November 19, 2017
There may be no other person who has done as much harm to the world in this century as Peter Peterson, the Wall Street billionaire. Peterson has used his money to promote his complaints about excessive budget deficits. Due to his ability to fund a wide range of organizations, he has helped to keep these concerns at the center of public debate.
Back in the last decade, when some of us were trying to raise the alarm about the housing bubble and the economic damage that would be caused by its collapse, Peterson’s crew were keeping the budget deficit front and center. News outlets like the Washington Post, New York Times, and National Public Radio had any number of news stories and columns raising concerns about the budget deficit. There was virtually nothing discussing the housing bubble and the risks it posed.
After the bubble burst and the economy desperately needed stimulus in the form of larger budget deficits, the Peterson organizations were still pressing their concern about exploding deficits. At a time when millions of people were needlessly unemployed, and millions more underemployed, Peterson’s crew pressed the case for reducing the deficit. They were so successful they got the Obama administration to appoint the Bowles–Simpson commission on the deficit just as the recession was hitting its trough in terms of unemployment. This deficit fanaticism probably had an even more negative impact in Europe where the European Union and the European Central Bank imposed austerity on the countries of southern Europe that have led to downturns comparable to the Great Depression (much worse in the case of Greece).
Anyhow, given this background, it is a bit annoying to see Michael A. Peterson, a man with no other distinction than being Peter Peterson’s son, being prominently cited in an article on the accounting gimmicks used by the Republicans in their tax plan. The piece also cites the Center for a Responsible Federal Budget, one of the many Peterson funded budget organizations.
It is also striking that these gimmicks are given so much attention when items like the Fed’s decision to sell off assets, which will have a comparable effect on debt and deficits, are completely ignored. It would also be nice if a budget reporter once in a while noticed the hundreds of billions of dollars in rents earned each year on government-granted patent and copyright monopolies (three hundred and seventy billion dollars worth of rents are collected each year in prescription drugs alone. This is almost two percent of GDP and more than five times the size of the gimmicks featured here.)
Just to be clear, the Republicans should not get away with misleading the public on the cost of their tax cut for rich people, but it would be helpful if this and other articles had a more realistic discussion of the consequences.
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