National Debt and Deficit. Simoleon Sense. Robert Reich. The March jobs report in two graphs - Ezra Klein. Republican policies don’t care about poor people - Ezra Klein. I’m not saying that congressional Republicans don’t care about poor people. But they really care about rich people. So far, the policy agenda they’ve pushed has been a mixture of very expensive tax cuts for the very wealthy and very deep cuts to a lot of programs that focus on the very poor. It’s . . . curious. Think back to the tax deal. The GOP’s demands were: 1) the extension of the Bush tax cuts for high-earners; and 2) a massive cut in the estate tax. Put together, the two items will increase the deficit by close to a trillion dollars over 10 years.
Now they’ve moved onto deficit reduction, or at least spending cuts, and their priorities in the 2011 budget are telling. As for the 2012 budget, we know Social Security is being left alone, and we know Medicaid — which is to say, health care for poor people — is taking a $1 trillion cut. It’s very difficult to argue that these programs are the most wasteful in the federal government. Historinhas. Dan Ariely. The new economics foundation. Economics and Politics by Paul Krugman - The Conscience of a Liberal.
Krugman and Karl Smith on the Fine Print in the Recent Growth-Through-Austerity Reports « Rortybomb. Hey! Even I was tricked by the three-card monte of the recent GOP/AEI research on growth-through-austerity, and I’m trying to watch the red Ace very closely as these conservatives spin the cards around. Where I thought they were actually putting their markers down on the full “growth through austerity” case, where cutting the deficit is the most important thing to do for the economy right now, they each had an escape hatch where they can say “umm, we actually just said growth would be boosted a bit from ‘Non-Keynesian’ elements like confidence.
Not that the economy would expand.” Palming the expansionary card, everything left on the table is higher unemployment, lower GDP, and a transfer from necessary services towards corporate tax cuts. Well played. Krugman caught this language from the AEI report: Not that this will make any difference to the GOP position, of course. And Karl Smith goes over the JEC report: I love the crowdsourcing elements of the econoblogosphere. Yup. Like this: The Exceptional Mr. Greenspan. What's Behind Low Investment? This post by John Taylor is getting a lot of attention, because it does show a striking correlation between investment and unemployment: John Taylor But when Taylor leaps from that correlation to saying that what we need for economic recovery is to “lighten up on the anti-business sentiment coming out of Washington,” I wonder what is going on in his head.
I mean, Taylor presents another graph, showing a plunge in fixed investment since 2006: But that’s overall fixed investment. Let’s decompose it: It’s mostly the housing bust! Yes, business investment is low — but no lower than you might expect given the depressed state of the economy. What the data actually say is that we had a catastrophic housing bust and consumer pullback, and that businesses have, predictably, cut back on investment in the face of excess capacity. Greg Mankiw's Blog. Demand, Supply. Progressive wishful thinking. Progressive bloggers have many admirable characteristics.
They try to rely on real science, not junk science. They look for public policies that reduce suffering. But when it comes to government they often become slightly unhinged, adopting the sort of “faith-based” reasoning that they tend to deride in conservatives. Recently I’ve notice three blog posts by Greg Mankiw that (directly or indirectly) challenged progressive faith in big government. All were derided by progressive bloggers, but in each case Mankiw was clearly right. Part 1. Mankiw didn’t even comment on the data, he merely reported it. The progressive response is that the Laffer Curve idea is far-fetched, and that higher tax rates don’t reduce GDP per capita. All this may be true, but progressives can’t point to any European models (except perhaps special cases like Norway and Luxembourg) that raise the sort of revenue they claim the US would raise if we boosted taxes as a share of GDP to European levels. And Brad DeLong: