Arnold Kling has this today:
[we need] policies that restore a situation where reasonable growth and reasonable interest rates can coincide. To start, this means ending the disastrous trends toward ever less government spending and employment each year
By 2038, CBO projects, federal spending would increase to 26 percent of GDP under the assumptions of the extended baseline*, compared with 22 percent in 2012 and an average of 20½ percent over the past 40 years.
Did you two visit the same country?
*The “extended baseline” is an unrealistic scenario, which includes spending cuts that are embedded in current law but unlikely to be retained by Congress. The more realistic “alternative fiscal scenario” projects even higher spending relative to GDP.
If “we” are all going to agree to be civil to one another in our discussions, and if “we” are all going to try to be less “divisive” in our approaches, then can you explain the above to me? I am not interested in hearing about people being idiots or party line hacks. Larry Summers is a fantastic economist, he has a career of writing very reasonable things, he has written things that irritate both left and right (though he is generally thought of as a man of the left) and he is surely aware of what the data looks like. So, can there be a reasonable argument made that government is getting smaller? If so, can one show me the data? If you combine all local, city, state and federal spending, rules, regulations, employment, is there something that I would learn from a better exposition of the situation than the lines of an OpEd? And beyond questioning whether Mr. Summers begs the data question, is it really the case that the trend, if true, is “disaterous?” Indeed, the crux of macro right now is that it is not clear at all – just look at the debates among macroeconomists about whether the fiscal “austerity” from last year were bad given the strong GDP growth we saw during the year (google monetary offset if you want to learn more).
Ultimately, does all of this have to be about narrative? Is there a place, or SHOULD there be a place, for less passionate discussion of things like this? I am increasingly nihilistic about what I can accomplish in a classroom at least from an intellectual standpoint. For the things that are uncontroversial, I suspect students are not interested in it. For things that seem to separate people by which tribe they are in, reason, data, empirical evidence, solid logic, etc. don’t have any bearing on how they think about it.
Why is narrative so powerful? And what sorts of things can we do in a classroom to avoid treading in those murky water? For example, if I were teaching micro right now and asked kids to draw a government intertemporal budget constraint, the second I write the term “government” we drop down the rabbit hole.