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February 4, 2013

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Latest Posts from Economist's View


Posted: 11 Jan 2013 12:42 AM PST
Republican threats over the debt-ceiling can and should be defused:
Coins Against Crazies, by Paul Krugman, Commentary, NY Times: So, have you heard the one about the trillion-dollar coin? It may sound like a joke. But if we aren't ready to mint that coin or take some equivalent action, the joke will be on us — and a very sick joke it will be, too.
Let's talk ... about the ... debt-ceiling confrontation. ... It's crucial to understand ... the vileness of that G.O.P. threat. If we were to hit the debt ceiling, the U.S. government would end up defaulting on many of its obligations. This would have disastrous effects on financial markets, the economy, and our standing in the world. Yet Republicans are threatening to trigger this disaster unless they get spending cuts that they weren't able to enact through normal, Constitutional means. ...
This is exactly like someone walking into a crowded room, announcing that he has a bomb strapped to his chest, and threatening to set that bomb off unless his demands are met.
Which brings us to the coin.
As it happens, an obscure legal clause grants the secretary of the Treasury the right to mint and issue platinum coins in any quantity or denomination... — and it offers a simple if strange way out of the crisis.
Here's how it would work: The Treasury would mint a platinum coin with a face value of $1 trillion... This coin would immediately be deposited at the Federal Reserve, which would credit the sum to the government's account. And the government could then write checks against that account, continuing normal operations without issuing new debt. ...
But wouldn't the coin trick be undignified? Yes, it would — but better to look slightly silly than to let a financial and Constitutional crisis explode.
Now, the platinum coin may not be the only option. Maybe the president can simply declare that as he understands the Constitution, his duty to carry out Congressional mandates on taxes and spending takes priority over the debt ceiling. Or he might be able to finance government operations by issuing coupons that look like debt ... but that, he insists, aren't debt and, therefore, don't count against the ceiling.
Or, best of all, there might be enough sane Republicans that the party will blink and stop making destructive threats.
Unless this last possibility materializes, however, it's the president's duty to do whatever it takes, no matter how offbeat or silly it may sound, to defuse this hostage situation. Mint that coin!
Posted: 11 Jan 2013 12:33 AM PST
Tim Duy:
More on Central Bank Independence, by Tim Duy: Central bank independence is a hot topic right now. Two obvious themes are in play. First, should central banks always be independent? Second, are the supposed threats to independence widespread?
On the first topic, Izabella Kaminska offers this:
Nowadays, the idea of not having an independent central bank is seen as being a bit backward. One could even say that central bank independence is widely accepted as the optimum set-up for any country's monetary system, a reflection of its developmental status.
"Independent central bank? Check."
"This country must be civilised. "
Yet, can we really be so absolute about the matter?
In Raiders of the QE surplus — a post that challenged the controversy regarding the UK Treasury's so-called raid of Bank of England surpluses — David and myself proposed that central bank independence must not be treated so resolutely. We argued, in fact, that any central bank's status should be determined by the economic context it finds itself in.
I tend to agree. I don't recall there being an Eleventh Commandment to the effect of "Thou shalt always grant independence to the monetary authority." Ultimately, the central bank serves the public, and the latter only grants independence if the former is adequately meeting the needs of the public. In other words, central bank independence is ultimately tied to job performance.
With this in mind, note this Reuters piece by Leika Kihara:
Abe had run his campaign with a relentless focus on economic policy and had called on the Bank of Japan (BOJ) to take drastic steps to end the nation's long bout of deflation, or else face a radical makeover at the hands of parliament.
The vote had become an unexpected referendum on the BOJ itself, and the bank had lost.
Senior officials concluded that to preserve the BOJ's scope to act in a future crisis, it needed to move quickly to show it recognized reality, according to people familiar with the hurried deliberations. Abe had won a mandate for more forceful monetary easing, and Japanese taxpayers were frustrated with an economy slipping back into its third recession in five years.
Kihara suggests that what many perceive as the loss of independence is the Bank of Japan's response to the will of the people:
"The LDP's win was just too big, and it won an election calling for a 2 percent inflation target. If that's the will of the people, the BOJ must respect that," said a source familiar with the central bank's thinking. "Otherwise, the BOJ could lose everything, including its independence."
