A hit from 2021 where he tries to 'understand' why people don't like big deficits.
'but periods of high deficit spending have often (though not always) tended to be fairly good economic times, as in the 80s, the early 00s, and the late 10s.'
and here he is arguing for more government spending in 2020/21
'Even before the election, I wrote about the need for more government spending — a lot more — to hasten a post-Covid recovery.'
Smith is just another guy who cheers on 'solutions' so that later he can cheer on 'solutions to the problems the previous solution created'. He has been a loud voice about how the government doesn't have to really worry about debt most of the time, and a loud voice claiming that debt will restore stability and growth in a crisis. Now that we are on the other side with debt vastly exceeding the growth we got from the debt he just switches gears to the next fix without explaining why his reasoning sucked eggs in the first place.
This is exactly my impression of Smith from paying attention to him for awhile a few years ago, so thank you for taking the trouble to back it up. Smugness and "Noahpinions" grounded in shifting sand. It's interesting to me that so many current pundits such as he have only one really firm commitment, that of an entirely open border. It doesn't seem like a coincidence.
I have been following Noah for some time and have never run across advocacy of an "open border." Do you have a post in mind? I've always associated him with merit based immigration which would lead to higher levels of immigration but far short of an "open border."
I’m pretty sure Noah never explicitly calls for an honest “open border” but instead, like so many dishonest Dems, calls for policies and enforcement which have the effect of a de facto border so open it doesn’t stop any immigrant who wants a better life in America.
In that case, why not focus your criticism on the effective border control policy that you think is being overlooked instead of talking about "open borders?" Which immigrants wanting a better life in America should be admitted and which not and what's the process for achieving that?
It's also trivial to google and find Smith repeating the patent balderdash about how Biden is being tough on the border, making it more secure than ever, than under Trump. That fact alone puts him in league with Karine Jean-Pierre in terms of lying through his teeth.
You did not even attempt to answer my question. Neither Trump nor Biden handles the border correctly. American law says that people who claim asylum have a right to a hearing. Neither provided the resources to hear the cases promptly admit those worth valid claims and reject and deport those without valid claims. But even allowing people to remain in the US until their claims are heard is not an "open border."
If you choose to pretend there is good faith (as for but one instance the ludicrous pretense that there is a portal between e.g. Africa or China and Brownsville or Del Rio, with no intervening countries) among those claiming asylum, their non-profit and Catholic church and coyote enablers, and the Biden administration with its "app" solution that was somehow going to reduce claimants by making the whole thing even easier - then you have your own reasons for wishing the destruction of the country and I certainly wouldn't presume to know what they are. You have provided no evidence that this is not *exactly* what an open border looks like.
Debt seems great when you think interest rates are going to be low forever. I think the Fed did a great disservice keeping rates low during COVID because it sent a terrible signal to policy makers about debt being cheap. So cheap you could even waste trillions on paying people to stay home and not work.
Excessive restriction on movement, school and business closures were bad at any interest rate on government borrowing. Deficits are bad to the extent that they finance activities that have 0> NPV. The interest rate that drives the discount rate of the NPV is a function of what is needed for the Fed to achieve its inflation target. If the discount rate is right and the NPV < 0 then the deficit is OK, too.
There are a lot of people that can only understand their monthly payment and have little emotional or intellectual concept of principle, and when interest rates are 0% the monthly payment is effectively zero.
So if the cost in your brain (however inaccurate) is $0 and you can purchase political power for free (COVID checks were popular) you go with it.
Maybe if people believed Larry Summers about how it would all cause inflation and the monthly payment would go up they would behave differently, but that is asking a lot of financial acumen from politicians and voters that they haven't showed historically. And there exists and entire industry of Krugmen-esque "experts" that were telling them that would never happen at the time.
I really find it baffling that people read Smith with some of the things he says.
'When population is growing rapidly, programs like Social Security and Medicare are like sustainable Ponzi schemes'
Hi, you know that EVERY Ponzi scheme can be sustainable as long as more people are paying in than taking out right? That is the problem with Ponzi schemes is that they use the pay in/out structure to make them appear sustainable, which they are up until they aren't. He is literally using the precise nature of a Ponzi scheme and then claiming it is something different if it wasn't for those darned (never born) kids. Anything to avoid admitting that large government policies like this are outright frauds- promising benefits that they cannot pay by imagining a world in which maybe they could have paid.
Yes. The colorful language gets in the way of a serious point. The present formula for benefit payment and tax collections are sensitive to changes in the numbers of employed and receiving benefits. If we want this to be in rough balance over time we need to keep changing the formulae. Changes would be smaller if the trust funds for these programs were financed with a VAT.
I think "sustainability" is the wrong concept. We should be aiming for perfection. Expenditures should meet a non negative NPV criterion. And the choice between taxing and borrowing would be guided by a vision of NPV of the activities forgone by the marginal lender or taxpayer. I think this criterion would produce patterns of taxes, spending and deficits that would look quite Keynesian during recessions and inflation (the Fed will occasionally make mistakes) and "fiscally responsible" (fairly low of zero deficits) in normal times, a lot better than "sustainable."
you cannot earn your way in to an over levered position- too much debt.
