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You can tell how freaking out of touch these people are by the giant banner hanging behind Jake "The Snake" Tapper as they opine: IS THE U.S. HEADED TOWARD BANKRUPTCY?

NO, JAKE! NO, WE'RE NOT. WE HAVE A FIAT CURRENCY, YOU CAN LOOK THAT UP.

Sheesh.

All the tidal opinion currents of the Very Serious People are flowing toward one thing: Their beloved Grand Bargain, now perceived in the form of the Simpson-Bowles Super Master Economic Plan, is the lighthouse beacon toward which these political lemmings swim. All will be well, if only the little people will give up their stubborn insistence on food and medical care in their old age. Dear God, don't they understand?

You see, of course, who's missing from this ominous roundtable: Us.

TAPPER: Do you hear that in the distance?

Two ticking time bombs threatening to send the economy back into recession or worse.

The first, just over four months until it detonates. It's that fiscal cliff you've heard about. Unless Washington gets its act together...

From Clip: Let's get the job done and let's not play political games.

TAPPER: A big if, as we ring in 2013, the ball will also drop on the economy -- huge automatic government spending cuts, $110 billion total. That's like wiping out the economy of both the Dakotas and Montana overnight. Good-bye Mount Rushmore.

Simultaneously, tax increases will kick in for everyone -- the Bush income tax cuts, gone. The same with the payroll tax cuts. For a middle class family of four, a tax bill more than $2,000 higher. And that's just the short-term challenge.

This is a giant shell game based around one thing only: Avoiding inflation so rich people don't lose money on their investments. This goal is so widely accepted in the Village as Very Serious Economics, they don't even mention it. It's for the greater good, don't you know.

Their panel is front-loaded with those people who already agree with them. I mean, Grover freaking Norquist? That anyone would include him in a serious discussion about anything other than his role as perpetual spoiler is beyond me.

The long-term picture even worse.

And that brings us to the second time bomb. As the baby boomers retire, the commitments we've made to seniors will balloon. Over the next 75 years, Medicare will run a deficit of more than $30 trillion. That's two times the entire size of the United States economy.

Social Security will run out of money in just 20 years.

In short, if nothing is done, our national debt poses a clear and present danger to the United States.

And, yes, politicians have been warning about the nation's debt for decades, but already this year, we've seen economies destroyed by debt -- overseas in Greece, Italy and Spain. And here at home, with Stockton, California; San Bernardino.

So the big question -- are we next? Is the U.S. headed toward bankruptcy?

Who writes this swill? Jake, a serious question: You actually believe that the economy of the United States is comparable to Greece? Really? You've been listening to whacky Peter Schiff again, haven't you? Jake, some advice: You should not be in the business of journalism when your talents so clearly lie in the direction of PR.

Wait, I guess that's the same thing now.

(END VIDEO TAPE)

TAPPER: So with that, let's start with our first topic, which will be entitlement spending, specifically, can we fix the nation's finances without cutting entitlement benefits?

That's Social Security, Medicare and Medicaid, other mandatory spending programs.

Kim, can we?

KIMBERLEY STRASSEL, COLUMNIST AND EDITORIAL BOARD MEMBER, "THE WALL STREET JOURNAL": No, we can't. You know, we talk all the time about -- have fights over highway bills and farm bills, all this discretionary spending. Those things that you just mentioned, they are 60 percent of the federal budget. And we are already facing a huge problem. Medicare could go bust in as little as eight or nine years. We're already paying out more for Social Security than we're taking in.

And one of the problems here is that what we have to decide is -- is how we are going to rein in the costs.

Right away, you see the problem here. Strassel is from the editorial board of the Wall Street Journal. Said editorial board is famous for being plain batsh*t crazy, frequently contradicting the actual reporting done by its own staff. If you want someone you can take seriously, you don't invite someone from the Wall Street Journal editorial board, which exists only to inflame. They don't do nuance, as Strassel illustrates.

