Posted by Paul Vigna
on December 10, 2010
You know what, I’ll be as happy as the next guy to see my paycheck get bumped up a bit next year, both because my taxes won’t be rising, and the reduction in the FICA tax. I’ll finally be able to complete my collection of racoon-proof garbage cans, and I can easily afford that new ice scraper for my car, and maybe I’ll buy a few Beatles songs at the iTunes store. Hell, I might even buy a new winter coat. The wife says my current one makes me look like the Unibomber.
But, I mean, come on! $860 billion? $860 billion?!
That’s what the Obama-GOP tax-cut deal is going to cost the US government over the next decade. Does that strike anybody else as, well, insane? Especially considering the bill effectively covers a two-year period? How’s that math work? You know what all those Congressmen and Congresswomen and the President should do with their savings? But some dictionaries. Turn to the first section, “A,” and look up “austerity.” It comes after “asinine.”
For two years, all we’ve heard out of Washington, and the GOP especially but even from the White House, has been this canard about how the government needs to straighten out its finances. Looming fiscal train wreck I believe is a phrase I’ve heard bandied about.
If I hear one more person say double-dip recessions are rare, as a reason for why we won’t have one, I may have to find a small porcelain statue to break.
Hey, you know what’s rare? Home prices doubling in five years while wages are flat. A housing bubble and credit bubble exploding one after the other. An unregulated, opaque market in derivatives growing to $600 trillion. The U.S. government guaranteeing the private debts of the banking sector to prevent a total collapse of the entire financial system. A continent’s worth of sovereign debt crises, all at the same time.
I’m not as depressed as Paul Krugman seems to be, but let’s at least be realistic. Sure, a double-dip recession is “rare,” but so is everything that’s happened the past three years. Rare is not a synonym for never. Just because the brain surgeons who didn’t see the first recession coming, from Ben Bernanke to Larry Kudlow, are telling you there won’t be a relapse doesn’t make it so. If you ignored the biggest tornado in 80 years until it rode up behind you and swept your sorry self into Oz, why should anybody assume you have suddenly, inexplicably turned into The Amazing Kreskin?
I don’t know where the economy’s going. If I did, I’d be running a hedge fund in Connecticut and collecting 2 and 20. But nobody else does either, and to just blithely ignore a very real risk just because it’s “rare,” after all the awful rarities that have befallen us these past few years, well, you’re either an ostrich, an ideologue, or a central banker trying to jawbone the nation into a recovery that you can’t engineer.
Posted by Paul Vigna
on June 28, 2010