Comments for David Brooks and the Power of Magical Thinking at the NYT at http://www.cepr.net , comment 1 to 19 out of 19 comments http://www.cepr.net Thu, 20 Jun 2013 00:11:13 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-931 " $80 billion was a fix to the alternative minimum tax. This is done every year. Since no one ever expected to pay this tax, making this fix could not provide any stimulus " The Yanks are coming -- the Yanks are coming! Did that cry keep the World War going? The bailout money is coming to a theater near you! A sentence designed to keep the consumers spending, keep the stock holders from putting new money into long treasuries, and keep them from selling stock? You hold long enough for me to sell. You can't time the market, you can't sell, but I can time the market. But the Yanks came late. The bailout went only to the bit-byte-bucket, the null-socket. Yes of course a token amount was returned to the burden bearers of tax and inflation, but only after being filtered through the community of commission chargers, insurers, certifiers, and notaries. Notaries and heaps of government offices. You get the picture! It was merely the inefficiency dividend which goes always only to the mob, their lobbyists, and the lobby's back-pocket barkers of *government knows best* politicians. With lower prices on stocks for insiders who easily knew exactly when the government would stop trashing prices, profits were a barrel-fish shoot-out at the OK Corral. How many more boom-bust cycles government has up-sleeve? Limitless supply ! - doubleBubble tripleDip Sat, 12 Jun 2010 11:45:28 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-930 Unfortunately the U.S. is not too far away from Greece when you do the numbers including the debt in the trust funds as this article does. http://www.briefing.com/GeneralContent/Investor/Active/ArticlePopup/ArticlePopup.aspx?SiteName=Investor&ArticleId=NS20100514150704AheadOfTheCurve We don't need to panic, but it would be wise to have a long term plan to start reducing the accumulated debt during the good years. I agree with Zinc on "US military spending is the starting point." and "Allowing the Bush tax cuts to expire is another." - AndrewDover Sat, 12 Jun 2010 10:29:14 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-929 Thank you Mr. Dover! - Stephen Sat, 12 Jun 2010 09:40:32 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-925 was on DailyKos, and pointed out that Brooks is often simply unable to follow his own logic to conclude that, on many subjects, conservatives have their heads up their collective ass. - Rob Lewis Sat, 12 Jun 2010 05:08:16 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-922 The 60% number is calculated by only including the "debt held by the public", which is 8.5 trillion and excluding "Intra-governmental Holdings" like the social security trust fund. 8.572 trillion debt / 14.4 gdp = 59.5% 13.04 trillion debt / 14.4 gdp = 90.4% What is the Debt Held by the Public? The Debt Held by the Public is all federal debt held by individuals, corporations, state or local governments, foreign governments, and other entities outside the United States Government less Federal Financing Bank securities. Types of securities held by the public include, but are not limited to, Treasury Bills, Notes, Bonds, TIPS, United States Savings Bonds, and State and Local Government Series securities. What are Intragovernmental Holdings? Intragovernmental Holdings are Government Account Series securities held by Government trust funds, revolving funds, and special funds; and Federal Financing Bank securities. A small amount of marketable securities are held by government accounts. - AndrewDover Fri, 11 Jun 2010 14:43:37 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-921 Andy, The CIA factbook and dean baker give a number of about 60%, you give me to two data sets that give a number of 90%. Then you tell me not to use all available information in order to clear up this difference. You're a fog machine. And you didn't answer my question. But I figured it out I think. Total US wealth is about 44T Therefore someone claiming consumer debt is 13T is rather disingenuous since we can always transfer the debt and wealth numbers via stimulus and taxes. - Stephen Fri, 11 Jun 2010 10:39:10 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-920 Stephen, the federal public debt is 92% of GDP. As of Wednesday, the total U.S. public debt was: $ 13,046,148,615,770.79 http://www.treasurydirect.gov/NP/BPDLogin?application=np GDP = $14.43 trillion (2009 est.) from https://www.cia.gov/library/publications/the-world-factbook/geos/us.html And don't tell me the bonds in the social security trust fund don't count as debt. - AndrewDover Fri, 11 Jun 2010 09:39:39 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-918 Someone.... what's the retort to those who say that though the US debt as a percentage of GDP is only 60% today as opposed to 110% post war, there is an important distinction in that US private debt is much higher? - Stephen Fri, 11 Jun 2010 08:05:13 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-916 It's simple really. Democrat in the WH = 'debt crisis'. Republican in the WH = 'deficits don't matter'. - Oggie Fri, 11 Jun 2010 07:59:15 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-914 "Magical thinking" is an appropriate term for a column that makes assertions--as though they were widely accepted facts--of what are clearly Brooks' intentions or designs, his schemes. He divines what the public thinks about all manner of issues and prophecizes with the assurance of an oracle consulting the vapors emanating from a crack in the rocks of a tax-exempt Foundation. - diesel Fri, 11 Jun 2010 06:18:47 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-915 "Magical thinking" is an appropriate term for a column that makes assertions--as though they were widely accepted facts--of what are clearly Brooks' intentions or designs, his schemes. He divines what the public thinks about all manner of issues and prophecizes with the assurance of an oracle consulting the vapors emanating