Shutdown

By “massively unsustainable cuts”, we mean, I presume, a reduction in spending to what it was during the Clinton administration?

Riiight, because during the Clinton administration we all know that NPR, the National Endowment for the Arts, ACORN and Planned Parenthood received zero dollars from the federal government. But let’s just gloss over those details and talk about reducing “spending” in the abstract, no?

…I’ll start believing the right-wing is serious about reducing spending right about when they start demanding that we reduce defense spending to the level it was at when we last won a war.

“Repugs”? Really? How exactly does name-calling serve the point of the post?

I can only assume that Brett feels that there has been neither population growth nor even the tiniest smidge of inflation over the last, oh, 15 years or so. That would explain his belief that government could offer the exact same services for the exact same dollar amount.

So allow me to correct you: There has been population growth and inflation over the last decade and a half.

However, if you’d like to ‘reduce’ government down to the same % of GDP as it was under the Clinton years, I’d be thrilled to agree with you. I suggest ‘reducing’ taxes back to the Clinton rates too, so it’s paid for.

I’ve always assumed it would go down like on West Wing, where the president shows that he’s just better than the speaker, and the two personally hash out a compromise budget in the Oval Office.

But now I realize that I don’t have information to go on — we barely got into the first month of the Santos administration, and we certainly didn’t reach the point where Josh leaves as Chief of Staff to run for mayor of Chicago and Santos brings in a CEO to replace him.

@4: Prof. Quiggin isn’t interested in discussion. He just likes to rant. He’d have people like me in a re-education in a second, if he had the power, but fortunately he doesn’t.

There’s a big difference between being a being bored by you, y81, and desiring you to be put in a re-education camp.

y81:
Taking a couple of evening classes at the local community college wouldn’t kill you…

March 2011: L’An Zéro begins. And all this time we we worried about a nuclear winter,

16: One way to destroy a commentariat is community troll-bashing. There is nothing more ugly and boring. Let Quiggin deal with it.

Like I said before, the big question here is Social Security/Medicare. The Tea Party base of “anti-government” conservatives depends crucially on Social Security and Medicare recipients; they’re anti-government only to the extent that any other government program competes with their Social Security and Medicare. So either the Republicans aren’t going to let those payments stop, or they will and they pay the price, or we find out just how much concealment of causal relations these people can take.

The worst political case is, of course, that Obama caves to let the payments continue but gets the blame for them almost not continuing. Worst moral case, I don’t know, it depends on your time horizon.

We have (pull a number out of the air) a six hundred billion dollar budget hole. Since the six hundred billion dollars we borrowed last year went to people who paid taxes, subtracting that six hundred billion dollars from their income and therefore their taxes means the budget deficit is really seven hundred and fifty billion dollars. We are going to reach the debt limit next week, unless the conservative democrats and the republicans decide to increase the debt limit.
Two hundred and fifty billion dollars of that at the very most is medicaid, food stamps, negative income tax, and other liberal welfare, in that order. Welfare is about 20 billion or thereabouts.
The other five hundred billion is right wing welfareby definition.

Obama doesn’t actually have to sign the order to lift the debt limit….

#21 – the comparison with Hoover is not new. See the July 2009 Harper’s (Kevin, Baker, “Barak Hoover Obama: The Best and Brightest Blow it Again, http://www.harpers.org/archive/2009/07/0082562?redirect=1982284879)

But another relevant comparison is with the real FDR, not the one of memory – the FDR who strangled the recovery and plunged the country back into recession in 1937 due to an obsession with balancing the budget.

But another relevant comparison is with the real FDR, not the one of memory – the FDR who strangled the recovery and plunged the country back into recession in 1937 due to an obsession with balancing the budget.

Obama had better hope that comparison extends to getting re-elected as FDR was. If there is a second recession, all bets on that are off.

“We have (pull a number out of the air) a six hundred billion dollar budget hole. Since the six hundred billion dollars we borrowed last year “

I think you probably want to pull numbers out of someplace other than the air, if you’re going to be off by a factor of two to three fold. We borrowed closer to $1.65 billion last year.

On the subject of complaints about material like this on CT:

I think that John correctly tagged the nature of the Republican party many months ago, and he deserves credit for that insight. I’m sure that he doesn’t take any particular pleasure in that insight. I’ve differed with him on Obama pretty strongly, but this is a conversation worth having still.