The counterargument is that the Bank of Japan is fooling itself; a response to political pressure, by the fiscal authority or the electorate, is simply a loss of independence. More accurate, in my opinion, is that the Bank of Japan is choosing the avenue of least restraint - either willingly acquiesce to political pressure and retain some modicum of self-respect, or suffer the humiliation of have their independence seized from them by legal decree. Can't blame them for taking the first option.
Gavyn Davies responds to charges that other central banks are losing their independence, coming to the opposite conclusion:
It seems to me that this is a very premature conclusion. While there is no denying that this is indeed the objective in Japan, the direct opposite seems to be happening in the rest of the developed world.
Davies' first point is:
First, it is argued that the central banks are now operating far outside the realms of traditional monetary policy, and have crossed the border into territory that has always been deemed to be clearly "political" in western democracies....I would point out that none of the recent actions of the central banks, including the 2008 bank rescues and the subsequent credit easing, have been contrary to the wishes of elected officials, such as the US Treasury secretary, the UK chancellor, or a clear majority in Congress. As a result, there are very few signs that the political process sees any urgent need to re-assert any control over central bankers in these areas. Obviously, this could change if central bankers were to become more hawkish in ways that could prove politically unpopular, but to date there is little sign of that happening either.
Indeed, one can argue that, aside from the Bank of Japan, the last few years have strengthened the notion of an independent central bank (I made an argument to that effect here regarding the European Central Bank). And notice were Davies ends up - in the current environment, the lose of independence is most likely to come from being excessively hawkish. With inflation low, some elements of Congress might publicly lament about runaway monetary policy, but few would actually take the chance of derailing what recovery we have by undercutting the central bank in the pursuit of tighter policy.
Davies' second point:
The second reason given for the inevitability of political control over the central banks concerns the relationship between fiscal and monetary policy....politicians will "order" the central bank to expand the monetary base to finance the budget deficits. This will hold down the public debt ratio, and if it causes inflation to rise, that might be a welcome side effect....This has now happened in Japan, but it has taken a full two decades of failing economic activity to get there. And while the outcome in Japan will presumably have powerful effects on opinion elsewhere in the world, the current situation is a long way from fiscal dominance over the central bankers.
Again, the key is "failing economic activity." If central bankers can't or won't due their jobs, they will lose their independence, period. Davies then points out something that is often missed:
In the US, for example, the Fed has, entirely voluntarily, announced an open-ended programme of bond purchases, which will be continued until unemployment falls substantially. Furthermore, the Fed chairman has hinted that he thinks that, for a while, fiscal policy should be more supportive of economic activity.
I made similar comments to Pedro DaCosta at Reuters, although I think more forcefully. Congress and the President are remarkably tone deaf with regards to the message from the Federal Reserve, which is essentially "issue as much debt as you want; we won't stand in the way as long as inflation is under control." Federal Reserve Chairman Ben Bernanke has opened the door to implicit cooperation, but fiscal authorities remain afraid to enter.
Which brings me to Greg Ip, who argues against the platinum coin because it would infringe upon the Fed's independence (and I thought I was going to make it through the year without writing something on the platnium coin). How he gets there is interesting. Ip first argues that the platinum coin and the subsequent (although not immediate) increase in the monetary base need not lead to an increase in inflation as long as the Fed has the ability to control interest rates:
...in 2008, Congress gave the Fed authority to pay interest on reserves. Because banks should not lend reserves to each other for less than they can get from the Fed, this restores the Fed's control over interest rates regardless of the size of its balance sheet, and thus over inflation...What this means is that while the platinum coin option expands the Fed's balance sheet and, ultimately, the monetary base, it has no implications for inflation, even if the Treasury never buys back the coin.
So the platinum coin does not cause inflation because the Fed has a tool to control interest rates. Ip continues:
But while the economic consequences for the Fed are benign, the political consequences are not. As I noted earlier, the Fed buys coins in response to demand from commercial banks (the process is explained here). Banks won't want a $1 trillion platinum coin, so the Fed will only buy the coin if Treasury forces it to. The Treasury, in "depositing" its coin at the Fed, is in reality ordering the Fed to print money. And if Treasury doesn't take the coin back, the money stays printed.
