White House Burning Open Thread

By James Kwak

Now that the book has been available for a week, I imagine at least two or three people have started reading it. This post is for people to discuss the book if they are so inclined.

If you want to hear Simon discussing the book, the book website has a page of links to past media appearances. Several are the five-minute cable news variety, but for in-depth interviews there are Fresh Air and Leonard Lopate, among others.

10 thoughts on “White House Burning Open Thread

  1. Even though I am certain the book is a good read, since I already know the reaction to the book is negative, how to convince the congress and media of the need to reconsider, is the true problem. Living each day as if it were your last, is no way to run a gvt, or a business.

  2. What a formula for recovery: More taxes!!! When wages are down, inflation up, horrible unemployment, and government as big as it’s ever been. Complete nonsense!


  4. I haven’t read the book yet but I did hear an interview with Johnston about the book.

    I think everyone agrees that the financial deficit this country faces is a creature
    of medical cost inflation. I take the authors preferred solution to be for government to step in with monopsony power and bring that inflation under control.

    In the interview Johnston said that he favored a slowly raising gax tax. Given time people would be able to adjust to the tax – one would assume that this would include using other means of transport or changing where they live.

    This seems to me to be two very divergent methods at solving not dissimilar problems. The problem of medical inflation – it seems to me – is largely driven because costs are hidden from the public. The employer tax break for providing insurance to employees drives people to get all medical care through insurance instead of paying directly. Medicare and Medicaid pay first dollar with fee for service.

    If you think that the solution to Medical cost inflation is more intervention – having government cover more people and thus be able to ratchet costs down in a way that doesn’t affect service why limit that solution to just health coverage? Why not just have the government provide gas for everyone or create gas stations?

    I suppose this all rests on the idea that health care is special. It’s possible. But the idea reminds me of nothing so much as that of the “commanding heights” of the economy that was popular in the 30’s 40’s 50’s. At that time the special areas were steel production, energy production, heavy manufacturing. Today everyone looks at those same areas and says – Let the market prevail but in the case health care, the market cannot make rational decisions because it’s special.

  5. Well when the only thoughts are more ways to fund debt issued currency it’s not hard to understand the real problem. Is the denial of the fact that debt based currency has destroyed every government for the past few thousand years.
    For those who say we cannot trust the government; we agree. We simply need a constitutional amendment that leaves the government zero wiggle room; for they like all of us are weak.
    1. Defined GNP
    2. No money spent into economy beyond the defined GNP.
    3. Exception shall only be in declared war against a nation or a disaster caused by nature.

  6. I wish Simon and James could make a condensed version of this book, especially the first part, and somehow make it easy for people with a 7th-grade education to read it. Ignorance leads to people’s making the wrong choices. They are unaware of what the government does, or how it does it. Why don’t we teach basic econ in high school? As is, people listen to Fox News and buy the bill of goods sold by Wall St. It’s not just funny when someone says to cut all the taxes, but “don’t touch my medicare!” It’s disastrous.

    The history is illuminating because the history S & J give us is not what people learn in school. The explanations of our continual missteps are clear. This book ought to be required reading for anyone literate.

    So far the commenters are missing the point, which is political. We elect our representatives, and they make the decisions that control our lives. The government wastes money on fruitless wars; Congress passes tax rules that will surely lead us to disaster. If only there were a way to wake people up! Maybe this book will help, but that’s asking a lot.

    Thank you, Simon and James.

  7. the national debt doesn’t matter (provided that it’s still expanding.) the DEFICIT matters…but not the debt. nothing “moving a few million people internally” can’t cure. and that would basically be my book. how many pages was yours?

  8. You say that the Federal Reserve “prints” money. Would you clarify? Currency is printed by a subdivision of the Treasury.

    The VAT would need adjusting for SS recipients if you want to hold them harmless since the COLA is based on an adjusted CPI that doesn’t keep up with inflation.

    You mention raising taxes in this economic environment wouldn’t be your preferred solution, but that since the push for deficit reduction is so strong, you recommend a mixture of cuts and tax increases, because shredding the safety net isn’t in society’s best interest. Why not protect the safety net more, and go heavy on the tax increases? As you say in the book, tax increases and spending cuts have the same effect – they take money out of the economy. Except, in this case the cuts will actually reduce the money being spent in the economy on things having the greatest return to the GNP, while taxing the rich would capture money setting on the sidelines, or being gambled in monetary casinos. Doesn’t seem like they would have any multiplier effect, increasing the GNP. Are you just trying to propose what’s conceivably doable? You point out that the wealth’s financial implosion cost us 7.5 trillion dollars national debt, if I got that right. The Bush tax cuts cost us trillions more – out of the SS reserves. When is the wealthy going to pay us back? In reducing the deficit, Congress will be taxing someone – the poor and middle class with cuts, or wealthier people with tax increases. You showed that the GNP grew faster in high income tax periods (above 50%), and when capital gains taxes were 25% or greater. So that would seem to be best for society.

    At best, Republicans will start from your compromise and hit the ground somewhere between it and their extreme. At best, it is the same dumb thing Obama has been trying.

  9. I have read the book and feel good that we have options that will work. I lent the book out. The most vociferous opposition to the ideas came from a person who had not read the book. It was an eyeopener. Common ground between me and those that oppose the book is how do we prevent our politicians from being foolish?

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