I still see no reason to budge from my prediction: that the wealthy patrons of the Republican party would lose too much from a sustained shutdown, and as a result they won’t let it go too far. The true believers will not go along, but is there an issue where the Republicans have yet sided against the money people?

As I recall, John, it’s not that people discounted the threat of a government shutdown should the Republicans win the House/Senate; it’s that this wasn’t enough of an incentive to get out and vote for Democrats.

Really. I can’t say this often enough: “Vote for Us or the Republicans Win” just isn’t any sort of viable (let alone defensible) election strategy. And that’s all you’re giving us here, an I-told-you-so, the Republicans won, now look what happened.[1]

Bear in mind that if you say every election cycle that people should vote for the Democrats or else the Republicans will shut down the government, this becomes nothing more than an exercise in perpetual hostage-taking. And people simply won’t put up with that.

[1]I’ll channel the old Naderite gang and say that as events in WI play out, people are finally waking up to the fact that on the national level the Democrats simply aren’t going to be there for them. They’ve got to help themselves. Who knows? Maybe this is the straw that broke the camels back, the incident that finally gets the collective action ball rolling again. And this, btw, is not a particularly progressive or liberal opinion. It’s a moderate – dare I say “populist” – opinion.

Lee,
Thanks for a very insightful comment. I want to ask you just one thing, why do you think the economy will come back in a meaningful way?. I see several challenging trends converging. One is simply that our expectation of normal is roughly 2006, when the economy was being unsustainably stimulated by the housing bubble, so any return to a trendline, should be to a trendline some unknown distance below that. Then we have the poinonous effect of US politics, coupled with the deleterious effects of increasing maldistribution of wealth. Finally we have the world running into various limits to growth issues. The later is likely in the very near future to be augmented by the fallout from the Jasmine revolution whirlwind. We have an extrordinary series of difficult challenges, and simultaneously an almost complete breakdown of our political machinery. That doesn’t bode well for recovery.

To avoid the pitfall of pulling numbers out of me arse, i did a quick check of the recurring interest on the US debt as of January 2011. With an annual deficit of a bit less than $1.5 trillion, the interest on that is running in the $400 billion range; this cannot be so easily ignored when determining the likely outcome of a shutdown. Just wanted to offer some substantive numbers.

Well, welcome to Belgium ;-)

(and to a world in which domestic concerns are not necessarily world news)

By “massively unsustainable cuts”, we mean, I presume, a reduction in spending to what it was during the Clinton administration? Or perhaps the early Bush administration?

Er, Brett? Just about everyone here discounts anything you have to say as simple and simple-minded partisan idiocy. Mostly because of your continual and constant efforts to pass off your own opinions as some sort of fact. You’d leave yourself a lot less open to ridicule if you actually posted some real facts and real cites to back them up.

For example, when you claim that the Clinton administration spent a lot less, what are the figures you used to arrive at this conclusion? Where can I find them? Are these figures nominal, or are they adjusted for inflation? Are these figures flat on a per-capita basis, or do they reflect an increase in per-capita spending? If the latter, is this increase evenly distributed? Do these figures show an across the board increase in spending on all programs and outlays, or is this increase in just a few concentrated areas? And so on and so forth.

If you can give me credible cites and figures to back up your claims, I’ll believe you. If you refuse to give them, well, I will – as usual – dismiss what you have to say content-free editorializing.

What’s it going to be?

My prediction: they’ll do the usual kabuki (with shutting the government down or without, doesn’t matter), raise the social security eligibility age by a few years (’cause that’s the only “politically feasible” thing to do), and everything back to normal.

Omega Centauri #34 Yes there are lots of long-term problems but I don’t see anything in your list that would prevent a short-term cyclic recovery. We have already had 5 quarters of positive growth, interest rates and inflation rates are still low, consumer confidence is going up, all the recent recoveries started “jobless” but then led to job growth, and last but not least, there are lots of people who want to go back to work, and to express that pent-up consumer demand. I expect a hot GDP.

I also expect a hot climate, and this is a challenge you didn’t mention, though it may very soon face us squarely. My fear is of abrupt temperature change in the next 20-30 years, disrupting agriculture. We know that the climate system has experienced abrupt temperature changes in the distant past, though we have found this evidence accidentally, we have only vague theories of attribution, and we don’t know how to predict them. But it seems likely that forcing a systemic parameter (like CO2) would be a good trigger. If Earth has a sudden heat spike that shuts down world agriculture for a few years, it would starve most of civilization, though not before enormous panic and mayhem.

