Debt Limit Update

We hear there is an agreement.

The country's future has been held hostage, and we paid a substantial ransom.

The price will be economic contraction. Jobs will be lost.

I suppose disaster is better than catastrophe.

New Poll Questions

At least, these are questions I wish pollsters would ask:

Q: Do you support reduced government expenditures even if it means you lose your job?

Q: Do you support reduced government expenditures even if it means reduced unemployment compensation when you lose your job?

Q: Do you support reduced government expenditures even if it means reduction in Medicaid when you lose your job?

Q: Do you support reduced government expenditures even if it means reduced Social Security benefits?

Q: Do you support reduced government expenditures even if it means reduced Medicare?

For business owners:

Q: Do you support reduced government expenditures even if it means fewer customers buy your products or services?

Pudd'nhead Wilson, Chapter 1 by Mark Twain (Excerpt)

Mr. David Wilson, a young fellow of Scotch parentage had finished a post-college course in an Eastern law school a couple of years before. A homely, freckled, sandy-haired young fellow, with an intelligent blue eye that had frankness and comradeship in it and a covert twinkle of a pleasant sort, Wilson had just made the acquaintance of a group of citizens. An invisible dog began to yelp and snarl and howl and make himself very comprehensively disagreeable, whereupon young Wilson said, much as one who is thinking aloud:

"I wish I owned half of that dog."

"Why?" somebody asked.

"Because I would kill my half."

The group searched his face with curiosity, with anxiety even, but found no light there, no expression that they could read. They fell away from him as from something uncanny, and went into privacy to discuss him. One said:

"'Pears to be a fool."

"'Pears?" said another. "Is, I reckon you better say."

"Said he wished he owned half of the dog, the idiot," said a third. "What did he reckon would become of the other half if he killed his half? Do you reckon he thought it would live?"

"Why, he must have thought it, unless he IS the downrightest fool in the world; because if he hadn't thought it, he would have wanted to own the whole dog, knowing that if he killed his half and the other half died, he would be responsible for that half just the same as if he had killed that half instead of his own. Don't it look that way to you, gents?"

"Yes, it does. If he owned one half of the general dog, it would be so; if he owned one end of the dog and another person owned the other end, it would be so, just the same; particularly in the first case, because if you kill one half of a general dog, there ain't any man that can tell whose half it was; but if he owned one end of the dog, maybe he could kill his end of it and -- "

"No, he couldn't either; he couldn't and not be responsible if the other end died, which it would. In my opinion that man ain't in his right mind."

"In my opinion he hain't got any mind."

No. 3 said: "Well, he's a lummox, anyway."

That's what he is;" said No. 4. "He's a labrick -- just a Simon-pure labrick, if there was one."

"Yes, sir, he's a dam fool. That's the way I put him up," said No. 5. "Anybody can think different that wants to, but those are my sentiments."

"I'm with you, gentlemen," said No. 6. "Perfect jackass -- yes, and it ain't going too far to say he is a pudd'nhead. If he ain't a pudd'nhead, I ain't no judge, that's all."

-

Discussion Question - Was David "Pudd'nhead" Wilson an early member of the Tea Party?

Or was the dog?

Early Sunday Morning?

So, are we going to have a constitutional crisis?

No, Thomas Friedman, a third party won't help.

A modest proposal: can the debt limit. It serves no useful function.

Federal Spending 2007 to 2010

Here's a graphical picture of the increase in government expenditure as a percentage of GDP from 2007 to 2010.

The Truth About Federal Spending

New Data: There Has Been No Recovery

Turns out, according to latest data from the Bureau of Economic Analysis, we haven't had a weak recovery for the past three years - our GDP actually decreased from 2007 to 2010 by 0.3% per year. One of the main contributing factors has been decreased state and local government expenditures.

Here's what the Washington Post's Ezra Klein has to say in his article "The Recovery-Less Recovery."

Slow Growth: Chicken or Egg?

Today's Commerce Department report shows the economy is growing at an annual rate of 1.3%. That is not enough to keep up with population growth.

The New York Times explains: "The economy’s slow growth rate is partly responsible for stubbornly high joblessness across the country. As of June, 14 million Americans were actively looking for work, and the average duration of unemployment has been reaching record highs month after month. Businesses are sitting on a lot of cash, but are still reluctant to hire because there is so much uncertainty about the future of the economy."

The Times has it backwards. The stubbornly high joblessness is causing the economy's slow growth rate. But cheer up, things could be worse. And if deficit hawks in Congress get their way and reduce government spending in the midst of joblessness, they will be.

Ideas and Words

"Where an idea is wanting, a word can always be found to take its place."

- Goethe