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Among the myriad Republican myths about taxes, the most pernicious and demonstrably false - that "tax cuts pay for themselves" - is the mostly deeply held by the GOP faithful. As President George W. Bush famously (and erroneously) put it, "You cut taxes and the tax revenues increase." Now, a survey of leading economists conducted by the University of Chicago Booth School of Business is just the latest shovelful of evidence to bury Arthur Laffer's zombie lie.

Earlier this year, as Congressional Republicans learned the hard way three weeks ago from CBO Director Douglas Elmendorf, another Chicago Booth poll revealed that "80 percent of economic experts agreed that, because of the stimulus, the U.S. unemployment rate was lower at the end of 2010 than it would have been otherwise." (As Elmendorf told the House Budget Committee, ""Only 4 percent disagreed or strongly disagreed. That is a distinct minority.")

Now, the U of C is back with a new two-part survey on the Laffer Curve. In the first question, 35 percent agreed and another 35 percent were unsure that "a cut in federal income tax rates in the US right now would lead to higher GDP within five years than without the tax cut." (That response is unsurprising, given that one definition states that GDP equals consumption plus investment plus government plus net exports minus taxes.) But far more interesting are the results on the question that gets to the heart of Arthur Laffer's supply-side snake oil which has been Republican orthodoxy ever since Jude Wanniski sketched Laffer's curve on a cocktail napkin. In a nutshell, not a single one of the economists surveyed agreed that "a cut in federal income tax rates in the US right now would raise taxable income enough so that the annual total tax revenue would be higher within five years than without the tax cut."

In his comments, David Autor of MIT pointed out, "Not aware of any evidence in recent history where tax cuts actually raise revenue. Sorry, Laffer." Former Obama administration economist and current University of Chicago professor Austan Goolsbee put it this way:

Moon landing was real. Evolution exists. Tax cuts lose revenue. The research has shown this a thousand times. Enough already.

Of course, you don't have to take Goolsbee's word for it. Your own eyes will suffice.

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So Goolsbee will be gone soon. Is this a signal that the administration wants to take a new direction, or will they replace him with someone just like him, because to do otherwise is to admit they're doing something wrong on the economy?

WASHINGTON -- The White House says Austan Goolsbee, a longtime adviser to President Barack Obama, will resign his post as the chairman of the Council of Economic Advisers this summer to return to teaching at the University of Chicago Graduate School of Business.

Goolsbee has been the face of the White House on economic news, and is a regular every first Friday of the month explaining the administration's take on the latest jobless numbers.

Goolsbee served on the three-member economic council since the start of the administration. He advised Obama during his 2004 Senate race and was senior economic policy adviser during the 2008 presidential campaign.

Here's Ezra Klein on the news:

For two years now, economists on both sides of the political aisle have been begging Congress to cut the obvious deal: significant short-term stimulus paired with two or three or four times as much long-term deficit reduction. We're nowhere near cutting that deal. About half of official Washington is now pretending that tax cuts have nothing to do with deficits and tax increases have no place in closing deficits, a position even conservative economists consider extreme.

Is that why Austan Goolsbee is leaving? Perhaps not. The Chicago economist has been with Obama since the campaign (and in fact worked on his initial Senate campaign). That's a long time to be in the political pressure cooker. It's a long time to be away from your university, and to ask your family to accomodate a new city and new hours and new responsibility and new notoriety. But it can't have helped. If Goolsbee was spending his days crafting major economic policy to help the country dig out of this hole rather than trying to wanly explain that a slow recovery is nevertheless a recovery, the job would've been rather harder to vacate.

Which suggests that the real question isn't who his replacement will be, but whether he or she will matter. The job of the CEA chair is to give the president good economic advice. That's a very important job if the president can take your advice. It's a very dispiriting job if he can't.

Tracking the U.S. economy these days is like watching the Titanic go down, except the crew members are running around the deck, waving their arms and saying, "Everything's fine, don't panic! Everybody back to the all-you-can-eat buffet!" On This Week with Christiane Amanpour, White House economic adviser Austan Goolsbee insists this is not a jobless recovery and everything's moving along just the way they planned.

