Petitioning the media to change its budget reporting might be outside the standard scope of action among progressives, but it is a well-defined action that could make a real difference. Much of our budget debate today is complete nonsense in large part because the public is so poorly informed.
Ben Bernanke has been saying that the economy's getting a bit better, so interest rates are going up. And at some point, sooner than later, he and his buds at the Federal Reserve are going to start adding a bit less juice to the punch bowl. I don't really know what to make of the markets and I suspect they're just going to be volatile for a while. But it's the real economy I'm worried about, and I used to have a friend in Bernanke when it came to that. Now, I'm not so sure. Fed policy always has costs and benefits and deep monetary stimulus is no free lunch. But as long as the broader economy remains in the residual gravitational pull of the great recession, the benefits of the Fed's aggressive actions outweigh the costs. I get that they're planning their pivot, which isn't the same as pivoting. But they're doing so too soon.
For now, our political system appears to be broken, with our elected officials rewarded for winning political, not economic, battles. It's almost as if we have decided to deliberately ignore the lessons of our own Great Depression and Europe's debt crisis.
As the government's role as economic hall monitor is debated and global markets and foreign economies adjust to their own challenges, our focus is on investing in the old-fashioned companies with strong balance sheets, increasing earnings, strong cash flow, and seasoned management teams.
These are the elephants in the American economy. All other spending is minor compared to spending on healthcare and the military. If we can get greater efficiencies in these two areas, all the other problems become much more manageable.
In this case the strong support of the public for these programs -- which cuts across party and demographic lines -- overcame the power of corporate money and the political elite. When push came to shove, not enough politicians were prepared to go against the strongly held views of their constituents.
As the fiscal picture has improved, both through actions we've taken already and the improving economy, it's much tougher to make the hair-on-fire urgency case that drove this benighted debate in recent years.
You might have heard that "austerity is dead." Meanwhile we have two real problems to worry about: unemployment and crumbling infrastructure.
If the Washington Post wants to restore some credibility on this issue, they need to get real about the economic vulnerability of most retirees and start emphasize raising the "tax-max" -- the salary cutoff for payroll taxes -- as part of the fix here.
Those obsessing about deficits never cared so much about deficits. They use deficits and debt to further their shrink-the-government agenda. In that context, the fact that the deficit numbers no longer support their four-alarm-fire messaging strategy is but a minor inconvenience.
While there is plenty of fat and waste in government, it's important to emphasize that government operations cannot always be assessed on a simple profit and loss basis; there are many critical cases where the government steps in precisely because the free market can't or won't.
The only thing that scares politicians more than losing votes because of the sequester is actually doing some work to avoid losing those votes.
How can we care for the elderly and poor while not bankrupting ourselves? My modest proposal turns the problem completely around. Rather than the poor and elderly being the cause of the problem, they instantaneously become its cure.
Even as the economy slowly recovers from the worst downturn since the Great Depression, government-haters and deficit-hawks are sticking to their same story: Americans have lived beyond their means and must now learn to live within them. The reality is quite different.
Is speedier air travel more important than lunch for senior citizens or early childhood education for pre-schoolers? How about cancer research, heating assistance, police protection, or special education? All have lost funding to the sequester.
The story of the Reinhart-Rogoff error tells us a great deal about how the elites use economists and the prestige of the economics profession in order to impose their will on the public.