New Economic Perspectives has the article Peterson Thinks We Need Austerity While He Lives It Up!
In case you didn’t know, Pete Peterson has spent gobs of money on his private think tank which has been trying to confuse the public about money and economics for decades. One thing they produce is commentaries like the one that this article rails against.
Here are some excerpts from the New Economic Perspectives article by Joe Firestone.
Here are quotations from the report and my explanations of why they are ridiculous deficit/debt terrorist nonsense.
While today’s deficits are much lower than those during the financial crisis and recession, over the next ten years debt will remain at historically high levels under the policies outlined in the President’s budget. Over the long term, our debt is on a rising and unsustainable path that harms our economy and threatens our future standard of living.
First, Government deficits that don’t exceed the sum of private sector savings and trade deficits are not bad for the private economy. They are good because they contribute directly to private sector savings and the aggregate demand and subsequent economic growth it can create. It would be nicer for all of us if Mr. Peterson learned that lesson before his propaganda turn the US into a third world banana republic; unless, of course, that’s what he’s about.
As a share of the economy, our national debt is already higher than at any time since 1950, shortly after the end of World War II. This level of debt leaves our nation poorly prepared to enter an era in which demographic changes pose enormous budgetary challenges for the federal government. The Peter G. Peterson Foundation’s Fiscal Confidence Index recently found that a significant majority of voters — 83 percent — agree that policymakers should spend more time addressing the nation’s debt.
Again, the level of debt and/or the level of the debt to GDP ratio have no effect on our Government’s capability to deficit spend. The Government can afford to do whatever it needs to accommodate demographic changes just as it could afford whatever needed to be done during World War II and after 1950.
I commented on the New Economic Perspectives article as shown below.
You forget to mention that if the debt was so high in 1950, how did it get reduced and yet we had a growing economy, we were bailing out Europe and Japan at the same time, building the interstate highway system, sending people to the moon, fighting a war in Viet Nam, developing Nuclear bombs and ICBMs, supporting higher education and schools, adding Medicare and Medicaid, and reducing the level of poverty.
Shouldn’t Peterson be studying all those things we accomplished with a smaller economy than we have today? If we did it once before, why can’t we do it again?
The article does mention that we did a lot of things during the 1950s, but it does not emphasize the fact that there is a logical paradox when Peterson’s own commentary said “our national debt is already higher than at any time since 1950, shortly after the end of World War II.” This implies that our debt must have been reduced after 1950 if it is only now getting back to those levels. Why doesn’t anyone ask Peterson to explain that?