It’s official: there is no debt problem. Paul Krugman says so — so it must be true : [D]ebt and deficits have faded from the news. And there’s a good reason for that disappearing act: The whole thing turns out to have been a false alarm. I’m not sure whether most readers realize just how thoroughly the great fiscal panic has fizzled — and the deficit scolds are, of course, still scolding. They’re even trying to spin the latest long-term projections from the Congressional Budget Office — which are distinctly non-alarming — as somehow a confirmation of their earlier scare tactics. So this seems like a good time to offer an update on the debt disaster that wasn’t. About those projections: The budget office predicts that this year’s federal deficit will be just 2.8 percent of G.D.P., down from 9.8 percent in 2009. You see the trick, right? He’s using 2009 as our baseline. But 2009, the Year of Our Stimulus, produced the worst deficit-to-GDP ratio since the late 1940s. This chart , produced in 2010, shows the historical perspective. Look at the yellow line at the bottom; that’s the deficit-to-GDP ratio. See how it spikes up in 2009? More Krugman: It’s true that the fact that we’re still running a deficit means federal debt in dollar terms continues to grow — but the economy is growing too , so the budget office expects the crucial ratio of debt to G.D.P. to remain more or less flat for the next decade. The economy is growing? Well . . . if we are using GDP as our measure (and Krugman does), Q1 was actually a contraction of a percentage point . But let’s return to the big picture as explicated by Krugman: Things are expected to deteriorate after that, mainly because of the impact of an aging population on Medicare and Social Security. But there has been a dramatic slowdown in the growth of health care costs, which used to play a big role in frightening budget scenarios. As a result, despite aging, debt in 2039 — a quarter-century from now! — is projected to be no higher, as a percentage of G.D.P., than the debt America had at the end of World War II , or that Britain had for much of the 20th century. See? Debt to GDP is no worse than just after World War II! Once again, of course, Krugman is playing with the numbers, as you can see by consulting the handy chart above again. This time, look at the green line on top. See the hugely monstrous spike in 1946? The total outlier, caused by years of destructive world war? The economic disaster caused by the crippling of an economy that spent four years without millions of its most productive citizens? We’re headed back there, on the natural . . . with no world war to explain the tremendous rise in the debt-to-GDP level. And nothing to stop us from breaking through the disastrous WWII levels. (Note how the trough of that graph was 1971, when we finally went off the gold standard for good. That’s when we began our inexorable addition to the mountain of debt.) Reassured yet? Oh, but Krugman says the problem is easily fixed: Still, rising debt isn’t good. So what would it take to avoid any rise in the debt ratio? Surprisingly little. The budget office estimates that stabilizing the ratio of debt to G.D.P. at its current level would require spending cuts and/or tax hikes of 1.2 percent of G.D.P. if we started now, or 1.5 percent of G.D.P. if we waited until 2020. Politically, that would be hard given total Republican opposition to anything a Democratic president might propose , but in economic terms it would be no big deal, and wouldn’t require any fundamental change in our major social programs. Love how the only possible roadblock might come from Republicans. Let’s be honest: he’s not really talking about spending cuts, or he would talk about Democrat intransigence too. Anyway, Krugman again cooks the numbers by expressing these tax increases or spending cuts in terms of a percentage of GDP. What are these piddling numbers in reality? 1.5% of GDP ($15.68 trillion) is $235 billion . That’s the tax hike or spending cut that Krugman says would be no problem. Yet the sequestration “cuts” (actually reductions in increases in spending) were only $85 billion off the hoped-for increases — about 1/3 of that $235 billion number. And Krugman wailed that they would cost us 700,000 jobs and that we needed to spend more . The problem that Krugman “forgets” to confront is that, historically, no matter how high you raise that top rate, you never get federal revenue much above 20% of GDP. I have discussed that here before . Even with a top income tax rate of 90%, you still get 20% of GDP as revenue — because people change their behavior as you raise the top rate. So we need to do it through cuts — and Krugman told us that a mere 1/3 the cuts he says are required were far too damaging to actually implement. So you can pretend the numbers are small, and shrug off the political difficulties — but you are contributing to the situation and helping ensure it will never be fixed, Krugman. So yes, we’re still headed towards the cliff. Clip and save Krugman’s column; it’s a keeper. Like his early 2000s call for a housing bubble, it will make fun reading sometime in our bleak future.
Krugman: Debt Crisis? What Debt Crisis?
Newscom Last February President Obama launched a new initiative to help “boys and young men of color” facing tough odds in life to stay on track and reach their full potential. At the time we observed in an editorial that there was a not-exactly-minor problem with “My Brother’s Keeper” (as the initiative was dubbed): its exclusionary nature. By “color,” the president meant black and brown, and by “boys and young men,” of course, he meant youthful males of those colors.
