Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version appeared at Project Syndicate.
High among the many priorities of newly-inaugurated US President Joe Biden are the challenges of an economy that appeared to be slowing down as 2020 ended, with the latest employment numbers looking bleak. A fourth-quarter slowdown in the US recovery from the horrendous second quarter could be attributed to the expiration of some of the bipartisan stimulus programs that were passed by Congress in March of 2020, or to the third wave of Covid-19, or to both factors. Even if Covid-19 abates during the course of 2021 and pent-up consumer demand then kicks in, the US faces challenges right now, in such areas as schools, infrastructure investment, state and local finances, and especially the fight against the pandemic itself.
Biden has announced a $1.9 trillion “American Rescue Plan.” That includes a $20 billion national vaccine program, $50 billion to expand testing, and $100 billion to help schools re-open safely. He wants to help cities and states hard-pressed by the crisis and to support those who can’t work due to the pandemic. On a more permanent basis, he wants to invest in infrastructure and education and to extend health insurance coverage to those not already reached by the Affordable Care Act.
He is rare among successful presidential candidates in having been honest during the campaign that his spending would continue the trend of record budget deficits, notwithstanding his plans also to raise taxes on the wealthy. Most economists approve of this fiscal expansion, in light of still-high unemployment, low inflation, and very low interest rates.
It is expected, however, that because a Democrat has been elected president, many Republicans will now switch from four years of indifference to budget deficits (even when unemployment was far lower) to a sudden rediscovery of their dangers. Observers recall that the Republicans have done this before, most recently in 2009. That was the last time when a new Democratic administration took the reins in the midst of another inherited crisis — Barack Obama and Vice-President Biden, as it happens.
But it is worth pointing out that the pattern goes back a full 45 years. Republicans oppose deficits only when, and only when, Democrats hold the White House
The history features three long cycles, each cycle alternating fierce Republican opposition to deficits with a reversal when they come to power: (1) the 1980s, (2), 1990-2008, and (3) 2009-2020.
Consider the three cycles in chronological order.
1. 1980s:
- The Administration of President Jimmy Carter in the late 1970s ran budget deficits, as most of its predecessors had done. Ronald Reagan in his 1980 presidential campaign attacked the deficits. Notwithstanding the 1980 and 1981-82 recessions, he warned that the accumulated national debt was approaching $1 trillion and said there was an urgent need to start bringing it down, to act “beginning today,” which arithmetically would have meant running budget surpluses.
- With Reagan in the White House in 1981, he and a Republicans Congress launched a three-year program of extensive tax cuts. They did not propose net cuts in spending (but, to the contrary, expanded the military budget). As a result, the US began to run record budget deficits. These deficits tripled the national debt to $3 trillion by the time Reagan left office and quadrupled it to $4 trillion by the time his successor left office. Even after the US economy had fully recovered from the recessionary years of 1980-82, George H.W. Bush in his famous speech in 1988 accepting the nomination to be Reagan’s successor, appeared unconcerned about the budget deficit: “read my lips, no new taxes.”
2. 1990-2008:
- Bill Clinton did not campaign against the budget deficit, but once in office, he was persuaded to make fiscal responsibility a priority.
- In 1993, Republicans in Congress uniformly voted against Bill Clinton’s PAYGO (“Pay As You Go”) plan, which was to achieve a path of steady deficit reduction. (Under PAYGO, anyone wishing to cut a tax or raise spending had to propose an offset somewhere else in the budget.) The Republicans, led by House Speaker Newt Gingrich, predicted that the plan would result in slower growth and larger deficits. Instead, the 1990s economic recovery achieved historic length, unemployment fell below 4%, and the budget went into surplus by 1998-2000. Nevertheless, the opposition party continued to oppose Clinton’s fiscal policies, which included a plan to refrain from spending the surpluses until social security was funded.To give credit where credit is due, the PAYGO plan was actually a continuation of the policy that the first President Bush had initiated in alliance with Congressional Democrats in 1990. Many in the GOP never forgave Bush for his apostasy regarding taxes.
- His son, George W. Bush, took up occupancy in the White House in the first month of the new millennium. He let the PAYGO provisions expire. In 2001 and again in 2003, he instead followed the Reagan playbook by enacting big tax cuts (reducing taxes on dividends and capital gains and lifting the estate tax even for the wealthiest). Bush also raised federal spending during his first term, at four times the rate that Clinton had, not just defense spending, but domestic spending as well (including, for example, subsidies to farmers and fossil fuel producers). Even with unemployment falling below 5% in 2005, he did not listen to warnings that to run large budget deficits during a period of economic recovery might leave less “fiscal space” with which to respond to the next recession or crisis. His Vice President, Dick Cheney, reportedly said, “Reagan showed that deficits don’t matter.” Another $ 4 trillion was added to the national debt during the two Bush terms.