The economics may be the same as QE; as Mr Krugman notes, coins, like bonds, are liabilities of the central government. But the politics are utterly different. We have a central bank to separate fiscal from monetary policy. The Fed implements QE when it has decided that's the best way to carry out its monetary policy objectives. Buying a coin solely to finance the deficit is monetizing the debt, precisely the sort of thing central bank independence was meant to prevent. How could any Federal Reserve chairman justify cooperating in such a scheme, in particular since the Fed would be taking the White House's side in a fight with Congress over a matter of dubious legality?
Ip initially claims that the platinum coin does not cause inflation, which is good, but it is monetizing the debt, which is bad. But how can both of these things be true? I think there is a logical error here. Because if, as Ip claims, the platinum coin does not lead to inflation, why should the Fed care about how government spending is financed? In Ip's analysis, whether government spending is financed by debt or platinum coins is irrelevant. Indeed, it is strongly irrelevant in Ip's analysis - he doesn't just say that there is no difference at the zero bound, he says there is always no difference (..."no implications for inflation") as long as the Fed can pay interest on reserves (..."regardless of the size of the balance sheet").
If the Fed has control over interest rates, and thus control over inflation, then how can the platinum coin infringe on the Fed's independence? The Fed is not charged with stopping monetization. It is charged with price stability. We don't care about monetization itself; we care about monetization because it has the potential to generate hyperinflation, which Ip says we don't have to worry about because the Fed can control interest rates. Thus there is no threat to Fed independence. In short, no one is ordering the Fed to raise the inflation target; it remains free to conduct monetary policy with the objective of 2% inflation.
Furthermore, turn the situation on its head and say that what if push came to shove and the Administration was forced to choose between issuing the platinum coin or defaulting on the debt? What would be the consequences of the Fed asserting its independence by not accepting the coin? Financial chaos as the world's safest asset becomes unsafe leading to a massive deflationary shock? For this the Fed would lay claim to its independence? Indeed, this is exactly the sort of thing that gets a central bank stripped of its independence. See Davies above. Either retain its independence by willingly accepting the coin, or be complicit in triggering a global recession which, in the process, would cost it its independence eventually. Ultimately, the Fed would have no choice to accept the coin.
Simply put, at some level lofty ideas about strict central bank independence are like those of moral hazard, largely talk around the water cooler. When the economy is on the line, moral hazard concerns will pale in comparison to the need to saving the financial system, as too would the idea of independent central banks. The old adage is true: There are no atheists in foxholes.
Bottom Line: The idea of central bank independence has always been more of an illusion than reality. Ultimately, the monetary authority is a creation of the electorate. It retains the illusion of independence so long as its actions are consistent with the conventional wisdom of the public. At this point, only the Bank of Japan is threatened with such a loss of independence. Otherwise, fears are as of yet unfounded.
Posted: 11 Jan 2013 12:24 AM PST
David Altig at Macroblog on "summarizing the general state of the labor market":
... the employment half of the Fed's dual mandate from Congress ... has been heightened since the Federal Open Market Committee (FOMC) announced, first in September, that it will continue its asset-purchase programs as long as "the labor market does not improve substantially." But what constitutes substantial improvement is a matter of some art...
A terrific gallery that includes "a range of labor market indicators" is available at the Calculated Risk blog—you might also check out the Cooley-Rupert Economic Snapshot—but here at the Atlanta Fed, we have been experimenting with our own method for summarizing the general state of the labor market. Though this project is very much a work in progress, the idea is to highlight variables that look at employer behavior, signals of employer and employee confidence, measures of labor resource utilization, and leading indicators of labor market conditions.
As a first pass, we've organized a collection of variables we find interesting, grouped in the categories I just described. ...
We've based one prototype for how all of this information might be visualized at once on the following "spider chart" ... Here's how to read this chart: Think of each point on the inner orange circle as representing the value of each of our labor-conditions variables in the fourth quarter of 2009. ... (We've chosen 2009:IVQ as a benchmark because that's the last time we experienced two consecutive quarters of negative employment growth. You can thus think of 2009:IVQ as the quarter just before the beginning of the current "jobs recovery.")
The chart's outer dark-red circle represents the value of each of the labor-conditions variables in the first quarter of 2007—the beginning of the last recession... Moving out from the inner orange circle to outer dark-red circle tracks the progress each variable makes from its value at the end of the recession (i.e. 2009:IVQ) toward its prerecession (i.e. 2007:IVQ) level. ...
