So: if you think Ryan’s spending cuts are “fairly small,” doesn’t this mean you think our long-term deficit is “fairly small?”
MernaMoose
Nov 1 2010 at 1:26pm
For my part, I’d say it’s more along the lines of “the government has gotten entirely too big and needs to get significantly smaller”.
MernaMoose
Nov 2 2010 at 9:24pm
Arnold,
If you’re still watching this, I’d find it very interesting to see some discussion of this idea.
Is it possible to design government institutions in such a way as to make them want to maximize economic growth, maybe in order to maximize their own tax revenue stream?
How can we build a better system of checks and balances, wherein the government itself is unable to forget that its long term welfare is tied to the long term economic well being of its citizens?
A hard problem indeed, but imagine being able to do it!
Duane Moore
Nov 8 2010 at 8:09pm
Arnold, I would like to see some thoughts from you on why the Fed’s recent monetary stimulus has not produced the inflation that many expected. And what is likely to happen with the latest round of quantitative easing (QE2)?
Also, I am interested to hear your thoughts on the topic of how inflation is actually measured. I have heard anecdotally from many folks that everyday goods such as fuel and food don’t appear to be getting any cheaper, yet we are told that the inflation rate is close to zero. I understand the current situation that housing prices may be keeping inflation low. But then how do we explain that inflation was not rising dramatically when housing prices were going up and up before the bust in 2008? I have heard very few people discuss the mechanics of how inflation is actually measured and would like to hear any insights you have on that.
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