I have found two Congressional publications so far for the Congressional Progressive Caucus’s Better Off Budget. The first is a 2 page summary.

When the federal budget invests resources wisely, we can meet the needs of working families and shrink the deficit. The Better Off Budget not only creates jobs, it reduces deficits by $4.08 trillion over the next 10 years. It’s the right budget for the country, for working families and for our future.

The second one goes a little deeper in 26 pages.

In a previous post Congressional Progressive Caucus Budget Strikes Back Against Austerity, I took the commentator to task for implying that increased spending must be “paid for”.  Reading the two page summary, I didn’t find the statement to be quite as bad as the analyst implied.

Still, this two page summary might leave some people with the impression that cutting the deficit is an important issue to tackle.  The above quote only mentions reducing the deficit in 10 years.  Perhaps toward the end of the 10 years it might be appropriate to have some deficit reduction, but it must be clear that deficit reduction is completely unnecessary and unwanted until the recovery is much more robust and the income inequality is reduced significantly.

When I looked at the 26 page document, I did find some charts that plotted the deficit as a fraction of the gross domestic product.

This shows a very short term increase in the deficit and then a rapid decline in the deficit.  By the beginning of 2015, the Better Off Budget deficit is smaller than the current law and smaller than the President’s proposed budget.  I don’t have the capability of determining exactly when the deficit ought to start to decline as the economy recovers.  A lot depends on the speed of the recovery and the needs of the economy for deficits.

As a rough measure, I bet it would be safe to say that a long term federal budget deficit that is a smaller share of the GDP than is the growth of the GDP in the same period of time would be a deficit that is well within the capability of the economy to handle without a hiccup.

If we could get a budget like this passed, it would probably be a good first step.  My fear is that if it turns out that the economy does not recover as fast as hoped and the need for deficits does not go down as fast as hoped, voters will be left with the impression that this budget failed and we need to go back to austerity.  This is what happened after the President’s too weak stimulus at the beginning of his term in office.  Rather than recognizing that the stimulus and deficit were too small, and that they needed to be increased and tried for a longer period of time, the voters were convinced that the program was a failure and that we had to go in  the opposite direction.  (Or at least that is how the 2010 vote that turned the House Republican was interpreted by the nattering nabobs of negativism.)

The fact that President Obama was either too timid, or didn’t believe it himself, to explain what had happened, has made correcting the problem unnecessarily hard from a political point of view.  The political problem is amply demonstrated by the need for a Congressional Caucus to publish a budget that is much better than the President’s proposed budget.

Naked Capitalism has the post Journalist Schools BBC on Russian Intervention in Crimea by Yves Smith.

A fellow blogger with substantial experience in Europe sent this BBC footage, which I believe readers will find instructive. There were several things I liked about this segment. First, in contrast to US TV, where two sides who hold strongly opposed views talk past each other, there was a real discussion. Each side actually went beyond its talking points while remaining civil. Second was that the Telegraph writer Liam Halligan debunked some popular perceptions about Russia and Putin.

Here is the video of the BBC show.

We seem to have this uncontrollable urge to “do something”, even when there isn’t much to be done.

Even I have the troubling thought that we can’t just sit there and do nothing, but the choice isn’t between doing something and doing nothing. The choice is between doing something to make the situation worse and doing nothing. In that case, doing nothing does seem to be the better alternative.

With the empty threats that Obama has been making against Russia, it calls to mind Mark Twain’s statement, “It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt.”

Or as I have always said, “Never make a threat that you aren’t willing to carry out.” It would be the height of foolishness to carry out some of the threats that have been made. What credibility do you have when the person you are threatening knows that you have made a threat you dare not carry out?

The corollary to this is not that if someone calls your bluff on an idle threat that you must go through with it to maintain your credibility. The corollary is that if your bluff gets called, learn the lesson to stop making such threats. You should have foreseen the likelihood of getting into such a spot before you opened your mouth.

The Daily Kos featured the Cartoon: Paul Ryan tours the ‘inner city’.

If Paul Ryan had really said this, it would be a classic example of kidding on the square.

The New York Times has the OpEd The Timidity Trap by Paul Krugman.

