Unemployment Down once again.

[sardia]

I'm amazed at how quickly people's memories fade. The White House wanted to extend the Bush tax cuts for two years for the middle class and poor (not that they saw much benefit from this) only. The idea was that this would help keep money in the economy, while allowing the tax cuts for the richer folk would help close the deficit gap. The GOP held whole thing hostage until the tax cuts for the rich were reinstated. IIRC this was attached to a budget which had to be passed and involved a lot of things like unemployment extensions. It was one of the first really big hostage taking episodes for the GOP and gave footing for them to then pivot and start the pointless fight about the deficit (I might be getting my timing wrong here but this is just from memory).

Now Grover Norquist is making noise about impeachment efforts if the tax cuts are allowed to sunset (which they should!). There's pretty good evidence that all these tax cuts (just to bring this kind of back on topic) didn't do much in the way of job creation.

The events are right, but the attitude is off. It was passed in the lame duck session after the Democrats lost the House, and lost the filibuster proof part of the Senate. Obama and the democrats decided to pass something before it was too late, and the easiest option was to extend the tax cuts in exchange for extended unemployment benefits. There wasn't any hostage taking just yet, instead the Democrats made a deal to extend unemployment. I remember because they accomplished quite a bit in that lame duck session. The nuclear weapons reductions treaty passed, and I believe healthcare for 9/11 rescue workers. It was quite a whirlwind session, and I was surprised they passed that much. I still thought it was an imbalanced deal, tax cuts are worth more to republicans than unemployment is to democrats, but it wasn't terrible.

[JudeMorrigan]

Now Grover Norquist is making noise about impeachment efforts if the tax cuts are allowed to sunset.

I realize this is Grover Norquist we're talking about but ... huh? How would that work?

[Bubbles McCoy]

I'm amazed at how quickly people's memories fade. The White House wanted to extend the Bush tax cuts for two years for the middle class and poor (not that they saw much benefit from this) only. The idea was that this would help keep money in the economy, while allowing the tax cuts for the richer folk would help close the deficit gap. The GOP held whole thing hostage until the tax cuts for the rich were reinstated. IIRC this was attached to a budget which had to be passed and involved a lot of things like unemployment extensions. It was one of the first really big hostage taking episodes for the GOP and gave footing for them to then pivot and start the pointless fight about the deficit (I might be getting my timing wrong here but this is just from memory).

If I recall correctly, Obama's plan would have still only brought back about a fourth of lost revenue from the tax cuts. Still, I tend to agree that Obama doesn't deserve most of the blame there; it is much harder to raise taxes than to lower them.

[phonon266737]

Is phonon even debating anything other than the previous chart is misleading? I read his article, and it merely repeats the same story. The budget will stabilize in the unlikely event that everyone gets their act together and lets everything expire. (Doc fix doesn't pass, Bush tax cuts expire, AMT is reduced) How likely is all that? Almost nil. Which is why they proposed the alternate base line, where interest payments eat up a larger and larger percentage of federal revenues, along with social security and medicare.
Really, if you reverse it, it makes much more sense. The budget deficit will grow out of control unless you raise taxes and reduce spending, both of which are unlikely. Or it'll happen as late as possible, so that more draconian tax hikes and spending cuts happen because legislators will be forced since they ran out of options to delay the inevitable.

It doesn't disagree with the idea that having two wars, and tax cuts don't help. Nor does it invalidate the statement that blames the Bush tax cuts for causing a large portion of our deficit.

My whole point is you can't blame any one thing for a deficit. It's a total straw man argument to blame today's problem on Bush rather than look to a solution.
We have a deficit. Options: cut spending or raise taxes. Former President George W Bush hasn't had any real control over the tax rate, debatably, since 2006 when the D's took legislative power. What is blaming him accomplishing? If the sole problem with the budget is so clearly the "Bush Era Tax Cuts", then why aren't we seriously debating ending them..all of them.

[Yakk]

Because there are people with large amounts of political power whose stated position is that they will force the US government into default before they increase taxes?

And a large percentage of the US electorate, while they do not agree with the above stated position when asked, are convinced to vote for said power base, giving them a majority of the house and a filibuster position in the Senate.