3. 2009-2020
- A housing finance crisis led to recession in December 2007. By the time Obama took office in January 2009, the economy had descended into free-fall. No Republican congressperson voted for Obama’s Recovery Act, even though the economy was in its worst recession since the 1930s. After re-taking the majority in Congress in 2011, they succeeded in blocking continuation of the stimulus, despite an unemployment rate that was still 9 percent. A look at the timing supports the proposition that the stimulus turned around the economy in the first half of 2009 and that its curtailment after 2010 slowed the subsequent recovery. Candidate Donald Trump attacked Obama’s deficits. He said he would balance the budget “quickly” if elected president. He even claimed during the 2016 campaign to be able to eliminate the national debt. That would have required budget surpluses averaging more than $2 trillion per year over 8 years.
- In this perspective, the new president predictably pursued the policy path of the predecessors of his party. As Reagan had done in his first year in office and Bush in his, Trump and his co-partisans in Congress passed a tax cut in 2017 that was projected to cost $1.9 trillion over ten years, overwhelmingly benefiting the rich. They increased spending too, even though the economy was at the peak of the business cycle. As a result, the budget deficit surpassed $3 trillion in 2020 (more than double the previous record). The national debt at $22 trillion is now poised to exceed 100% of GDP. The only time this has happened before was at the end of World War II.
4. What next?
The US is now starting the fourth cycle. All signs point to the desirability of large-scale federal borrowing at record-low interest rates, to be spent on worthy causes ranging from the short-term (immediate federal leadership to defeat the coronavirus) to the long-term (investment in infrastructure and education). With a razor-thin majority in the Senate, Biden is in a position to get things done. But if history is a guide, the other party will fight spending proposals every step of the way and thereby work to slow the recovery in American economic and physical health… until it is once again their turn in the White House.
This post written by Jeffrey Frankel.
An excellent review of our fiscal history over the past 40 years but one protest about the opening line:
“The Administration of President Jimmy Carter in the late 1970s ran budget deficits, as most of its predecessors had done.”
Yes St. Reagan complained that the nominal Federal debt rose under Carter but shouldn’t this be measured in terms of the change in the real debt? Carter ran primary surpluses that exceeded the real interest expense on the Federal debt at least in his last year. Even Milton Friedman noted this in an oped in 1980 – one I guess the supporters of St. Reagan forgot to read.
Back in the day, maybe 80’s I was delivering a paper at a AIAA conference in Virginia. I was at breakfast and a man asked me about wonderful St. Reagan. I told him governor Reagan signed the largest tax increase bill in California history. Don’t know if that is true or not but it did end the conversation.
This is fully accurate in my view, Jeffrey. I would only add the further note on GOP hypocrisy and just plain lying that under all three of their presidents that they enacted budget-deficit-enhancing tax cuts, usually mostly for the rich, they always claimed that these would “pay for themselves” drawing on Arthur Laffer, who has never failed to step forward to support this nonsense, even though it has never proven to be the case in the US.
“Republicans oppose deficits only when Democrats hold the White House”
…and in other news, dog bites man.
Some Republicans know enough macroeconomics to understand when deficit spending makes sense and when it doesn’t; however, they are more interested in making sure any Democratic President is a one termer than they are interested in the good of the country. Sen. McConnell even admitted this quite brazenly back in the early Obama days. But some Republicans are just plain stupid and genuinely don’t know any better; e.g., the Tea Party idiots. And finally, there are those Republicans who have a zero sum view of economics and believe that deficit spending is something that necessarily makes them worse off in order to subsidize the lazy lifestyles of “those people.” It’s just another version of Reagan’s “strapping young buck” buying T-bones with food stamps.
The sad thing is that this is an economics blog, so you’d expect people who comment here would have some familiarity with basic macroeconomics. Then you see economic illiterates like CoRev and sammy and PeakTrader and lately Bruce Hall. You’d think that after all these years they would have learned something about macro. I guess you can’t put new wine in an old cask.
I agree with PGL.
Republicans appear to have no shame in supporting deficits when their man is in the oval office and then discover fiscal responsibility when their man is not.
most of the deregulation that people laud St Ronnie of Reagan for was instigated if not put into practice by Carter way tool late.
To a large extent, the issue is irrelevant since the real battles have been about tax policies – which the GOP has consistently won.
I am encouraged by the sounds Biden is making. And, yes, Republicans have a long, sordid record of hypocrisy when it comes to deficit spending.
However, Democrats have their own long, sordid record as deficit hawks when what the economy really needed was stimulus.
https://www.jacobinmag.com/2020/12/joe-biden-austerity-economy-covid-crisis-stimulus
Hopefully, Biden’s encouraging words get translated into action, Democratic deficit hawks actually see the light, and enough Republicans put the needs of the economy above their cynical maneuvers.
With this crew on both sides of the aisle, he has his hands full. But at least, unlike Obama, he doesn’t shy away from using the bully pulpit to sway public opinion as a way of pushing Congress to do the right thing.
JohnH: There is a world of difference between gross hypocrisy, and mis-assessing the size of the output gap or the sustainable debt/gdp ratio.
