Category Archives: Talking Points Memo

Cut And Grow Fail: CBO Schools Tea Party Freshman In Basic Economics

This little ditty was posted Friday on Talking Points Memo. It should be a wake-up call to all those TEA partiers and other right-wingers out there that think that all will be fine in the world if we only cut spending and do nothing to increase revenue.

Unfortunately though, regardless of economic schooling provided by the CBO, there will those that continue to burry their heads in the sand and refuse to believe anything a socialist government agency has to say:

Rep. Tim Huelskamp (R-KS), a Tea Party-backed freshman who voted against the final debt limit bill, recently asked to hear from the Congressional Budget Office about the impact of government spending on economic growth. It’s an article of faith on the right that vastly shrinking government will unleash the forces of private enterprise, and faced with CBO’s opposing view, Huelskamp wanted to know the answer to two questions:

1). What current federal departments, agencies, programs, or portions thereof do not contribute to economic growth?

2). In the programs that CBO believes do contribute to economic growth, what level of spending cuts would amount to a level you believe would be significant enough to “probably slow the economic recovery”?

But if the newly elected member of the Budget Committee was hoping the non-partisan CBO would buy into his premise, he’ll be sorely disappointed.

In a response letter Thursday, CBO-chief Doug Elmendorf gives Huelskamp a layman’s lesson in Keynesian economics: Under current economic circumstances, new federal spending would help economic growth, and current and future cuts could stymie it, particularly if they hit key government investment.

“When demand for goods and services falls short of the economy’s ability to produce them, as is the case currently, increasing government spending can increase aggregate demand and thereby narrow the gap between the economy’s actual and potential levels of output,” Elmendorf writes.

The precise details matter. The more robust the economy, the lower the impact. But, according to Elmendorf, “when the Federal Reserve’s ability to lower short-run interest rates is constrained because those rates are already near zero, as they are currently, the short-run effects of changes in government spending on output tend to be larger than usual.”

To illustrate the point, Elmendorf notes that deficit reduction measures that cut spending by $100 billion next fiscal year, and hundreds of billions more over the coming decade “would decrease real (inflation-adjusted) gross national product (GNP) in 2012, 2013, and 2014 by amounts ranging from roughly 0.1 percent to 0.6 percent depending on the year and the assumptions used.” In other words, the GOP’s current governing theory is damaging the economy and, by implication, costing jobs. And for those Republicans who want to cut more, ” a reduction in primary deficits that followed the same gradual time path but was twice as large would produce macroeconomic effects that were roughly twice as large.”

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There are important growth-related reasons to reduce deficits if and when the economy improves — it reduces the extent to which government spending “crowds out” private investment, by undertaking functions the private sector can do more efficiently. But we’re not there yet and, according to CBO, won’t be until the end of the decade. Spending cuts like the ones describe above, “[a]t the turn of the decade, from 2019 through 2021…would increase [GNP] by roughly 0.5 percent to 1.4 percent.”

But again the specifics matter, and if the GOP wants to slash across the board, they’ll do damage anyhow.

“Some types of spending, such as funding for improvements to roads and highways, may add to the economy’s potential output in much the same way that private capital investment does,” Elmendorf writes. “Other policies, such as funding for grants to increase access to college education may raise long-term productivity by enhancing people’s skills. The positive longer-term impact of deficit reduction on GNP would be smaller if the policies that reduced deficits included cuts in productive government investments.”

Huelskamp’s original letter is here. Read Elmendorf’s response here.

The letters stem from the below exchange between Huelskamp and Elmendorf at a recent Budget committee hearing. Elmendorf and Huelskamp are arguing two different points. Huelskamp would like to see big cuts to federal safety net programs and other spending. Elmendorf argues that while the macroeconomic consequences of slashing some of those programs might be minimal in the long run, the near-term impact would be significant, given the current downturn.

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Filed under Congressional Budget Office, debt deal, economy, government spending, job growth, Talking Points Memo, tax cuts, tax revenues, Tea Party

Poll: 26% Of U.S. Clueless On Who We Declared Independence From

I suppose ignorance is bliss, but leading into the 4th of July holiday weekend you would think even the most ignorant amongst us would know from what country the United States gained it’s Independence from. I bet it wouldn’t be hard to guess from who’s base the 26% belong to;

TPM LiveWire

Pop quiz: Who was emperor when the United States declared independence from China?