By framing the tax cuts as an example of a failed Bush era legacy policy that are continued by the current political party, people hope to drum up enough support for ending them in order to save the nation from the "default before an iota of tax increase" folks by defeating them politically. Bush is an unpopular president at this point, and by identifying the taxes with the originator of said taxes rather than a current party, we leave current parties with a possible "way out" by blaming said legacy. The fact that history and facts also back this narrative -- that said tax cuts seem to be responsible for the vast majority of the US deficit problems -- just makes the narrative stronger.

If your position is that, instead, we should consider mistakes made by a particular party to be something we should never talk about, and treat history as something to neither learn from nor discuss when solving todays problems, and that we shouldn't attempt to frame problems in ways that illustrate how they came about instead of as if we where a bunch of aliens with no knowledge of history, I'm not sure how this is a good plan.

[Garm]

Options: cut spending or raise taxes.

Wrong, we can do both, or do nothing. That gives us four options instead of two. Look, now we're not bound by the either/or fallacy. Doing nothing would allow the Bush tax cuts to sunset and that chunk of the deficit would magically disappear. As the economy improved that would increase tax revenue which would also lower the deficit. Of course there are other problems facing our country like rising healthcare costs and Medicare and Medicaid. Fact of the matter is that a lot of policies, especially those coming from the Austerity First crowd, are actually worse (if we're talking about deficit reduction) than just doing nothing.

[Ghostbear]

Do you think that this argument based on massive speculation that someone else might have done better is going to convince anyone of anything?

When the question is "How much responsibility does Bush have for the current deficit and debt?" and then I posit that we should include the wars if Afghanistan and Iraq, and then someone else (fairly) points out that a war in Afghanistan could very easily have occurred anyway, then yes, I think speculating that a different president would not have dropped the ball so thoroughly in invading Afghanistan would be relevant. I don't see how it's "massive" speculation at all, since it's pretty well documented (just read some recent history) that Bush wasn't particularly competent, and that the wars were poorly executed- that another president could have been more competent and executed them more capably seems like a trivial assumption to make.

I'm not sure that it's entirely fair to blame Bush for Americans' dislike of higher taxes and their affinity for lower taxes. If we are going to give Obama a (partial) pass for renewing the Bush tax cuts because it was more politically popular that the alternative, why shouldn't we give Bush a (partial) pass for enacting them in the first place because it was more politically popular than the alternative?

Where exactly did I give Obama a pass? Did you somehow not notice the four separate times I pointed out that he bears some responsibility?

My whole point is you can't blame any one thing for a deficit. It's a total straw man argument to blame today's problem on Bush rather than look to a solution.

It's not a strawman at all, how does strawman even make sense in this instance? Even it if isn't the right course of action, I can't see how it would be a strawman, of all things.

I don't think I've seen anyone say "if not for the Bush tax cuts, we wouldn't have a deficit" but "if not for the Bush tax cuts, the deficit would be much more manageable". Those are quite different statements, and in the case of the second one, it does make sense to go ahead and blame that one thing, because you feel that without it things would be much better.

[Whimsical Eloquence]

How is this present deficit/debt blame roulette relevant to a comment on Keynesianism? The thing people seem to realise is that "Keynesian Economics" is not equivalent to "More Government Spending" or, as the more careless (though still frequent) Strawman suggest, "National Debt". Indeed, ideally implementing Keynsian counter-cyclical policy would give Governments greater budget prudence rather than Laissez-Faire policies.

Crucially, there seems to be a most unfortunate and venal situation which has been allowed to arise without much substantive challenge namely the abandonment of any is/ought distinction in public discussion of economics in which what should be an investigation of fact has become almost entirely politicised. The idea, for instance, that a Libertarian must defend some variant of Laissez-Faire Classical models or (even more deleteriously) the Austrian school, to be consistent in their position. I might believe that Government intervention could be beneficial to the economy as a whole while still believing it to be something that should not be done. Indeed, this is surely the test of any real Liberalism (or its estranged Libertarian cousin), that even if given certainty of the benefit of State action over restrain one will still chose the latter for the sake of Liberty or Rights - consider many of the hypothetical "torture" arguments. Yet the possibility of this normative/descriptive distinction seems unknown to public discourse as currently instanced. The present situation is comparable to one that we would universally think absurd - the idea of right-wing Newtonian Physics vs. left-wing Relativistic Physics (though Conservapedia is notable in championing some strange form of this).

