That?s the title of a report by David Dayen. Key takeaway:
Republicans theorize that a deficit deal would increase confidence in the business sector and financial markets, spurring economic growth all by itself. But there?s ample reason to suspect this ?expanding by contracting? theory. Sadly, the Obama Administration appears to have swallowed it. Last week, several White House officials, including Director of the National Economic Council Gene Sperling, stressed deficit reduction as the primary component of their economic-growth strategy, and repeatedly claimed that reducing the deficit would generate ?confidence.?
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?I think it?s bogus,? said Mishel, of EPI. ?And it reflects what happened in the Clinton era, when you elevate a tactic to the level of principle. They feel politically forced into shifting to deficit reduction. And they now rationalize this as good for jobs. And I think they all know better.?
Someone noted that with Goolsbee leaving all of the big names surrounding economic policy are no longer economists but lawyers and people associated with Wall Street. And it is also telling that, with the Larry Summers editorial from the weekend, all of the economists you?d recognize who have left the administration are calling for more stimulus, while it is those there now calling for confidence.
It?s worth noting, too, that it?s not even good politics. Having made the ?pivot? from jobs to deficits because they thought it was what voters wanted to see, they?ll now get beat up over ? not focusing on jobs.
Opinionator
The True Cost of Tomatoes
Some long-overdue improvement in the working conditions of Florida tomato-harvest workers.
Ross Douthat
Privacy and the Weiner Scandal
What does his downfall tell us about sexual privacy in a digital age?
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