Visual source: Newseum
Paul Krugman in The New York Times:
For the past two years most policy makers in Europe and many politicians and pundits in America have been in thrall to a destructive economic doctrine. According to this doctrine, governments should respond to a severely depressed economy not the way the textbooks say they should — by spending more to offset falling private demand — but with fiscal austerity, slashing spending in an effort to balance their budgets.
Critics warned from the beginning that austerity in the face of depression would only make that depression worse. But the “austerians” insisted that the reverse would happen. Why? Confidence! “Confidence-inspiring policies will foster and not hamper economic recovery,” declared Jean-Claude Trichet, the former president of the European Central Bank — a claim echoed by Republicans in Congress here. Or as I put it way back when, the idea was that the confidence fairy would come in and reward policy makers for their fiscal virtue.
The good news is that many influential people are finally admitting that the confidence fairy was a myth. The bad news is that despite this admission there seems to be little prospect of a near-term course change either in Europe or here in America, where we never fully embraced the doctrine, but have, nonetheless, had de facto austerity in the form of huge spending and employment cuts at the state and local level.
Former Obama economic adviser Lawrence Summers
takes on Mitt Romney's "fantasy" economic plan:
The Romney campaign has been very clear about what the former governor is promising: $5 trillion in tax cuts on top of extending the Bush tax cuts, with those benefits heavily weighted toward the country’s wealthiest taxpayers. Romney himself has acknowledged the lack of details, stating in reference to his tax plan that “frankly, it can’t be scored.” I have been party for many years to searches for “high-income tax shelters” that can feasibly be closed. I know of no reputable expert in either political party who would find that there is anything even approaching $5 trillion in potential revenue to be generated from this source.
Romney has also proposed a massive defense buildup, even while he says he will cut spending deeply enough to balance the budget. I think it’s clear why he won’t tell voters which cuts he would make: In the past, disclosing his planned budget cuts was politically damaging.
We have seen this movie before. When President Bill Clinton left office, our country was paying down its debt on a substantial scale. I was privileged as secretary of the Treasury to be buying back federal debt. George W. Bush campaigned on a program of tax cuts supported by economic advisers who were not subject to the rigors of official budget scorekeeping. The results — trillions of dollars of budget deficits — speak for themselves.
of Religion News Service, writing in USA Today
, picks apart Republican Paul Ryan's claim that his austerity budget is based on the misunderstood principle of subsidiarity:
The misunderstanding is in part because subsidiarity has two complementary elements: It argues that lower levels of society (individuals, families, communities) should be allowed to carry out social functions that they can fulfill and larger society (state and federal governments), meanwhile, should provide help ("subsidium," is the formal Latin term) to cover things the smaller units cannot.
Society's decisions should be made, Clark wrote at the Catholic Moral Theology blog, "at the lowest level possible and the highest level necessary." It's not just a matter of ever smaller government, or reflexively devolving responsibilities downward, but of making sure that key societal functions are provided for. [...] "The principle of subsidiarity protects people from abuses by higher-level social authority and calls on these same authorities to help individuals and intermediate groups to fulfill their duties," says the Vatican's Compendium of the Social Doctrine of the Church. [...]
In an interview in early April that prompted the latest debate, Ryan doubled down on his version when he compared subsidiarity to "federalism," "meaning government closest to the people governs best." Even a number of Catholic conservatives were prompted to correct the House Budget Committee chairman on that score.
For Republicans and certain presidential nominee Mitt Romney, the best defense appears to be a good offense on issues and themes being pushed by President Barack Obama and Democrats. In recent days, Romney has come out in favor of steps also advocated by Democrats to hold down interest rates for federal student loans and renew the Violence Against Women Act.[...]
Coming off a primary campaign dominated by conservative issues, Romney is now pivoting toward the center to try to win independent support while also challenging Obama on topics considered strengths for the president.
In addition, Romney offered a GOP variation of a central theme Obama has pushed in recent months -- fairness, or the lack of it, in America's economy -- in his speech Tuesday night after five more primary victories that amounted to his virtual coronation as the Republican standard-bearer.
"We will stop the unfairness of government workers getting better pay and benefits than the very taxpayers they serve," the former Massachusetts governor said. "And we will stop the unfairness of one generation passing larger and larger debts on to the next."
From the AP
Republicans controlling the House are opting for the politically safe route as they follow up their tightfisted, tea party-driven budget with less controversial steps to cut spending.
Instead of big reductions in Medicaid and Medicare, top GOP lawmakers are sticking mostly with familiar proposals like cutting money for President Barack Obama’s health care overhaul and federal employee pensions while reaching out to Democrats to help pass annual spending bills. [...]
Still, conservatives are enthusiastic about the cuts, though they pale in comparison to what’s in store if Republicans win the Senate and take back the White House.
“It is, to a certain extent, an introduction to what we might go through next year if the elections go the way we want,” said Rep. Mick Mulvaney, R-S.C.