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Monday, February 27, 2012

Buchanan Presents Will the U.S. Ever Again Have a Functioning Budgetary System? Today at U. of Hong Kong

BuchananNeil H. Buchanan (George Washington) presents Will the United States Government Ever Again Have a Functioning Budgetary System? at the University of Hong Kong Faculty of Law today as part of its Taxation Law Research Programme, Asian Institute of International Finance Law:

The government of the United States is currently borrowing larger-than-usual sums of money, in large part because of the depth and length of the crisis-induced economic downturn. Even before the current crisis began, a large number of American politicians were convinced that the federal government should commit either to running balanced annual budgets or even to paying down the entire balance of its debt. These views, even though they lack serious evidentiary or theoretical support, have been embraced for strategic reasons by an emerging political movement in the United States. Newly energized anti-government activists have eagerly created a fiscal logjam, in order to force cuts in the size of government. This profound fiscal logjam, and the contractionary policies to which it has led, is bad news for the U.S. economy - which means that it is not good for China or Hong Kong. This lecture will discuss the background of the U.S. budget situation, the emergence of the radical anti-government movement that has created the political gridlock surrounding government budgeting, and the prospects for overcoming the political roadblocks that are preventing the United States government from setting forth on a sensible path for long-term economic prosperity and budgetary stability.

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Comments

Great question. Ask Sen. Harry Reid.

Posted by: Jake | Feb 27, 2012 4:45:53 PM

"Newly energized anti-government activists have eagerly created a fiscal logjam"

Meaning that if only the Democrats controlled the Congress they would immediately increase taxes to close the deficit? Just like they did in 2009 and 2010?

Sorry, but that's partisan wishful thinking. Neither party wants to accept the political consequences of closing the gap. Republicans would prefer that Democrats take the lead on cutting spending and Democrats would prefer that Republicans take the lead on raising taxes, but neither of those will happen.

The fiscal impasse is rational if all each side cares about is the next election. That may not be the only explanation, but it's the most likely one.

Posted by: AMTbuff | Feb 27, 2012 5:40:15 PM

"an emerging political movement in the United States."

It has been emerging since at least Ross Perot. Deficits are still far down the list of the average American's priorities and until such time as interest on the national debt is more than a pittance, it will remain a low political priority.

Posted by: ohwilleke | Feb 28, 2012 6:10:24 PM