Living the high life ...
"Reagan proved deficits don’t matter."
Dick Cheney
One thing you have to admit: Dick Cheney and the Bush Gang knew the economy. But they got shorted. MarketWatch reports the U.S. government agreeing "... Sunday night to rescue Citigroup Inc. with a huge bailout plan that includes a $20 billion capital infusion, guarantees for up to $306 billion of Citi's troubled assets — and control of executive bonuses."
Today, looking remarkably like the old kids, the new kids hit the block.
Commenting on Barack Obama's choice of Tim Geithner, Lawrence Summers, and Peter Orszag to head his fiscal hit squad, Bloomberg sees "... an economic team steeped in fighting crises and likely to push for an unprecedented government role in reviving growth and stabilizing the financial system."
Bloomberg's Rich Miller and Robert Schmidt consider Obama's top priority to be "... a stimulus package that may run to $700 billion or more, in an attempt to head off millions of job losses as the credit crunch freezes the economy."
The financial mess in which the U.S. now finds itself has already had several trillion dollars thrown at it. The stimulus package Obama will likely sign into law next February adds another trillion to the more than ten already weighing down the U.S. economy.
Bloomberg quantifies the figure so far pledged big business on behalf of the taxpayer: $7.76 trillion. This to a system that has 'vanished' $32 trillion in recent years.
Bloomberg also suspects the original 'bailout bill' will likely face that typically US-ian problem, obesity. "The incoming administration may also enlarge the $700 billion financial-rescue fund enacted last month. It may surge to perhaps $1.2 trillion, said Martin Baily, who served as White House chief economist under Clinton and is now at the Brookings Institution in Washington."
That's another half trillion.
It was the abovementioned Peter R. Orszag, who will head the Congressional Budget Office, who not too long ago noted of the U.S. budget deficit: "The key point is, even if it were sustainable, it's not desirable. We still will owe the money to foreigners. We're still mortgaging our future national income. Just because you can take out a larger mortgage to buy a bigger house doesn't mean you should."
... in BubbleWorld
"... we shouldn't worry about the deficit next year or even the year after."
Barack Obama
It seems Orszag's boss — having undergone a Keynesian Awakening, shares Dick Cheney's view. And that of the man shaping his team of Clintonistas, i.e. the only one not on it; Citigroup director, former NEC chief, and Bill Clinton's Treasury Secretary, Robert Rubin.
Of Rubin, Rahm Emmanuel's father might say: "Obviously he’ll influence the president. Why wouldn’t he? What is he, an Arab? With $20 billion in his pocket, he’s not going to be mopping floors at the White House."
When you see only one solution, I guess that's the one you use. However, with Rubin massaging the future from the Citi, one wonders just who won this past election.
"Stimulus shouldn't be paid for."
Hillary Clinton
Indeed. She should know. As top Obama economic adviser Austan Goolsbee put it on MSNBC: "Look, it needs to be as big a number as it needs to be. I really mean, it's got to meet the task at hand."
I'm sure Hillary, Rubin, Dick, and the President-Elect would agree.
