Saturday, June 26, 2010

Crank up the deficit please

I won't even bother to comment on the financial "reform" bill that came out of conference — except to say that the banks that were too big to fail in 2008 are even bigger now, and that everything in the bill depends on the zeal of the regulators, who never were especially zealous in the past.

What really has me steamed at the moment is the Senate's refusal to continue Medicaid assistance to the states, and to extend unemployment benefits. This is not the time to force state and local governments to lay off large chunks of their workforces, nor to deprive an unemployed worker of the ability to feed the kids. Being "deficit hawks" makes sense for Republicans, of course. If they can prolong the national misery, they can pick up more seats in the midterm election. A double-dip recession probably could win them the presidency next time around. As for Ben Nelson, I suspect he's just an idiot.

Deficit cutting is getting quite fashionable, though, and even if the United States manages to continue some level of stimulus, Europeans are determined to move the other way. Aggressive budget balancing by the UK, Germany, and France almost certainly will push Europe back into recession. Given that it's a world economy now, they'll drag the rest of us down with them.

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