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Dear Leaders: Would You Please Lead Already?

March 31st, 2011 . by economistmom

cabinetroom-what-to-do-time-magazine

Here’s a letter that a bunch of budget-world VIPs and otherwise very “Honorable” people–oh, and my “non-honorable” self snuck in somehow–sent to President Obama and Congressional leaders today.  Kind of a simple plea: would you please start leading on fiscal responsibility instead of just standing there, fighting over which side or corner is the more fiscally irresponsible?  Or instead of just sitting there, feeling helpless about what to do because the problem is so large and your political selves so entrenched?  Here’s the text of the letter:

Dear President Obama, Speaker Boehner, Minority Leader Pelosi, Majority Leader Reid, and Minority Leader McConnell:

As you continue to work on our current budget situation, we are writing to let you know that we join with the 64 Senators who recently wrote that comprehensive deficit reduction measures are imperative, and to urge you to work together in support of a broad approach to solving the nation’s fiscal problems. As they said in their letter to President Obama:

“As you know, a bipartisan group of Senators has been working to craft a comprehensive deficit reduction package based upon the recommendations of the Fiscal Commission. While we may not agree with every aspect of the Commission’s recommendations, we believe that its work represents an important foundation to achieve meaningful progress on our debt. The Commission’s work also underscored the scope and breadth of our nation’s long-term fiscal challenges. Beyond FY2011 funding decisions, we urge you to engage in a broader discussion about a comprehensive deficit reduction package. Specifically, we hope that the discussion will include discretionary spending cuts, entitlement changes and tax reform.

By approaching these negotiations comprehensively, with a strong signal of support from you, we believe that we can achieve consensus on these important fiscal issues. This would send a powerful message to Americans that Washington can work together to tackle this critical issue. Thank you for your attention to this matter.”

We agree with this letter and hope that you will work together to agree on a comprehensive, multi-year debt stabilization package.

To see the full letter including the complete list of signatories, go here.

7 Responses to “Dear Leaders: Would You Please Lead Already?”

  1. comment number 1 by: Gipper

    The big problem is not the deficit, it’s policy. There’s a brutal policy war that’s going to be fought, and that’s why this is taking so long.

    In this battle, the Republicans have the advantage. Their chief weapon is denial of revenue, aka tax cuts. Republicans want smaller scope of federal power (eliminate departments of Education, Agriculture, Labor, Commerce, HUD, HHS) and to pare entitlement programs.

    Democrats chief weapon is demonizing rich people as those whose should carry the burden of paying for everyone else’s goodies. They want the scope of federal power to grow and grow, but if the Republicans can block the necessary revenue, then Democrats are forced to get real.

    Instead, Democrats are resorting to threats and bluster about the necessity of shutting down the government and terrorizing financial markets with the specter of default. All lies, and now Republicans aren’t responding to the threats, thanks to the fear instilled by the Tea Party.

    Democrats have had a good run since 1932. But now the math is taking over. They’ve over-promised and under-delivered, and they’re scared. Economistmom is scared. Now some in the Democrat vanguard try to appear bi-partisan and use the deficit and the debt as the measure of non-partisan concern.

    But the reality is that the deficit and the debt are concerns for Democrats, not Republicans. All the deficit does is crowd out future spending on the things that Democrats mostly want. Republicans only care about defense.

    So let’s stop pretending that the deficit is the big deal. The big deal is the scope of government. Will federal spending be 15, 18, 21, 25, or 28% of GDP? Once that war is decided on the political battlefield, the deficit will take care of itself.

  2. comment number 2 by: Matt Franko

    That list of signatories is a virtual “Wall of Shame”.

    Think about it, many are basically the same people who were there when we got into this “mess”, why should we trust their judgement on this issue ?

    Resp,

  3. comment number 3 by: Jim Glass

    Matt, it’s time for you and your friends to face hard reality, and make your peace with it.

    All …all! …the world’s central bankers, Nobel economists, Clark prize winners, economic textbook authors, public finance textbook authors, etc and so on, are just too dim to understand Mosler — no matter how many web sites explaining NeoChartalism his fans put up in plain sight of everybody to explain the truth.

    What can you do to counter such willful-congenital endemic gross stupidity? Nothing. Nothing at all. Stupid will out.

    So …give up, give yourself a break — and us one too.

  4. comment number 4 by: BillSmith

    Hmmm… the House has passed their offerning. Where is the other side… (that would be the Senate’s).

  5. comment number 5 by: Matt Franko

    Jim,

    Paul Krugman may be close to coming around on this. He may need a little more time but we’ve moved the ball forward as evidenced by this post of Krugman’s:

    Link_http://krugman.blogs.nytimes.com/2011/03/27/the-euro-straitjacket/

    At least PK now knows the US cannot end up like Greece (as opposed to probably all of the folks who endorsed this letter here)… we press on!

    Resp,

  6. comment number 6 by: Jim Glass

    Matt, re…

    At least PK now knows the US cannot end up like Greece…

    … if you are referring to Krugman noting the difference between the US having a floating exchange rate and Greece a fixed one, I suspect every economist in the world knows that (and also that the USA really is no longer on the gold standard too!) That creates overlap between Krugman and MMT of, well, zero.

    But hey, look, if you want to talk about Krugman on MMT, you should just quote Krugman on MMT. For instance

    the modern monetary theory people … say that deficits never matter as long as you have your own currency. I wish I could agree with that view … But for the record, it’s just not right.

    the idea that deficits can never matter, that our possession of an independent national currency makes the whole issue go away, is something I just don’t understand.

    (He later follows up with more he doesn’t understand about it.)

    That very clealy leaves him on the “dimwit list” of top experts incapable of understanding Mosler.

    So my prior advice to you stands. Consider it. Please.

  7. comment number 7 by: Matt Franko

    Jim,

    I dont think a floating exchange rate is the operative factor.

    It’s more about Greece ceding their full monetary sovereignty to the EMU.

    What this does is limit Greece’s ability to establish govt sector accounting liabilities (what folks here may call “a fiscal deficit”). The EMU/EU places a limit on member’s ability to do this accounting transaction for some reason I cant figure out.

    So hence, Greece appears in some sort of “violation” of the accounting rules established under the treaty, and it’s govt securities may be “kicked off” some sort of list of qualified collateral or some such nonsense …. go figure…

    But it looks like PK now understands this nonsense, and it is some sort of progress….

    Resp,