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Tag Archives: economic policy

More on Hillary Clinton’s approach to federal spending and debt

05 Monday Sep 2016

Posted by willykay in Uncategorized

≈ 1 Comment

Tags

Chuck Raasch, deficits, economic policy, federal debt, Hillary Clinton

Friday I wrote a piece taking St. Louis Post-Dispatch columnist Chuck Raasch to task for reviving the deficit doom and gloom BS that has crippled economic growth over the past several years. The post referenced only Raasch’s criticisms of the 2016 presidential candidates’ economic positions and did not elaborate on their positions beyond that level of description. It strikes me that it might be useful, in case my earlier post left anyone feeling confused, to enlarge on the points I tried to make about potential impact of Clinton’s economic proposals on the the federal debt

In (very) short, Clinton’s response to the deficit is to create an environment for economic growth which should, over the long-term, increase tax revenues and lower debt. In the short-term, she aims for a neutral equilibrium between revenue and spending that does not generate deficits. She does not address these issues under the rubric of debt reduction since that goal is implicit in developing a strong economy. Brookings Institute economist Henry Aaron has said that when it come to reducing the federal debt, “how we achieve that goal is at least as important as whether we achieve it.” This concern for addressing debt in a way that does not destroy but rather enhances social support systems is evident in Clinton’s proposed policies:

Clinton has taken a two-pronged approach to economic growth:

(1) Clinton proposes several progressive tax reforms that will generate more revenue (see this factsheet for details).

(2) Clinton is also proposing to invest in growth by using the new revenue generated by her tax reforms to pay for a suite of initiatives involving physical infrastructure renewal, small business supports, health care, education and research (see her position papers).

Neil Erwin at The New York Times summarizes Clinton’s proposals, and notes that her tax plan would generate $1.1 trillion dollars in additional revenue over the decade and, when combined with her new spending, would be revenue neutral. His evaluation does not address the viability of the spending proposals to promote growth. However, the steps outlined by Clinton to promote growth and short and long-term fiscal stability have earned high marks from many financial analysts (see here, here and here (pdf)) .

Clinton did not satisfy Chuck Raasch’s preconception that politicians who engage in “serious” discussion of federal debt must serve up the bitter medicine that, because of our supposed past profligacy, we now require . She instead outlined an approach to debt that utilizes growth rather than retrenchment. Her plan involves promoting greater fairness in the tax code, less income inequality – a major growth inhibitor – along with spending initiatives that are, based on reliable research, designed to spur growth. Given the caveat that economic prediction is a mug’s game, her plan does not necessarily entail deficit spending and, arguably, will lower the long-term debt burden.

This approach can be criticized – and reputable analysts have done so – but, unlike Raasch’s casual dismissal, the criticism should be based on the merits of the proposal itself rather than a narrowly preconceived, popular idea of what it “should” propose to do. It should also include a fair assessment of the severity of the debt problem rather than the “the end is coming” hysteria that Raasch seems to endorse. As I noted in my earlier post referenced above, many economists do not consider our current and projected national debt to be the looming horror that is portrayed by deficit alarmists. And many of those economists and financial experts agree that the Clinton proposals, unlike those of Donald Trump , if they were to be enacted, would have a good chance to insure that our long-term debt does not mushroom into just that type of problem.

Ann Wagner: New GOP corporatist star

27 Saturday Jul 2013

Posted by Michael Bersin in Uncategorized

≈ Leave a comment

Tags

Ann Wagner, economic policy, Keystone XL Pipeline, missouri, political pandering, Roy Blunt

The St. Louis Beacon recently noted that Rep. Ann Wagner (R-2) was pulling in campaign donations in a way that is truly “notable for a House first-termer,” and “significantly above the norm among Missouri members of Congress in either party.” Consequently, it stands to reason that Wagner is going to have to prove her worth the folks who have invested in her.

It’s for this reason that it’s worth giving special attention to her response to President Obama’s speech in Warrensburg on Wednesday in which she seized the initiative to go on the warpath for the Keystone XL pipeline, declaring that:

Right now, President Obama can approve the Keystone XL pipeline and create tens of thousands of good-paying jobs while ushering in a new era of energy independence.

Of course, unbiased analysis casts doubt on such rosy job numbers (see also here). As for energy independence, a recent report notes that the pipeline will likely result in higher gas prices in the U.S. Last I heard, increasing energy prices wasn’t that good for the economy. It goes without saying that Wagner, a standard-issue GOP climate change denier, isn’t concerned with the economic costs that would result from the negative environmental impact of the pipeline.

Repeating false rhetorical sound-bites, though, is what being Republican is all about, and it shouldn’t really excite much surprise that Ann Wagner’s got that skill down solid. It is interesting, though, that she chose Keystone XL as her pivot-point rather than what seems to be the rather uniform GOP talking points du jour as exemplified by her Missouri colleagues, who en masse seem want to pretend that the President is just talking pretty talk while they’ve somehow been concentrating on the economy inbetween the endless hearings attempting to find or create an administration scandal.

Wagner’s fundraising sources suggest that she may have been doing a little multitasking. Our Ann seems to have figured out that she can go after the president, and at the same time put in a plug for one of those projects favored by the Big Oil interests and energy PAC folks who have funded a big chunk of her sizable war-chest.