But but but the output gap was over 18% in 2016 – right?!
There’s also a world of difference between conscious gross hypocrisy (read Sen. Mitch McConnell) and unconscious cognitive dissonance (read some of the folks who used to comment here). The remedy for the latter is a perpetual education project and gentle consciousness raising. The remedy for the former is public shaming. Of course, Bruce Hall would regard either remedy as some kind of totalitarian deprogramming effort.
The other day Dean Baker went after some economic stupidity ala Thomas “no relationship to Milton” Friedman. And of course he has a lot of fun with the stupidity ala Robert “no relationship to Paul” Samuelson.
So Brucie boy should realize that when I write Bruce “no relationship to Robert” Hall it was in reaction to another episode of his economic stupidity. Simply put – if one does not want to be called on stupidity, just avoid writing incredibly stupid things.
If JohnH was one of the 3 bears in the Goldilocks tale, I bet he could not make up his mind whether the porridge was too hot or too cold. The other day he was using some weird oped ala Jeffrey Sachs that bashed Paul Krugman for not caring enough about fiscal discipline over the long-run. But now he is saying that some Democrats are too much about the fiscal stance over the long-run.
I am not saying he is flipping flopping here even though it appears he is. No – I am saying as usual JohnH has little clue what he is babbling about.
JohnH is a wolf in sheep’s clothing. he is baiting democrats to take an extreme and indefensible position. some of you think he is a third party type of person. think again. his interest is in damaging the democratic party.
He showed his hand with his praise of Cameron. I bet he will be cheering for Romney in 2024.
But “mis-assessing the size of the output gap or the sustainable debt/gdp ratio,” when done by Democrats is so much worse than the persistent gross hypocrisy practiced by Republicans. Jacobin says so, and everyone should consult them on economics, right? After all, they believe in Murc’s Law: only Democrats have agency, so they must be credible!
Ah yes – focus on what Cecilia Rouse wrote in 2012. But of course there was this clown named JohnH who kept telling EV readers that Cameron’s fiscal austerity helped UK workers even though we repeatedly noted how much real wages declined under Cameron. Before decrying hypocrisy aka throwing rocks be sure you shore up your glass house.
January 27, 2021
Coronavirus
US
Cases ( 26,166,201)
Deaths ( 439,517)
India
Cases ( 10,702,031)
Deaths ( 153,885)
UK
Cases ( 3,715,054)
Deaths ( 101,887)
France
Cases ( 3,106,859)
Deaths ( 74,456)
Germany
Cases ( 2,179,679)
Deaths ( 55,358)
Mexico
Cases ( 1,778,905)
Deaths ( 152,016)
Canada
Cases ( 761,227)
Deaths ( 19,533)
China
Cases ( 89,272)
Deaths ( 4,636)
January 27, 2021
Coronavirus (Deaths per million)
UK ( 1,471)
US ( 1,323)
Mexico ( 1,172)
France ( 1,139)
Germany ( 660)
Canada ( 514)
India ( 111)
China ( 3)
Notice the ratios of deaths to coronavirus cases are 8.5%, 2.7% and 2.4% for Mexico, the United Kingdom and France respectively.
https://news.cgtn.com/news/2021-01-28/Chinese-mainland-reports-54-new-COVID-19-cases-XpzmOkBsgo/index.html
January 28, 2021
Chinese mainland reports 54 new COVID-19 cases
The Chinese mainland on Wednesday recorded 54 new COVID-19 cases – 41 local transmissions and 13 from overseas – the National Health Commission said on Thursday.
Of the locally transmitted cases, 28 were reported in Heilongjiang Province, 9 in Jilin Province, 3 in Hebei Province and 1 in Shaanxi Province, the Commission said.
No new death related to COVID-19 was registered on Wednesday, and 96 patients were discharged from hospitals.
A total of 28 new asymptomatic COVID-19 cases were recorded, while 988 asymptomatic patients remain under medical observation.
The total number of the confirmed COVID-19 cases on the Chinese mainland has reached 89,326, and the death toll stands at 4,636.
Chinese mainland new locally transmitted cases
https://news.cgtn.com/news/2021-01-28/Chinese-mainland-reports-54-new-COVID-19-cases-XpzmOkBsgo/img/f75ede38ea7847b6b860dcedb926e640/f75ede38ea7847b6b860dcedb926e640.jpeg
Chinese mainland new imported cases
https://news.cgtn.com/news/2021-01-28/Chinese-mainland-reports-54-new-COVID-19-cases-XpzmOkBsgo/img/67c43e933c0d46b8808399638b4bea79/67c43e933c0d46b8808399638b4bea79.jpeg
Chinese mainland new asymptomatic cases
https://news.cgtn.com/news/2021-01-28/Chinese-mainland-reports-54-new-COVID-19-cases-XpzmOkBsgo/img/e04e3fd62e0e4d529f490d4ce63e13fa/e04e3fd62e0e4d529f490d4ce63e13fa.jpeg
Kevin Drum lets us know that BEA reported an advanced estimate of real GDP growth for 2020QIV and that growth was not all that great. He also plays amateur economist here. Check out his view which includes a trend line estimate of the output gap, which comes to something near 3.6%:
https://www.motherjones.com/kevin-drum/2021/01/chart-of-the-day-gdp-was-up-4-in-the-4th-quarter/
I looked over a few of the details. Exports up a lot but so were imports. Investment demand was strong but the growth in private consumption and government purchases was quite weak. So maybe Kevin is right that we need some more fiscal stimulus.
