The Hill: Conrad ready to present Dems' budget as soon as next week

What the Hell is Sen. Kent Conrad smoking? And why it is that he won’t share (c’mon, Senator, don’t bogart that doobie!)? In today’s Washington Post Sen. Conrad enables the hostage taking of the Republican Party by saying that he does not think that the two trillion in budget cuts that the Administration is talking about is enough.

Worse, the Senior Dufus from North Dakota is actually tying these cuts to the Republican threat of not raising our debt ceiling. But don’t take my word for, here is a quote:

Conrad said he would agree to raise the debt limit for no longer than six months without a more serious effort to reduce future borrowing. And he told reporters that he is recruiting like-minded senators to “send a very clear message that some of us are not going to vote for a long-term extension of the debt limit unless there is a credible plan” to reduce borrowing.

-snip

What makes me nuts about this whole thing is that it has no basis in economic reality. Yes our debt is high, we have been in the worst economic downturn (major recession plus an anemic recovery) that the nation has seen in 80 years, pretty much the life time of the majority of the nation, this tends to lead to higher debt.

However, the cost of borrowing is at historic lows. 3% is not a lot of interest to pay on new debt and the reality is that we need more stimulus not less. That is not just the opinion of a Liberal Blogger, but by someone who would be considered a real authority in such things, PIMCO founder, Bill Gross.

Mr. Gross just put out a prospectus that takes all the lawmakers who are focused on debt to the woodshed. From the TMP article about it:

Both parties, in fact, are moving to anti-Keynesian policy orientations, which deny additional stimulus and make rather awkward and unsubstantiated claims that if you balance the budget, “they will come.”

It is envisioned that corporations or investors will somehow overnight be attracted to the revived competitiveness of the U.S. labor market: Politicians feel that fiscal conservatism equates to job growth. It’s difficult to believe, however, that an American-based corporation, with profits as its primary focus, can somehow be wooed back to American soil with a feeble and historically unjustified assurance that Social Security will be now secure or that medical care inflation will disinflate.

Admittedly, those are long-term requirements for a stable and healthy economy, but fiscal balance alone will not likely produce 20 million jobs over the next decade. The move towards it, in fact, if implemented too quickly, could stultify economic growth. Fed Chairman Bernanke has said as much, suggesting the urgency of a congressional medium-term plan to reduce the deficit but that immediate cuts are self-defeating if they were to undercut the still-fragile economy.

http://my.firedoglake.com/somethingthedogsaid/2011/06/22/sen-kent-conrad-joins-the-republican-hostage-takers/?du