Comments | tongodeon: Debt Limit Experiments

tongodeon

Debt Limit Experiments

Jul 29, 2011 11:05

Field experiments and natural observations are two kinds of tests that aid in understanding big complex systems. In the former, you verify your theories by messing with the system and see how it reacts. In the latter, you make inferences from observing the system as it behaves normally. An observer might watch a colony of beavers working on a dam ( Read more... )

economics, politics

Leave a comment

Back to all threads

loic July 29 2011, 18:48:39 UTC

We're not actually going to default, we're just going to be forced to dramatically cut services and benefits and pay to public servants. Mission accomplished, Tea Party Douchebags.

mmcirvin July 29 2011, 19:03:13 UTC

What concerns me is that we seem to be in a politico-economic positive feedback loop. The conventional wisdom of almost everyone in the US, Democrat or Republican, concerning government spending is upside down; everyone seems to believe, on the basis of vague memories about the Reagan administration, that cutting spending stimulates the economy.

So if we cut spending, and all those out-of-work public servants stop spending the money they don't have, and a bunch of bridges fall down and poor people have to choose between food and housing, and the economy slows down even more, the solution must be to cut more spending.

I'm trying to figure out where the bottom is here. Bonus Armies marching on Washington, or something.

loic July 29 2011, 19:13:50 UTC

Right. Even the political middle-ground in 2011 USA is shrill and irrational. The idea that tax is theft and that government is bad is just basically stupid.

I'm kind of hoping that things go badly. Badly enough to change the discussion.

If we assume that we won't default on debt then cutting 1.4B from the budget means cutting 50% from the budget. That would be pretty incredible. And would totally fuck the economy. Not to mention out of work public servants cutting benefits would have a huge impact on consumer spending (since benefit recipients are likely to be spending everything every month). Cutting 50% from the military would probably mean stopping paying soldiers entirely, not buying more weapons and turning off the AC in Afghanistan.

I think you'd see armies marching on Washington.

mmcirvin July 29 2011, 19:27:48 UTC

The mind-boggling thing is that Europe is caught in the same loop. It particularly seems to have infected thought in the UK and Germany.

mmcirvin July 29 2011, 19:29:26 UTC

...It does go back a long way. Franklin Roosevelt even got bitten by it in 1937.

mmcirvin July 30 2011, 00:14:19 UTC

...Anyway, I don't believe that hitting rock bottom will change the discussion in any good way. I've been reading comments by people on the other side. Everything that happens, no matter what, can be interpreted in terms of government being too big and Obama taxing and spending your wealth away, if that's your epistemic filter.

I've been watching the polls. People hate the Republicans in Congress much more than they do Obama... but the generic Congressional ballot response is getting more Republican anyway, probably because they're upset at Obama. Everyone's just confused and mad and the chances of it shaking out well are slim.

loic July 30 2011, 00:27:04 UTC

The lack of economic literacy is pretty depressing.

And the fact that nobody's willing to make the tough decisions that need to be made. Baby boomers paid into social security, but then borrowed against it - effectively already spent that money. Now they want to be able to spend it again. And the wealthy seem to think that their tax loopholes are a right rather than merely not-quite-illegal.

mmcirvin July 30 2011, 01:37:43 UTC

Well, but the thing about economics is that it's a politically polarized discipline. The supply-siders insist that we're the economically illiterate ones and can quote Austrian and Chicago School dudes to prove it. And I can link to Paul Krugman articles back at them, and then we're back where we started. You and I think recent events have proven that Krugman is the one who's making sense, but there's no way I'm going to convince these guys and I'm not sure events can either.

The question is just what the median voter ends up thinking. And I admit, I have a really bad intuition for that kind of thing. Recently I saw a poll saying that Democrats approve of Obama's job performance to a greater degree than any president since Truman, and that shocked me, because I don't think I know anyone who approves of Obama at this point. The liberals whose opinions I read all think he's a crypto-Republican sellout, and my conservative friends of course think he's a commie, so that leaves nobody. Obviously I'm in something of a bubble because ( ... )

Back to all threads