"Keynsian Economics" really is just "Economics" or "Macro-Economics" (the non-sensical peculiarity of the Micro-/Macro- division is akin to something we might expect of a bizarre parliamentary compromise) and for someone to cry out that they are a "Keynesian" is not to imply oneself in favour of Government intervention, it is to imply oneself in favour of fact.

[folkhero]

When the question is "How much responsibility does Bush have for the current deficit and debt?" and then I posit that we should include the wars if Afghanistan and Iraq, and then someone else (fairly) points out that a war in Afghanistan could very easily have occurred anyway, then yes, I think speculating that a different president would not have dropped the ball so thoroughly in invading Afghanistan would be relevant. I don't see how it's "massive" speculation at all, since it's pretty well documented (just read some recent history) that Bush wasn't particularly competent, and that the wars were poorly executed- that another president could have been more competent and executed them more capably seems like a trivial assumption to make.

It's also pretty well documented that nation building is exceedingly difficult, so I don't think "Bush screwed Afghanistan up" is sufficient evidence that Gore, or whoever would have done better. I do think it's fair to place the lion's share of responsibility for all the shittiness of the Afghanistan war on Bush. I don't think the message to take from the war is that it would have turned out OK if we just had someone better in charge.

Where exactly did I give Obama a pass? Did you somehow not notice the four separate times I pointed out that he bears some responsibility?

Did you somehow miss the two separate times that I put the word "partial," in parentheses before the word pass?

[Ghostbear]

It's also pretty well documented that nation building is exceedingly difficult, so I don't think "Bush screwed Afghanistan up" is sufficient evidence that Gore, or whoever would have done better. I do think it's fair to place the lion's share of responsibility for all the shittiness of the Afghanistan war on Bush. I don't think the message to take from the war is that it would have turned out OK if we just had someone better in charge.

That the task is difficult would seem to indicate to me that if you did a decent job planning and preparing for it, that yes, things would have turned out better. Not OK, but better- which is all I had said. Maybe if they had known what they were doing, Afghanistan could have been finished by now, earlier? Perhaps less troops would have been needed if we thought about our initial approach better, perhaps less equipment lost, or a more decisive blow dealt to the Taliban. Maybe something else- it doesn't seem difficult at all for me to imagine a better orchestrated Afghanistan costing less money, regardless of why.

Did you somehow miss the two separate times that I put the word "partial," in parentheses before the word pass?

Nope, but I noticed they were preceding the word "pass"- I wasn't giving him any pass, partial or not. I assigned some blame to Obama and the present congress. I assigned more blame to Bush and the prior congress. That does not mean Obama and the present congress are getting a pass.

[Whammy]

How is this present deficit/debt blame roulette relevant to a comment on Keynesianism? The thing people seem to realise is that "Keynesian Economics" is not equivalent to "More Government Spending" or, as the more careless (though still frequent) Strawman suggest, "National Debt". Indeed, ideally implementing Keynsian counter-cyclical policy would give Governments greater budget prudence rather than Laissez-Faire policies.

This part I can agree with; people always seem to forget that part of Keynesian economics..

Crucially, there seems to be a most unfortunate and venal situation which has been allowed to arise without much substantive challenge namely the abandonment of any is/ought distinction in public discussion of economics in which what should be an investigation of fact has become almost entirely politicised. The idea, for instance, that a Libertarian must defend some variant of Laissez-Faire Classical models or (even more deleteriously) the Austrian school, to be consistent in their position. I might believe that Government intervention could be beneficial to the economy as a whole while still believing it to be something that should not be done. Indeed, this is surely the test of any real Liberalism (or its estranged Libertarian cousin), that even if given certainty of the benefit of State action over restrain one will still chose the latter for the sake of Liberty or Rights - consider many of the hypothetical "torture" arguments. Yet the possibility of this normative/descriptive distinction seems unknown to public discourse as currently instanced. The present situation is comparable to one that we would universally think absurd - the idea of right-wing Newtonian Physics vs. left-wing Relativistic Physics (though Conservapedia is notable in championing some strange form of this).