As of the December 2012 employment report, here's where we stand:
Spider1
The chart tells a familiar, but not too happy, story. Only one of the variables in the collection of employer behavior, employee and employer confidence, and labor resource utilization categories has recovered even half the gap from its prerecession benchmark. The labor resource utilization variables look particularly bad, with one variable—marginally attached workers—actually getting worse over the recovery as a whole. On the brighter side, our leading-indicator variables are looking relatively strong, perhaps portending improvement ahead.
The interpretation of these spider charts comes with several caveats. First, a variable such as the level of payroll employment will eventually exceed its pre-recession level, and grow consistently over time as the population grows. A variable like "hiring plans"—which is the net percentage of firms in the National Federation of Independent Business survey expecting to hire employees in the next three months—cannot grow without bound. Thus, the charts by construction are about visualizing the transition to some fixed benchmark, not a device for monitoring labor markets over the long run.
Second, it is not obvious that 2007:IVQ levels are necessarily the best benchmarks for all (or even any) of the variables we are monitoring. ...
Finally, signs of labor market improvement sufficient to alter the pace of FOMC asset purchases may be more about momentum or steady progress than about the return to a specific target or threshold. In fact, this chart depicts signs of such progress over the past three years...:
Spider2
...but that progress has been very modest in some cases, notably along labor utilization dimensions.
Posted: 11 Jan 2013 12:06 AM PST
Posted: 10 Jan 2013 03:25 PM PST
What causes poverty?:
Talk of 'shirkers' echoes Victorian past, by Tristram Hunt: ...the debate about how to cut back Britain's spiraling social security system is ... replete with echoes of the past. The language of "workers" versus "shirkers" is a straight lift from the mid-Victorian moralism of deserving and undeserving poor. Yet the most unfortunate rhetoric involves the return of "character" as the critical determinant of poverty. ...
This was the prejudice that first spurred Charles Booth, the Liverpool shipping magnate, to investigate the causes of poverty in 1880s London. Dismissive of socialist claims of mass unemployment, he established a network of researchers to pick over the lives of the poor.
It was a pioneering sociological investigation designed to prove Booth right: that poverty was limited and the poor were poor because of their alcoholism, lust or dislike of work. ... In fact, Booth's study revealed that circumstance not character dictated poverty. ...
Booth's study formed an important part of that New Liberal moment when Victorian laisser faire was exchanged for an interventionist state. In its wake came national insurance and the old-age pension. ...
From a post in November, 2007 on this topic:
 ...During 1817 ... a group of prominent New York merchants and professionals (many of them having formerly been the principle supports of such institutions as the New York Hospital and a variety of other worthy causes) officially and quite publicly began to rethink their habit of giving. Such previously generous philanthropists as DeWitt Clinton, Thomas Eddy, and John Griscom took their cue in this from British reactionaries. In so doing, they succumbed to the rhetoric of several hard-nosed British social thinkers, most notably Thomas Robert Malthus, Jeremy Bentham, and the Scottish conservative Patrick Colquhoun.
Twenty years earlier, all three of those gentleman had been instrumental in the founding of the London Society for Bettering the Condition and Increasing the Comforts of the Poor. Despite the burden of its long-winded name, the London Society specialized in the cutting off of funds for social welfare rather than the distribution of charity. Men like Malthus, Bentham and Colquhoun believed that a distinct line must be drawn between the "deserving poor" (those hit with hard times resulting from unfortunate histories) and "undeserving paupers," the latter being the drunk, lazy and whorish of society, to whom the provision of any form of aid was a reprehensible act of facilitation.
Another key concept underpinning the logic of the London Society was the presumption (for lack of a more accurate term) that paupers outnumbered the deserving poor by a factor of about 9 to 1. In reform meetings and from church pulpits, politicians and clerics again and again cited this astonishing though unverifiable statistic, which soon became accepted as fact. In time, the public mind became convinced that a mere ten percent of London's poor were the crippled and the orphaned, while 90 percent were degenerates. For every one individual in London's slums who genuinely needed aid, popular wisdom held that there were nine who required something else entirely: intolerance, punishment and correction. As a corollary to this line of thinking, logic dictated that 90% of the charitable aid previously offered was superfluous. In turn, wallets closed, and checks stopped being written.