Kevin is shutting down his blog at MJ. Starting his own. https://jabberwocking.com/
I’ve been checking out his posts at both places.
Hopefully at some point, economists and politicians will have rational discussions about federal budget deficits and how they affect cash flows and demand in the economy. Deficits are not evil or good per se, but rather as they impact inflation and unemployment. Thus, Carter’s deficits, although low relative to GDP, were inappropriate when inflation was rising rapidly. OTOH, deficits under Obama and Trump, although high relative to GDP, were appropriate given the Fed’s inability to achieve its inflation targets and the reduction of unemployment to a 67 year low of 3.5% in Jan. & Feb. 2020. https://fred.stlouisfed.org/series/FYFSGDA188S
Keynes, of course, figured all this out decades ago and most American voters today are no longer as gullible as they were just a few years ago. Perhaps the “deficit hawks” will soon go the way of the dodo and we can be done with all the lies and BS about deficits. Hope springs eternal.
I had stated on this blog that Cuomo had failed nursing home residents in some of his moves on the virus. I think I remember a certain resident of the NYC area taking great offense to this. Those moves could not be shoved off onto federal errors (though there were many errors at the federal level). Although I know it will be a royal pain in the A– , if someone wishes to challenge me on this I can do my best to hunt the old comment down and put it in this thread:
https://www.nytimes.com/2021/01/28/nyregion/nursing-home-deaths-cuomo.html
I may have even made more than one critical remark about Cuomo–but this is the one I definitely remembered in my mind making. As you can see I made the comment around mid-summer 2020, and you can also see an NYC resident’s defense of Mr. Cuomo, just below my comment:
https://econbrowser.com/archives/2020/07/an-employment-w-what-would-it-take#comment-238128
You may have noticed that I just skip over your total wastes of time arguing with Barkley. I guess back then I had not learned my lesson arguing with a drunk troll. Look – playing out whatever stupid partisan garbage you fancy at the moment (agreeing with Bruce Hall – snicker) does not save anyone’s life. So wear your damn mask like the rest of us.
I started reading this when that damn NYTimes fire wall kicked in. Look it was the New York Attorney General who put this stinging indictment out as she should. Of course we had Trump sycophant Bruce Hall persistently saying we overestimating these deaths. Of course Bruce Hall is a liar.
But note you are following Bruce Hall’s partisan lead blaming the governor of New York for the utter failures of the White House. I doubt people in the rest of this nation understood the hell my city went through back in April. But guess what rest of the nation – your ignorance is now biting you in the a$$ whereas New York took appropriate action after all hell broke loose and we have tried to tell the rest of you idiots it would be wise to do the same.
Anyone can look at the numbers here, there’s no paywall:
https://ag.ny.gov/sites/default/files/2021-nursinghomesreport-final.pdf
Some highlights of the Jesse McKinley and Luis Ferré-Sadurní authored NYT story (Mihir Zaveri also contributed):
” In one instance, an unnamed facility reported to the Health Department that it had 11 confirmed and presumed deaths on site through early August. The attorney general’s survey of that same facility, however, found 40 deaths, including 27 at the home and 13 in hospitals.”
“…….. Another facility reported one confirmed and six presumed Covid-19 deaths to the Health Department, according to the report. The attorney general’s office, however, said the facility reported to its investigators that there were more than four times that number — 31 dead — by mid-April.”
“The attorney general asked 62 nursing homes — about a tenth of the state’s total — for information about on-site and in-hospital deaths related to the virus; investigators then cross-referenced that information with public reports of deaths issued by the Health Department. The deaths reported to the attorney general’s office at most of those facilities totaled 1,914, compared to the state’s much lower count of 1,229.
Ms. James said that her office was investigating those circumstances “where the discrepancies cannot reasonably be accounted for by error or the difference in the question posed.”
The above facts, as mudslinger pgl would have you believe, were sponsored by the Industry Association of Red Wines. Or alternatively~~solid journalism at the New York Times. The gentle reader may be the judge of which version holds more credibility.
Mudslinger? You love to dish it out but you turn into a total wimp when it comes back at you. Poor little Moses – such a baby.
The AG report is a careful review of what went wrong. Yep – in the State of New York we take this stuff seriously unlike that former White House who covered up their incompetence. I have only began to read this but maybe you should do so too rather than just highlight the number of tragic deaths.
