Define headline heaven? Any time you can gratuitoulsy insert the names Art Cashin, Becky Quick and Paul Krugman in the same title. Like in this case. HERE’S WHAT YOU NEED TO KNOW.
From UBS Finacial Services:
Can I Get An “Amen!” Out There – Becky Quick, who brightens up mornings at CNBC “Squawkbox” got mad enough to take on Paul Krugman in a terrific piece on Fortune.com. Here’s how it began:
It’s bad enough that we can’t have a serious conversation about any of our nation’s problems during the election season. Now folks like Paul Krugman are trying to ensure that we can’t have one after the election either.
The New York Times columnist and Nobel Prize-winning economist recently wrote a column attacking a bipartisan proposal to reduce the nation’s debt problems, arguing, “We’re not facing any kind of a fiscal crisis.” He maintains that President Barack Obama, if reelected, should reject calls to resurrect the debt-reduction blueprint.
She goes on to cite a variety of well credential sources who flat out disagree with Krugman’s contention. She then cements her argument by going through the numbers.
America took in $2.45 trillion last year and spent $3.54 trillion, leaving us with a deficit of about $1.1 trillion. A nation with as much goodwill as ours can do that from time to time, but this marks the fourth year in a row we’ve spent over $1 trillion more than we took in. Just in that time, we’ve borrowed more than $17,000 for each man, woman, and child in the country.
The interest payments on all that debt are a potential tsunami of their own. We’re spending $258 billion a year on interest payments for our massive debt. That’s more than we spend on the departments of Commerce, Education, Interior, Energy, State, Homeland Security, and Justice combined. And the Congressional Budget Office projects that if we don’t tackle some of this debt, our interest payments will soar to $1 trillion a year just over a decade from now.
As for our entitlements, the situation is equally dire. As the law is currently written, the Social Security trust fund will run dry in 2033. If nothing changes before then, Social Security recipients will have their benefits cut by 25%. Simpson-Bowles tries to keep the program solvent by putting in modest steps to raise the retirement age gradually far into the future — by one year in 2050 and another in 2075 — so as not to change the social promises made to people who are nearing retirement age now. But the longer we wait to discuss the real problems in entitlement programs and enact changes like this, the more draconian the fix will need to be.
That’s why Krugman’s claim that there is no fiscal crisis isn’t just laughable, it’s downright dangerous. Krugman throws down the gauntlet when he calls Simpson-Bowles “a really bad plan.” As President Clinton notes, nearly every constituency will find some part of it hard to swallow. But the beauty of the plan is that it attempts to unify the country through shared sacrifice that is also grounded in some form of fiscal reality. And there’s nothing “really bad” about that.
It’s a terrific piece. You should pull it up.
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Tangentially, is there anyone out there who doesn’t think Paul Krugman is a farce, wrapped in a joke, inside a humiliation (and all endorsed by the Nobel prize winning committee which with every passing year proves it has the darkest, most demonic sense of humor in the history of the world)?