It seems clear that economists like Paul Krugman, Joseph Stiglitz and Dean Baker were right about the disastrous long-term consequences of an inadequate stimulus, while the White House keeps insisting it worked. Not only do they insist it worked, they want to emphasize more of the same pro-business, deregulation strategy. To me, this very risky half-assed approach is sort of like a parent patting herself on the back that, when her kid had a strep throat, she saved money by only filling half of the antibiotic prescription. So now the infection's gone into his heart, but he no longer has a sore throat. Progress!

Bottom line? Voters will not trust this president with a second term if they don't hear an economic narrative coming out of the White House that resonates with their own experience. They will not trust President Obama to fix the economy if he can't identify what they perceive as the real problem:

AMANPOUR: So you've heard all that. John Berman set it up. This Friday, this last jobs report was meant to be the acid test. What is that telling us? Is the recovery threatened?

GOOLSBEE: Well, hold on. And I said last month when we had an excellent jobs report, 100,000 above expectations, and I said again this last Friday when it came in below expectations, don't -- don't make too much of any one month's job report, because they're highly variable. You want to look at a little bit of a trend to get a more accurate barometer, and the overall direction is, yes, somewhat slowed from the stiff headwinds of gas prices, of the events in Japan, of some of the events in Europe. But overall, the last six months, we've added a million jobs in the private sector.

AMANPOUR: Right, but every economist, including many of your advisers and colleagues, have said that in order for this to be sustainable, you have to actually have above 150,000 jobs per month. And it was way below that this month.

GOOLSBEE: Well, and in the three months before that, it was well above it. What I'm emphasizing is the -- every economist knows that the monthly numbers are highly variable, so you want to look at a little bit more than just one month before concluding on a trend.

AMANPOUR: So what happens if this same kind of report comes out next month? What does that then tell you?

GOOLSBEE: Well, look, what we know is that we have moved a long way from when the economy is in a rescue mode, the private sector's in freefall, and the government is the only thing standing between us and falling into another Great Depression. We were losing 780,000 jobs a month when the president comes into office. Fast-forward to now: We've added 1 million jobs over the last six months.

If we face stiff headwinds, that are shocks like the -- like the Japanese earthquake, we have to deal with that, but I think the -- the trend is relatively clear.

AMANPOUR: But what do you say to the American people when so many economists were expecting something, according to a Bloomberg survey, of 165,000 to 170,000 to be created this month, to see the unemployment come down a little, which it didn't? What do you say to the American people about that? Where is the light, in other words?

GOOLSBEE: The first thing that I say is the same thing I said one month ago when it came in the opposite, 100,000 above expectations, and that is, let's not conclude too much of anything from one report. Let's look at what's happened over six months.

And what has happened over six months is we've added a million jobs in the private sector. The president has enacted -- we passed a tax policy in December, which has come into place this year and will continue over the course of this year, to put -- to give a payroll tax of $1,000 plus to 150 million workers and to give direct incentives for business to start investing. And they've accumulated money on their balance sheet.

Our -- our effort now as a government should be to get the private sector, to help them stand up and lead the recovery. It -- the government is not the central driver of recovery.

Yes, that attitude continues to be the problem. When you have 9% unemployment and no consumer demand, the government should be driving the economy to get spending cash back into the hands of people who will spend it, and they're not. As Jared Bernstein told us last week, the White House just wasn't interested in that approach.

AMANPOUR: Right, but, again, it is slower than expected. So, economists are asking and people are asking, is this kind of a wake-up call, do you think, to sort of shift the political debate from what's been all about debt reduction and shift it back to job creation? I mean, is this an opportunity, for instance, to try to talk about creating jobs and adding maybe another stimulus? Let's say there was no politics involved, in a perfect environment. What would you do to get this off the slow burner?

