The Issue that Worries Me

Alan J. Auerbach and William G. Gale write,

Although current deficits are reasonably low, the medium and long-term fiscal outlooks have deteriorated in the past year, due largely to legislative actions (and their implications for future policy) and changes in economic projections. Even under a low interest rate scenario, the long-term budget outlook is unsustainable. Moreover, the nation already carries a debt load that is twice as large as its historical average as a share of GDP and that makes evolution of the debt-GDP ratio much more sensitive to interest rates.

The necessary adjustments will be large relative to those adopted under recent legislation. Moreover, the most optimistic long-run projections already incorporate the effects of success at “bending the curve” of health care cost growth, so further measures will clearly be needed. These changes, however, relate to the medium- and long-term deficits, not the short-term deficit.

They say that the solution is to build a wall on our southern border.

Just kidding.

29 thoughts on “The Issue that Worries Me

  1. We’re going to make the Chinese pay for our debt crisis juts as much as we’re going to make Mexico pay for the wall and the Saudis pay for the refugees.

  2. Excuse me, but who said building a wall on our southern border will address our fiscal problems?

    Here’s a better joke: “They say the solution to our fiscal problems is to bring in unlimited numbers of unskilled, net-tax-eating third-world immigrants.”

    Not terribly funny, true, but it has more basis in the actual view being attacked than this post’s stab at “comedy.”

    • It is funny because it is absurd. The same reason Trump is funny.

      And democrats don’t want unlimited numbers of immigrants, they just want enough to win the election.

      • It is absurd but not funny because nobody is proposing a wall as a solution to the fiscal problem. It is like saying, “And they say a two-state solution to the Israeli-Palestinian conflict with solve our fiscal problems.” For a joke to be funny, it has to resonate with reality in some way. But humor is apparently not a libertarian strong point. Neither is reality, for that matter.

        Trump is absurd because he’s not serious about any issues at all, including immigration.

        • “For a joke to be funny, it has to resonate with reality in some way.”

          This would be the opposite of absurdist humor. The wall idea is dumb in a lot of ways. You build a 10 foot wall and the Mexicans will get an 11 foot ladder. (Some comedian). And who are you going to get to build the wall? We are talking about masonry, so that means Mexicans (some other comedians).

          But seriously, all the “build a wall” comment is a rallying cry that you are for actual enforcement. You don’t need the wall for will of enforcement. You need will of enforcement to have a wall. Trump isn’t going to build a damn wall.

          • First, why wouldn’t he build a literal wall. Cost estimates for an actual wall aren’t particularly high.

            Second, your correct that enforcement is the issue (someone has to man the wall). However, that’s where the wall is so important. The phrase someone else used that I loved was “Schelling Wall”. It’s like a giant physical symbol of our commitment to enforcing borders. Anyone can talk about doing so (and have for decades) but having a physical wall is a material commitment to the principle.

          • He might build it just to signal how crazy he is, which is why I shouldn’t even predict he wouldn’t, but it would be for no other reason.

          • Again, my theme is that Trump is just point on the trend line that includes Obama. Obama looks at issues and answers 1. “is it far left liberal?” and 2. “do conservatives hate it?”

            Unless the government is threatened or can’t run, he won’t even pursue 1. unless the answer to 2. is yes.

            So, indeed, Trump may build a wall. But mostly because of who it would piss off, not because he actually believes in it.

  3. A higher debt to gdp being more sensitive to interest rates just means interest rates are more sensitive to debt to gdp and therefore smaller changes in interest rates will be necessary to affect growth and inflation. There is no normal for either, only past averages which have little bearing on the future.

  4. How does importing more NAMs help the debt crisis?

    1) They are net tax liabilities, so they make the debt crisis worse.

    2) They tend to vote Democrat, and leaving aside parties they tend to vote for entitlements just like they do back in their home countries.

    So how does more immigration help the problem your most worried about?

    Furthermore, how does voting for anyone in the establishment help the debt crisis?

    1) Republicans used their GWB mandate to pass Medicare Part D and invade Iraq.