from a crack in the rocks of a tax-exempt Foundation. - diesel Fri, 11 Jun 2010 06:18:47 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-913 If deficit's are such a problem then the best solution is electing a Republican President, the financial media suddenly ends its concern about government deficits and moves on to bigger and better fish to fry. - lineup32 Fri, 11 Jun 2010 05:55:59 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-911 Is what the CBO has said about the stimulus not relevant or true? http://www.calculatedriskblog.com/2010/05/cbo-stimulus-raised-gdp-17-to-42-in-q1.html CBO reports the stimulus added or saved anywhere between 1.2 million to 2.8 million jobs that would have been gone otherwise. - Brett Fri, 11 Jun 2010 04:50:24 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-910 http://voices.washingtonpost.com/ezra-klein/2010/06/deficits_and_reckless_minoriti.html#more also points out the obvious hypocrisy of the republican party who lowered taxes and increased spending during their time in power. - AndrewDover Fri, 11 Jun 2010 04:39:00 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-908 Nice critque, but I am puzzled by one point concerning Glaeser's study: "We would predict that there would be no correlation between the spending in the category considered by Glaeser and the change in unemployment rates." I supposed that the purpose of additional stimulus was explicitly to change the unemployment rate, so is the recommendation to have a stimulus that excludes the category that Glaeser studied? This category of spending would seem to have high political appeal to core Democratic constituents, such as trade unions. - Eric Fri, 11 Jun 2010 04:26:54 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-904 A full-dress refutation of Master Davey's economics is as if Dr. Einstein had done Citizen Velikovsky the same favor in physics. The laddie may not even grasp what his team is up to, though I suppose he could not exactly quote "According to a Hamilton Project/Center for American Progress study by David Autor, high-skill sectors saw no net loss of jobs during the recession. Middle-skill sectors like sales saw an 8 percent employment decline. Blue-collar jobs fell by 16 percent" and then frankly shout "Yippee! Success at last!" Happy days. - JHM Fri, 11 Jun 2010 03:06:55 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-903 [quote]"deficit spending in the middle of a debt crisis has different psychological effects than deficit spending at other times."[/quote] Uh huh. Take the Iraq "surge" for example, designed to address a "crisis". Same principle, stretch out the resources with more debt financing to avoid even higher costs over the longer run. So the "psychological effects" during that "crisis" were conveniently consistent with "surge spending", but when it comes to massive unemployment, they're suddenly in direct conflict with "stimulus spending". In that case, why not open up the enrollment standards for the military to include anyone not employed for "domestic service in defense of national security" and call it a "surge" instead of a "stimulus". It's win win all around. Full employment, eradication of terrorists and no negative psychological effects. - izzatzo Fri, 11 Jun 2010 02:52:43 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-902 And of course he sums up his column with first a call to cut "middle class entitlements" and then acknowledges that current recession has exacerbated the current economic inequality between the elites and the masses. He seems to say this is very sad, but the only policy suggestion he has is to make it worse. I also note that new Prime Minister of Japan is all for deficit cutting and is proposing a "sales tax" increase. Japan is actually a very low tax country by OECD standards,however, it is is capital gains and not very progressive income tax that are low. Most of revenue comses from its VAT/Sales taxes, which of course discourage consumption, not something we really want for global rebalancing. The new PM and Finance minister want to double down on this, despite the fact that when a Japanese Goverment did the same thing 15 years ago, it sent the country back into recession and deflation, exacerbating the very deficit it was aimed at correcting. The orthodox castle is impervious to the empirical results of these natural experiments. Finally, Brooks analogy is particularly weird as because currently Ireland has a debt to GDP of 14% because of the collapse of its banks and the examples of small countries retrenching in the nineties in a period of overall rapid global expansion may work very differently when all the OECD countries begin retrenching at the same time. This is not going to end well. But the rich guys who think they should be richer talking on CNBC's worldwide exchange were just giddy in anticipation of the dissolution of the welfare state and a return to the crony capitalism of the 1920s. - sherparick Fri, 11 Jun 2010 02:50:53 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-and-the-power-of-magical-thinking-at-the-nyt/#comment-901 I agree with your macro analysis of the dimensions of the deficit and the need for the government to borrow while the private sector can't or won't. On a micro scale, the so called deficit hawks refuse to focus on the causes and the most obvious fat to be trimmed. The US consumer market has been targeted by every country in the world, to the point that domestic jobs, personal income, wages, quality of life, and opportunity is dwindling. Every country in the world wants to devalue their currency, tighten their domestic belts, and export their way to prosperity (and the US). For the past 15 years we have tried that scenario, aided by a debt bubble in the US, and only dug a deeper hole. US military spending is the starting point. Health care cost containment, including nationalization of portions of the monopolistic health care complex are likely required. Allowing the Bush tax cuts to expire is another. All the things that make David Brooks puke. But are, nonetheless, true. - zinc Fri, 11 Jun 2010 02:37:09 +0100