Wednesday, June 22, 2011

The Dangerous Fantasy of Targeting "Deficit Reduction" for Economic Growth

The Great Deficit Hype took a couple of hits in recent days. Tragically, it's not likely that anyone in the Beltway is listening, the priority of deficit reduction has taken such a tenacious hold.

But even in the apparent absence of  rational policy possibilities, it's worth paying attention to some saner voices - and from relatively stodgy circles. 

Professor of economics and and former vice-chairman of the Federal Reserve, Alan Blinder, had this warning in the Wall Street Journal (via Economist's View) :
"The Myth of Job-Killing Spending" ...  House Speaker John Boehner and other Republicans regularly rail against "job-killing government spending." ... Using the same illogic, employment should soar if we made massive cuts in public spending—as some are advocating right now.
Acting on such a belief would imperil a still-shaky economy that is not generating nearly enough jobs. So let's ask: How, exactly, could more government spending "kill jobs"? ...

The Great Republican Tax Lie

Reagan economic advisor Bruce Bartlett, interviewed by Lawrence O'Donnell, on the Big Republican Lie that "tax cuts pay for themselves":