Give up?

Perhaps you should ask one of the Americans who, when asked what country the U.S. separated from, named France, Japan, Mexico, Spain or, yes, China.

A new Marist poll shows that 26% of people in this country don’t know that the U.S. declared its independence from Great Britain. That includes 20% who aren’t sure — and another 6% who think it was another country.

Looking at the numbers more deeply, it appears the closer to 1776 you were born, the more likely you are to know the correct answer. So enjoy the July 4th holiday, everyone, and don’t forget to be thankful that we’re out from under the yoke of our Mexican colonial oppressors.

Hat tip to Mario DeStefano

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Filed under 4th of July, Declaration of Independence, Great Britain, Marist Poll, Talking Points Memo

Taking Responsibility Chris Christie Style

Josh Marshall | October 27, 2009 – Talkingpointmemo

You may remember, about a month and a half ago, another incident emerged in Chris Christie’s troubled history driving cars.

Back in 2002, on the way to an event, Christie turned the wrong way onto a one-way street and struck a motorcyclist head on, seriously injuring the guy on the motorcycle. There were all sorts of questions about just how that happened and whether Christie got off easier than your average Joe might have. There was also the small matter of Christie saying he’d never been sued over the incident, despite evidence emerging later that a suit had been filed and then dropped, apparently after an out of court settlement. But there never seemed to be any dispute that Christie … well, hit a guy on a motorcycle while driving the wrong way on a one way street.

But on Fox & Friends this morning, when asked about the incident, Christie denied it ever happened. “I was not driving the wrong way down a one way street and the Governor knows it,” Christie said. “I didn’t hit someone, they hit me.”

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Filed under accountability, Chris Christie, Gov. Jon Corzine, New Jersey, Talking Points Memo, traffic violation

Beyond Brown: Did Another Top Christie Aide Politicize Prosecutor’s Office To Help Former Boss?


So far, the charges that Chris Christie turned the U.S. attorney’s office into a “branch office” of his campaign for governor, as Jon Corzine put it yesterday, have centered on the relationship between Christie and Michele Brown, a close friend and top aide to Christie when he was US attorney. Brown reportedly took several actions this year that benefited Christie’s GOP bid for governor, and in 2007 got an undisclosed $46,000 loan from him.

But did another of Christie’s former top aides also put the prosecutor’s office in the service of his one-time boss’s political aspirations? Ralph Marra, who until this month was the acting U.S. attorney, has several times appeared to insert himself into the political back-and-forth over the race, appearing to pointedly criticize a request by the Corzine campaign for public information, and even triggering a Justice Department probe into whether he made inappropriately political public comments that may have boosted Christie.

Let’s look at the facts:

Christie has had a major hand in the Marra’s rise up the prosecutorial ranks. When Christie became U.S. attorney in 2002, he made Marra, a veteran prosecutor, his first assistant, the number 2 post in the office. Then when Christie stepped down last December to run for governor, Marra became acting U.S. attorney. (Marra returned to the first assistant position last week, with the confirmation of the new U.S. attorney, Paul Fishman.)

In July, Marra went before the cameras to announce a high-profile corruption bust that involved the arrests of a bevy of New Jersey mayors, elected officials, and rabbis. (It was this same bust that Brown reportedly tried to change the timing of, in one of her own apparent bids to help Christie.)

The case as a whole was a boon to Christie, under whose leadership much of the investigation had been carried out. And it appeared to damage Corzine, by focusing attention on the state’s rotten political culture which the incumbent governor had earlier pledged to clean up. But at the press conference, Marra made sure that message wasn’t lost, departing from the “just-the-facts” approach that prosecutors customarily take in such cases, and instead seeming to point the finger at the Corzine administration. Said Marra:

There are easily reforms that could be made within this state that would make our job easier, or even take some of the load off our job. There are too many people that profit off the system the way it is and so they have no incentive to change it. The few people that want to change it seem to get shouted down. So how long that cycle’s going to continue I just don’t know.
According to video of the press conference, Marra also declared:

With so many profiting off a corrupt system is it any wonder that few want to change the system? Once again the victims in this are the average citizens and honest business people in this sate. They don’t have a chance in this culture of corruption.