    2) Obama and the democrats passed Obamacare, a giant entitlement increase that mostly taxes white people to subsidize NAMs.

    So who is it that is likely to decrease the entitlement burden again?

    Do you know of any multicultural NAM heavy countries that run consistent budgets and have exemplary governance?

    I don’t think anyone expects a wall to SOLVE the fiscal crisis, but it would certainly help the fiscal crisis, whereas not building one would hurt the fiscal crisis.

    Perhaps most importantly, a wall would symbolize that people really did care about America as a people and nation. Everyone inside the wall is in this together and will work to find a solution, whatever the shared sacrifice because we are an extended family.

    Otherwise, its just a rootless cosmopolitan elite mostly interested in smashing and grabbing whatever it can, while it can, by any means necessary. Whose only plan for the inevitable fiscal crisis is to flee or wall themselves off in their gated communities ala South America and other NAM dominated areas.

    • If immigrants were just pouring in, even the Democrats would stop it. It is the trickle level that they like.

      Don’t worry, if we ever got close to the libertarian ideal of realizing the free lunch benefits of actual libertarian immigration, the Democrats would put a stop to it ASAP.

      Building a wall doesn’t make democrats suddenly follow-through on their prior promises of enforcement in exchange for amnesty.

      As I said, I’d make immigrants pay their way, the high-human-capital ones would get the front of the line, they wouldn’t have any incentive to try to game the welfare system…just as American citizens wouldn’t, because they would have to be vested. Safety net insurance would be made to be just that. All these are self-financing and don’t require the never-gonna-happen wall and would get rid of the low-level fever of constant immigration angst. That is why Republicans and Democrats would never do anything like it.

      Otherwise, you are probably wrong about the impact of all realistic states of immigration including the current worst of all worlds.

      • The USA will be majority non-white within this century, hardly a trickle. I agree a lot of damage has already been done, deportations of existing illegals will be necessary.

        I agree that it takes more then a wall, but it doesn’t take less then a wall. Would anyone not willing to build a wall also do what it takes on enforcement? Unlikely.

        NAMs are not self financing. It takes a lot of earnings to provide a first world living standard, and they don’t have the genetic human capital to do so. No government program can give them the necessary genetics. And none of us want to live in some third world hellhole.

        I’ll believe you’ll restructure our immigration program and welfare state when I see it. As it stands immigrants tend to vote for higher welfare and higher immigration.

        The best thing that could be done to ensure smaller government is to deport big government voters. Your only hope to achieve your governance objectives is to keep America white. You’ll never get what you want with a majority NAM citizenry.

  5. “Although current deficits are *reasonably* low,. . . ” A&G

    Pray tell, why do they exist at all; why do they continue?

  6. “Moreover, the nation already carries a debt load that is twice as large as its historical average as a share of GDP . . . ” A&G

    And the proportion of GDP represented by governmental expenditures has changed how much over the same periods?

  7. Trump is not really serious about immigration?
    Perhaps, but the question now might more be, are his masses of
    Euro-American working/middle class supporters serious about him following through
    on it and if not or if his policies are squashed are they street-activist serious enough about it?

    • If Trump is elected president and – as he has strongly hinted, and as I strongly expect – reverts backs to his conventional plutocratic corporate progressivism and backs something resembling the Gang of 8 bill (suitably disguised with “enforcement” measures, of course, some of which may even be real), I expect no effective response from the voters he will have betrayed.

      Sad to say, if ordinary Americans had any ability to organize a political movement, they would have done so long ago to defend their interests against the bipartisan ruling class, and would not have needed a clown like Trump to bring them together. As for “street” activism, I can’t think of any examples of that working for the non-Left in the US for decades. If it were tried, it would be suppressed quickly and brutally. Take a look at what’s happening to Europeans protesting against the Merkel/EU open-border migrant policy. The pictures are not pretty.

