Evening Must-Read: Mark Thoma: Erskine Bowles is Back
Mr. Krugman’s assertion that America followed a course of austerity while the economy was still in a deep slump due to the influence of “Bowles-Simpsonism” ignores the fact that one of the key principles set out in the National Commission on Fiscal Responsibility and Reform report was that deficit reduction must not disrupt the fragile economic recovery. Indeed, it is largely due to the failure of our elected leaders to reach agreement on long-term deficit reduction along the lines of our recommendations that we ended up with the mindless austerity of sequestration….
Does anyone remember Bowles or his associates objecting strenuously to the sequester, getting out in public forums and arguing it was a big mistake? Writing letters and op-eds to the NY Times, that sort of thing? I don’t…. I don’t see them calling for delay until the economy recovers, only for a different type of austerity, e.g.:
simply waiving this sequester–or coming up with some agreement to spend partway between pre- and post-sequester levels–would represent a huge failure… send a message… that Washington is not serious….
Many projections suggest that our major social insurance programs will face financial difficulties in the future…. At some point we may need to cut benefits. But why, exactly, is it crucial that we deal with the threat of future benefits cuts by locking in plans to cut future benefits [now]?…