Readers forum: Feb. 6, 2013 Guns; disaster; budget
Economists measure the effect of austerity in terms of multipliers. In normal times, when an economy is booming and some austerity is imposed, one dollar in spending cuts, produces about a 50-cent reduction in GDP. This is partly because a central bank simultaneously reduces interest rates to encourage business borrowing. Also, many businesses remain confident that demand will increase and they continue to invest. Under these conditions austerity reduces deficits and balances national budgets.
Conditions now are very different. Interest rates cannot go lower. Both consumers and businesspeople are justifiably nervous that sequestration or other cuts will produce more layoffs, slower hiring and reduced consumer demand.
Olivier Blanchard, chief economist for the International Monetary Fund, which strongly supported the severe austerity program underway in Greece, has admitted that the adverse effects of austerity were greatly underestimated. The actual multiplier was about 1.5 rather than 0.5. As a result, GDP reduction was greater than the spending cuts and deficits have increased.
GOP and tea party conservatives should be very concerned that their demands for immediate and large spending cuts will have a similar disastrous effect here in the U.S. False treatments can be worse than the original disease.
See "Growth Forecast Errors and Fiscal Multipliers" at www.imf.org/external/
pubs/ft/wp/2013/wp1301.pdf.
Keith Carmichael
Charleston
Do not pass budget, do not get paid
Editor:
I believe if Congress can't pass a budget then they should not be paid. It is their fault that this has not been taken care of in a timely fashion.
They should not be scaring the elderly and the sick or federal employees by saying they would be the ones to not get paid or get their monthly checks if the budget is not passed.
They need to pass a budget to save money, not spend more. The people cannot give any more. They themselves should not get any raises until we are in a much better place than where we are.
Beverly Clark
London
Be reasonable when restricting gun rightsEditor:
When I try to reason why the Sandy Hook Elementary School shootings, or any of the other public-place shootings took place, I deplore what happened. What I am trying to do is reason how we can resolve and solve the use of guns for all people.
From the beginning of recorded civilization the individual has had to defend and protect himself. The gun has always been a tool that, when used properly, has given us opportunity to put food on our table and protect ourselves and our property.
The rational individual wants to have firearms for gaming and protection. The Constitution gives us that right. When the government takes away our privilege to own guns, they leave the individual vulnerable and defenseless. A rational individual may kill another by accident, but not with malice or intent. Therefore, the government needs to take into consideration the individual's need to own firearms.
When the individual turns to crime as a means of meeting his needs - money, objects or even drugs - the criminal sometimes goes from fisticuffs to guns. Using the gun achieves results much faster. Of crimes committed by gangs or drug lords, which happens on a daily basis in any large city in the United States, guns have been used as the extended arm of the criminal.
Crimes committed by the mentally deranged are more emotional. These persons target any and all people. No warning. No reason. When this type of personality has been identified as dysfunctional or deterministic, they are no longer considered rational. Perhaps it would be smart to hospitalize the identified confused individual until their medication is adjusted to meet their needs, protecting society. It should be understood when the person's behavior has stabilized they would again be filtered back into society.
Let us reason together. The cause is using a gun irresponsibly. The effect is killing an innocent person.
Handle the criminal in a manner which is dictated by law. Identify and treat the mentally ill. Let those who do not exhibit criminal nor illusive behavior keep their firearms.
When we attack the problem of gun control, let us understand that guns do not kill. People kill. But not all people kill. We, the people, in order to form a more perfect union for all people, wish to maintain our firearms to provide for and maintain our lifestyle and to protect ourselves.
Mary W. Trotter
Scott Depot
Cuts will cause economic disaster
Editor:
A couple of months of austerity is the cure for an individual's excessive Christmas spending.
However, national economics is more complicated. Each individual's spending is someone else's income. The level of spending determines business activity, GDP and in turn both business and consumer confidence.
Economists measure the effect of austerity in terms of multipliers. In normal times, when an economy is booming and some austerity is imposed, one dollar in spending cuts, produces about a 50-cent reduction in GDP. This is partly because a central bank simultaneously reduces interest rates to encourage business borrowing. Also, many businesses remain confident that demand will increase and they continue to invest. Under these conditions austerity reduces deficits and balances national budgets.
Conditions now are very different. Interest rates cannot go lower. Both consumers and businesspeople are justifiably nervous that sequestration or other cuts will produce more layoffs, slower hiring and reduced consumer demand.
Olivier Blanchard, chief economist for the International Monetary Fund, which strongly supported the severe austerity program underway in Greece, has admitted that the adverse effects of austerity were greatly underestimated. The actual multiplier was about 1.5 rather than 0.5. As a result, GDP reduction was greater than the spending cuts and deficits have increased.
GOP and tea party conservatives should be very concerned that their demands for immediate and large spending cuts will have a similar disastrous effect here in the U.S. False treatments can be worse than the original disease.
See "Growth Forecast Errors and Fiscal Multipliers" at www.imf.org/external/
pubs/ft/wp/2013/wp1301.pdf.
Keith Carmichael
Charleston
Do not pass budget, do not get paid
Editor:
I believe if Congress can't pass a budget then they should not be paid. It is their fault that this has not been taken care of in a timely fashion.
They should not be scaring the elderly and the sick or federal employees by saying they would be the ones to not get paid or get their monthly checks if the budget is not passed.
They need to pass a budget to save money, not spend more. The people cannot give any more. They themselves should not get any raises until we are in a much better place than where we are.
Beverly Clark
London
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