Archive for January 26, 2010

Sleeping with the enemy…

January 26, 2010 Leave a comment

James Galbraith is at it again. Writing about the concession some progressives are willing to make on the need for deficit reduction some day in the future, he writes:

In reality, we need big budget deficits. We need them now. We need bigger deficits than we’ve got, to stabilize state and local governments and to provide jobs and payroll tax relief. And we may need them for a long time, on an increasing scale, and in the service of a sustained investment strategy aimed at solving our jobs, energy, environment and climate change problems. To pretend that expansionary policies are needed only for now, gives all this away.

Government needs to borrow big, because your credit limit has been reached – you’re maxed out:

The public deficit is just the obverse of net private savings. That is, when private credit is booming, investment exceeds saving and deficits tend to disappear. That’s what happened in the 1990s. When credit collapses, deficits return. That’s what’s happening now. Large long-term deficits will occur, or not, depending only on whether we succeed in generating a new growth cycle, financed by the expansion of private credit. Policies to cut spending or raise taxes — now or for that matter in the future — contribute nothing to this goal.

If Washington wants to balance its budget, it must make it possible for you to borrow more by providing relief on the debt you have already accumulated, because, you see,

… the economy works better and people are happier when they can borrow and invest privately. But if we don’t get them, the alternative isn’t a “return to fiscal responsibility.” It’s a choice between large public budget deficits that fund important and useful activities and tax relief, or large deficits because the recession, housing slump and high unemployment drag on and on, all made worse by cuts in Social Security, Medicare and other public spending.

Notice his use of the word, invest, rather than the more accurate term, buy another 42 inch high-definition, wide-screen television. If he had use the more accurate terminology at this point in his commentary, it would have been perfectly obvious to you, that you were being milked like a cow – a domestic farm animal, fed hay though one body cavity, and relieved of the mother’s milk of permanent debt servitude through another.

Government must run up a huge debt in those times when you cannot. James would rather you were the one to incur the debt, since the whole consumer mall walking experience makes you just gushy with various positive hormonal feedback loopy thingies. However, when you are permanently displaced because your job just went to Brazil, government must step in with its public credit card to fill the empty void.

What is silly about this entire argument, which we revisit again and again, is not merely that it is so incredibly stupid as to defy conprehension that it continues to be held by a grown man of Galbraith’s professional stature. What really makes it so astonishing is that the economists in the Messiah’s administration agree with all of Mr. Galbraith’s arguments, and still are pushing for deficit reduction.


Because, as Galbraith knows, Washington has absolutely no intention of balancing the federal budget, or even reducing the deficit – ever.  They just intend to spend as much of it on the military as they can. Which is why he threw dust in your eyes at the beginning of his commentary:

If you exclude Social Security and Medicare, there is no way to cut deficits seriously… except by slashing the Pentagon or by raising taxes. If you had to do something, I agree, those would be better moves. But good luck. It’s not a political battle one can win.

You see that’s James’ real agenda here – to misdirect you away from attacking the bloated defense budget as a battle you can’t win, and so direct you into a dead end, where, if you then argue for increasing the budget deficit still more to feed the hungry, and care for the sick, you can be isolated, marginalized and ignored.

When will progressives ever begin to see through these charlatans?