The Justice Department’s internal ethics unit subsequently opened an investigation into whether his comments violated departmental guidelines that forbid political statements from prosecutors. (DOJ did not immediately respond to a request for comment from TPMmuckraker about the status of the probe.)

Then in August, Marra sent an email to the U.S. attorney’s office staff, obtained by, in which he slammed the “barrage of FOIA requests” which the Corzine campaign had made earlier that year, seeking information on Christie’s tenure as U.S. attorney. Marra said the requests had “unfairly drawn [the office] into a political campaign.” He also denounced what he called the “wholly trumped up (and then apparently leaked) complaint” by the Corzine campaign that led to the DOJ probe of his press conference comments, and defended those comments as “generic and general.”

As we noted yesterday, back in February Christie had appeared to announce his intention to appoint his former colleagues to positions in his administration, if elected. He told a crowd of supporters: “I’ve got a group of assistant U.S. attorneys sitting down in Newark … I’m going to take a whole group of them to Trenton with me and put them in every one of the departments.”

It’s worth asking whether some of Christie’s former colleagues, like Marra and Brown, decided to use their positions to help make that happen.

A spokesman for the U.S. attorney’s office did not immediately respond to a request for comment.

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Filed under Chris Christie, corruption, Gov. Jon Corzine, Michele Brown, New Jersey, Ralph Marra, Talking Points Memo, US Attorneys Office

Dem Women: Kyl, McDonnel and Christie Are ‘Backward’

From TPM

In a DNC conference call this afternoon, Sen. Debbie Stabenow (D-MI), Rep. Debbie Wasserman-Schultz (D-FL) and State Del. Margaret Vanderhye (D-VA) accused members of the Republican party of being “backward” and “out of touch” on women’s issues.

The call targeted Republican gubernatorial candidates Chris Christie in New Jersey and Bob McDonnell in Viriginia, as well as Sen. Jon Kyl (R-AZ) and Republicans in general.

“I think we have an outdated view, an extreme view, a lack of understanding of what women’s lives are like today and the role of women in America,” Stabenow said. She wouldn’t, however, use the word “sexist.”

The lawmakers cited Republicans’ opposition to health care reform as evidence, since women are usually in charge of their families’ health care, and are disproportionately hurt by current health insurance policy.

Read more >>>Here

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Filed under Chris Christie, Health Care, Talking Points Memo

In New TV Ad, Christie Explains Exactly What He’ll Do As Governor (Sorta) – Eric Kleefeld
October 5, 2009

Former U.S. Attorney Chris Christie, the Republican nominee for Governor of New Jersey, seems to be responding to the mounting criticism that he’s failed to give specifics on how he would fix the state. In a new TV ad he explains exactly what he’ll do — in the form of generalities.

Here’s exactly what I’ll do as governor,” Christie says boldly. “I’ll cut spending and end the special interest giveaways. I’ll cut taxes and restore your property tax rebates. I’ll bring good jobs back to New Jersey not chase them to other states. And I’ll make sure all our children get the education they deserve.”

It would be nice to know how he would do all of this considering that the Corzine Administration is already doing it. And how would he pay for it?

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Filed under Central New Jersey, Chris Christie, Gov. Jon Corzine, Talking Points Memo

Might Be Big Trouble for Christie

Josh Marshall – TPM:

As noted earlier, we sent Eric Kleefeld down to the Elizabeth, New Jersey police department headquarters to get the police report on gubernatorial Chris Christie’s wrong-way collision with a motorcyclist back in 2002. And here’s Eric’s write-up on the report.

But just a few moments ago, another big development surfaced — an apparent lie about the accident Christie was caught in by New Jersey public television station NJN.

One of the things that made us most curious about this was that Christie’s negligence (he was driving the wrong direction on a one-way street) seemed so clear that we were wondering whether the accident didn’t lead to a lawsuit.

Earlier today, NJN asked Christie whether the accident had led to a lawsuit. And Christie said, point blank, no.

But a few hours after getting Christie’s flat denial, NJN found records of a 2004 suit, which appears to have been later settled out of court.

We’re going to keep on this and see what more we can find out. But this looks about as close as you can find to a straight up, caught red-handed lie by Christie.

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Filed under Chris Christie, Elizabeth NJ, motor vehicle violation, NJN, Talking Points Memo