Did Last Year’s Debt Ceiling Debate Hurt the Economy?

Cool economists Justin Wolfers and Betsey Stevenson had an article in Bloomberg on Monday arguing that another debt-ceiling battle could “sink” the economy based on how costly the last one was.

Justin and Betsey believe the government needs to spend more money now to help the economy (after all, interest rates are insanely low right now), so they naturally oppose the Republican’s hypocritical efforts to restrain the debt ceiling. I believe this makes them biased to look for evidence that fights over the debt ceiling are bad for the economy. Meanwhile, I do not think the government should spend more money (after all, interest rates can go up rather quickly,) so I am biased to be skeptical of their evidence, which I believe is weak, cherry-picked, and contradictory.

Let’s look at the evidence they claim:

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Hurting Enemy Bloggers With The Oops Cost

Political blogging is becoming dangerous – at least for the partisans. It appears that conservative bloggers are being targeted by some on the left for “SWATting,” a despicable tactic where someone spoofs a phone call to 911, posing as the blogger and claiming they just killed someone at their house in an attempt to draw a SWAT team (or at least policemen) with guns blazing.

Patterico lit up the conservative Interwebz on Friday with his detailed account of his experience that almost got him killed. Now a RedState blogger is claiming to have been attacked in the same way, although he had a much calmer encounter with his local law enforcement, perhaps due to precautions he had taken to alert the sheriffs about this very tactic.

What’s funny to me is that Patterico and most of the commenters have a (generally right-wing) perspective where the people who built the hoax are the “evil” and “demented” bad guys that need to be brought to justice, and the police are good guys that just happened to get caught up in this and almost accidentally kill an innocent man. “I don’t blame the police for any of their actions,” the blogger says. “But I blame the person who made the call.”

The right’s reaction reminded me of what how the left ignores government mistakes in other sectors. Take the recent hullabaloo about the J.P. Morgan trade that lost $2 billion and how that allegedly justifies the Volcker Rule or other forms of complex financial regulation. Democrats imagine a static world where there are specific problems with rules or people that the government can isolate and fix. Add a new law on top of the old one. Replace the corrupt or incompetent regulator with someone nobler or smarter.

Continue reading Hurting Enemy Bloggers With The Oops Cost

Reasons For Optimism 7-9

It’s been a while since I added to the Reasons For Optimism series, but that’s more due to me lacking focus than because of any dearth of good news. Just in the last week we saw some cool progress in all three of the sectors that I think will greatly transform our lives in the next decade.

7. Outer Space. After a successful rocket launch on Tuesday, SpaceX’s Dragon capsule successfully docked at the International Space Station yesterday, becoming the first private company to do so. The numbers are complicated, but SpaceX has essentially caught up to NASA’s capabilities and costs in just a few years and is on track to make things even better and cheaper and faster (using more reusable parts, for one). It’s pretty cool to read this latest Elon Musk interview about their current successes and future plans, and then look at the confidence he had four years ago after some initial failures made others skeptical.

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One Year of PL Blogging!

It has been exactly one year since my first postlibertarian blog post: “What Is A Postlibertarian?” I have been blogging on and off about politics and economics since I was in high school, but on this new blog I applied the latest things I had learned about writing, marketing, SEO, and networking, turning this into my most successful blog yet. In my first year I published 145 posts and acquired 38,166 hits and 156 comments. (Actually, 1 of those posts and 105 of those hits belong to the honorable Nick Sacco.)

The posts with the most pageviews are on the sidebar, but I wanted to highlight a few of my favorite posts that haven’t gotten as much attention:

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The Privatization of Outer Space

Early Tuesday morning, SpaceX launched their Falcon 9 rocket with its Dragon capsule into orbit, where it is now hurtling towards the International Space Station where it will hopefully become the first “commercial” or “private” spacecraft to dock at the ISS.

It is a little hard to appreciate the importance of this, as human beings have been launching rockets for decades. But until recently, outer space has been limited to the domain of large governments that had the enormous resources required to figure out how to escape earth’s gravity and design giant vehicles that could do it, all while being able to absorb delays and setbacks into a big government budget.

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Obama The Socialist Will Destroy Socialist Programs!

It’s been a few months since I blogged about a crazy conservative email, but I got one this morning that was just too much to pass up. It’s from AmeriPAC, with a classic subject line of “Obama Threatens Supreme Court Again.” Inside, we learn the following:

President Barack Obama has again threatened the Supreme Court over ObamaCare – this time indicating that if the Court does not rule his way, he will take his revenge on senior citizens by destroying Medicare.

That paragraph is followed by some purported evidence that “Medicare will face disruption and ‘Chaos'” if ObamaCare is overruled. Oh no! If the Supreme Court overturns a big socialist government health program, Obama is going to destroy another big socialist government health program!

Wouldn’t that be a 2-for-1? Shouldn’t anti-socialists be rejoicing?

I know, the GOP has had trouble meshing their newfound love for fiscal responsibility with their old support for the biggest government program for their biggest demographic (seniors), but I still think it’s funny when they make the irony so raw and obvious.

Ah, but it gets better! (You didn’t think I would mock this email if it only contained one bit of silliness, did you?) Farther on we read about the real scary future about Obama and the Supreme Court:

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Another Insane Debt Ceiling Showdown?

