Monday, November 15, 2010

Quote Of The Day

Economist Dean Baker, on a New York Times editorial concerning the federal budget deficit:
Obviously it is politically popular in Washington to be obsessed by the deficit, but we are supposed to have an independent press in this country. It is utterly loony to be focused on the projected deficit in 2030, when we have tens of millions of people who are seeing their lives ruined today by the downturn. This is like debating the colors to paint the classrooms when the school is on fire with the students still inside. Given economic reality, it would make far more sense to use the effort devoted to construct an elaborate game like this to designing a route toward restoring full employment.

It would also be worth pointing out to readers and participants in the NYT game that the long-term deficit is 100 percent a health care story. If the United States paid the same amount per person for health care as any of the 35 countries with longer life expectancies, we would be looking at huge budget surpluses for the indefinite future. Pointing out this simple fact would at least get people to focus on the real long-term problem facing the country: a broken health care system.

The NYT Doesn't Know That We Have [25] Million People Unemployed
This quote also summarizes, at least to me, why so many of the people who were worried about the federal government "taking over" health care during the debate on health care reform are complete and utter morons. The government, at one level or another, already pays for taking care the most at-risk portion of the population - prisoners, service members and veterans (military health care and TriCare), senior citizens (Medicare), and the poor (Medicaid). That adds up to almost a third of us. As costs of medical care go up, an issue that the ridiculous, roughly 2,000 page long health care "reform" bill somehow managed not to address, so do some of the biggest items in the federal budget.

That's really a distraction from the larger issue, though, which is that the federal government is obsessing with the wrong issue right now, and the press is letting them. Having so many people out there who aren't paying taxes, and may soon lose their homes, is a crushing burden on both government budgets and the economy in general. That unemployment is caused by lack of demand, not lack of capital, which is what a federal deficit tends to cause. There's plenty of capital out there now. There's just no will to spend it. That's not going to change for the foreseeable future, because there isn't enough consumer demand. What affects consumer demand? Yes, that's right, employment.

Until someone at the national level figures this out, we're going to continue as we have been. They can crow all they want about the occasional uptick in the economy, but we're still deep in a hole with nothing but a shovel.


Paul Sunstone said...

I believe your analysis is spot on, Cujo. But most of our politicians these days are corporate whores. They are never going to listen to Krugmann, Baker, and others who have been trying to tell them what's really going on.

Cujo359 said...

Democrats these days can't even figure out the simple things, let alone something to do with economics. I suppose we shouldn't be surprised.