Why I Would Not Have Signed on to a Letter Endorsing Simpson-Bowles as the Starting Point for Long-Term Budget Negotiations
Christy Romer in Vanderbilt

The Worm Ouroboros: Internet Edition

Ken Houghton sqys:

Because He Would Never Name N. Gregory Mankiw or R. Glenn Hubbard as Arsonists Screaming for a Fire Hose | Angry Bear: Go read Mark Thoma. Because he's a kinder, gentler human being than I am...

And so I do:

Economist's View: Former CEA Chairs and the Unsustainable Budget Deficit: Reading the names on the list, and noting the staunch opposition to tax increases by some, this came to mind:

Back in 2000, the U.S. government's long-term budget was out of balance--although not by all that much. The government had, you see, made promises--very popular promises--for Medicare, Medicaid, and Social Security without proposing sufficient funding streams to pay for those promises. So back in 2000, looking forward, we had a choice: raise taxes, or "bend the curve" by cutting the growth of spending.

Instead of doing either of these, we elected George W. Bush. Two wars. A big (and ill-advised) defense buildup that is very unsuited to protecting us from Al Qaeda and company. A huge unfunded expansion of Medicare. Plans for the unfunded expansion of Social Security that came to nothing. However, instead of raising taxes George W. Bush reduced them.

This simply does not work. As Milton Friedman liked to say, to spend is to tax. If the government spends somebody will pay for it. And if you don't levy the taxes to pay for it now all that means is that the person who owes the taxes does not know it yet. ... Taxes are going up over the next decade--barring cuts of 1/3 to Medicare, etc. They can either go up smartly or we can pretend they don't have to go up, in which case they go up stupidly. The argument for small government was lost long ago, and was lost again and anew in the past decade with Medicare Part D and the wars of George W. Bush.

The time to stand up to the budget busting was when it happened, and when members of the list had the power to affect policy, not many years later in an article at Politico. Many on the list were either part of the decision making team in the 2000s that opened the hole in the budget, or supported what the team did. I suppose it's possible to argue things were different in 2000 -- there was a wide expectation that budget surpluses would be the "problem" at that time. But if the forecasts by members of the list were so bad then -- and they were -- why should we listen now?

The long-run budget problem does need to be addressed, but the standing of some on the list to make this claim can certainly be called into question.

"Gee," I thought to myself. "The person whom Mark is quoting is really smart, and writes really well. I should pay attention to him or her..."

You would think I could remember and recognize what I myself wrote only six months ago. [Insert early-onset dementia joke here.]