The London Society remained a venerable body and dominant force in British life for decades: influential in the development of such institutions as workhouses and debtors prisons. It was likewise influential, through its example, in New York and other American cities. By the end of 1817, Clinton, Eddy, and Griscom, joined by hundreds of other New Yorkers, had formed a clone organization on the banks of the Hudson: the Society for the Prevention of Pauperism (SPP).
Several months before the founding of the SPP, New York's Humane Society (which at that time specialized in helping humans rather than dogs and cats) announced rather forlornly the result of recent research revealing a startling fact: no less than 15,000 men, women and children - the equivalent of one-seventh of the city's total population - had been "supported by public or private bounty and munificence" the previous winter.
In their book Gotham, historians Edwin Burrows and Mike Wallace have eloquently described the SPP's point of view, expressed in response to the above data. In the grand tradition of the London Society, the SPP said it believed that "willy-nilly benevolence" only made things worse. "Giving alms to the undeserving poor not only undermined their independence but also drove up taxes and sapped the prosperity of the entire community." Thus, "for their good as well as everyone else's … the SPP recommended that all paupers in the city be cut off from all public assistance forthwith." Soon the Humane Society itself announced its intention to disband, in the wake of its realization that the very act of giving charity had "a direct tendency to beget, among [the citizenry] habits of imprudence, indolence, dissipation and consequent pauperism."
"Tough love" was in. Cruelty equaled kindness. Frugality equality generosity. And all three were not only cheap, but easy. A few ministers sang out against the reverse-logic of the SPP, but far more praised the organization than damned it. God himself, it seemed was on the side of self-reliance. A generation later, Social Darwinists would express a similar point of view: that the strong must be allowed to flourish, and not be hamstrung by the needs of the clawing weak. Charles Darwin's The Origin of Species would not see print until 1859. Indeed, Darwin himself was but eight years old in 1817, and would not depart on the voyage of HMS Beagle until 1831. Nevertheless, the seeds of what was to become the philosophy of Herbert Spencer (born 1820), not to mention the nearly identical philosophy of the 20th century's Objectivist saint of selfishness, Ayn Rand, were quite evident in the grand pronouncements of the London Society and its New York equivalent, the SPP. ...
I'm always amazed at how little the debate, generated in large part by ideology and the belief in false facts about the poor, has changed since the 1800s.
This is from a post in June, 2007. It's an earlier history the deserving/undeserving distinction:
... In the early mercantilist period there was an ideological continuity between the intellectual defenses of mercantilist policies and the earlier ideologies that supported the medieval economic order. The latter relied on a Christian paternalist ethic that justified extreme inequalities of wealth on the assumption that God had selected the wealthy to be the benevolent stewards of the material welfare of the masses.[4] The Catholic church had been the institution through which this paternalism was effectuated. As capitalism developed, the church grew weaker and the governments of the emerging nation-states grew stronger. In the early mercantilist period, economic writers increasingly came to substitute the state for the medieval church as the institution that should oversee the public welfare. ...
The people could no longer look to the Catholic church for relief from widespread unemployment and poverty. Destruction of the power of the church had eliminated the organized system of charity, and the state attempted to assume responsibility for the general welfare of society. ...
Poor laws passed in 1531 and 1536 attempted to deal with the problems of unemployment, poverty, and misery then widespread in England. The first sought to distinguish between "deserving" and "undeserving" poor; only the deserving poor were allowed to beg. The second decreed that each individual parish throughout England was responsible for its poor and that the parish should, through voluntary contributions, maintain a poor fund. This proved completely inadequate, and the pauper problem grew increasingly severe.
Finally, in 1572 the state accepted the principle that the poor would have to be supported by tax funds and enacted a compulsory "poor rate." And in 1576 "houses of correction" for "incorrigible vagrants" were authorized and provisions made for the parish to purchase raw materials to be processed by the more tractable paupers and vagrants. Between that time and the close of the sixteenth century, several other poor-law statutes were passed.
