|While a Washington Post piece gave extensive coverage to the Post's favorite deficit hawks in a piece on the budget deficit, it did not include anyone who could present the basic economic facts to readers. The reason the deficit expanded from just a bit more than 1.0 percent of GDP in 2007 to more than 10 percent of GDP in 2009 and 2010 was that the economy plunged following the collapse of the housing bubble. The deficit was and is filling in a demand gap in the private sector as a result of this collapse.
The fact that deficit hawks would not allow the government to spend more money is keeping the economy from returning to full employment. As a result, close to 9 million people are out of work who would be employed if the economy were operating near its potential. This is forcing millions of children to grow up in families with one or both parents unemployed. It would have been helpful if the Post had presented the view of someone familiar with basic economics who could have reminded readers of these facts.
It also would have been helpful to include the views of someone who could have ridiculed the obsession with a debt to GDP number. When interest rates rise, as the Congressional Budget Office projects, the price of the long-term debt that we are issuing today (e.g. 10-year and 30-year bonds) will plummet. This means that the government could buy these bonds back at sharp discount rates eliminating trillions of dollars in debt. (For example, a 30-year bond issued with a 2.75 percent interest rate last year, would sell for less than 60 cents on the dollar in 2016 if the interest rate has risen to 6.0 percent. This would mean that if we bought back 30-year bonds with a face value of $2 trillion, it would only cost us $1.2 trillion. This would instantly eliminate $800 billion in debt, lowering our debt to GDP ratio by roughly 5 percentage points.)
This move would be completely pointless since it would not change our interest burden at all. But since Washington budget wonks seem to think the debt to GDP ratio is hugely important, it would be a very simple and costless way to make them all very happy. It would have been useful for the Post to note this so that its readers would realize that the budget debate in Washington is pretty much complete nonsense from an economic standpoint.
Blast from the Past. At Daily Kos on this date in 2004—Pure and Simple: Equal Rights:
|Thirty years ago this month, Right-to-Life activists in Boulder, Colorado—scurrilously egged on by the local, chain-owned daily newspaper—challenged one of the nation’s earliest tendrils of what they called the “gay agenda.”
Then, as now, the gay agenda was a quintessential American agenda— the acquisition of equal legal protection by yet another group of our country’s second-class citizens. At issue in Boulder was not gay marriage or civil union, but another basic right: non-discrimination in employment. Shortly before Christmas, 1973, the nine-member city council—with its two-year-old liberal majority at the helm—passed one of the first four or five such ordinances in the U.S. Some gay activists and progressives to the left of the council had wanted something more: a clause proscribing non-discrimination in accommodations.
The legislation was initiated by Mayor Penfield Tate II, elected by the unpaid council as the first black mayor in Colorado history, chosen in a city with less than 2% African-Americans. A lesbian acquaintance told Tate she had been fired specifically because of her sexual orientation. Tate knew about injustice first-hand. And he saw the matter quite simply: an abrogation of the constitutional right of every American not to be legally diminished for background or belief or biology.
On today's Kagro in the Morning show, it's State of the Union day. Greg Dworkin reads the polls on issues likely to be included, and what reaction we can expect. We watch Jennifer Rubin fulminate about the President recounting having met the Pope. Procedural fact check: would Chuck Hagel would be just the 3rd cabinet nominee to have to overcome a filibuster. Well, yes & no. Behind the scenes SOTU meta. The IOC is set to axe wrestling from the 2020 Olympic games. Armando weighs in! Finally, a Utah town's debate over a local ordinance recommending that every home keep firearms, and everyone undergo free, city sponsored gun safety classes. Hey, that's socialism!