Remember last year’s debt ceiling debate? Congress finally raised the ceiling, but our growing government may hit the new limit before the year is over. When Speaker of the House John Boehner said Republicans will fight for spending cuts this time, too, there were immediate outcries of hypocrisy.

As @ObsoleteDogma paraphrased: “Regulatory uncertainty is bad. But default uncertainty is good.” Many also find it ironic that the Republicans are setting up for another showdown even as they are trying to undo the results of the last showdown. (The last deal set up some defense cuts, among other things, but Republicans are now trying to override them.) Others wonder why the GOP even pretends to really care about deficits since they raised a fuss about “$535 mln Solyndra loan guarantee, but just voted to expand a $140B corporate welfare bank.”

The established economist view is that the US should not at all be restricting its borrowing as it tries to spend its way to a recovery that will get enough people off assistance programs and generate enough tax revenues to finally start worrying about the deficit later (nevermind that some of that spending just gets wasted). That’s why economist Justin Wolfers says “Boehner is nuts. The House Republicans are nuts. Congress is nuts. The idea of a debt ceiling is nuts. Nuts nuts nuts.”

Continue reading Another Insane Debt Ceiling Showdown?

Wednesday Links

1. Even as states like Connecticut are abolishing the death penalty, we learn that another man was wrongfully executed in Texas many years ago. I’ve never taken a confident stance on the death penalty either way, but I think I’m ready to officially and confidently oppose it, simply because the government makes too many mistakes and “death is the ultimate oops cost“. Follow @MikeRiggs to learn more about government mistakes, especially pertaining to violence (warning: may make you angry).

2. NPR has 50 years of government spending in one graph. It doesn’t show the growth in government spending, and they try to say with a straight face that a change of 18% to 24% of GDP is “roughly” the same, but it is very interesting to see the proportions. I didn’t know, or had forgotten, how much defense has dropped as a percentage of spending since the Cold War – even though that’s largely just because other things like Medicare and Medicaid have grown so much. Also interesting that the share of interest is smaller than it was 20 years ago and about the same as it was 50 years ago, due to interest rates dropping so much. I wonder how long they will stay low, and what will happen if interest rates rise along with the projected growths in Social Security, Medicare, and Medicaid…

3. The Economist argues that the election encourages America to feel worse about itself than it needs to: “People tend to think in black and white. America is either in decline or it is ordained to be for ever the world’s greatest nation. Government is either paralysed or it is running amok, stifling liberty and enterprise and snuffing out the American dream.”

4. If you want to get down and dirty with a nerdy analysis of Mitt Romney’s positions based primarily on his many Republican debate performances, check out Expected Optimism’s detailed posts (see the first paragraph for links to other categories).

5. A Russian satellite has taken the most detailed single picture of Earth yet with this 121-megapixel shot. I’ve always been amazed at how completely uninhabited the Earth looks from daytime at these distances. Contrast this with a night shot, and I’m awed both by how much mankind is affecting this planet, and how little.

6. Random funny Internet pic of the day. (Future of Ron Paul’s Campaign edition)

One Router to Service Them All

Once upon a time, the government decided to pass a giant stimulus. It had a noble goal of creating jobs, stimulating the economy, and upgrading necessary infrastructure all at the same time. But when the government starts handing out money, people start lining up to take it.

In 2010, West Virginia received a “$126 million federal stimulus grant to expand high-speed Internet” across the state. They decided to spend about $24 million buying fancy Cicso routers for schools and libraries that cost $22,000 each. These high-end routers were built to serve college campuses handling hundreds or thousands of computers, but many of them are being put in small rural buildings with less than five computers – even some that have “just one computer terminal.”

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The Fuzzy Line Between Moderate and Establishment

Indiana Republican Richard Lugar has served in the Senate for almost thirty-six years; he started before the first Star Wars movie released. But after a long string of unopposed victories his time is finally coming to an end, as he lost his party’s primary on Tuesday to the more conservative Richard Mourdock.

Mourdock is pro-government enough to disappoint libertarians, but he wants to abolish several federal departments and was backed by the Tea Party. He tried to paint Lugar as an out-of-touch liberal, noting, for example, that Lugar voted to raise the debt ceiling fifteen times.

In a way, this was unfair to Lugar, because raising the debt ceiling was one of those things that pretty much everybody in Congress has done for decades; there’s nothing especially “liberal” about it. But in a way, that’s also the point – Lugar was deeply embedded in the “status quo” that got us where we are today. (Don’t get me started on his lobbying connections.) Apparently this Washington insider thought he could represent the state for the rest of his life when he didn’t even own a home in Indiana anymore.

Now the media wasted no time lamenting Lugar’s loss and bemoaning how terribly extreme the Republican party is becoming. NPR said he was a “legend undone by his greatest strength” and that he lost because “his friendship with Obama… in the cauldron of hyperpartisanship, was most vividly turned against him by his own party.” CNN said Republican voters were “punishing him for the qualities he considered assets: seniority, expertise in foreign policy and a penchant for bipartisan cooperation.” And those weren’t even the opinion pieces. Ezra Klein said Lugar’s loss shows how much Republicans are to blame for polarization in Congress.

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