Pols will keep spending away the future so long as they can. History seems to show that ever increasing deficits, and more and more debt piling up will eventually lead a large loss of purchasing power which today is likely to come through currency adjustments, and buyers of US debt requiring higher returns for the purchase of debt.
As to Social Security, it has been an intergenerational Ponzi scheme for quite some time if not in its underlying construction when it was originated.
I would be better if it and all safety net transfers were finance with a VAT whos rate could be varied easily to keep the aggregate basically deficit neutral.
At the very least I think anyone might take a cursory glance at the Youth of Today and decide that the prudent course is to dismantle the nukes and hide them deep in the ground.
According to wikipedia the CBO scored the ten year cost of the the Trump tax cuts at $2.3T. The CBO claimed economic growth as a result of the act would reduce that to $1.9T, but let's use 2.3T.
COVID cost us $4.7T, not counting whatever the Fed got up to.
I would conclude from this that it's a waste of time to be fiscally responsible. Whatever money you save the other party will spend on whatever made up emergency it comes up with. Even if nothing happens, it will just go to wipe asses in nursing homes.
I say SPEND. Preferably on getting people to have more children. When the house of cards collapses what will matter is how many productive young people we have to rebuild.
While it is true that you must run a primary surplus to avoid an ever increasing share of debt to GDP if interest rates are higher than growth rates, the inverse is not necessarily true. That is, you won’t necessarily stabilize debt as a share of GDP just by running any primary surplus. It will depend on the degree to which interest rates exceed GDP growth. For example, if growth is -1% and interest is 1%, you must run a significant overall surplus to void ever-increasing debt as a share of GDP. (Of course, nominal debt would have started falling before you hit the surplus that kept the percent the same.)
Lets google Noah Smith+Deficit
https://www.noahpinion.blog/p/why-do-people-worry-about-deficits
A hit from 2021 where he tries to 'understand' why people don't like big deficits.
'but periods of high deficit spending have often (though not always) tended to be fairly good economic times, as in the 80s, the early 00s, and the late 10s.'
and here he is arguing for more government spending in 2020/21
https://english.aawsat.com/home/article/2668621/noah-smith/federal-deficits-dont-work-credit-cards
'Even before the election, I wrote about the need for more government spending — a lot more — to hasten a post-Covid recovery.'
Smith is just another guy who cheers on 'solutions' so that later he can cheer on 'solutions to the problems the previous solution created'. He has been a loud voice about how the government doesn't have to really worry about debt most of the time, and a loud voice claiming that debt will restore stability and growth in a crisis. Now that we are on the other side with debt vastly exceeding the growth we got from the debt he just switches gears to the next fix without explaining why his reasoning sucked eggs in the first place.
This is exactly my impression of Smith from paying attention to him for awhile a few years ago, so thank you for taking the trouble to back it up. Smugness and "Noahpinions" grounded in shifting sand. It's interesting to me that so many current pundits such as he have only one really firm commitment, that of an entirely open border. It doesn't seem like a coincidence.
I have been following Noah for some time and have never run across advocacy of an "open border." Do you have a post in mind? I've always associated him with merit based immigration which would lead to higher levels of immigration but far short of an "open border."
https://www.noahpinion.blog/p/repost-why-immigration-doesnt-reduce
https://twitter.com/Noahpinion/status/1627083249880289280?lang=en
https://twitter.com/Noahpinion/status/1664344590567223296
A thoroughly risible post about how the only way to secure the border is to build factories in other countries:
https://www.timesleader.com/opinion/op-ed/1285635/noah-smith-the-sensible-border-fix-protectionists-will-hate
Dumb, wrong, probably not revisited:
https://www.bloomberg.com/view/articles/2019-11-11/the-southern-border-crisis-has-fizzled-out#xj4y7vzkg
Nonsensical:
https://twitter.com/Noahpinion/status/1542414136520257536
Completely stupid and illogical, gonna take it back?:
https://twitter.com/Noahpinion/status/1657283755579707392
Give away the country - "dammit":
https://www.noahpinion.blog/p/give-us-all-the-refugees-dammit
I’m pretty sure Noah never explicitly calls for an honest “open border” but instead, like so many dishonest Dems, calls for policies and enforcement which have the effect of a de facto border so open it doesn’t stop any immigrant who wants a better life in America.
In that case, why not focus your criticism on the effective border control policy that you think is being overlooked instead of talking about "open borders?" Which immigrants wanting a better life in America should be admitted and which not and what's the process for achieving that?
And "open border" would be "Stupid", "nonsensical" and "illogical" but they do not commute.
It's also trivial to google and find Smith repeating the patent balderdash about how Biden is being tough on the border, making it more secure than ever, than under Trump. That fact alone puts him in league with Karine Jean-Pierre in terms of lying through his teeth.
You did not even attempt to answer my question. Neither Trump nor Biden handles the border correctly. American law says that people who claim asylum have a right to a hearing. Neither provided the resources to hear the cases promptly admit those worth valid claims and reject and deport those without valid claims. But even allowing people to remain in the US until their claims are heard is not an "open border."
