A Sober Look at the Deficit Hysteria: The Ryan Plan, Social Security and Medicare

Program for Sunday, July 3, 2011
1:00 pm till 3:00 pm, at UMKC, Room 301, Haag Hall

Max J. Skidmore, Curator’s Professor of Political Science UMKC and Thomas Jefferson Fellow

Editorial comment: Why Max Skidmore’s Talk is something that everyone needs to understand.

1. The deficit hysteria – that the U.S. Federal deficit is a dangerous and very serious problem that must be dealt with immediately to avert some kind of a disaster – is first of all hysteria – hysteria being excessive and unfounded fear.
2. The fear being promoted is baseless. The U.S. Federal deficit creates no burden for future generations, with the current U.S. monetary system, the U.S. Federal Government cannot go broke, U.S. Treasury checks cannot bounce, we do not have to tax in the future or borrow money from the Chinese (or anyone else) to deal with the deficit (or the debt which is the accumulated net deficits). The U.S. Federal Government cannot create money without limit.
3. The deficit – is used as a pretext to not to do what is needed to offset cyclical problems — and thus keep the main street economy in the hole for a potentially long time
4. The deficit hysteria about U.S. Federal deficit is being used as a pretext to destroy current and future progressive programs. Things can hardly help to get worse until deficit hysteria is exposed for what it is.
5. Political Economy includes the functioning of the political system as it actually works. Economists are very good at proposing policies that make sense but that have difficult political problems that must be overcome first. Max Skidmore understands the politics as well as the phoniness of deficit hysteria.  (James Webb)