Monday, November 30, 2009

How to simultaneously pass a stimulus, lower deficits, and disallow a filibuster

A large stimulus can be done through reconciliation, and therefore need only 50 votes plus the Vice President, if it's deficit neutral. But how can it be deficit neutral and still be a stimulus? One answer is that for reconciliation it must be deficit neutral over a period of 10 years (see here and here), so put in the spending now, and the tax increases, on the very wealthy, to more than pay for it 5 or more years later. If unemployment is still high by then, do another one of these stimuli at that time.

Yes, the Republicans will howl. They can't say it will explode the deficit (with much traction), because it's deficit paying. And, in fact, if the tax increase is a large permanent one on the wealthy, as it should be, the CBO score could show it paying down trillions in debt over 20 years to satisfy the deficit hawks. Nonetheless, the Republicans will, of course, say that the economy, and civilization as we know it, will end because taxes are being raised, despite the fact that Bush had massive tax cuts for the rich and brought us to the brink of a depression and trillion dollar deficits, while Clinton raised taxes and turned record Republican deficits into record surpluses, and had the longest economic expansion in U.S. history. I sincerely hope that if this happens Obama will end his harmful aversion to touting the achievements of the last Democratic president. The constant reply to Republican claims of disaster whenever taxes are raised should be Clinton, Clinton, Clinton (and in California Pat Brown, Pat Brown, Pat Brown).

And it's crucial for the Democrats to understand that any negative at the ballot box from the Republicans screaming tax increase, will be swamped many, many times over by passing a stimulus, and jobs programs, that will make unemployment and the economy far better by election time. A bad economy at election time, that's improving very slowly if at all, will hurt the Democrats immensely more than the Republicans screaming about tax increases which will be only on the very wealthy. Unfortunately, it may be too late for great improvement by the 2010 midterms, but strong action now would also greatly improve prospects in 2012, when not only much of congress, but also you know who, is being voted on.

Thursday, November 5, 2009

A Krugman from the physical sciences

Having a Nobel Prize winning economist (and in my opinion one of the greatest in history) writing a popular newspaper column has done tremendous good. Before Paul Krugman we had no one who was a great expert on economics writing a weekly popular newspaper column for the general public on economics and political economy. The result was that far too many people learned harmful, or extremely harmful, misconceptions from Robert Samuelsons posing as economists.

Wouldn't it be great if we could have a Paul Krugman for the physical sciences? In fact, we have what looks to be an excellent candidate, Nobel Prize winning physicist Burton Richter. Dr. Ricter is a finalist in the Washington Post's America's Next Great Pundit Contest.

It's extremely important in today's far more advanced world that the public and politicians understand scientific and technological issues and how they relate to politics, economics, and society in general. Ricter's two contest columns show an exceptional ability to meet this need. The first one is especially good, "Separating partisanship from technology". Here is a sample:
So many things in front of our Congress involve science and technology issues, including limiting greenhouse gases, renewable energy programs, equal treatment for all on the Internet, nuclear weapons reliability, computerizing medical records, computer vulnerabilities, etc. It is odd that Congress has no organization of its own to analyze these sorts of things. It has a trusted Congressional Budget Office to referee arguments on program costs, as was done recently on the cost of the Senate health-care reform bill, but Congress has nothing to analyze the impact of technology.

It was not always so. In 1972 Congress decided that knowledge was power and created the Office of Technology Assessment, so that it would have its own nonpartisan organization to look into the effects of technology on legislation and on the country. In 1995 it decided that ignorance was bliss and abolished OTA as part of the Gingrich revolution, in order to save about $20 million out of a congressional budget of $2 billion. It has been blissful ever since, getting its information on science and technology issues from outside organizations that too often have serious conflicts of interest.
And I would add that that $20 million the Republicans "saved" was just 1/350,000th of our $7 trillion GDP in 1995. The smarter science and technology related policy, legislation, and spending that $20 million could have contributed might easily have resulted in an increase in GDP of $20 billion, 200 billion, or much more, and then there are externalities and international benefits. It was an incredibly high return investment. Talk about being penny wise, pound foolish. This was stupid even by Republican standards.

Wouldn't it have been valuable if we had a columnist like Burton Ricter writing about this at the time. Like Paul Krugman, a columnist like this could do tremendous good.