One is simply that our expectation of normal is roughly 2006, when the economy was being unsustainably stimulated by the housing bubble, so any return to a trendline, should be to a trendline some unknown distance below that.

There are any number of ways to interpret this statement, but most of them seem to as being wrong or irrelevant. It is true in the limited sense that consumers were able to borrow against housing value to support demand in 2006. But on the supply side of the equation, only a very small percentage of GDP was going into housing construction and it was itself only mildly above a sustainable trend. There is no sense in which a housing bubble was hiding a lack of productivity in the general economy. Another way of saying this is, the quantity of stuff we were making in 2006, that was a lot of stuff and we are still capable of making that much stuff (and more). And our economy is still operating below capacity so the return to trend trajectory is still upwards.

You might argue that weak consumer incomes will leave demand suppressed. My answer to that is that if it is the case (and consumer demand is non-responsive), then the government can continue financing massive deficits without generating inflation. But anyways, we are seeing increased consumer demand, so I don’t think the short run picture is that gloomy as long as the Republican house members are brought to heel by their financial masters (though here I am not as confident as Lee A. Arnold).

SoV, re the Wisconsin budget issue see Somerby’s The Daily Howler with links to Politifact which grades the claim that Walker “created” the budget deficit as false. He also links to Ezra Klein’s retraction of the claim from TPM.

Try as I might, I can’t see how anything you wrote or what you linked to refutes anything I said. Could you walk me through your reasoning on this one?

My advice for commentors, re: trolls. They feed on attention, so no matter how eregagious their reasoning or ethics, never, ever, ever respond to them. Humans can take anger and scorn, trolls even enjoy it, but as KD Williams has shown pretty convincingly, we can’t take the silent treatment. Never respond and I promise they’ll just go away.

Please, no use of ‘repug’. I’m a life-long Democrat and don’t really care for Republicans, but if I want Atrios, I’ll read Atrios; and there’s a reason I rarely read Atrios. Keep CT safe.

Map Maker, the right back then was crystal-clear in denying that there would be good times again (see the WSJ for examples). They claimed that the Bush I /Clinton tax increase would lead to disaster.

Then, when the good times came, they flipped.

And please note, the late 1990’s were better than the Reagan era or the Bush II era.
In fact, for most Americans, I believe that the gains in the Clinton era were greater than the combined gains under Reagan and Bush II. Not average gains, but combined gains.

Mapmaker #53 I think that you are correct, and I imagine that all presidents understand that the economy is mostly the luck of the draw.

I remember that Bush’s re-election chances were destroyed, not by the defense cuts, but by his tax hike (“read my lips”) and the short 1990-91 recession. Had Bush won, he might have adjusted the Republican rhetorical narrative (remember, he was originally against “voodoo” economics).

I would want to hear what an economist would say about the 1990’s technically, but the insight I have taken from Clinton’s years is that you can raise taxes enough to project balanced budgets, and still get a booming economy.

You may have noted that this insight is massively resisted by the “starve the beast” crowd. They go to long and twisty lengths to explain the Clinton boom, including the assertion that it was caused by Reagan’s tax cuts, 12-15 years before!

There seem to be two kinds of contributors on the “starve the beast” side. There are the true believers, who are emotional and somewhat inarticulate and are rather sparse. Then there are what appear to be public relations hacks hired by the business lobby to flood the comments at political-economic blogs. “Blog comment management,” I call it. They show up in Ezra Klein’s comments — and during elections, there are sudden swarms at Mark Thoma and Brad DeLong and elsewhere — there were some here on Crooked Timber, too. These latter types are a bit too ready with endless reams of carefully chosen facts and figures, to be genuine. I haven’t noticed this on the left.

What, me worry?

I think you can sum up the reasons for the lack of talk on the Left about the (perhaps) impending govt shutdown under two main headings.

Most basically, only the Right is comfortable talking Revolution these days. Their thinkers have predicted ten of the last zero Second American Revolutions over the past few decades, most of them within the past two years.

