The "Primary" Budget...

March 31st, 2011
 
Again, the last voices of reason in economics seem to be at the the CBPP. Robert Greenstein wrote last week:
 
"The nation is on an unsustainable fiscal course, and policymakers need to make major changes in policy. As a number of bipartisan panels have recommended over the past year, policymakers should aim to stabilize the debt as a share of the economy (the Gross Domestic Product) so the debt does not rise relentlessly as a share of the economy. That would put the nation on what economists define as a sustainable budget path.
 
To achieve this goal, policymakers should aim to balance the primarybudget — the budget other than interest payments on the debt. As these panels have explained, stabilizing the debt — and avoiding the specter of a debt explosion in future decades — is the key, not balancing the totalbudget (i.e., the budget including interest payments). As a rough rule of thumb, if the budget excluding interest payments is in balance, then the debt will not grow faster than the economy. That means running total budget deficits of no more than about 3 percent of GDP. [1] In short, balancing the total budget isn't necessary to put us on a sustainable course and reassure financial markets. Stabilizing the debt is."

 

Please read the entire piece. Our future actually does depend upon it.

 

GOP Budget Insanity, ctd.

Feb 9th, 2011

James R. Horney writes for The Center on Budget and Policy Priorities providing an analysis of the GOP's proposed spending cuts announced last week:

"Under the plan, non-security programs would shrink, on average, by 15.4 percent below current funding under the continuing resolution (which expires on March 4) and 19.4 percent below what President Obama proposed for fiscal year 2011.  Programs and activities that face the risk of such cuts include funding for K-12 education, the Federal Bureau of Investigation, the Centers for Disease Control, and food safety inspections, and a number of programs that serve low-income children, seniors, and people with disabilities."

Take a very close look at their plans for defense. Their intention is to raise it. The one department of government which literally misplaced 2.3 trillion dollars just before the 9/11 attacks will get higher funding without any greater oversight. The one government agency which awarded over 280 Billion dollars in contracts between 2007 and 2009 to private contractors convicted of defrauding the American taxpayer is the only body that will have it's purse increased without any new demands for accountability. 

The Big Trend

Jan 4th, 2011

After years of slavish devotion to Reaganomic fantasy and the effects of the "W. Tax Cuts," we have a very predictable economy. True, it is an inequitable, unsustainable and shameful sort of reverse Socialism, but it is something we can really count on. Enjoy the 112th Congress. This is what they want to make "permanent."

From the CBPP:
"The average income of the bottom 90 percent of households fell 7 percent from 2007 to 2008, in inflation-adjusted dollars, the largest one-year drop for this group since 1938.  The loss in 2008 more than wiped out the increase from 2002 to 2007, leaving the average income for the bottom 90 percent of households at its lowest level since 1996.”