The Poor Law of 1601 was the Tudor attempt to integrate these laws into one consistent framework. Its main provisions included formal recognition of the right of the poor to receive relief, imposition of compulsory poor rates at the parish level, and provision for differential treatment for various classes of the poor. The aged and the sick could receive help in their homes; pauper children who were too young to be apprenticed in a trade were to be boarded out; the deserving poor and unemployed were to be given work as provided for in the act of 1576; and incorrigible vagrants were to be sent to houses of correction and prisons.[8]
From the preceding discussion it is possible to conclude that the period of English mercantilism was characterized by acceptance, in the spirit of the Christian paternalist ethic, of the idea that "the state had an obligation to serve society by accepting and discharging the responsibility for the general welfare."[9] The various statutes passed during this period "were predicated upon the idea that poverty, instead of being a personal sin, was a function of the economic system.[10] They acknowledged that those who were the victims of the deficiencies of the economic system should be cared for by those who benefited from it. ...
However, as noted above, the view that the poor "were the victims of the deficiencies of the economic system" died out, and was replaced by the idea the character problems are the main reason people are poor. This variation in attitudes about the poor -- it's the system, it's the individual -- goes back and forth over time, and we are currently seeing an attempt from the right to re-impose older Victorian attitudes -- and with some success (I recently wrote about the blame the individual versus blame the system distinction and how it has changed during the recession, see the end of this post).
Posted: 10 Jan 2013 10:24 AM PST
Via an email from Austin Frakt with the subject "should we worry a lot about Medicare growth?," and the answer in the text "It doesn't seem like it. Massively demographically driven. A bit more revenue and it's fixed for a long time." [Remember that projected health care cost growth is the main source of worry about future debt problems, and hence the driving force behind the push from deficit hawks for spending cuts and tax increases, well spending cuts anyway, the so-called deficit hawks are not so fond of tax increases which betrays their true motives.]:
Medicare growth
Chart of the day: Projected Medicare spending, by Austin Frakt: The vertical axis is percent of GDP. "Excess cost growth" means in excess of the rate of GDP growth. The chart is from a new ASPE report by Richard Kronick and Rosa Po. Description of OACT's alternative scenario is here, beginning on page 12 (PDF). Note that in addition to assuming a perpetual doc fix, it also assumes "a gradual phase-down of the productivity adjustments [about which, see Figure 1 here] and the elimination of the IPAB requirements." Given these, is an excess cost growth totaling three-quarters of a percentage point of GDP over two decades a lot?
UPDATE: Link to and quote from the OACT's alternative scenario
Update: Austin adds a clarification:
I'm not sure I buy my own statement that we only need a bit more revenue. The demographics are costly. The real message is that there is nothing much we can do about it. Cutting beneficiaries or benefits amounts to a cost shift, and is probably net cost increasing, system-wide. So, we must spend the demographically-driven amount. We then just need a bit more to deal with health care cost inflation. One would like to reduce that to zero, but a modest increase won't kill us, and certainly not quickly.
Posted: 10 Jan 2013 08:29 AM PST
Something to remember:
The debt reduction that's already happened, by Steve Benen: When it comes to most of the major political disputes in Washington, congressional Republicans insist Democrats focus on reducing the debt Republicans built up during the Bush/Cheney era. It underpins everything from the budget fight to the debt ceiling to efforts to expand public investments.
What the debate tends to ignore is the debt reduction that's already happened. Michael Linden and Michael Ettlinger reported yesterday that since the start of 2011 fiscal year, President Barack Obama "has signed into law approximately $2.4 trillion of deficit reduction" over the next decade. ...

Roughly three-quarters of the deficit reduction has come is in the form of spending cuts, which should further make Republicans happy. ... To be sure, it would be my strong preference that policymakers not make this a priority at all. What the nation needs is jobs and economic growth, and the most sensible course of action would be to delay fiscal concerns for a later day. ...
But... The conventional wisdom suggests nothing is being done to address a perceived debt "crisis," and that somehow Republicans have the high ground in demanding more and more cuts. It seems spectacularly insane to me to think the GOP has credibility on the subject given that it was Republicans who created the budget shortfall in the first place, but establishment assumptions are hard to shake.
But that's what makes the Linden/Ettlinger report so worthwhile: something is being done, whether this deserves to be a priority or not. ... What's more, let's also not forget cost-saving measures Obama proposed -- cap and trade, Dream Act -- and the GOP killed. ...
Postscript: Just as an aside, let's also take a moment to compare administrations. Obama, in just the last two years, has accepted $2.4 trillion in debt reduction through multiple proposals. How many debt-reduction proposals did Republicans approve during the Bush/Cheney era? None. Even when there was a Republican-led House, Republican-led Senate, and Republican-led White House? Yep, even then.

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