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As with investments, so with people: “Past performance is not a guarantee of future results.”

I recall that Newt was a highly credible guy, once upon a time. Not so much anymore.

As for this subject being Koo’s “wheelhouse”: global warming is Al Gore’s “wheelhouse”; that doesn’t mean he’s not out to lunch on the subject.

Your past credibility wouldn’t serve to elevate any of those guys. Same here. You don’t help Koo; Koo hurts you.

And on that score, the “IB4TZ” was for him; not so much you.

Despite Koo’s purported guru status, I find his analysis of the present situation missing some depth that leaves me in doubt as to its applicability to our circumstances. Not to mention that some of his assertions caused the needle on my BS meter to ping off the upper limit stop.

It really doesn’t help me to know what Koo’s strong suit is, in fact it makes it worse, because when he says that trimming the U.S. deficit by $4T would trigger another Great Depression...sorry, that’s crazy talk unworthy of a guy who’s supposed to be an expert at this. Yes, if we carved all of it out of the 2012 budget, then we could very likely cause some serious pain. If we just stopped payment on the next scheduled $4T of government outlays — yeah, THAT would be a disaster. But nobody was talking about those kinds of Barakalyptic scenarios. Still, that doesn’t stop Koo setting up a bad implementation of $4T in deficit reductions as a straw man, plastering an S&P label on it, and using it to bash S&P, and it didn’t stop Wiesenthal thinking Koo was credible in doing so, and doesn’t seem to have dissuaded you at all, either.

I don’t buy it.

From all I’d read and heard, S&P didn’t care to see the whole $4T carved out of next year’s budget; they were more focused on Congress agreeing to fiscal reforms that would result in $4T in deficit reduction over that infamous next ten years. So, right there Koo’s alarmism about S&P rings hollow.

That aside, the United States is decidedly NOT Japan (nor Ireland); our economies are structurally different in elemental ways that play heavily into whether or not fiscal policies undertaken there would or wouldn’t work here: our governments are different in basic ideology, policy, and programs, and regulatory details; and our very societies are culturally different in how they respond to stresses. The differentiating factors are myriad; the two systems cannot be assumed to behave the same way under similar fiscal conditions.

To gloss over that, and then assert that S&P analysis of U.S. deficit, debt, and driving factors thereof, produced conclusions that prescribed exactly opposite what would truly cure our ills is just too much to swallow.

A more plausible argument would be to observe that Koo’s unfettered Keynesianism leaves him naturally disposed to regard S&P with a jaundiced eye, and his criticism of S&P drives from his observations of all the ways they disagree with him. This is much the same as the criticism of House Republicans emanating from the White House, these days: “They’re wrong to disagree with ME.”

At the day’s end, Mr. Koo is attempting to argue that a nation topping $14T in debt shouldn’t try to save the credit rating of its sovereign debt by enacting measures to reduce its deficit by a paltry $4T over the next decade. People who walk about with their eyes open already know that our baseline budgeting is such that, if we locked spending at 2011 levels for the next ten years — if we spent every year from 2012 through 2021 exactly the same amount of money we spent in 2011 — the difference between that level of spending versus what we’d spend end up spending due to built-in year-on-year baseline budget increases would be $9T. Locking spending at 2011 levels for a decade would result in $9T fewer dollars spent.

S&P was looking for less than half that.

All they wanted to see were real reductions to the built-in percentage values for the year-on-year baseline budget growth; cuts to the annual baseline increases from, say, 5.4% to 2%. Oh, the humanity!!! Every department in government would still have seen budget growth next year, and with GDP growth currently running around 0.4 to 1.2 percent per quarter, a two or three percent annual growth in government spending would actually have been quite sufficient.

Over successive years, as the economy picks up in response to a government at last serious about fiscal matters, GDP growth would surpass the annual increases in government budgets, natural growth in tax revenues would begin to approach parity with government spending, and — far from another Great Depression — we’d be in much better shape in ten years.

Yes, we would still be running a deficit, but it wouldn’t be 75% of revenue like it is today. More like 30%, and falling.

Yes, we’d still have huge debt, but it wouldn’t be over 100% of GDP like it is now. More like 60% of GDP, and falling.

More important than ANYTHING else: our numbers would be steadily moving in the right direction; with shrinking deficits, growing GDP, growing revenues (without any new taxes), and an overall government becoming accustomed to real fiscal restraints like those that you and I have to live with in our own personal finances. AND it would all be happening without having to “swallow the camel,” regardless of the fact that Democrats would be continually portraying it all as exactly that in every outrageous way imaginable.

THAT is the kind of scenario that S&P would have preferred to see getting signed by Obama, but Koo thinks it a recipe for total fiscal calamity.

I think Mr. Koo is missing one thing more: a “k” at the end.