Posts Tagged ‘neil young’

No reason to get excited

1 August 2011

President Obama and Congressional leaders have apparently reached a deal on reducing the deficit, which might end the debt-ceiling crisis for now, assuming Congress passes it. Cause for celebration? More like cause for heavy sighs. I’ve been saying over and over that cutting government spending in an economic slump makes the slump worse. The best that can be said about it is that the (real-world political) alternative is worse, i.e., not raising the debt ceiling.

In a front-page article in today’s NYT a chorus of economists make the same point. In a time of slack demand, don’t weaken demand further by cutting government spending. The headline (from MSNBC.com’s republished version):

“Economists warn cuts to federal spending ill-timed:
Debt deal to spend less on US economy puts recovery at risk, experts say.”

The Times could have put this story on its front page months ago. Too late — by now, slashing social spending has gone from Republican fantasy to Washington Wisdom.

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Motor city is shrinking

4 June 2009

Neil Young saw it all coming in 1981, on his re*ac*tor album:

Everyone has an opinion on GM’s Chapter 11 bankruptcy filing this week, as well as the Obama Administration’s bailout/buyout of the carmaker.   Robert Reich gets it right, I think, in a Financial Times column, “General Motors holds a mirror up to America.” Reich asks what the goal of the bailout is, and rejects a few possible answers before concluding that it’s basically a cushion, designed to give GM’s workers and community some time to adjust to still-harder economic and psychological blows ahead.  People are queasy about the idea of bailouts, but they sense that they could be next and so do not protest too much.

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