Functional Finance

Denying the Data Today Won't Make President Obama's Austerity Go Away

That's right. Remember my last diary where I did prove without a shadow of a doubt that the austerity that this administration has put forth right now, and in effect right now, does not make this President a Keynesian? I provided a lot of reference material on Keynes proving each point I made, because that's what we encourage on this site. That's called backing up one's assertions with facts and data. I did.

The same facts were put forth by economist Jared Bernstein who used to work for VP Joe Biden and is now a senior fellow at the Center for Budget and Policy Priorities. As a Post Keynesian MMT proponent, I don't have the same outlook on economics, to say the least, as the CBPP on a number of things, especially on public debt and deficits. However, there's no reason to doubt the data in this paper from Richard Kogan; it is clearly well sourced from the CBO and the President's own Office of Management and Budget analyzing the Budget Control Act of 2011 signed into law by the President.

CONGRESS HAS CUT DISCRETIONARY FUNDING BY $1.5 TRILLION OVER TEN YEARS: First Stage of Deficit Reduction Is In Law

This proves without a shadow of a doubt that anyone who shows up in every thread and types that "cuts only happen in the future" must not be very intellectually curious. After all, as most can see with thier own eyes, the 70% of recommended cuts from Bowles Simpson going into effect this year, the year 2013, occurring until the start of fiscal year 2023 actually happen every year accumulating up to 1.5 trillion in real cuts. These are the indisputable facts.     

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Grover Norquist is Winning Thanks to a Debt Ceiling Crisis Every Few Months

That's right. I don't know in what world some people are living in, but they should pay attention. Yes they should actually pay attention to what Grover Norquist is saying and how much these stupid debt ceiling crisis I predicted are playing into his hands. (h/t Addison)

Norquist: Republicans Should Hold Federal Government Hostage Every Month

And so this constant state of crisis and delayed/short term appropriations are going to be official soon.

House passes short-term debt limit deal

The Republican-led House today passed a bill to "suspend" the nation's debt limit until May, which if passed by the Senate and signed into law, would stave off for a few months the risk of letting the U.S. government default on its loans.
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House Democrats, meanwhile, grumbled that the short-term bill amounts to political gimmickry that keeps Washington in crisis mode.

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"The premise here is pretty simple," House Speaker John Boehner said on the House floor. "It says there should be no long-term increase in the debt limit until there's a long term plan to deal with the fiscal crisis that faces our country. Every hardworking taxpayer in America knows that they have to do a budget. Every hardworking taxpayer understands that you can't continue to spend money that you don't have."

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House Democrats also complained that the bill prolonged the debate over the debt limit rather than solving it.

"The good news is that our Republican colleagues finally realized that America should pay its bills and dropped their condition that that be matched by cuts," Rep. Chris Van Hollen, D-Md., said in a news conference. "The bad news is they've decided that America only needs to pay its bills for three more months."

Yes, even when that 3 month suspension becomes a raise only every few months more down the line it won't be close to normal standard procedure as some have tried to claim. This is true for a number of reasons; past raises of debt ceilings were never crisis showdowns and always were routine until Obama put them on the table as something to be negotiated. So given the completely different context comparing past debt ceiling raises to now I needn't go any further, but I will. What happened in 2011 was unprecedented and we are still dealing with the fallout right here and right now. It almost happened to former President Bill Clinton in the 90s but even Jonathan Chait admits Clinton was much more politically savvy in dealing with it than Obama so it was averted.

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