Eh, this part I would probably have to disagree with. As I particularly enjoy reading up on economic thought and it's development (recently read a lovely book called Keynes Hayek: THe Clash that Defined Modern Economics], there really are serious differences in the viewpoints and models that make up the Keynesian (and even amongst its branches such as New and Neo-Keynesian), Chicago School, Austrian School, etc. and if the models that serve as the foundation of these models differ, by extension the policies supported by them are going to differ. Now do I think maybe there is some overlap and that ideas from one school are implementable in another? Of course, I'm a New Keynesian, but I like the idea of Friedman's Earned Income Tax Credit that plays a major part of our welfare system now, for example, and as much as I dislike the Austrian School, some of their ideas I think have merit for discussion (and actually, I recall one criticism of Austrian economics is many of their ideas can be explained just as easily by Keynesian analysis).

Now when politicians are debating and discussing it? Yeah, it's probably just the "Wikipedia" version of both views they are debating, but within the field of economics itself I would suggest not being so quick to dismiss it as just a 'ideological spat' (as if that is necessarily a bad thing, which I don't think so *shrug*).

"Keynsian Economics" really is just "Economics" or "Macro-Economics" (the non-sensical peculiarity of the Micro-/Macro- division is akin to something we might expect of a bizarre parliamentary compromise) and for someone to cry out that they are a "Keynesian" is not to imply oneself in favour of Government intervention, it is to imply oneself in favour of fact.

Well, I wouldn't say the Macro/Micro division thing is just something "silly"; micro focuses on the individual units of the economy such as market structures, individual consumption choices, individual businesses, etc. while the macro side of things focuses on the economy as a whole and the effects of fiscal and monetary policies. It's really more of a specialization than a division, and one of the biggest things of New Keynesian Economics has been to synthesize them together (basically Keynesian economics with a microeconomic basis). And I would like to note that said New Keynesian economics is, I believe, the current "mainstream" economic school of thought, but again, don't be so quick to dismiss the other schools of thought (at the very least, they serve as a nice 'gadfly' to keep things thinking ^_^). Although being Keynesian does in fact imply favor of government intervention in the economy since, well, one of their main points is that markets are imperfect--->market failures that the market on it's own can't get out of on its own--->Use government intervention to get out (though I guess you could be of the idea that even if gov't intervention could make the economy more efficient it shouldn't be done, but that involves non-economic arguments *shrug*).

Feel free to criticize politicians who throw around terms like Keynesian or Austrian without knowing what the hell they are talking about though ^_^. Good chance most of them have no idea what they actually mean (heck, that Keynes Hayek book I mentioned earlier made a good argument Ronald Reagan was a grade-A Keynesian in action, Hayekian in rhetoric).

[userxp]

Ha ha ha. 8.3%? You Americans don't know how to do proper unemployment. In Spain we're at 23%, and the youth rate has just surpassed 51% (and growing!). Beat that if you can!

[omgryebread]

Ha ha ha. 8.3%? You Americans don't know how to do proper unemployment. In Spain we're at 23%, and the youth rate has just surpassed 51% (and growing!). Beat that if you can!

How does Spain calculate though? Americans only count those filing for unemployment benefits, not those who have given up trying to find a job and aren't collecting.

[Dark567]

Ha ha ha. 8.3%? You Americans don't know how to do proper unemployment. In Spain we're at 23%, and the youth rate has just surpassed 51% (and growing!). Beat that if you can!

How does Spain calculate though? Americans only count those filing for unemployment benefits, not those who have given up trying to find a job and aren't collecting.

True, but even if you use the 'real' US rate, it's still between 11% and 15%, much worse, but still better then Spain.

[Bubbles McCoy]

Americans only count those filing for unemployment benefits...

I don't know where this myth originated, but it's brought up disturbingly often. You are perfectly correct that those who haven't looked for work recently aren't counted - only those who have looked in the past four weeks are - but filings have nothing to do with the official unemployment rate.

What filings for benefits are used for is as an indicator for unemployment. Filings are reported weekly, and their tight correlation with the overall unemployment rate makes them a handy intermediate measure between monthly employment reports.