If you choose to pretend there is good faith (as for but one instance the ludicrous pretense that there is a portal between e.g. Africa or China and Brownsville or Del Rio, with no intervening countries) among those claiming asylum, their non-profit and Catholic church and coyote enablers, and the Biden administration with its "app" solution that was somehow going to reduce claimants by making the whole thing even easier - then you have your own reasons for wishing the destruction of the country and I certainly wouldn't presume to know what they are. You have provided no evidence that this is not *exactly* what an open border looks like.
I think this is ad hominem, but I can't really tell what thought crime I'm bein accused of.
Nailed him.
Agreed on Noah.
Debt seems great when you think interest rates are going to be low forever. I think the Fed did a great disservice keeping rates low during COVID because it sent a terrible signal to policy makers about debt being cheap. So cheap you could even waste trillions on paying people to stay home and not work.
Excessive restriction on movement, school and business closures were bad at any interest rate on government borrowing. Deficits are bad to the extent that they finance activities that have 0> NPV. The interest rate that drives the discount rate of the NPV is a function of what is needed for the Fed to achieve its inflation target. If the discount rate is right and the NPV < 0 then the deficit is OK, too.
There are a lot of people that can only understand their monthly payment and have little emotional or intellectual concept of principle, and when interest rates are 0% the monthly payment is effectively zero.
So if the cost in your brain (however inaccurate) is $0 and you can purchase political power for free (COVID checks were popular) you go with it.
Maybe if people believed Larry Summers about how it would all cause inflation and the monthly payment would go up they would behave differently, but that is asking a lot of financial acumen from politicians and voters that they haven't showed historically. And there exists and entire industry of Krugmen-esque "experts" that were telling them that would never happen at the time.
I really find it baffling that people read Smith with some of the things he says.
'When population is growing rapidly, programs like Social Security and Medicare are like sustainable Ponzi schemes'
Hi, you know that EVERY Ponzi scheme can be sustainable as long as more people are paying in than taking out right? That is the problem with Ponzi schemes is that they use the pay in/out structure to make them appear sustainable, which they are up until they aren't. He is literally using the precise nature of a Ponzi scheme and then claiming it is something different if it wasn't for those darned (never born) kids. Anything to avoid admitting that large government policies like this are outright frauds- promising benefits that they cannot pay by imagining a world in which maybe they could have paid.
Yes. The colorful language gets in the way of a serious point. The present formula for benefit payment and tax collections are sensitive to changes in the numbers of employed and receiving benefits. If we want this to be in rough balance over time we need to keep changing the formulae. Changes would be smaller if the trust funds for these programs were financed with a VAT.
I think "sustainability" is the wrong concept. We should be aiming for perfection. Expenditures should meet a non negative NPV criterion. And the choice between taxing and borrowing would be guided by a vision of NPV of the activities forgone by the marginal lender or taxpayer. I think this criterion would produce patterns of taxes, spending and deficits that would look quite Keynesian during recessions and inflation (the Fed will occasionally make mistakes) and "fiscally responsible" (fairly low of zero deficits) in normal times, a lot better than "sustainable."
you cannot earn your way in to an over levered position- too much debt.
Pols will keep spending away the future so long as they can. History seems to show that ever increasing deficits, and more and more debt piling up will eventually lead a large loss of purchasing power which today is likely to come through currency adjustments, and buyers of US debt requiring higher returns for the purchase of debt.
As to Social Security, it has been an intergenerational Ponzi scheme for quite some time if not in its underlying construction when it was originated.
I would be better if it and all safety net transfers were finance with a VAT whos rate could be varied easily to keep the aggregate basically deficit neutral.
down size the military capitolistic comPlex
down size the CIA
down size home land secuirty and spying on us citizens
WHAT A SURPLUS THAT WOULD INCURE
At the very least I think anyone might take a cursory glance at the Youth of Today and decide that the prudent course is to dismantle the nukes and hide them deep in the ground.
According to wikipedia the CBO scored the ten year cost of the the Trump tax cuts at $2.3T. The CBO claimed economic growth as a result of the act would reduce that to $1.9T, but let's use 2.3T.
COVID cost us $4.7T, not counting whatever the Fed got up to.
I would conclude from this that it's a waste of time to be fiscally responsible. Whatever money you save the other party will spend on whatever made up emergency it comes up with. Even if nothing happens, it will just go to wipe asses in nursing homes.
I say SPEND. Preferably on getting people to have more children. When the house of cards collapses what will matter is how many productive young people we have to rebuild.
People on their own are near zero productivity. People+capital (not money) = productivity.
While it is true that you must run a primary surplus to avoid an ever increasing share of debt to GDP if interest rates are higher than growth rates, the inverse is not necessarily true. That is, you won’t necessarily stabilize debt as a share of GDP just by running any primary surplus. It will depend on the degree to which interest rates exceed GDP growth. For example, if growth is -1% and interest is 1%, you must run a significant overall surplus to void ever-increasing debt as a share of GDP. (Of course, nominal debt would have started falling before you hit the surplus that kept the percent the same.)