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I love these little white board demos that Austan Goolsbee does on a fairly regular basis. It's such a nice, sane, intelligent version, especially in comparison to some of the bat-$#!% crazy ones we're forced to watch while monitoring Fox News.

In this one, Goolsbee talks up the National Wireless Initiative. I don't know if our generally myopic world view makes the fact that we have such slow internet speeds (compared to other countries) something that is well-known. I suspect not.

But the Obama administration does want to address that and extending internet connectivity to far more people in the hopes of stimulating job growth and thereby, the economy:

As the President explained today, his plan would expand wireless coverage to 98% of Americans, while reducing the deficit by nearly $10 billion by making more government spectrum available:

For our families and our businesses, high-speed wireless service, that’s the next train station; it’s the next off-ramp. It’s how we’ll spark new innovation, new investment, new jobs.

And you know this here in Northern Michigan. That’s why I showed up, in addition to it being pretty and people being nice. (Laughter and applause.) For decades now, this university has given a new laptop to every incoming student. Wi-Fi stretched across campus. But if you lived off-campus, like most students and teachers here, you were largely out of luck. Broadband was often too expensive to afford. And if you lived a bit further out of town, you were completely out of luck, because broadband providers, they often won’t build networks where it’s not profitable, just like they wouldn’t build electrical lines where it wasn’t profitable.

So this university tried something new. You partnered with various companies to build a high-speed, next-generation wireless network. And you managed to install it with six people in only four days without raising tuition. Good job. Good job, Mr. President. (Applause.) By the way, if you give me the name of these six people -- (laughter) -- there’s a whole bunch of stuff in Washington I’d like to see done in four days with six people. (Laughter.)

So today, this is one of America’s most connected universities, and enrollment is near the highest it’s been in 30 years.

And what’s more -- and this is what makes this special -- you told nearby towns that if they allowed you to retrofit their towers with new equipment to expand your network, then their schools, their first responders, their city governments could use it too. And as a result, police officers can access crime databases in their cars. And firefighters can download blueprints on the way to a burning building. And public works officials can save money by monitoring pumps and equipment remotely.

And you’ve created new online learning opportunities for K-12 students as far as 30 miles away, some of whom -- (applause) -- some of whom can’t always make it to school in a place that averages 200 inches of snow a year. (Laughter and applause.) Now, some of these students don’t appreciate the end of school [snow] days. I know Malia and Sasha get really excited about school [snow] days. Of course, in Washington things shut down when there’s an inch of snow. (Laughter.) But this technology is giving them more opportunity. It’s good for their education, it’s good for our economy. In fact, I just came from a demonstration of online learning in action. We were with Professor Lubig and he had plugged in Negaunee High School -- (applause) -- and Powell Township School in Big Bay. (Applause.) So I felt like the guy in Star Trek. I was being beamed around -- (laughter) -- across the Upper Peninsula here. But it was remarkable to see the possibilities for these young people who are able to, let’s say, do a chemistry experiment, and they can compare the results with kids in Boston.

Or if there’s some learning tool or material they don’t have immediately accessible in their school, they can connect here to the university, and they’re able to tap into it.

It’s opening up an entire world to them. And one of the young people who I was talking to, he talked about foreign policy and what we were seeing in places like Egypt. And he said, what’s amazing especially for us is that now we have a window to the entire world, and we can start understanding other cultures and other places in ways that we could never do without this technology.

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[h/t David]

On This Week with Christiane Amanpour, Jake Tapper interviews Obama economic advisor Austan Goolsbee about the upcoming vote on the national debt ceiling, and wonders what will happen if the new Republican extremists successfully keep it from being approved.

TAPPER: There's a big crisis point coming up potentially, and that is the nation is only about $400 billion away right now from reaching the $14.3 trillion debt ceiling, meaning this spring Congress will have to vote on whether or not to lift that ceiling. A number of Republicans, especially Tea Party candidates, have said that they will not vote to do so.

What economic effects would people see immediately if Congress does not raise the debt ceiling? And does the administration have a contingency plan if that happens?

