First, on a question about spending cuts, Kagen touted the cuts to Defense that Secretary Gates recently announced. The only problem is that Gates was merely proposing that the Pentagon shift its spending to where it makes the most sense, not that they actually spend less. Here's what I wrote about these cuts back in August:
Defense Secretary Robert Gates has undertaken an effort to reform the Pentagon's budget. Praise came swiftly, but has been somewhat tempered the last few days. NPR had a story about how taxpayers won't see any benefit, at least not anytime soon, from Gates' plan. This was due to the fact that the cuts will come from programs that the Pentagon thinks are no longer necessary, but the savings will be redirected into programs that the Pentagon thinks are necessary.Spending money wisely is an excellent idea, but it is not the same as a cut in spending.
Next, during a question on job creation, Kagen said, "costs are going up. We've got mild inflation." I'm sure this would come as news to liberal economist and Nobel Laureate Paul Krugman.
The Consumer Price Index for the 12 months ended in September was only 1.1%. The Bureau of Labor Statistics reports, "[o]ver the last 12 months, the index for all items less food and energy rose 0.8 percent, the lowest 12-month increase since March 1961."
And from the New York Times:
In framing his cautious arguments for additional Fed action, Mr. Bernanke said inflation (about half of the implicit target of “about 2 percent or a bit below”) was “too low”So if Kagen can't recognize the fact that we aren't experiencing inflation currently, will he be able to recognize the real thing? Being able to do so could be critical since the Fed is about to embark on a program of money creation explicitly designed to increase the inflation rate.