Bill's Big Diamond Blog

Pacific Star

Let's take a break from politics, economics, and the daily grind and watch the beautiful video one Colin Rich made with limited means, unlimited imagination, a balloon, two cameras, and a parachute. Earth is a lovely place and his video reminds us of that.

Pacific Star II from Colin Rich on Vimeo.

Long Term Debt vs. Unemployment—False Choices

The Republican focus on the federal deficit as a primary issue in this year's Congressional election cycle makes little sense in the context of our real economic problems. Economist Brad DeLong uses a good metaphor in a response to Henry Blodget's questions about long-term federal debt:

Think of it this way: our natural gas pipes are corroding, and there is a good chance that tomorrow ten years from now we will have a gas leak and if we do not fix it the house will explode. And Henry Blodget is using that danger to argue that we shouldn't turn on the heat tonight even though it is snowing outside...

Here's the false warning that's being promulgated: "There's a crisis coming in federal spending and if we don't start dealing with the pain now by cutting programs and spending by the government to alleviate unemployment, we'll be overwhelmed later by the mountain of debt we're accumulating."

Here's why it's a false warning: The long-term debt service on government spending to stimulate the economy pales in comparison to another problem. That looming issue is the long-term (and societally draining) economic damage done to the country if we let a decade be lost to high unemployment and lost productive labor, thereby creating additional drains on both the public and private sectors.  In the current employment crisis environment, job one should be getting the country back to work— in order to create the conditions in which we dig ourselves out of this critical situation limiting the economy's stability and resilience.

It's myopic to look at debt due to federal domestic spending only, rather than the total situation the US economy is currently facing. Yet this single-minded approach seems to be crowding out discussion about solving the growing long-term unemployment crisis and its drain on the housing market, the demand for goods and services, and on the country's sense of hope that the future is something to invest in, rather than horde against.

I hope we can keep talking sense about dealing with the real problems in front of us, rather than being distracted by fears that a stronger America won't ever make sacrifices or hard choices to deal with paying our bills. Right now, the sacrifices being made are focused incredibly unevenly on those least equipped to cope with the losses: namely the poor and those becoming poorer daily.

Dean Baker responds to those voices crying out about an American "debt crisis" in the following way:

We can point to a debt crisis in Greece, and arguably Portugal and Spain, but it is not clear what that has to do with the argument for stimulus in the United States. There were debt crises in Latin America in the 80s, no one ever raised these in the context of the Reagan era budget deficits.

There needs to be more coverage of reasonable plans to revisit the unemployment issue during this election year, not less of it.

The 99ers— Over a Million and Growing

As if we had to ask, here's how bad it is (according to Annie Lowrie's piece in the Washington Independent):

The joblessness crisis — in the average duration of unemployment, if not the absolute unemployment rate — is unprecedented in the postwar United States. Of the 15 million unemployed in America, over 7 million have been out of work for more than six months, nearly 5 million for a year and over 1 million for two years — the worst statistics since the government started keeping count in 1948.

Souter Speaks on How the Court Decides

Linda Greenhouse hopes that retired SC Justice David Souter will continue to share his thoughts in public as a guide to his thinking on the bench. His recent Harvard commencement address included the following statement on why the court does more than parse the Constitution for a "fair reading:"

The reasons that constitutional judging is not a mere combination of fair reading and simple facts extend way beyond the recognition that constitutions have to have a lot of general language in order to be useful over long stretches of time. Another reason is that the Constitution contains values that may well exist in tension with each other, not in harmony. Yet another reason is that the facts that determine whether a constitutional provision applies may be very different from facts like a person’s age or the amount of the grocery bill; constitutional facts may require judges to understand the meaning that the facts may bear before the judges can figure out what to make of them.