Economy & Budget

What has Harry Reid done?

Nothing is more infuriating than hearing a politician who has failed to act in six months on a single piece of legislation to end a crisis complaining about someone who has strenuously worked to produce a solution to the problem.


Reid's charge, Boehner's abdication: Obama should call the House back into session

Senate Majority Leader Harry Reid (D-Nev.) made an extraordinary statement this morning correctly taking House Republicans and Speaker John Boehner (R-Ohio) to task for what is one of the great abdications of responsibility in modern government. Reid is right, but these charges and counter-charges are wearing thin, and it is time for President Obama to exercise his authority to call the House of Representatives back to do what they are paid by taxpayers to do: govern.


Time to be the Speaker

I have a simple plea to John Boehner – be the Speaker.

The Speaker of the House can dictate what spending gets done and what doesn’t, if he uses his constitutional powers.

The president can merely sign or reject anything passed by the Congress.

The Senate can merely accept or amend anything passed by the House.

It is Boehner’s House that holds all the cards in the spending/tax debate. So, come back from Christmas and start playing them.


Plan B is Plan Nowhere

Speaker Boehner’s “Plan B” is clearly a tactic, not a serious proposal, and it is going nowhere.
It reminds me of the Bruce Springsteen song “Radio Nowhere” — “I was trying to find my way home/ But all I heard was a drone/ Bouncing off a satellite … This is Radio Nowhere/ Is there anybody alive out there?”
Really, we are so very close to an agreement, why put out a “Plan Nowhere” that is not a serious proposal? In fact, it would make the problems worse if it were to be adopted, which it won’t.
Why would he do this?


Ultimate responsibility

Are the Republicans allowing President Obama to define the issues in the fiscal-cliff debate? President Obama desperately would like to keep the focus on taxes when the most severe problem is spending. It must be emphasized that you can tax the top 2 percent at 100 percent and you would still have a gigantic fiscal problem.


Scarcity and choice

According to Wikipedia:

“Opportunity cost is the cost of any activity measured in terms of the value of the next best alternative forgone … It is the sacrifice related to the second best choice available to someone, or group, who has picked among several mutually exclusive choices. The opportunity cost is also the ‘cost’ (as a lost benefit) of the forgone products after making a choice. Opportunity cost is a key concept in economics, and has been described as expressing ‘the basic relationship between scarcity and choice.’ ”

As my friend Steve Bell, of the Bipartisan Policy Center, reminded me yesterday, the opportunity costs of not doing a “big” deal that includes fundamental entitlement and tax reform in the context of the fiscal cliff are enormous.


C-SPAN the fiscal-cliff talks

The First World War was begun because of incompetent statesmanship by leaders who did not want a war but blundered into one. The fiscal-cliff fiasco can only happen if leaders in Washington continue the same mistakes that have plagued the capital for far too long and blunder into an economic crash they do not want.

Given the limited time and momentous issues surrounding the fiscal-cliff discussions, I propose that first, Congress enact a 30- to 45-day cooling-off "punt"; second, that Senate leaders be brought into the center of the fiscal-cliff talks; and third, that a major round of fiscal-cliff talks be conducted in public and broadcast live on C-SPAN.


Unintended consequences

The very notion that we can borrow our way out of the recession seems to be the latest diversion these days, but it is bound to have unintended consequences.

For starters, it sends the wrong message to consumers and businesses in our economy that are already leveraged to the hilt in debt. It sends the message, whether intended or not, that spending profligately beyond our means will ultimately save us from the results of having lived beyond all measure of financial prudence as individuals and as a nation.


IMF’s LaGarde and the fiscal cliff

The International Monetary Fund has jumped into the so-called “fiscal cliff” crisis in the United States with Managing Director Christine LaGarde weighing in on the situation this past weekend, saying, “The best way to go forward is to have a balanced approach that takes into account both increasing the revenue, which means raising tax or creating new sources of revenue, and cutting spending as well.”

Speaker Boehner should immediately take Ms. LaGarde up on her challenge by eliminating the $100 billion line of credit that the U.S. Treasury has given LaGarde’s IMF.


Are we immoral if we don't support entitlements?

The arguments for entitlements are usually moral arguments, never economic arguments. No one thinks that it’s good for our economy, even the most reality-phobic Keynesian. It is never “this will work and we’ll all prosper,” but always presented to us in moral guise: “Don’t throw Grammaw off the cliff!”