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March 24, 2015

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Posted: 24 Mar 2015 12:06 AM PDT

'Congressional Budget Plans Get Two-Thirds of Cuts From Programs for People With Low or Moderate Incomes'

Posted: 23 Mar 2015 09:59 AM PDT

The true goal of Republican's "deficit fetishism":

Congressional Budget Plans Get Two-Thirds of Cuts From Programs for People With Low or Moderate Incomes, by Richard Kogan and Isaac Shapiro, CBPP: The budgets adopted on March 19 by the House Budget Committee and the Senate Budget Committee each cut more than $3 trillion over ten years (2016-2025) from programs that serve people of limited means. These deep reductions amount to 69 percent of the cuts to non-defense spending in both the House and Senate plans.
Each budget plan derives more than two-thirds of its non-defense budget cuts from programs for people with low or modest incomes even though these programs constitute less than one-quarter of federal program costs. Moreover, spending on these programs is already scheduled to decline as a share of the economy between now and 2025.[1]
The bipartisan deficit reduction plan that Alan Simpson and Erskine Bowles (co-chairs of the National Commission on Federal Policy) issued in 2010 adhered to the basic principle that deficit reduction should not increase poverty or widen inequality. The new Congressional plans chart a radically different course, imposing their most severe cuts on people on the lower rungs of the economic ladder. ...

Paul Krugman: This Snookered Isle

Posted: 23 Mar 2015 09:09 AM PDT

Mediamacro:

This Snookered Isle, by Paul Krugman, Commentary, NY Times: The 2016 election is still 19 mind-numbing, soul-killing months away. There is, however, another important election in just six weeks, as Britain goes to the polls. And many of the same issues are on the table.
Unfortunately, economic discourse in Britain is dominated by a misleading fixation on budget deficits. Worse, this bogus narrative has infected supposedly objective reporting; media organizations routinely present as fact propositions that are contentious if not just plain wrong.
Needless to say, Britain isn't the only place where things like this happen. A few years ago, at the height of our own deficit fetishism, the American news media showed some of the same vices. ... Reporters would drop all pretense of neutrality and cheer on proposals for entitlement cuts.
In the United States, however, we seem to have gotten past that. Britain hasn't.
The narrative I'm talking about goes like this: In the years before the financial crisis, the British government borrowed irresponsibly... As a result, by 2010 Britain was at imminent risk of a Greek-style crisis; austerity policies, slashing spending in particular, were essential. And this turn to austerity is vindicated by Britain's low borrowing costs, coupled with the fact that the economy, after several rough years, is now growing quite quickly.
Simon Wren-Lewis of Oxford University has dubbed this narrative "mediamacro." As his coinage suggests, this is what you hear all the time on TV and read in British newspapers, presented not as the view of one side of the political debate but as simple fact.
Yet none of it is true. ...
Given all this, you might wonder how mediamacro gained such a hold on British discourse. Don't blame economists. ... This media orthodoxy has become entrenched despite, not because of, what serious economists had to say.
Still, you can say the same of Bowles-Simpsonism in the United States... It was all about posturing, about influential people believing that pontificating about the need to make sacrifices — or, actually, for other people to make sacrifices — is how you sound wise and serious. ...
As I said, in the United States we have mainly gotten past that, for a variety of reasons — among them, I suspect, the rise of analytical journalism, in places like The Times's The Upshot. But Britain hasn't; an election that should be about real problems will, all too likely, be dominated by mediamacro fantasies.

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