Lots of blame to go around but a lot of the blame was a system not ready for this hit and people not listening to guidance from the Governor. But yea – a purely partisan hack will insist that Cuomo is the sole reason for this tragedy. Not even close but do act like Bruce Hall if you wish.
“We take this stuff seriously”
Yes, nothing says “serious” like when the state quoted grotesquely undercounted numbers and the Attorney General has to play clean up. We just wish you didn’t take donald trump so “serious” in New York State before unleashing him on the rest of us. “Thanks New York ‘criminal justice’!!!”
New York is good about one thing, being “bipartisan” in robbing John Q Taxpayer blind. That and the size of the rats in New York City you guys are “deh best”
https://www.nytimes.com/2016/09/23/nyregion/cuomo-former-aides-charges.html
https://www.reuters.com/article/us-new-york-corruption/ex-cuomo-advisers-others-charged-in-new-york-corruption-cases-idUSKCN11S1E3
https://www.cityandstateny.com/articles/policy/ethics/corrupt-cuomo-associates.html
Next time Andrew Cuomo stands behind a podium to tell another undercounted death count LIE tell him all of us in “fly over” country told him to please keep doing “God’s work”, would you??
@ pgl
BTW, your rhetorical defenses of Mario Cuomo’s political moves with Covid-19 infected nursing home patients’ lives just because he is the leader of the Democrat party in New York state is both adorably cute and humorous. It reminds me of the stereotypical SEC football fan, who defends the superstar football player accused by 12 different women of rape, saying he is “a fine young man” because he can score 3 touchdowns a game for the LOCAL team. While adorable and humorous, not sure that’s flattering to your intelligence.
*Andrew Cuomo, excuse me. Is till have his father on the brain.
“I think I remember a certain resident of the NYC area taking great offense to this.”
No Uncles Moses – I never take offense when people bother to get the story correct. But please return to your gallons and gallons of red wine.
@ pgl
Very intelligent response. Make false equivalencies with the FACTS on Andrew Cuomo’s negligent homicide of the elderly that you can’t reconcile with your 24/7/365 idealism of a political party and playground quarrels you’re having with other commenters. You’re very mature. And you prove that nearly everyday here. If I’m a “drunk”, what’s your excuse?? But if you think ignoring or defending the negligent homicide (or intentional??) of old people in New York State Nursing Homes is an exhibition of “intelligence” on your part—by all means—please continue on,
new york was the guinea pig. and they made plenty of mistakes. and many people died. that should not be in dispute. but they made mistakes within the context of knowing this was a dangerous situation, and trying to take action in real time while blind to what they were fighting. its not like they simply denied the existence of the virus and chose to look away. i would imagine new york could have performed better if they were not in conflict with the federal response at the time.
Thank you. Now if you wish to take my place with this troll, I’m fine with that as I’m done with people exploiting our suffering to make themselves feel important.
Listen troll. Friends of mine died from this. I have taken this seriously from day one as has most people in my city. If you insist on being a partisan piece of garbage exploiting this tragedy to make yourself feel better, I will a habit of ignoring you.
@ pgl
I wonder very much why “friends of yours” died from the Covid-19?? Most people who follow the rules of prescribed public health policy and/or scientists do not die from Covid-19–because when they follow the rules they don’t acquire it to begin with. Maybe “your friends” were listening to some very odd pronouncements/opinions from the New York man you call “your own personal Jesus”??
https://www.nytimes.com/2021/02/01/nyregion/cuomo-health-department-officials-quit.html
No wait, pgl!!!! That “can’t be!!!!!”…….. because Andrew Cuomo is a Democrat. Correct?? Isn’t that out of your “PGL’s Manual of Life” textbook?? Please update those assembled here in the comments section.
“Most people who follow the rules of prescribed public health policy and/or scientists do not die from Covid-19–because when they follow the rules they don’t acquire it to begin with.”
and many of those rules were developed AFTER seeing what was happening in NYC. the city has much better control over the spread today, because people have the resources to respond and know the rules. that was not the case in march 2020. on the other hand, there is no excuse for somebody like desantis to continue to ignore history and kill his citizens today with his inaction.
I like the spirit of what you said but let me take a little exception to this:
“Carter’s deficits, although low relative to GDP, were inappropriate when inflation was rising rapidly.”
Carter’s Administration was not exactly one of fiscal stimulus at all. And if we went into a time machine back to 1979, there was a lot of controversy with respect to whether we were even at full employment. Yes the CBO today had real GDP > their measure of potential real GDP but mind you CBO estimates are not the only estimate of full employment. Plus back then any fiscal stance could be offset by monetary policy. Yea his new FED chair Paul Volcker went all in with tight money but that was heavily criticized by economists at the time.
But come on – 1979 was not 1966.
I’m not sure what you mean by 1979 was not 1966, but inflation in 1979 was over 11% annually while in 1966 it was 3%. https://fred.stlouisfed.org/graph/?g=gJ4#0
Inflation under Carter accelerated from 5.8% in 1976 to 13.5% in 1980 which is the worst acceleration of the past 70 years.
