Comments: Please: Ignore All Patterns

The largest demographic group that always votes probably won't like Obama putting social security on the table.

Posted by rob payne at July 11, 2011 09:44 PM

"Sure, the people telling us we have to be very very scared of the deficit are the exact same people who told us we had to be very very scared of Iraq's WMD, but I think this time they're telling the truth.

Mr Schwarz, WHEN did you start believing that the "leopard can change its spots"?

Posted by Rupa Shah at July 11, 2011 10:05 PM


Posted by Rupa Shah at July 11, 2011 10:09 PM

Yes, the people telling us we have to be very, very scared of the deficit are the exact same people who ran up the debt: The total price tag on the Iraq and Afghan wars is at least $3.2 trillion, according to the Costs of War project. And since Panetta now wants us to stay in Iraq to fight Iran (surprise), we'll have to cut Granny's Medicare to help the books look good.

Posted by Paul Avery at July 12, 2011 11:43 AM

To not pay the public debt is a violation of The 14th Amendment. I know I'll be screaming TREASON should America default. And also, I'm positive the printing press ain't broke, plenty of trees left to cut.

Posted by Mike Meyer at July 12, 2011 12:30 PM

Mr. Schwarz:

You’re right until you’re wrong. The US public debt is not the problem people think it to be. Private debt, however, is a remaining problem. The housing bubble hasn’t deflated yet and non-financial business debt still needs to lower some. It’s scary that policy makers are looking for an encouraging the housing market to grow again to get the economy “working” again but doing so will create bigger problems down the road as the housing market still has some deleveraging to do.

The US public debt is in no position to default anytime soon unless policy makers decide to just not pay the debt. Health care costs create a long term structural problem for the federal budget but health care costs create a long term structural problem everywhere in our economy. There is no other long term structural problem in the federal budget despite claims to the contrary.

Since the 80’s, deficits have been larger than many, including myself, think they should be. This is largely due to cutting taxes and increased military spending. Neo-liberal economic policy (which on paper hates deficits but can’t seem to get away from them) has created the current budgetary mess. Those people who are telling you to be scared of deficit are proposing more neo-liberal economic policies as the solution. The problem is that wherever neo-liberal economic policies are tried, the economy breaks and usually in a big way.

Just like the people telling us to be scared of Iraq, the solution to the fear actually would create a situation in which US public debt would actually become a problem. The solution to the issue of the debt is not to peruse more neo-liberal policy (if the spending cuts are enacted, and they will be, the next major thing will be tax cuts that create a large deficit again) but to instead return to some semblance of sound budgeting.

In addition to worsening the issue of the debt, these neo-liberal policies will make the depression worse and longer. As pointed out in this very blog (, the best thing for the economy would be spending on direct aid to the poor and spending on infrastructure projects. Whether the money is taxed or borrowed to meet this spending, the net effect of the deficit would possibly be to reduce it. Cuts in spending, especially if coupled with tax cuts, would lead to a worse economy and worse deficits.

The same people who told us to be very scared of the deficits are the same people who are telling us to be very scared of weapons of mass destruction in Iraq. In each case they are lying and using fear to advance policies that benefit a few while harming tens of millions. In both cases the strategy works.

Posted by Benjamin Arthur Schwab at July 13, 2011 11:47 AM

@BAS - I think Jon is joking here....but I'm not sure whether you realize that.

Posted by Aaron Datesman at July 13, 2011 01:03 PM

I think Jon is joking here

You think correctly.

Posted by Jonathan Schwarz at July 13, 2011 03:49 PM

opps. I'm sorry. I didn't realize. Sorry...

Posted by Benjamin Arthur Schwab at July 13, 2011 04:48 PM