Gorbachev helped destroy the Soviet Union by borrowing abroad and printing money to paper over the need for fundamental reform. How familiar does that sound? Simon Johnson has an interesting piece today about how to make it sound less familiar. His three-point plan is: Raise interest rates, begin to wean ourselves off Saudi oil, and bring the deficit down to about 5% GDP by next year. Hold it, five percent by 2010? You've got to be joking.Here's a map of the CBO projected budget deficit as a percent of GDP (via WSJ):
In 2010, the CBO projects a budget deficit that appears to be 10 percent of our GDP. Simon Johnson wants to cut that in half. That's a great idea. It's also a $700 billion idea. Where are we going to find that kind of money?
Cutting $700 billion from an economy emerging from a recession is going to be painful, wherever you find the fat. So why not cut the freshest meat and seriously consider not spending most of the stimulus bill? I know, I know: It's a stimulus bill, we're in a recession, what am I thinking?
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Does this mean I am going to have to wait eight hours in line for a roll of toilet paper?
ReplyDeleteYou will receive a voucher for a roll of toilet paper per person in household which you will be able to redeem at your local emergency distribution center (Walmart).
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Cut the military budget by 50%, this would reduce the budget by $500 billion in one clean swipe. It would also force us to bring home ALL the troops worldwide, where we illegally occupy over 150 countries.
ReplyDeleteIT'S JUST THAT SIMPLE!
Reagan used slight hand hand to lower unemployment by adding the military. Exactly what jobs will they have when they get home? Dealing with the civil unrest perhaps.
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