Inflation is a sign that aggregate demand must be excessive? Oh my – did you sleep through the economic debates back then or what? Ever heard of the OPEC price shocks or did you sleep through the entire 70’s?
If inflation is rising rapidly as it was during the Carter administration, then budget deficits are inappropriate. That is just basic Keynes and not hard to understand.
Of course the oil shock of the Iranian revolution was critical, but Volcker proved that inflation could be controlled with appropriate policies. I am surprised that these questions are even open for debate.
BTW – a lot of economists blame accelerating inflation on excessive monetary growth and not necessarily fiscal stimulus. If you are going full blown Monetarist – then fine by me but be consistent.
Paul Mathis I’m skeptical about blaming 1970s inflation on Carter’s budget deficits. Recall that Carter’s on budgetdeficit in 1979 was only 1.5 percent of GDP and had been falling fairly dramatically and inversely with the rate of inflation. The source of 1970s inflation is due to the Fed using a loose monetary policy to combat supply shocks (viz., oil) coupled with weak multi-factor productivity growth in the workplace. Inflation in the 1970s was a global phenomenon and not just a US problem.
Obama’s deficits were largely cyclical and designed to recede as the economy expanded. And that seems to be the case with Biden’s proposed deficits. Those are deficits that we can live with. The problem with Trump’s deficits is that they were designed to be structural. That’s kind of an important difference.
Someone remembers the 70’s. Paul – please pay attention.
Well, I remember some parts of the 70s better than other parts. One of my college roommates could have starred in a Cheech & Chong movie.
2slugbaits,
Well, it is an old wisecrack that if you remember the 60s you weren’rt really there, :-).
The Fed’s monetary policy was not loose during the period of high inflation of the 1970s.
From 1972 when inflation, which had been declining since 1970, hit a low of 3.3% until 1980 when inflation peaked at 13.5%, Real M2 increased a total of 3.1%. Compare that with the past 10 years when Real M2 increased 73%, but inflation hit a high of only 3.1% in 2011.
https://fred.stlouisfed.org/graph/?g=gJ4
https://fred.stlouisfed.org/series/M2REAL#0
I did not say that Carter’s budget deficits caused the high inflation of 1976-80, but they were inappropriate given the accelerating inflation rate. When inflation is low, as it has been for the past decade, high budget deficits are appropriate regardless of which political party controls the White House. Again, this is just basic Keynes so why is this even an issue? Are there Anti-Keynesians about?
Gosh…….. it’s getting to the point in America where even an illiterate white supremacist isn’t trustworthy anymore:
https://www.nytimes.com/2021/01/27/nyregion/proud-boys-informant-enrique-tarrio.html?action=click&algo=bandit-all-surfaces&block=trending_recirc&fellback=false&imp_id=49768185&impression_id=03b86360-6191-11eb-89ed-95f5f0aed966&index=0&pgtype=Article®ion=footer&req_id=23211710&surface=most-popular-story&variant=0_bandit-all-surfaces
Next thing you know they’ll be telling us our first lady is a retired nude model. I mean….. if you can’t trust your KKK brethren, who can you trust?? I feel a total loss of my innocence and naïveté today. Er something……..
Off topic for pgl and the rest of the howlers who supported the loss of lives from COVID-19 in order to ridicule Trump. From the American Journal of Medicine, Jan. 1, 2021:
But, hey, got rid of Trump so 400,000 deaths is a small price to pay.
https://www.amjmed.com/article/S0002-9343(20)30673-2/fulltext
Bruce Hall: You ya goin’ to believe – an article from early August 2020, with a total of 22 citations by Google Scholar, or e.g. CDC in October on use of Hydroxychloriquine, citing articles in NEJM, JAMA, Lancet?
That’s a pathetic attempt to rehabilitate the Trump administration’s complete disaster of Covid response.
That is why Bruce once again provided no link, no title, and no authors. He was hoping no one else would realize what he was citing here.
Memo to Brucie Boy – assuming the rest of us are as dumb as you is a risky idea. Learn to cite sources – even the discredited pieces of garbage you love.
Bruce Hall Please check the footnotes. The reference to the HCQ hospital study is actually the now thoroughly discredited Henry Ford observational “study” dating to last April and early May. Once again you have made a complete fool of yourself.
We have pointed this out to this fool at least a dozen times. And he still peddles this nonsense?
just curious bruce, exactly how many lives would have been saved by using your miracle hcq treatment. lets put a number on this. if you want to tout this as a miracle drug, tell me how big this miracle really is.
these drugs were not restricted in use. they simply were not used, because they do not work. if they had worked, they would have been used. overwhelmed hospitals were not in some massive anti-trump consipiracy to let people die in an effort to undermine trump, no matter how weird your conspiracy theory mind works. you really are a sick and demented individual.
“Off topic for pgl and the rest of the howlers who supported the loss of lives from COVID-19 in order to ridicule Trump.”