And I’d argue that an important source of failure was what I’ve taken to calling the timidity trap — the consistent tendency of policy makers who have the right ideas in principle to go for half-measures in practice, and the way this timidity ends up backfiring, politically and even economically.
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The classic example is the Obama stimulus, which was obviously underpowered given the economy’s dire straits. That’s not 20/20 hindsight. Some of us warned right from the beginning that the plan would be inadequate — and that because it was being oversold, the persistence of high unemployment would end up discrediting the whole idea of stimulus in the public mind. And so it proved.

What’s not as well known is that the Fed has, in its own way, done the same thing. From the start, monetary officials ruled out the kinds of monetary policies most likely to work — in particular, anything that might signal a willingness to tolerate somewhat higher inflation, at least temporarily. As a result, the policies they have followed have fallen short of hopes, and ended up leaving the impression that nothing much can be done.

This is another ironic Paul Krugman piece where he unknowingly identifies his own problem and blames it on others.

The irony is that a purported Keynesian economist is too timid to come right out and say what it is that Keynes taught us.  There is no monetary solution to this problem.  Anybody who pretends that the Fed has any effective tools to combat the type of Great Recession that we faced is setting us all up for a huge disappointment.

Krugman does identify the weakness in Obama’s stimulus.  He should never leave that topic.  To hint that there is another solution in the hands of the Fed is to promote Milton Friedman propaganda.  At various points, Krugman admits that he was mesmerized and bamboozled by Friedman, but he seems to forget these moments of clarity for the most part.

Truthout has the article Abby Huntsman Promotes the Wall Street Banksters’ Big Lie. The article has this piece of information that I am surprised that I did not know (because it is not true).

From when it was created in 1935 up until the 1980s, Social Security was paid for by taxes coming in from people who were currently working. In other words, people currently in the workforce paid for the Social Security benefits of people who had already retired and started collecting Social Security checks.

But in 1983, the Reagan administration changed things around. It raised Social Security taxes so that, in effect, working people from the Boomer generation would pay for both their own retirement and the retirement of people older than them.

The Reagan administration did this so that Social Security could afford the benefits surge that would come about once all the Boomers retired. The extra money it got from raising Social Security taxes was invested in government bonds. Today we call that extra money the Social Security trust fund.

And right now, that fund is working just swimmingly. In fact, it’s running at a $2.6 trillion surplus!

As a result, Social Security, will continue to pay out 100 percent of its scheduled benefits, until 2033, when the trust fund runs out of money.

Again, though, this isn’t a problem. It’s part of the plan.

The trust fund was created to pay for Boomers’ retirements, and since by 2033 most Boomers will be well into their eighties and nineties, it makes sense that the fund will run out by then.

Maybe, I need to do some more research on this.  It is odd that I have never seen this information about the trust fund until today.

The Social Security Administration web site has the article Debunking Some Internet Myths.

The Social Security Trust Fund was created in 1939 as part of the Amendments enacted in that year. From its inception, the Trust Fund has always worked the same way. The Social Security Trust Fund has never been “put into the general fund of the government.”

The statement at the end of the excerpt from the article about Abby Huntsman is very misleading.  The trust fund was not created to pay for Boomer’s retirements.

The Daily Kos has the article Craziest person in Illinois wins Republican primary.

I have been going back and forth as to whether or not to post this. The video is 7 minutes long, but I have never managed to get past the 56 second mark. When she starts talking about all the money in the vaults of the banks, it just becomes too much for me. Maybe, I just don’t need to hear any more to see the point of the headline. Maybe you either need more convincing or you have a stronger stomach than I do.

Enjoy, if that’s the proper word.

The Daily Kos has the article Bill Kristol confuses fiasco-fatigue with war-weariness.

The article juxtaposes this political cartoon

With the following quote from Bill Kristol:

Are Americans today war-weary? Sure. The Iraq and Afghanistan wars have been frustrating and tiring. Are Americans today unusually war-weary? No. They were wearier after the much larger and even more frustrating conflicts in Korea and Vietnam. And even though the two world wars of the last century had more satisfactory outcomes, their magnitude was such that they couldn’t help but induce a significant sense of war-weariness. And history shows that they did.

So American war-weariness isn’t new. Using it as an excuse to avoid maintaining our defenses or shouldering our responsibilities isn’t new, either. But that doesn’t make it admirable.

Just as people still read yearly predictions from the astrologers in the newspapers, people keep listening to the talking heads that have a proven record of being wrong on almost everything.