GOOLSBEE: Well, look, it pains me that we would even be talking about this. This is not -- this is not a game. You know, the debt ceiling is not -- is not something to toy with. That's the -- the -- if we hit the debt ceiling, that's the -- essentially defaulting on our obligations, which is totally unprecedented in American history. The impact on the economy would be catastrophic. I mean, that would be a worse financial economic crisis than anything we saw in 2008.

As I say, that's not a game. I don't see why anybody's talking about playing chicken with the -- with the debt ceiling.

If -- if we get to the point where you've damaged the full faith and credit of the United States, that would -- that would be the first default in history caused purely by insanity. I mean, that would -- there would be no reason for us to default, other than that would be some kind of game.

As our Jon Perr points out, Republican support for raising the debt ceiling ended with Obama's election!

I mean, I hope we don't -- we shouldn't even be discussing that. People will get the wrong idea. The United States is -- is -- is not in danger of default. We -- we do not have -- we do not have problems such as that. This would be lumping us in with a series of countries through history that I don't think we would want to be lumped in with.

TAPPER: Well, Republicans are talking about -- some Republicans are talking about making an issue out of the debt ceiling to force the administration and the Congress to cut spending. President Obama himself has talked about the need to tackle the debt and the deficit and the need to cut spending. Where specifically does President Obama want to cut spending? Where is there fat to cut from the budget?

GOOLSBEE: Well, you know, the -- as you know, the president's going to release his budget. He's -- we're going to have -- we are going to have to make in the medium run a series of tough choices, and the president's not afraid to do that, and I think you will see in his budget that he's willing to...[do that].

Of course, Jake Tapper doesn't consider the idea that deficit fears are overblown even worth discussing. And Goolsbee assures him that Obama is ready to make "tough choices." Get ready for the run against Social Security!

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Austan Goolsbee debuted as the new chair of the Council of Economic Advisors on This Week with Christiane Armanpour today and made a feisty (well, feisty for an economist!) defense of the president's tax policies. I'm still waiting to hear someone bring up reports from last week in which Obama wouldn't say he'd use his veto power if Dems compromised with Republicans over the tax cuts for the wealthy -- because obviously, his "strong stand" is just posturing if he doesn't back it up with the veto:

AMANPOUR: Hello. The world economy once looked to the American consumer to pull it out of recession. Not anymore. Now the world is looking to China and emerging economies where growth is taking hold. At his news conference on Friday, President Obama admitted that economic progress here was, quote, "painfully slow."

Joining me this morning, the president's top economic adviser, Austan Goolsbee, who's just been appointed chair of the president's Council of Economic Advisers. Thank you for joining us here. Thank you very much.

I want to ask you what's just happened. The House Minority Leader John Boehner has said that the only -- that he would consider extending the middle class tax cuts, "if the only option I have is to vote for some of those tax reductions, I'll vote for it," he said on "Face the Nation" this morning. What is your reaction to that?

GOOLSBEE: Well, I obviously haven't seen the comments, but I noticed the qualifier, if my only choice is. If he's truly saying that we can, as the president called for, get a broad consensus to extend the middle class tax cuts, we should do it.

AMANPOUR: And he's obviously saying...

(CROSSTALK)

GOOLSBEE: We shouldn't hold that hostage for the argument about the tax cuts just for the very, very highest income people. So if he's for that, I would be happy. In the past, we have seen some of these circumstances in which what appears to be the offer of doing this -- the sensible thing, in the light of day there was a little bit of a feeling, well, if the president is for it, I'm against it, and then it falls apart.

AMANPOUR: All right, well, he does obviously go on to say that he's obviously going to do everything he can to fight to make sure that all the tax cuts are extended. But if this does happen and he is going to vote for an extension of the middle class tax cuts, how do you think that those Democrats who oppose what the president wants to do will be brought on board? In other words, will they also go for just the middle class tax cuts and get this done by the midterms?

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