Henry Blodget has an outstanding post up tonight at Clusterstock, attempting to bridge the divide between deficit hawks like Niall Ferguson and proponents of new stimulus spending, specifically Paul Krugman and Brad Delong. It's worth the time to read his story as well as the comments left by readers. FWIW, the commenters there are overwhelmingly opposed to more stimulus and agree that it's time to return to fiscal discipline of some form. Crossing $13 trillion on the national debt tends to have that effect on people.
I responded in detail, and am including my comments below.
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NOTE: I apologize for the formatting and grammar and all caps in some parts, but when you're trying to be heard among many (at Clusterstock), you need to be loud.
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Video: Don't hesitate. Just watch it.
Click HERE to see more from Clarke & Dawes
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1...The first problem with the approach from Krugman and Delong is their AUTOMATIC assumption that fiscal stimulus works in creating jobs...IT DOES NOT...we have had 4 stimulus packages from bush and obama and they haven't helped...it's very inefficient to just throw borrowed money at the problem...witness the jobless numbers...you remember that Romer claimed the bill would keep unemployment at 7.5%...how's that working out for you Christina...?
2...It's all POLITICAL...krugman and delong DO NOT WANT to see the DEMS lose power...they advocate spending in order to win elections...this is disgusting...as you know, from the email i sent you yesterday, Delong wanted (advocated for) a $6 trillion stimulus a few months ago...and just yesterday he linked to an article saying if the DEMS want to stay in power, that they had better SPEND and SPEND...voters are sick and tired of deficit spending in the name of politics...
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My thoughts on Keynes, Krugman and Delong (in greater detail) are here:
A Victory For Sanity & Reason, A Big Fat Loss For Keynes & Krugman
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And we covered Niall Ferguson's thoughts here:
Coming Debt Crisis Means It's Now Or Never For The American Empire
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3....Rates will not always be this cheap...despite the FED's circle jerk of QE (quantitative easing), we must admit that there is at least a POSSIBILITY that Treasury borrowing costs will be HIGHER in the future than they are now...the market is currently distorted by EURO troubles, etc...and this means it won't be so simple or cheap to handle the debt going forward...also don't forget that we are borrowing everything at the short end...that could end badly if rates spike...
4...I'm not actually advocating ANY CUTS right now...but I am arguing for NO NEW STIMULUS and BAILOUTS...NONE...not for the states...not for unions, not for teachers...
5...Longer term we need massive cuts in DEFENSE (we could save $1 trillion by closing overseas bases and ending the ILLEGAL wars)...and ENTITLEMENT SPENDING...it's the unfunded liabilities that will kill us in the future...
6....Raise SS retirement age and MEANS TEST all entitlements...if you're wealthy, you're not going to get your entitlements for free...tax credits in exchange for the benefits...it's not asking much of wealthy retirees to give up benefits...and most would be willing to do so if they saw it was part of a plan in which everyone was asked to sacrifice...
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As an example of RIDICULOUSLY stupid stimulus spending see the following link which Matt Drudge posted today...
http://www.ajc.com/news/for-profit-colleges-reap-541761.html
This is what I meant in my comment above...and to think we are using BORROWED money for this purpose...I read stories like this and my loathing of Krugman and Delong only grows...This is the type of stupid spending that they advocate...
What happened to a grand vision for infrastructure...?...
My blood is boiling...you can't solve a DEBT problem with more debt...watch the first clip of this link...it is freaking priceless and gets to the root of the global debt problem and bailouts...it is brilliant COMEDY from Clarke & Dawes of Australia...
http://dailybail.com/home/brilliant-satire-clarke-dawes-on-the-insanity-of-european-de.html
Whatever...i don't know why i waste my time...some days i just want to quit and move to costa rica and watch the waves and the senoritas...
Geithner, Summers, Romer, Delong and Krugman are useless political hacks...and for the record, the Republicans are full of shite as well...BOTH parties are addicted to the Washington spending machine...