The Case for Dubya

Brad De Long delong at econ.Berkeley.EDU
Mon Jan 31 10:27:02 PST 2000

>So what's going to happen to the domestic spending caps? Will they
>break 'em, or are we on the "glide path" (wasn't all that long ago
>that was the fiscal buzzprase, no?) to austerity?
>The caps are dead. Last year Reischauer called
>for 'caps' that rose with inflation and population.
>This week Hastert said both the caps and a spending
>freeze are impractical, that spending should reflect
>some increase in the size of the economy (i.e.,
>inflation plus real growth). Clinton's budget
>proposal will discard the caps (as it did last year).
>The bottom line is that domestic spending is still
>headed south. Language is debased to the point where,
>when people talking about 'funding Medicare' or
>'strengthening Social Security,' they
>mean debt pay-down with some parallel credit to the
>Medicare trust fund (which is solvent under current
>policy for 10 years or more).
>You may recall Clinton in his SOTU proclaiming,
>let's credit the interest savings from paying down
>the debt to the Social Security Trust Fund. He
>might as well have said, let's all say abracadabra
>& declare the balance in the Trust Fund to have

Crippen's most optimistic baseline grows at inflation. Why the *(*W&E^&* can't he take his signals from Hasteret?

Brad DeLong

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