federal budget politics
When we last left the federal budget debate in early August, the Budget Control Act — the agreement to raise the federal debt ceiling and reduce the deficit — had been enacted into law and Wall Street and the rest of the country were supposedly breathing a deep sigh of relief because, at least as far as spending and taxing was concerned, life was good.
Except that it wasn’t and isn’t.
Over at Economist's View, Mark Thoma comments on a piece by Joseph Stiglitz from Monday's Financial Times that questions the value of using monetary rather than fiscal policy to deal with the economy. Stiglitz makes a number of very good points (you can almost hear the frustration in his writing), but he quickly goes past what I see as the money quote:
The Fed has bought more than a trillion dollars of mortgages and long-term bonds, the value of which will fall when the economy recovers – precisely the reason why no one in the private sector is interested. The government may pretend that it has not experienced a capital loss because, unlike banks, it does not have to use mark-to-market accounting.
You may want to have a strong cup of coffee -- or something stronger -- before you take a look at my column from this morning's Roll Call. Honestly, I'm not sure who besides those of us who analyze, comment on, and prognosticate about federal budget doings is going to benefit from what's ahead next year. Maybe I should raise my speaking fees.
In my Roll Call column this week, I take another shot at the Gallup poll on waste from about 10 days ago and on Steve Moore's characterization of that poll. Thanks. for listening. I feel much better now.
Waste Not, Want Not — but First Define Waste and Want
Sept. 29, 2009
Gallup released a poll two weeks ago that unwittingly but perfectly explains the ever-intractable politics of the federal budget. The poll, which was released Sept. 15, found that the average American believes that 50 cents of every tax dollar collected by the federal government is wasted.
I agree with my partners in crime--Congress and the President should be able to conduct responsible budget policies even without putting any of it on autopilot. But they don't conduct responsible budget policies, and, more importantly, we don't hold them accountable for this at election time, and so I think some type of automatic trigger could work.
