Logan Mohtashami, who lives in Orange County, CA, friended me on FB some years ago. I consider him one of the brightest people I know, but have never met. I love his latest FB analysis of the deficits and debt he just posted twenty minutes ago. It is a free form sort of talk, with an irrelevant aside about the Trump nominees to the Supreme Court, quickly forgotten, thank goodness. I believe it is well worth watching, and hope it is not too hard to follow.
Where I would love to have a face to face conversation or debate with Logan is on the edges. I would ask, how are Democratic Party politicians lying about the debt/deficits in any way comparable to the Republicans? The austerity Dems are a pain, but they are not as reckless and harsh as the Republicans. More substantively, I would ask, Wouldn't lifting the cap on Social Security and Medicare lessen the deficits coming in those programs? Wouldn't an investment in infrastructure redevelopment dramatically increase payroll tax revenue which would improve at least somewhat significantly the hockey stick on deficit and debt growth we both see coming? Wouldn't wiping off the books the student loan debt immediately improve cash flow for lots of people who would spend money on consumer goods and expand the economy, and sales taxes, and eventually income tax revenue increasing?
Logan, on this point about erasing student loan debt, is one of those who uses gross numbers to say only wealthier professionals would be helped with wiping out that debt. However, I think he misses the manner in which young people, with little assets, face much more limited prospects with even $30,000 in debt, for example. He is too macro and not enough micro-economic on this issue. Again it is an argument among the rational at that point.
Both Logan and I recognize the GDP and assets of our nation, our nation's size and military capacity, make it so we are not the PIGS (Portugal, Ireland, Greece, and Spain), which are nations too small to be able to overcome bond market vigilantes who would demand high yield rates for borrowing. Both of us recognize the EU can be helpful, though at this point, I dissent from him and enter Varoufakis territory to say reform the EU so it helps the PIGS, not punishes the people there. It is the reason I want to help Mississippi, not punish the people there.
For those who fetishize the national debt and deficits as if this was akin to our household budget, Logan helps us recognize what Alexander Hamilton was one of the first people in Western society to understand: The issue is nation building and nation sustaining. It is far more important to concern ourselves with what the government spends money on than whether debt is accumulated. One may suppose, theoretically, a point where the public debt is no longer something to ignore, but Trump was channeling Keynes, wasn't he, in saying in the long run, we're all dead?* The difference is Trump is a carnival barker, and Keynes was only expressing, in an exasperated way, those who refused to support priming the pump and using the government to get people working again.
* The link is worth reading because it shows why Niall Ferguson is sometimes an out and out jerk. Simon Taylor (of the Cambridge Business School) schools Ferguson if not skewers him on the context and meaning of the Keynes quote.
