James K. Galbraith, one of the country's most respected economists and a ND20 contributor, offered a statement today to the Fiscal Commission on behalf of Americans for Democratic Action, an organization co-founded in 1949 by (among others) by Eleanor Roosevelt. We at New Deal 2.0 recommend that you grab a coffee, sit back, and read this elegant, blistering, and brilliant description of why the Commission is both misguided and malignant.
For a quick snapshot, Galbraith's testimony is divided into ten sections, which address the following points:
-That the Commission's work is illegitimate
-That current deficits and rising debt were caused by the financial crisis.
-That future deficit projections are generally based on forecasts which begin by unrealistically assuming full recovery
-That, having cured the deficits with an unrealistic forecast, CBO recreates them with another, very different, but equally unrealistic forecast.
-That the only way to reduce public deficits is to restore private credit.
-That Social Security and Medicare "solvency" is not part of the Commission's Mandate.
-That as a transfer program, Social Security is also irrelevant to deficit economics.
-That markets are not calling for deficit reduction, either now or later.
-That in reality, the US government spends first & borrows later; public spending creates a demand for Treasuries in the private sector.
-That the best place in history (for this Commission) would be no place at all.
Our favorite line comes near the end with this withering address to the Commission: "You are plainly not equipped, either by disposition or resources, to take on the true cause of deficits now or in the future: the financial crisis."
Professor Galbraith, we could not have said it better.
*Stay tuned for words from the man himself here on ND20.