Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (44768)	10/7/2003 4:30:40 AM
From: IQBAL LATIF	Read Replies (1) \| Respond to of 50167

Angry Bear Is Amazed The Angry Bear is amazed at a Bush administration economist actually sounding like a real economist for a change: Angry Bear: Mankiw Believes in Rubinomics Employing a startling new tactic that was surely designed to throw opponents off balance, Greg Mankiw took the unprecendented step for a Bush administration economist of sounding like an actual economist yesterday: "Naturally the budget deficit is a cause for concern," Gregory Mankiw, chief economic adviser to President George W. Bush, told Germany's Handelsblatt newspaper. "It could push up interest rates.” Now Mankiw just needs to hold a Macro 101 class for some other members of the administration, past and present. Earlier this year, Dick Cheney and Mitch Daniels both said that they don’t believe that budget deficits push up interest rates. And Glenn Hubbard thought that this silly idea was just a partisan trick by the Democrats, which he labeled “Rubinomics.” Who knows, maybe Bush will eventually even let the economists have some say in economic policy making... Not quite. To sound like a real economist you have to say two things in addition: Even though the deficits that are worrisome are not the deficits of today but the projected deficits of five years from now, the time to try to fix tomorrow's deficits is today. It took 6 3/4 years from when the Clinton administration proposed its deficit-reduction package to the time when it was finally and completely phased in. The policy design, policy enactment, and policy implementation lags associated with the U.S. budget are very long and very variable. The worrisome deficits are in the far future, but our only chance to fix them started yesterday. Optimistic budget projections by CBO over the next five years assume extraordinary restraint in spending growth on the part of the legislative and executive branches. In American history, only one institutional mechanism has succeeded in achieving such restraint: the recently-lapsed Budget Enforcement Act. The Bush administration makes the enactment of a replacement Budget Enforcement Act with teeth to be its highest priority. Such an act needs to include (1) provisions requiring supermajorities for the legislative branch to even consider bills that increase the deficit in any forthcoming year, and (2) mandatory spending cuts and tax increases triggered by any breach of the Budget Enforcement Act's deficit caps. Say those two things as well, and they will start to sound like an economist. Posted by DeLong at 01:11 PM \| Permanent Link