Juggling Dynamite

David Stockman, was director of the Office of Management and Budget from 1981 to 1985, and is author of the forthcoming book “The Great Deformation: How Crony Capitalism Corrupts Free Markets and Democracy.”

In a NY Times Op-Ed yesterday he highlights the weak-kneed nonsense behind the allegedly “bold” Ryan budget plan which preserves insane levels of defense spending and some entitlement programs while splicing splinters off the cost bone in cuts to subsistence programs such as food stamps and health insurance benefits for the poor and disabled.

Adults must insist on an adult conversation about the numbers needed to cut the deficit. Governments cannot afford to preserve and hold harmless, crony popular areas. Every program needs to be up for significant cuts across the board. Time to get serious and turn the election attention into a productive, math based campaign.

We do need real fiscal conservatives in policy positions everywhere today, but shared pain, means shared by everyone.  See Stockman’s whole article here: Paul Ryan’s Fairy Tale Budget Plan.

Great article by Ambrose Evans-Pritchard of the Financial Times today surveying the seemingly never-ending nightmare which is our present global debt crisis.  Read it here:  Five years on, the Great Recession is turning into a life sentence.

But this too shall pass. It is not going to be a permanent recession, history assures us that the world will work its way through present problems: deficits will be curtailed one way and another, bankers will be disarmed of their financial powers of mass destruction and the real economy will finally find its way back to organic growth.  And yes large spending cuts are required.  But so are large debt write-offs–more money has been loaned than can ever be paid back.  It is necessary to admit this truth–admission is the first step to recovery. Here’s Ambrose:

“Much of the debt will have to be written off. Whether this done by inflation (1945-1952) or default (1930-1934) will be the great political battle of this decade. Pick your side. Pick your history.”

With all the buzz this weekend about the fresh-faced Ryan joining the Romney ticket one might think the smiling duo is a game changer in terms of the economy and recovery. Who knows which team will win more votes in November, but truthfully neither party has made any mathematical sense to date. The fact is that total US federal debt (included unfunded obligations promised) is now about 70 trillion dollars and growing 10 million dollars per minute.  There must be entitlement and defense cuts as well as revenue increases to dig the country out of its current hole.

Here is a direct link.

And the incoming recession will render present deficit projections by both parties overly optimistic. Here is a direct link.