You tried to have the most disgustingly dishonest piece of garbage comment of the day but poor Brucie has been eclipsed by Uncle Moses. Sorry dude – this does not even come close. Now let me read the rest of your outdated nonsense as I need a good laugh.
Bruce, your memory is, as usual, faulty. No one here “supported the loss of lives from COVID-19 in order to ridicule Trump.” In reality, you and the other Usual Suspects kept throwing up a fog of misinformation, using cherry-picked single data points with cherry-picked beginning and ending dates, not to mention spurious ‘studies’, in your futile attempts to paint Trump’s lack of effort and chaos-mongering in the best possible light, by denying the horrible reality the US was in.
Everyone else was pointing to the entirety of the data in an unsuccessful effort to show you Covidiots that, no, deaths were not at all likely to decline but instead they would almost certainly increase, perhaps at an increasing rate. We didn’t want a higher death toll; in fact, we were quite distressed about the prospect. We simply tried to show you that it was inevitable.
If anything, you and the other MAGAmorons, by trying to sow confusion and by cheering on Trump’s criminal inattention and ineptitude, have actively contributed to the mostly avoidable, much too high, and still rising death toll. If you still want to engage in blame-throwing, do it only when you’re staring into a mirror.
God I’m sick of this disingenuousness.
Very well said throughout. We are all sick of his incessant disingenuousness.
Bruce Hall The editor of the American Journal of Medicine disavows what the journal said about HCQ:
Dr. Joseph S. Alpert, editor-in-chief of the AJM, said the journal does not endorse HCQ treatment for COVID-19.
“This article does not mean the journal recommended this therapy,” he said. “The authors recommended it just as others recommend other interventions. We just publish their findings and recommendations.”
Alpert said the journal often presents multiple sides of a scientific argument.
“We have also published articles from other authorities that said don’t use it [HCQ treatment],” he said. “This is still controversial with two sides saying different things. Often we have editorials that dispute the article’s recommendations. We are a scientific journal and do not push or recommend any specific thing. The authors do that.”
https://www.msn.com/en-us/health/medical/fact-check-did-the-american-journal-of-medicine-recommend-hydroxychloroquine-for-covid/ar-BB1ddlAO?ocid=msedgntp
You lose again.
2slugbaits: Give it up. Bruce Hall will continue to argue that HCQ is an effective treatment for Covid-19 until the sun cools and entropy rules the universe, irrespective of any data.
Until entropy rules the universe. That’s the theme of Brian Greene’s latest book “Until the End of Time.”
http://www.briangreene.org/until-the-end-of-time/
…but it’s still less depressing than Sean Carroll’s cosmology. In Carroll’s multiverse there are an infinite number of Bruce Halls.
i still think bruce should put a number on it. we lost 400,000 lives due to covid so far. from the mind of bruce hall, md, how many fewer lives would have been lost if we had promoted the use of hcq, to this point?
Do you think Bruce Hall cares for one second that 400,000 people have died? He could care less – just like Trump could care less.
One of the latter “data points” available on HCQ.
https://www.readfrontier.org/stories/oklahoma-trying-to-return-its-2m-stockpile-of-hydroxychloroquine/
It might interest certain members of The Hall Family Institute on Epidemiology and Pharmacology that both the current Governor and the Attorney General of the “reddest state” in the nation are…… wait for it……. wait for it……. wait for it……… Republican.
“In April, Gov. Kevin Stitt, who ordered the hydroxychloroquine purchase, defended it by saying that while it may not be a useful treatment for the coronavirus, the drug had multiple other uses and “that money will not have gone to waste in any respect.” But nearly a year later the state is trying to offload the drug back to its original supplier, California-based FFF Enterprises, Inc, a private pharmaceutical wholesaler.
So Trump, Glenn Beck, and Bruce Hall helped some Blue State firm fleece citizens in a Red State. MAGA!
“Oklahoma seeking to return $2M worth of hydroxychloroquine” ABC news
“Oklahoma state officials are trying to return state’s $2 million stockpile of hydroxychloroquine” CNN
“US FDA…now says the (drugs) have not been shown to be safe and effective for treating or preventing Covid-19”
What to do with 1.2 million doses. Hmm.
Damn it, I just noticed you beat me to the punch. You weisenheimer son-of-a-gun.
January 27, 2021
Coronavirus
New York
Cases ( 1,405,906)
Deaths ( 42,963)
Deaths per million ( 2,208)
https://www.nytimes.com/2021/01/28/nyregion/nursing-home-deaths-cuomo.html
January 28, 2021
N.Y. Severely Undercounted Virus Deaths in Nursing Homes, Report Says
The state attorney general, Letitia James, said the Cuomo administration likely omitted thousands of Covid-19 deaths of nursing home residents.
By Jesse McKinley
https://www.nytimes.com/2020/09/05/opinion/sunday/coronavirus-nursing-homes-deaths.html
September 5, 2020
How Many of These 68,000 Deaths Could Have Been Avoided?
