Thursday, April 21, 2016

Two Things I Learned About Michael Kinsley

The New York Times published a review today of Kinsley’s latest book, Old Age: A Beginner’s Guide.  Reading attentively, I learned at least two things about him.

First, he’s an off-the-charts genius whose intellect simply can’t be compared yours or mine.  According to the reviewer, “Mr. Kinsley possesses what is probably the most envied journalistic voice of his generation: skeptical, friendly, possessed of an almost Martian intelligence.  If we ever do meet Martians, or any alien civilization, he has my vote as the human who should handle Earth’s side of the initial negotiations.”

OK, I’m reading a bit between the lines, assuming the Martians must be really smart to have developed an advanced civilization on such a barren planet.  I know; I saw the movie.  (Jordanians must be pretty brainy too.)  But the review goes on to plead with Kinsley to write more books, a whole shelf of them, before it’s too late.

And the second thing I learned is that Kinsley’s idea for a grand gesture by the Baby Boom generation, before it marches off into the land of assisted living, is to completely retire the government’s fiscal deficit.  I haven’t read the book to get the details, but this must mean something like: boomers vote for politicians who will raise taxes enough to buy back the bonds held by, well, some of them and some of their younger relatives.  As a last idealistic act, the énragés of 1968 will remove US treasuries from the world’s portfolios.  Searching for a heroic sacrifice comparable to waging WWII, Kinsley has hit on the idea of cashing in US bonds and, I suppose, replacing them with bonds from England or Switzerland or wherever.

Very Martian indeed.

7 comments:

ProGrowthLiberal said...

"It involves paying off the national debt. The idea is wildly improbable, yet interesting to think about. He should write a book about it."

John Kasich is getting ridiculed simply for wanting to balance the budget. Kinsley has adopted Trump's idea - retire the debt. Maybe Trump should hire Kinsley as his economic adviser.

Denis Drew said...

You see, the way it works is -- leaving aside any practical Keynesian concerns:
This generation leaves a debt for their kids and grand kids who will have more money (thanks to growing productivity [if they get unionized -- have more money that is]) to pay for it; who will in turn will leave a bigger debt for the great grand kids, who will do the same, and so on. It's human nature -- nothing much we can do about it -- wouldn't be worried about politics at all if that were all there was to worry about ...
... favorite example: Canadians pay half or whatever less for health care as much as we do and they don't want to pay for it; always running in the red.

Folks who do obsess on the deficit may just be looking for some way to save the world -- aren't we all? -- and since they don't care anything about poverty, adequate health care, crime in the inner city, etc. -- the deficit is just their save-the-world emotional outlet.

PS. Just thinking the comparison between ghetto kids who don't see anyway out so they don't try as much as they could and American elite kids coming out of university, heading for law or finance because they don't see any way out ...
... way out like as if they lived in continental Europe where increasing productivity making real things is there to join up with all around.

Bruce Webb said...

Kinsley like many seems to have fatally confused concepts of the relations between debt, deficits, debt service, and probably "unfunded liability". For example it would be impossible and unwise to pay down every penny of our current $19 trillion "Public Debt". For one thing the roughly one third of that which comprises "Intergovernmental Holdings" is by current measures TOO SMALL. Making all Federal retiree programs to include Social Security, Medicare Part A, Civil and Military Retirement meet the current definitions of 'solvency' would mean vastly increasing the amount of Public Debt on the books. For example if the Treasury doesn't owe $31 trillion to the Social Security Trust Fund in 2090 the later is officially "insolvent".

If I ran the zoo the key number we would be talking about is what I call "real debt service" which would be the actual cost of "net interest" on "Debt Held by the Public" (which is different than "Public Debt") once you subtract out interest paid to the Federal Reserve (which is NOT included in "Intergovernmental Holdings") and then adjust the remainder against the Fed's inflation target. "Net interest" is a big number. But only if you confuse 'nominal' and 'real', inflation target adjusted average rates (across all maturities) are somewhere near 2.4% and falling. And is only that high because of legacy 20 and 30 year bonds issued when coupon rates were much, much higher than today.

And figuring out those numbers and managing the differences in impact between "Debt Held by the Public" as against "Intergovernmental Holdings" and then compensating for the portion of the former held by the Fed SOMA is hard. While squeaking "$19 trillion and GROWING! EEEEEKK!!!" is easy.

Kinsley has always been overrated. On TV and in print his overall role has been to play the "Even Liberal Michael Kinsley agrees". To EVERYTHING promoted by 'sensible centrists' i.e. neo-libs.

Roger said...

OK, I'm not going to search out the source material for this, so my details may be inaccurate. The "national debt" of the United States has never been paid off since Alexander Hamilton persuaded Congress to take on the debts of the States from the Revolutionary War. There have been five times when the debt was seriously reduced (including 2001) and each occasion has produced a recession or serious depression. If we pay off the "national debt" then there are no U.S. Treasury Bonds. Thus, there are no instruments the banks can use as collateral when they need to borrow vast sums of money from each other which they do every day. There are also no risk-free assets for pension funds to buy. There are no risk-free assets for Bill Gross and PIMCO to sell. The "national debt" never has to be paid off. It never has been, and our great-grandchildren will not have to do it. Are we suffering from paying off the debt incurred in fighting World War II? Trying to compare a nation-state's finances to a family's is madness.

Ken Houghton said...

PGL - Kasich is getting ridiculed for "wanting to balance the budget" by adding another ~US$10T in unfunded liabilities, all of which will be magically extinguished by consistent 3.9% growth due to killing teachers, police, and firefighters as soon as they become pension-eligible, the way they're now doing it in Ohio.

Michael Kinsley would approve.

Ken Houghton said...

PGL - Kasich is getting ridiculed for "wanting to balance the budget" by adding another ~US$10T in unfunded liabilities, all of which will be magically extinguished by consistent 3.9% growth due to killing teachers, police, and firefighters as soon as they become pension-eligible, the way they're now doing it in Ohio.

Michael Kinsley would approve.

Sandwichman said...

Jubilee! Leviticus 25. Forgive the debt. That'll teach them critters a biblical thing or two.