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Sat Dec 1, 2012, 11:15 PM


will we be the lamest generation? the legacy of fiscal cliffs and grand bargains

Matt Yglesias is now hawking an initial White House budget proposal that is apparently being negotiated by Tim Geithner. Predictably, the two-stage proposal involves entitlement “savings” and cuts in both stage one and stage two, and backs off a bit on higher tax rates on the rich. In exchange, the White House gets some more stimulus spending...

The fact is, though, that our national government doesn’t just borrow in its own currency – it issues that currency. And so its ability to spend is not constrained by its tax revenues.... So here’s my proposal. This is what I think Americans should be calling for our government to do:

1. Allow the Bush tax cuts to expire but then enact a full middle class cut tax for folks under $250 K in order to offset entirely the impact of the expiration on that group of Americans. Also extend the payroll tax holiday.
2. Repeal of the Budget Control Act of 2011 – the “fiscal cliff” act. Just cancel it.
3. Dare Republicans not to pass this tax cut proposal, and thereby to declare themselves the eternal enemy of the American middle class...

7. Stop lying to the American people about the nature of the US public debt and US government liabilities. Let them know that the US government can always pay its debts and operates under no solvency constraint.
8. Make it clear to the US public that a bond vigilante attack can only occur if the Fed permits and encourages it; and that the latter can only occur if the Congress permits the Fed to take that step. The debt crisis is The Big Lie of our time....
9. Pack folks like Bowles, Simpson, Johnson, Peterson, Rogoff and Reinart in a box and ship them to northern Europe, where all of them can, to their hearts’ content, hawk their socially paralyzing budgetary gloom and doom to an audience of priggish budget moralists who are apparently fond of intentionally destroying economies, creating voluntary recessions and sustained stagnation, inflicting pain for pain’s sake and throwing their unemployed young people out on the street to be devoured.

Once these things are done, the American public will can finally wake up and understand the self-determining power it has in its hands to shape its future...Right now, it looks like we will be known as the generation that chose stagnation, blinkered bookkeeping and fiscal tunnel vision over dynamic national progress – a weak, cowardly and unimaginative people – the Lamest Generation.

Read more at http://www.nakedcapitalism.com/2012/12/dan-kervick-will-we-be-the-lamest-generation.html#1JwQVu8yaCVc7ryX.99

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