      • I should add that I also expect that a large proportion of Trump’s supporters are so irrationally infatuated with the man, and so emotionally invested in him, that they will believe whatever flimsy alibi he gives for betraying them. For example, I expect that they will forgive him for not building a wall when he explains that, unfortunately, Mexico just refuses to pay for it. “But, hey,” Trump will them, “a wall’s not really all that important, so instead I got Mexico to agree to take back a few felons! Aren’t I the greatest negotiator ever, or what?”

        • Most of them yeah, but some will feel betrayed like some democrats were when obama brought in the establishment clinton team with him into the white house and didn’t follow through on some stuff.

          • Putting aside my amusement at leftists who feel “betrayed” because Obama hasn’t turned the country into Cuba – what have they have done about it? Nothing. Which is exactly what I expect from Trump’s supporters in the event he is elected and betrays them.

      • Agree with everything djf said.

        I give Trump a 1% chance of following through on immigration. I do think a physical wall would be built, but I don’t think all the necessary follow up would be done. I defiantly don’t think he will follow through on mass deportation.

        • The main thing I would expect from a President Trump on immigration is a large increase in the amount of LEGAL immigration of all kinds. That, I believe, is what he means by the “big, beautiful door” he wants to put in the wall he supposedly intends to build. The increase in legal immigration will cancel out several times over whatever enhanced enforcement measures are taken (including a wall). As for deportation, since he has already said that he would deport all the illegals only to bring back all the “really good ones,” and he has just stated that this is his position “as of now,” it is painfully obvious that he will “negotiate” down to deporting felons.

          In sum, whether the next president is Hillary, Rubio or Trump, we will get some version of the Gang of 8 bill.

          • We’re on the same page, but what else can people do? A majority NAM future is so terrible, the window of stopping it so short, and its damage so permanent and unrepairable, that even desperate long shots have to be taken.

            The status quo in untenable and guarantees disaster.

          • I understand what is driving people to support Trump. I just don’t think doing so is rational, based on what we know about the man.

            Also, I still have concerns about other issues, on none of which do I trust Trump. I expect that our foreign enemies would eat him for lunch. Of course, Hillary would not do any better, IMHO.

          • “The main thing I would expect from a President Trump on immigration is a large increase in the amount of LEGAL immigration of all kinds.”

            Trump’s policy statement says he intends for “immigration levels to subside to more moderate historical averages.”

            I do not pretend to know if he means it, but I suspect Sessions has been led to believe Trump is serious.

        • I respect Sen. Sessions, but I think he has been misled about Trump’s seriousness on this issue. Or perhaps he’s overestimating his own ability to influence Trump after the election.

          I can’t prove that Trump is just exploiting this issue to propel his tawdry campaign. But bear in mind that he’s been interested in running for president longer than he’s been espousing anti-amnesty, immigration-restrictionist views. Draw your own conclusions.

    • I’d settle for The Feds not dysregulating the border by barring border states from enforcing the laws.

      • And when illegal immigrants are caught, they should be sent to the state where they crossed the border into 😉

  8. “fiscal outlooks have deteriorated in the past year”

    I suspect nothing changed in a year. They just had bad math before.

    Arnold, this leads me to the question, how do people who see how bad things are not understand Trump as phenomena? It seems like a lot of wonks look on how bad things are, but then turn around and are baffled by Trump.

    I figure you get the anger from the public, but we can’t rely on the public to reflect our preferred wonkish prescriptions. This makes a Trump fairly predictable. The public doesn’t pay attention. Things get bad enough. The public wakes up and vomits all over the process. Either a Hillary or Trump will win because somebody has to. But without a big wakeup call, the winner would just keep us going down the same road. The good scenario is a Paul Ryan or Rand Paul emerge on the other side. Hopefully not a lot of durable bad ideas are implemented in the mean time. To me, all this also falls back on the establishment. What am I missing?

    • Wonks are paid to produce propaganda for their masters.

      In any policy paper one Jupiter or another gets ignored to get the result the master has paid for. People ignore wonks because their are sophists. There is a difference between good rhetoric and good ideas.

Comments are closed.