- Peter Orszag on the Dual Deficit Problem The United States faces a painful dual-deficit problem, argues Orszag, the former White House budget director, in The New York Times. Currently, we face "a painful jobs deficit in the near term and an unsustainable budget deficit over the medium and long term." The solution, he writes, is to extend the Bush tax cuts for another two years before "ending them all together." This compromise, which splits the difference between the competing parties, could stimulate the economy in the short term, and be a tenable solution for the medium term (when the cuts become completely unaffordable). "Like all plans, this one isn't perfect. Some may complain that higher marginal tax rates, even if deferred until 2013, will cripple small businesses and economic activity," he writes. "It's hard to believe, however, that effectively returning the tax code to its 1990s form would lead to economic catastrophe."
Hampton Sides on Posthumously Pardoning Billy the Kid New Mexico Governor Bill Richardson recently declared that he would hold a hearing to consider posthumously pardoning the infamous western gunman Billy the Kid. This is a poor idea, writes Hampton Sides in a New York Times article: "Why should we care about a trigger-happy sociopath who's been moldering in his grave for almost 130 years?" Perhaps the governor is hoping that grabbing history buffs' attention with a political stunt will increase the tourist dollars flowing into state coffers. Sides concludes: "The state has begun to slowly pull away from the poverty, crime and backwardness that defined much of its past. Billy the Kid is a symbol of that era. Why does Mr. Richardson, as one of his last acts in office, want to revisit it?"
John B. Judis on the Difference Between a Depression and a Recession While there are many differences between the Great Depression and our current "Great Recession," The New Republic contributor finds that our current crisis is "more similar to the depressions of the 1890s and the 1930s than to the post-World War II recessions." Namely, the crises of the 1893, 1929, and 2007-8 were all precipitated and "deepened" by a financial collapse, they each were in part exacerbated by "overcapacity" in a leading industry (telecommunications in 2007), and all have spread into global downturns. To get out of a depression citizens must find a way to "pay down the debts they have accrued," develop new "leading industries" and make reforms to national and international financial systems. All of these steps require "a huge and active" government role, which is now lacking.
Anne Applebaum on the Two Europes In light of varying responses to the financial crisis, Europe is increasingly being seen as divided not into West and East, but North and South, writes the Washington Post columnist. To explain these new geo-political "terms of art," Applebaum defines the South by their "political classes [that] have not been able to balance their national budgets," while the North contains the continent's "budget hawks." And while Germany--the country in the new North that is "leading the region by example"--rescued the Greek economy earlier this year, she points out the move was "undertaken grudgingly, reluctantly, on behalf of banks that owned too many Greek bonds" and, in all likelihood, "won't happen again."
Lenore Skenazy on Walking To School With school starting back up across the country this week, The Wall Street Journal columnist has a piece of advice: make your kids walk. Or, more precisely, don't drive them to school. Granted, says Skenazy, "those of us who remember using our own legs for transit now run the risk of sounding Abe Lincolnesque." But a nice brisk walk to school is not only healthier, it represents a childhood rite of passage. Parents, notes Skenazy, "bought the line that good parenting is the same as over-parenting. That the more we could do for our children, the better." Along the way, "we forgot the joy of scuffing down the street when we were young, crunching leaves, picking up seeds, and decided we'd do it all for our kids."