The Daily Kos has the article Three Democrats seek audience with Eric Holder over FBI’s making mortgage fraud a low priority. Who do you suppose is one of those three Democrats?

Sen. Elizabeth Warren of Massachusetts, Rep. Elijah Cummings of Maryland and Rep. Maxine Waters of California, all Democrats, sent a letter to Attorney General Eric Holder Monday expressing their “deep concern” about an investigative report released last week that concluded the FBI placed mortgage fraud as its lowest priority for criminal investigations.
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It’s not exactly the first time anyone has called into question the lack of criminal prosecutions of mortgage fraud, but this is the highest-placed source of such an accusation so far.

You can also Sign the petition to Eric Holder: Make prosecuting mortgage fraud a top priority.

The comment to Eric Holder that I added with my signature said that he should look at the record of prosecutions after the Savings and Loan crisis, and then try to explain his own record to me.

Don’t let Eric Holder get away with asking you to look at how much effort and money he is putting into this, nor his recent record compared to his earlier record.  Take a look at the prosecutions after the Savings and Loan Crisis and compare to current results.

As Yoda said, “Try not. Do. Or do not. There is no try.”

The Rachel Maddow Show web page has the article The education of Scott Brown.

Less than two years after losing his re-election bid in his home state, former Sen. Scott Brown (R-Mass.) is apparently trying again, this time running in New Hampshire – where’s he still learning quite a bit.

It’s not altogether clear why Brown is running in the Granite State, but his strategy has nevertheless taken shape: the Republican intends to hit the campaign trail complaining about the Affordable Care Act. It worked in one state in 2010, Brown figures, so maybe it’ll work in a different state in 2014.

With this in mind, Brown visited with state Rep. Herb Richardson (R-N.H.) and his wife over the weekend at the lawmaker’s home, where the Senate candidate called the ACA a “monstrosity.” Sam Stein flagged an account of the meeting from the local newspaper
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The state lawmaker added that the health care law, which Brown claims to abhor, has been a “financial lifesaver” for his family.

If I didn’t actually know some people in New Hampshire, I might comment that Scott Brown is Massachusett’s gift to New Hampshire.

When I said that, I would have a Snidely Whiplash sort of grin and be twirling my mustache.

Naked Capitalism has the article Joe Firestone: Progressives Re-Arrange the Deck Chairs for Obama’s Austerity Budget.

The Congressional Progressive Caucus (CPC) recently issued its “Better Off Budget” document as an alternative to the White House/OMB document, and the coming House budget document, a Republican/conservative alternative. The “Better Off Budget” has received enthusiastic evaluations from writers affiliated with the DC progressive community. Richard Eskow’s recent treatment is typical and provides other reviews that are laudatory. These “progressives” clearly see the CPC budget as anything but an austerity budget. But is it, or is it not?
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In short, the CPC budget isn’t an anti-austerity budget as claimed. It is another exercise by budgeteers in near macroeconomic austerity that is likely to result in microeconomic austerity for the many, and continued prosperity for the few. And the pity of it is that budget plans like this are so unnecessary.

None of the deficit and debt terrorism and miserly fiscal policy reflected in these budgets are necessary, because there is no shortage of Federal fiscal capacity in the United States, and no justification for the fiscal policies the US Government has followed since the Recovery Act was passed in 2009. To end austerity, the Federal Government needs to budget to create full employment and benefits for most Americans, including solutions for the major problems facing the US, while letting the trade and budget deficits float.

First create full employment through various programs, including a Federal Job Guarantee to get and keep the employment level there. And then, let the twin deficits float until we’re at that point. A policy like this one adjusts to the savings and trade balance desires of Americans, while creating full employment, with whatever government deficit spending is necessary to accommodate those needs.

That’s how you end austerity for most people without causing demand pull inflation, or cost-push inflation. The second of these may occur because of developments in commodity markets that have nothing to do with Government employment or safety net programs. But that is a story for another day, unrelated to austerity and its remedy.

This analysis is more severe than what I stated in my previous post Congressional Progressive Caucus Budget Strikes Back Against Austerity.  I must be getting an understanding of Modern Money Theory when i can produce a critique that is in the same direction this one by Joe Firestone.  I just didn’t have the courage of my convictions.  I still worry about the overhang of liquidity when the economy starts to pick up.  I don’t have the faith that the Congress will be able to raise taxes when it becomes necessary.