Nursing home residents and staff members account for around 40 percent of coronavirus-related deaths in the U.S. There’s no justifiable reason for that.
https://www.nytimes.com/2020/07/23/nyregion/nursing-homes-deaths-cuomo.html
July 23, 2020
Blame Spreads for Nursing Home Deaths Even as N.Y. Contains Virus
With more than 6,000 nursing home residents dying of the coronavirus, a fight over whether relatives should be allowed to sue has erupted in Albany.
By Jesse McKinley and Luis Ferré-Sadurní
https://www.nytimes.com/2020/07/08/nyregion/nursing-homes-deaths-coronavirus.html
July 8, 2020
Does Cuomo Share Blame for 6,200 Virus Deaths in N.Y. Nursing Homes?
A state directive sent thousands of Covid-19 patients into nursing homes, but the Cuomo administration has given other reasons for the virus’s spread.
By Luis Ferré-Sadurní and Amy Julia Harris
https://www.nytimes.com/2020/05/13/nyregion/nursing-homes-coronavirus-new-york.html
May 13, 2020
Buried in N.Y. Budget: Legal Shield for Nursing Homes Rife With Virus
In New York, 5,300 nursing home residents have died of Covid-19. The nursing home lobby pressed for a provision that makes it hard for their families to sue.
By Amy Julia Harris, Kim Barker and Jesse McKinley
https://www.nytimes.com/2020/05/06/opinion/coronavirus-health-care-market.html
May 6, 2020
We Knew the Coronavirus Was Coming, Yet We Failed
The vulnerabilities that Covid-19 has revealed were a predictable outgrowth of our market-based health care system.
By Elisabeth Rosenthal
Meet the Press was a decent show until Tim Russert took over. And Chuck Todd may be even dumber than Russert. He actually thinks the Gamestop stock market games are option trading:
https://www.nytimes.com/2021/01/27/business/gamestop-wall-street-bets.html
Short selling stocks or buying them long is not option trading. But Chuck Todd thinks they are. OK – he is still not as dumb as Bruce Hall but DAMN!
I believe all of Menzie’s grades have been quite good in “Blog Host 101”. I can’t really remember ever giving Menzie below a B-minus in any of his “Blog Host 101” term papers or pop quizzes. I even was pondering giving industrious young Menzie an internship or apprenticeship at a boutique blog somewhere. Well, Menzie finallly gets his first F score today. For not letting us know Jeffrey Frankel had his own blog and even an RSS feed.
http://www.jeffrey-frankel.com/
Folks, I never thought I would see the day it would come to this. [ teehee!! teehee!! teeheeheehee!!!! ]
Master Jedi Frankelsohn has caused a “disturbance in the Force”
Moses Herzog: There’s a link on the right hand side of the blog, under “economics blogs” where you will find a link to his blog.
Haha, OK, no F
@ Menzie
I noticed in the last couple days James Kwak went over to “Medium” to blog and he’s just never going to blog under BaselineScenario anymore. I just, I’m very much a creature of habit and routine, and I just, I don’t know, it’s never gonna be the same as it was in 2008–to maybe around 2012. It kinda bums me out. But then if Kwak hadn’t become a law professor I might not have gotten into this blog as much. When Mike Konczal left “rortybomb” to go over to Roosevelt, it’s just like it took all the piss out of it for me, it seemed like his writing changed to be more “mainstream” over at Roosevelt. I just, I hate when things I like a lot change it really kills me. It’s like when the ’85 Chicago Bears disbanded. I can never really imagine football will ever be the same. I’m actually in a better mood the last 3 months, even probably a better mood than I was post-Maga/pre-covid. Like, January 2017 to December 2019, really was feeling dark, even before Covid. But just like those things that I like not being the same bums out a certain segment of me.
I mean obviously it’s still dark, but what I’m saying is, even WITH Covid, the world is a better place to me without trump in the White House. And I know many people will judge me harshly for saying this “out loud”, but I’ll take a world with Covid minus trump in the White House, than a world without Covid and trump in the White House, And I know saying that out loud gives ammunition to guys like Bruce Hall for their conspiracy theories, but like, that’s just how I feel I can’t really be honest and say it another way. It doesn’t mean “I’m happy” people are dying~~it just means I feel MORE people’s mortality is continually threatened with donald trump in the White House— comparatively to me it’s better where we’re at now than we were late October 2020. To me, if donald trump wins Nov 6th—that’s very evocative of 1933 Germany and the “Enabling Act”. I honestly feel like that, that is how close we were. That’s coming from a guy with about 25% German blood and proud of some portions of German culture. It really is not something I wanna think about how close America was there to Germany’s 1933 “Enabling Act”. I wasn’t sleeping well at all. Now I am actually getting REM sleep again.
Nov 3 I meant, anyway you get the gist.
So, Moses, did you see my latest peace offer? Any interest? I am going to be nice to your Macroduck in any case, or at least not mean.
One problem with his blog is that he seems not to allow any comments on it, at least it appears that he does not. Nor does he note his posts are also appearing here. Does he let them appear here so as to let there be some comments?