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Home Publications Blogs Beat the Press Post Tells Readers that Super Committee Staff Pick Raises Fears of Spending Cutbacks, Deeper Downturn

Post Tells Readers that Super Committee Staff Pick Raises Fears of Spending Cutbacks, Deeper Downturn

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Wednesday, 31 August 2011 04:25

Actually, the Post (a.k.a. Fox on 15th Street) would never be concerned about such things. However, the first paragraph of an article on the appointment of a staff director to the Super Committee told readers the selection of Mark Prater was:

"buoying hopes that the panel would produce a plan to tame borrowing."

The way that borrowing is "tamed" is either by raising taxes or cutting spending. With prospect for tax increases limited given the current make-up of Congress, most of the story here is likely to be spending cuts. This prospect no doubt buoys the hopes of the Post, as it routinely uses both its editorial and news pages to tell us, but the prospect of cuts to programs like Social Security and Medicare are probably not as encouraging to the rest of the population.

Comments (4)Add Comment
...
written by hapa, August 31, 2011 7:01
typo in title: "raises FEARS" i think?
Cantor: Spending Increases Are OK
written by Paul, August 31, 2011 12:22
As Eric, The Boy Wonder, carefully explained to Fox Noise, increased spending for disaster relief is OK as long as off-setting cuts are made elsewhere in the budget, perhaps by ending the Iraq war fiasco sooner rather than later.

OTOH, tax cuts do not need to be off-set with spending cuts under current Con dogma. Therefore, the way is clear for the growth prescription that Keynes recommended in these circumstances: tax incentives for consumer spending, e.g., Cash-4-Clunkers 2.0.

Return of the Master:

"If it is impracticable materially to increase investment, obviously there is no means of securing a higher level of employment except by increasing consumption. . . . I should support at the same time all sorts of policies for increasing the propensity to consume. For it is unlikely that full employment can be maintained, whatever we may do about investment, with the existing propensity to consume."

The General Theory of Employment, Interest and Money, p. 325.
We don't borrow
written by joe, August 31, 2011 2:40
please explain how we don't really borrow. China didn't start out with dollars. Once they had them, the money was moved from their reserve account at the fed to their treasury account in order to earn interest. There is no red phone to china. Bonds do not fund govt. Bonds are monetary tool. Govt spends first and then bonds are purchased after. Where else would the reserves to purchase the bonds come from? Cashing in a bond is an asset swap, all that changes is the maturity and interest rate. No new net financial assets are created to 'cash in a bond'. State govts are totally different...

Explained nicely here

http://www.google.com/url?sa=t&source=web&cd=1&ved=0CCQQFjAA&url=http://pragcap.com/does-china-fund-our-spending&ei=enFeTuCxIMXRiALK9qjuBw&usg=AFQjCNGl6vL0RpTaBNovV1bgfFdyAXE5LA

http://www.google.com/url?sa=t&source=web&cd=2&ved=0CDAQFjAB&url=http://pragcap.com/do-bond-markets-fund-our-spending&ei=enFeTuCxIMXRiALK9qjuBw&usg=AFQjCNG8J2Eo-ABg1dTU8YtR861_lOsJjA
We Don't Borrow When We Print Dollars
written by Paul, August 31, 2011 2:58
The Fed has "printed" 2 trillion dollars over the past 3 years and loaned it to the government to finance the deficit. So it is the equivalent of taking money out of one of your pockets and putting it in another - not exactly borrowing.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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