On Jan 28, 2010, at 12:33 PM, Max Sawicky wrote:
> Note the nice bumps in '09 and '10. Not also that under the "freeze
> that begins in 2011" (meaning that level prevails in 2012),
> discretionary spending is still 15% higher than 2008. Not great, bad
> fiscal policy, but not exactly catastrophic in structural terms.
>
> Not exactly drowning in the bathtub.
>
> The reason Obama got a laugh when he talked about 2011 was because
> this is the old game. You propose cuts for fiscal years beyond the
> one you are actually budgeting for (2011). Makes the projected
> deficit, based on ten-year windows, look better. "That's how
> budgeting works." Indeed.
First, change matters when you're talking fiscal policy, not levels. And second, there's already about 2% of tightening built in, which O is proposing to add to. So from 2011 onward, fiscal policy will tighten rather considerably. Given the weakness of the economy and its dependence on Washington for the weak recovery that it's had, it's pretty scary.
Besides, what will pay for all that high-flown rhetoric about green jobs and structural reinvention?
Doug