Wagner has been promoted as a GOP anti-Akin although her views about many issues that made Todd Akin, well,  Todd Akin are not too different. The real difference between Akin and Wagner may be their willingness to dance to the big money tune. There’s a reason that Ann Wagner can pull in the bucks, and an unwashed Tea Party favorite like Ed Martin can’t. I’m betting that a big part of her appeal hinges on her highly connected history within the Missouri and national Republican party – that is to say, the corporatist wing of the party, which we sometimes refer to as the Republican establishment. She may be able to polish up the fringewing base when necessary, but she quite clearly knows who’s polishing what as far as her political career goes. As a result, Wagner won’t miss a chance to signal that she’s going to do her best for the 1 percent who pay her campaign bills. Missouri now has a another GOPer camping out in what has been up until now exclusively Roy Blunt territory.

The GOP spin machine refocuses on the economy in the wake of President Obama

26 Friday Jul 2013

Posted by Michael Bersin in Uncategorized

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Tags

Barack Obama, Economic Growth, economic policy, Medicaid cuts, Medicare cuts, missouri, Roy Blunt, Social Security cuts, Tim Jones, Warrensburg speech

Yesterday in Warrensburg President Obama tried to raise once again the issue of economic growth and its corollaries such as infrastructure investment, education and energy. The response from Missouri’s GOP politicians can only have been inspired by the fact that they’re secretly trying out their stand-up comedy routines before getting together and hitting open-mike night at some comedy club:

Back in Washington, Sen. Roy Blunt, R-Mo., said on the Senate floor that he was glad the president is visiting Missouri. “But these speeches sound an awful lot like the 2012 campaign speeches. I think we need to move beyond that. We need to not just pivot to the economy, but we need to stick with the economy.”

And:

“Our nation would be in a better place if, instead of spending all his time giving speeches filled with unrealized rhetoric about a better America, President Obama would actually work with Republicans to address the enormous problems facing our nation,” Missouri House Speaker Tim Jones, R-Eureka, said in a statement.

Somebody needs to remind Senator Blunt about the priorities of his GOP congressional colleagues. Although perhaps he’s aware of some big economic impact that adheres to outlawing all abortions at 20 weeks; votes to ban gender-based abortion (which is not a problem in the U.S.); 38 (I believe that’s the current count) purely symbolic votes in the House to defund Obamacare, numerous set-to’s over shutting the down the government over such a routine matter as raising the debt limit to cover the nations already incurred obligations (all spending approved by congress, by the way); this summer’s unending hearings over poorly manufactured and managed non-scandals, etc. and etc. (And, by the way, don’t forget, all this useless activity costs us money.)

As for Speaker Jones, he actually has the right of it. Of course, God himself couldn’t “work with” Republicans. After all, as we have learned over the course of the past few years, working with Republicans to achieve almost any goal means meekly bowing your head and meeting their every demand, and, God forbid, never, ever criticizing them for acting like thugs – all while ignoring the druthers of the folks who elected President Obama with a rather resounding majority to do just those things that throw the excitable GOPers into a frenzy of tantrums.

Both Senator Blunt and Rep. Jones seem to want us to think that the President is all talk and no action. However, I do seem to remember numerous initiatives that the president has put forward while the GOP has done nothing at all but obstruct and fulminate. Specifically in response to columnist Josh Kraushaar, Economist Jared Bernstein managed to point out the weakness of these types of GOP talking points when used to counter the President’s new offensive on the economy:

There’s no hint in Kraushaar’s column about the Jobs Act that Obama proposed in September 2011. Nothing about the economic plan he pushed in fall 2010, either. Nothing about Dodd-Frank. Nothing even about the proposals Obama made in his State of the Union this year, most of which he’s still repeating (and House Republicans are still ignoring). For that matter, nothing about Obama’s deficit-cutting over the last couple of years. […]

Not to mention that there’s a very screwy giving-speeches-and-passing-things focus here. What Obama did for the economy in 2009-2010 was mainly implementing the stimulus passed in early 2009. That’s really not ignoring the economy.

I don’t think any sane person could deny that we’re recovering from the Bush recession  – and from where I stand the President deserves the credit. And also from where I stand, the folks who deserve the blame for the fact that this same recovery is less vigorous than it could be are the folks who insisted on a series of stupid budget cuts that culminated in the sequester – which all by itself is costing us plenty in terms of growth:

Forecasting firm MacroEconomic Advisers has lowered its second-quarter forecast for GDP growth from 1.8% to 1.3%. That’s very weak growth that will probably hold back hiring and spending, and depress confidence. “The sequester is expected to slow growth this year, and largely accounts for the weak second-quarter growth and lackluster third-quarter growth,” the firm said in a recent report.

Of course I read yesterday that Senator Blunt thinks he has the solution to all our economic problems. While – to his credit – speaking out against a mind-numbingly stupid GOP threat to hold the debt limit hostage to an effort to defund Obamacare, he added:

… Where we ought to be now is – we need more spending cuts. They need to be probably on the mandatory side rather than the discretionary side. I think that’s the formula that obviously allows us to move forward most easily here.

You know what that means. If the President decides, apropos Speaker Jones wishes, to “work with” Republicans, it will mean cuts to Medicare, Medicaid and Social Security. Just what the GOP has wanted all along.

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