From: cmk@athena.mit.edu (Charles M Kozierok)
Subject: Re: Death of America
Organization: Massachusetts Institute of Technology
Distribution: usa
Date: Tue, 15 Dec 1992 01:25:24 GMT

In article <Bz9pG0.Es3@apollo.hp.com> nelson_p@apollo.hp.com (Peter Nelson) writes:
>In article <1992Dec13.195223.26109@oracle.us.oracle.com> kwee@oracle.uucp (Karl Wee) writes:
>>cmk@athena.mit.edu (Charles M Kozierok) writes:
>>>
>>>if you were bill clinton, what would you do?
>>>
>>Here's what I'm considering: in order to get the deficit down to zero within
>>a few years, institute across-the-board, uniform percentage cuts to all programs
>>including all entitlements, BY DEFAULT.  Then, the
>>President and Congress can discuss what programs are more important than
>>what others, and reach consensus as to which programs should be spared some
>>cuts and what other programs must be cut deeper by the same amount as the
>>"spare".  But across-the-board cuts is the DEFAULT because the debt has
>>become the FIRST PRIORITY.
>
>  Do the math and explain what effect this will have on jobs.
>
>  If you assume a $350 billion dollar deficit, then this works out to 
>  about 10 million jobs @ $35K per person, which is about the US average
>  wage.   That probably would boost the unemployment rate to 16.5%,
>  *not* counting multipliers (e.g., the New York Times says defense industry
>  jobs have a "multiplier" of 2.5)

it will cause a dramatic increase in unemployment. but that is going to
happen anyway. do you really think they can go on like this forever?
it's only a matter of time. (btw i agree with the concept -- i don't
know about the exact numbers).

>
>  That's the number of jobs that would have to disappear from the
>  economy if you could wave a wand and reduce federal spending by
>  that much instantly.   Remember, you're not returning this to the
>  economy in lower taxes, else you'd have no deficit reduction, so
>  you're not growing the private sector, while cutting the 
>  deficit, at least not in the immediate term. 

those jobs never existed -- they were merely borrowed, like the money.
the unemployment is coming anyway. we might as well tackle it, not let
it tackle us.

>
>  Given that every poll in recent months have shown that job
>  formation is the top priority for most people out there, I
>  think you'd have a tough time selling this.   If you could find
>  a politically palatable way to "spread the pain" you'd have
>  better luck.  For instance, instead of increasing unemployment
>  by 10%, everybody gets to keep their job, but we all earn 10%
>  less.   This is called "inflation" and I predict this is closer
>  to how things will turn out.

most likely. but do you think the inflation will not cause at
least as much unemployment that swallowing the bitter pill now
would cause? you *really* think we're better off to just
sit around and wait for this to explode?

he said that debt has become the #1 priority but
you're right -- it isn't. it should be, but it isn't.
and the "unpalatability" of it politically is obvious. that's
how we got in this mess in the first place -- politicians
doing what is palatable: cut taxes, raise spending, let someone
else pay for it after they're out of office.

--
charles
Newsgroups: talk.politics.theory,talk.politics.misc