Roll back prices? Via WISTV Walmart is getting into the healthcare game. A clinic will open in Sumter and Florence at the end of July that could drive down healthcare costs across the community. If they’re successful, the concept could spread. “You hear articles and news stories all the time about how the cost of […]
Justice has been served: UCLA has agreed to pay $500,000, including $350,000 in scholarships, to settle a claim by a prominent African American judge over alleged mistreatment and racial profiling by campus police during a traffic stop last year, officials announced Friday. Los Angeles County Superior Court Judge David S. Cunningham, who is a former president of the Los Angeles Police Commission, and his attorney will receive $150,000 and an additional $350,000 will establish a scholarship fund named after Cunningham and administered by the UCLA Black Alumni Association for undergraduate or law students, according to a statement from both sides in the dispute. In addition, UCLA pledged to improve training for police on diversity and to hold a one-day community forum about relations between police and the public, including racial profiling. The judge in January filed a $10-million claim against UCLA for excessive force and racial profiling, alleging that he was “shaken, battered and bruised” in the Nov. 23, 2013 traffic stop in Westwood. $10 million dollars! I’ll be shaken, battered, and bruised for $10 million! I’ll do it for $150,000! Heck, I’ll do it for the low, low price of $50,000. UCLA? Call me, babe. Let’s set something up. According to Cunningham’s complaint, he was trying to find his registration and insurance forms in his car’s glove box when a prescription bottle for high blood pressure medicine rolled out. One of the officers asked him whether he was carrying drugs. Cunningham then said he went to search his trunk for the papers and that the officers, Kevin Dodd and James Kim, rushed and handcuffed him. Cunningham, who had reviewed many cases of possible police misconduct matters during his time on the Police Commission, said he feared for his safety and began yelling about police brutality and demanded they call a supervisor. In a statement after the incident, the UCLA police department said the matter began as a routine traffic stop and that Cunningham ignored officers’ orders to stay in his car. “Despite these instructions, the driver left the vehicle – an escalating behavior that can place officers at risk,” the department said at the time. He was . . . so scared about police brutality during the traffic stop that he exited his car without permission and made for his trunk — where, for all the officers knew, he was going to retrieve a gun and execute them. As a judge, he should have known that a traffic stop is one of the most potentially dangerous situations an officer can face . . . and that you don’t get out of your car and walk to your trunk. But you know what? It’s UCLA. UCLA and this judge deserve each other. The scholarship fund will be named the David S. Cunningham, III Scholarship for Civil Rights. Asked whether it will be reserved for African American students, [attorney Carl] Douglas said that will be decided by Cunningham and the black alumni association. That means yes.
While I sit here refreshing the opinions page for the D.C. Circuit Court of Appeals , let me bring to your attention a couple of interesting intellectual property cases: one new, and one a few weeks old that I meant to write about at the time. The more recent one is a suit brought by the heirs of John Wayne, otherwise known as “the Duke,” complaining that a certain university in North Carolina keeps suing them when they try to use the name “Duke” : [U]niversity spokesman Michael Schoenfeld wrote in an email that “the university doesn’t object to the use of ‘Duke’ on alcoholic beverages, as long as it is clearly linked to John Wayne’s likeness.” However, he wrote, Wayne’s estate wants the rights to use the word with or without the star’s image attached. “While we admire and respect John Wayne’s contributions to American culture, we are also committed to protecting the integrity of Duke University’s trademarks,” Schoenfeld wrote in a statement. “As Mr. Wayne himself said,” the statement continues, ” ‘Words are what men live by … words they say and mean.’ ” Richard Howell, John Wayne Enterprises’ attorney, disputed Schoenfeld’s assessment. Howell said that the company has proposed “over and over” a truce of sorts: A co-use agreement wherein the company will only use the name ‘Duke’ in connection with John Wayne’s name, image or likeness. I come down on the side of the Duke with this one — partially because I hate universities, partially because I don’t like lawsuits. But let’s assume these two spokesmen are telling the truth. The Duke’s legatees want to use the nickname “in connection with John Wayne’s name, image or likeness” and the university wants to limit it to situations where it is “clearly linked to John Wayne’s likeness.” It sounds like the university wants to ban any mention of the Duke’s nickname without an “image” attached — even if John Wayne’s name is used. Bollocks. Patterico hereby enters judgment in the court of public opinion in favor of the Duke’s legatees, and orders the president of that university to go soak his head. The second lawsuit is several weeks old, but I have been meaning to blog it for a while. It’s the copyright infringement lawsuit brought by the estate of Randy California against Led Zeppelin, for copying material from the Spirit song “Taurus” in the far more famous “Stairway to Heaven.” I told you about this musical similarity in June 2013 , saying: “Led Zeppelin opened for Spirit early in their careers, and heard this song live. You will not have to listen closely to hear the inspiration for Stairway to Heaven.” In May of this year, California’s estate filed suit , in anticipation of a monster re-released of the Zeppelin catalog. I have mixed feelings about this one. On one hand, if you listen to the piece, it’s pretty clear they ripped off part of California’s piece — and the fact that they were touring with Spirit at the time just solidifies the conclusion that you would have come to anyway regarding the similarities. It would have been nice for them to credit California and give him a piece of the royalties. And, as I say, I pointed out the similarities last year, long before the lawsuit — so it’s clearly not a made-up claim. (Do any of the lawyers read this blog?) That being said, California himself never filed suit. And in “Stairway to Heaven,” while Zeppelin took some of California’s music, the more famous band also transformed the germ of that idea into something quite different, taken as a whole. Patterico reluctantly hereby enters judgment for defendant in the court of public opinion, but awards no costs — and encourages Led Zeppelin to give California his writing credit anyway. P.S. During the writing of this post, I continued to refresh that first link, and (although I could be wrong) it appears there will be no Halbig decision today. There are four new opinions in other cases; it looks like that might do it for the day.
Read this article:
Two Interesting Intellectual Property Cases