Super Committee Failure a Reason for World to Give Thanks
Source Newsroom: Cornell University
Newswise — Robert C. Hockett, an expert in financial policy regulations and professor of Law at Cornell University, comments on the Congressional “super committee” as its deadline to establish a deficit reduction deal looms.
“It should surprise absolutely no one that the budget 'super committee' shows no sign of reaching a grand budget bargain. At the heart of the committee’s mandate is a goal that is fully as futile as it is absurd, namely, to impose austerity upon an economic agent that is simultaneously the only such agent able to add large scale purchasing power to a global economy whose principal challenge right now is slackened demand, and the only such agent that can borrow at near zero interest rates.
“The agent in question is, of course, the U.S., and for the committee to have 'succeeded' in fulfilling its misbegotten mandate would accordingly have been for the U.S. -- and with it, the world -- to have succeeded in what is for all intents and purposes a suicide attempt.
“Add to this the facts that Republicans continue to insist upon returning the U.S. to a feudal economic structure in which one percent hold nearly all wealth, while Democrats have rediscovered that it is crucial to all that we move economically forward not backward, and the only mystery remaining is why this ill-conceived monstrosity of a 'committee' bothered to meet at all.”
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Steven C. Kyle, associate professor of Applied Economics and Management at Cornell University and an expert on U.S. macroeconomic policy, comments about the reported failure of the Congressional “Super Committee” to reach a deal to reduce the federal deficit by $1.2 trillion over 10 years.
“We should all breathe a sigh of relief that the super committee seems to have avoided doing further damage to the economy by doing nothing at all.
“The ‘automatic’ cuts to spending that are triggered by the failure to pass anything are less damaging than what was on the table – if they are even allowed to take effect at all, which is debatable.
“Here is a quick prescription for what Congress should do, though in an election year it is probably too much to hope that they will do anything:
- “We have a long term deficit problem so stop talking about tax cuts and let the Bush tax cuts expire as scheduled.
- “We are in a recession which is in danger of double dipping so increase temporary spending on infrastructure projects which need to be done anyway and which are best done when we both need the jobs and can borrow the money at near zero percent.
- “Ignore the fantasies of those who think cutting spending in a recession can boost confidence or even that it can cut the deficit – Deepening a recession with spending cuts will just reduce tax revenues further and leave us no better off.”