Thursday, November 12, 2020

“A Fiscal Cliff: New Perspectives on the U.S. Federal Debt Crisis”, from the Cato Institute

 


Cato Books has published “A Fiscal Cliff: New Perspectives on the U.S. Federal Debt Crisis”, 504 pages, by John Merrifield and Barry Poulson. Amazon has a link. 

The Cato Institute, on Nov. 11, held a virtual book forum, link with details, with the two authors, as well as Chris Edwards, moderated by Jason Kuznicki.

Wolf Blitzer, on CNN, did some programs around the end of 2011 called “The Fiscal Cliff”, at a time of threatened government shutdowns and particularly at least two major brushes with failing to extend the debt ceiling, which the panel did not discuss today.

Barry Poulson talked about “debt fatigue”, and maintains that the business cycle should ultimately balance budgets, but making up deficits from recessions with surpluses in good years.  In fact, as I recall, Bill Clinton left office with a surplus, which got blown away by 9/11 (not mentioned in the forum). He gave examples of failed countries, like Argentina.

Other ideas mentioned included forcing states and localities to deal with their own debts, without bailouts (remember NYC in 1975).

Late in the presentation, the panel recognized the catastrophe of COVID but seemed not to take it too seriously.  They said future generations will have their own catastrophes to pay for (climate change?) wo we shouldn’t pass COVID on to them.

Possibly you could propose a lot of jawboning on wealthier people (especially with inheritances) to support those thrown out of work themselves.  Many aspects of our lives (like the performing arts as we have known them) could be gone forever when we come out of the pandemic.  

The possibility of immediate means testing of Social Security would come to mind as an idea.

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