August 02, 2011
Dana Milbank, a Washington Post columnist who doubles as a fashion critic, devoted today’s column to ridiculing progressive members of Congress who complained about the deal on the debt ceiling. He presents a number of quotes from progressive members of Congress who complained about cuts that may mean that people cannot afford housing, heat, food or medical care.
While these were all very funny, it would be much easier to find ridiculous comments from deficit hawks. For example, Mr. Milbank could fill endless columns with lines from former Senator Alan Simpson, the co-chair of President Obama’s deficit commission. Mr. Simpson apparently thinks that we have just discovered the existence of the baby boom cohort as they are on the edge of retirement.
He also could have included comments from David Walker, the former comptroller general at the Government Accountability Office and also former head of Peter Peterson’s Foundation. Mr. Walker has repeatedly warned that if we don’t get the deficit down, then the dollar could fall against other currencies. This one is really hilarious, because a decline in the dollar against other currencies is actually supposed to be one of the main benefits of lower deficits.
In standard economics the argument is that deficit reduction will reduce the trade deficit by lowering U.S. interest rates, which will make dollar assets less attractive to foreign investors. If they buy fewer dollar assets, then the dollar will fall, improving our trade deficit. Now how funny is that? Our former comptroller general doesn’t even know which way is up when it comes to the deficit, his life’s obsession.
Milbank also could have made fun of the bond rating agencies threatening to downgrade U.S. government debt. What does this mean? U.S. government debt is denominated in dollars. The U.S. government issues dollars. Do Moody’s and Standard and Poors think that the government will lose the ability to issue dollars? In other words, what could they mean with this threat to downgrade U.S. debt?
The credit rating agencies are making a nonsense threat. Now that is really funny.
Milbank could fill many columns making fun of the deficit hawks who are trying to whip up hysteria with nonsense stories about the budget and the economy. Of course the Post, his employer, is at the forefront of this effort. So, Mr. Milbank sticks to making fun of politicians who profess concern for the poor and middle class, and to fashion criticism.
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