Monday, May 30, 2011

Democratic Left Roundup: Economics Edition

Matthew Forstater, The Freedom Budget at 45 Levy Institute (PDF)

Discusses the Freedom Budget and its continuing relevance and presents a functional finance primer.
allowing the U.S. to default on its debt would have widespread consequences for the U.S. and world economies, including potentially pushing the U.S. back into a recession or, in the words of Princeton Professor Alan Blinder, “reignit[ing] the world financial crisis.” And as the Wall Street Journal noted today, failure to raise the debt ceiling would force draconian spending cuts that would wipe out all of the anticipated 2011 economic growth in just 95 days
“Exiting from the Crisis: Towards a Model of More Equitable and Sustainable Growth” is a new book (over 270 pages) now available on line.

This volume of essays from global trade union leaders and economists is the product of the Global Unions Taskforce on a New Growth Model, a joint project of the Trade Union Advisory Committee (TUAC) to the OECD, the European Trade Union Institute (ETUI), the International Trade Union Confederation (ITUC) and the Global Union Research Network (GURN).

The task force involved more than 30 global trade union economists .... from a wide array of advanced, emerging and developing countries. The report includes a Preface by Nobel Prize-winning economist Joseph Stiglitz, and fills a long-standing need to set out the global labour movements economic alternatives in a systematic fashion.
William K Black on cost-benefit analysis and Mitch Daniels on the New Economic Perspectives from Kansas City blog

Daniels warmed up his global warming denial audience (pun intended) with this joke, which he said he often shared with his daughter. Many of us who are parents look for these opportunities to mix family meals and an opportunity for moral instruction. This is how Daniels relates his efforts at teaching moral reasoning:

'If James Carville and Geraldo Rivera were both drowning, and you could only save one [laughter], would you read the paper, or eat lunch [laughter and applause]?'
Altruism is, as Ayn Rand stressed, a grave error. To be a Good Samaritan, particularly to save the life of someone who disagrees with you, is not a mitzvah but an unpardonable sin. It follows that one should teach their children that the correct response to learning that a person is drowning and only they can save a life – is to let them drown – while noshing. The death of those who disagree with us is a cause for celebration [“laughter and applause”].
One of the nice things about this post from Black is a list of 15 cases that undermine the argument that any economic regulation harms consumers.

Doug Henwood "What Financial Emergency"

Close examination of the CBO's projections cannot support anything resembling hysteria. The two things that have everyone terrified, Social Security and Medicare, actually look quite unthreatening.

In 2010, Social Security spending was 4.8% of GDP. In 2021, the CBO projects it will be 5.3%, an increase of 0.5 point. In 2010, Medicare spending (less premiums paid by beneficiaries) was 3.1% of GDP. In 2021, the CBO projects it will be 3.6%, also an increase of 0.5 point.

In other words, the budgetary monsters that are supposed to be the ruin of the American way of life will increase their share of the national economy by about 1%. That's a bit less than what the wars in Iraq and Afghanistan are costing us, and less than half the cost of the Bush tax cuts.
Ron Baiman explains how tax increases on just the upper 10% offamilies, restoring their income to 1973 inflation adjusted levels,would immediately erase the federal deficit.

Kathy Ruffing "What the 2011 Trustees' Report Shows About Social Security" Center for Budget Policies and Priorities

“The revenue loss over the next 75 years from making all of those [Bush]tax cuts permanent would be two and one-half times the entire Social Security shortfall over that period. Indeed, the revenue loss just from extending the tax cuts for people making over $250,000 — the top 2 percent of Americans — would itself be almost as large as the Social Security shortfall over the 75-year period. (See Figure 1.) Members of Congress cannot simultaneously claim that the tax cuts are affordable while the Social Security shortfall constitutes a dire fiscal threat.”

Gar Alperovitz "The New-Economy Movement" The Nation

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