But we on the Left honestly have no idea what to make of Tentherism, or the Gold Bug thing, or the Power of the Purse enthusiasts. We think, we hope that, somehow, the courts have all this in line. State Nullification was, somehow, invalidated by the Civil War. Surely SCOTUS would shut any stab at it in 2011 right down. Surely. Despite the federal judiciary being packed for a generation by the Right with Federalist Society drones, precisely to overturn stare decisis across a wide spectrum, surely the courts will stick with stare decisis.

But recent decisions tell us that we have no idea what moves by the other side the Roberts court will bless, so there doesn’t seem much point speculating about where the blow might fall, if they are up to something. If there is any “they” there to be up to anything.

That’s the second set of reasons we aren’t talking much about shutdown. Everything’s a conspiracy now. Everyone takes it for granted that any administration action or statement is not what it seems, but really a move in some inscrutable game of 11-dimensional chess. As for the opposition, well, we don’t even know who to chalk in at the center of our conspiracy theories, who might be the string-puller calling the shots on their side. We can’t even generate a decent set of seers similar to the Kremlinologists of old to read the govt Kabuki in our own country, because those guys were talking about some foreign govt, they could just make it up whole cloth and no one in this country was the wiser. We know too much to find any of these conspiracy theories quite convincing.

So, will there be a shutdown?

Who knows.

What will it mean if there is one?

Who knows.

If we are to have a shutdown, it will probably be sort of like Bull Run or Shiloh, a battle both sides blunder into, just sort of muddle through, and have no idea what it meant even afterwards. Hopefully all that without any actual gunfire.

I don’t think any sizable faction on either side would want a shutdown in itself. Maybe some teahadists actually would like the govt to just shut down and never get up and running again, but I doubt there numbers are great enough to pull this off. And even these people’s ideals would be better served by not increasing the debt limit. The shutdown just serves the purpose of the car crash in the game of legislative chicken, the bad outcome you try to convince the other side you are less concerned about, so that they will think that you are indeed crazy enough to crash, and swerve instead, leaving you the road.

What does the Right want to gain from winning a game of legislative chicken over the budget?

Again, who knows. But if I were convinced that they actually were engaged in a coordinated strategy (Which I’m not. All this secrecy in political maneuvering right now is engaged in for exactly the same reason we shield our “intelligence” agencies with secrecy. They have no idea what they’re doing, they need to be protected from public scrutiny.), I would expect them to play chicken over a very limited set of budget items. Discretionary funding for the ACA would clearly be in this set of items they want to deny. To escape blame for a shutdown, and to make it harder for our side to credibly threaten a shutdown, they would structure the CRs they allow through the House to include everything but their limited list. They would advance this as an irenic effort to take the shutdown weapon off the table, by getting 99% of the govt safely funded and no longer vulnerable to shutdown.

Why would they do this? We’re not talking about huge budget savings. But while deficit reduction would be their publicly offered rationale, their actual aim would be to create a constitutional crisis. There are several non-discretionary funding streams associated with the ACA the administration could tap if the Rs succeed in denying discretionary funds to it. It’s also true that HHS and IRS workers could be tasked to do the work needed to administer the ACA even if these agencies are not given funds for that purpose. But if the administration does that, the teahadists have their “overt act” (shades of 1861!), the first actually arguable Kenyan Usurpation. Woo hoo!

The problem the teahadists have is that they ran on the idea that the US stands on the brink, and only a Second American Revolution can bring it back from that brink. Well, they won their House, but the House by itself cannot work even a bloodless revolution of the scale of say, the Great Society, much less the New Deal. They have to have some red meat for the revolution fans they cultivated to win the last election, so the next best thing to a revolution would be a constitutional crisis.

Is this what they’re up to?

Who knows?

Who’s “they”?

I offer the scenario only by way of running through an example of the process you need to follow to attribute any sense to any moves you see in the US political scene right now. That process doesn’t end up finding any sense outside of crude conspiracy theories, because we don’t talk politics in this country, just conspiracy theories. At this point, I think that’s all we can say about the coming shutdown. None can say if it will happen, but if it does, none will be able to say until too late whether it is the work of a Confederacy of Dunces, or people who know what they’re doing.

I’ve always assumed it would go down like on West Wing…

Adam, you should really spend your time watching more highbrow television, like that sexy gay vampire show about the sexy gay vampires who have sexy gay vampire sex with each other.