by Eric Martin
Like Erik (sic) Kain, I find myself puzzling at the sudden, arbitrary hyperfocus on deficits, debt and fiscal austerity:
The notion that we need to balance the budget and pay down the debt right now is just taken for granted with no real attempt to explain why.
Is inflation out of control? No, not even close. Are our creditors closing our accounts? No, because our creditors know that all we need to do to pay them off is raise taxes or get out of this recession. When growth picks back up deficits will shrink. The deficit is not a problem in the first place. The whole thing is just a ruse.
Meanwhile, unemployment remains sky-high and so do corporate profits.
However, if you turn on the Sunday talkies, or flip to the Op-Ed pages of the major dailies, Washington elites are in the grip of austerity fever - placing the onus on the Obama administration to address both long term and short term fiscal issues in a way that was never asked of Bush. But why? It's not as if Obama invented the deficit or debt (just look at the arc of each during Bush's 8 years), and the throes of the deepest recession since the Great Depression is the exact wrong time to get religion on fiscal discipline (or in this instance, join the cult).
Yet Republicans barely bat an eyelash at the stark hypocrisy of grasping the mantle of fiscal discipline after the GOP-dominated Bush years (during many of which the GOP controlled both Houses of Congress and the White House). Along those lines, Kain cuts to the heart of the incoherence of these putative budget hawks: if reducing deficits and the debt were really so urgent, why not raise taxes?
Or, even, why not let Bush's massive, multi-trillion dollar, deficit exploding tax cuts simply expire as they were, ostensibly, designed to do? (of course, if deficits and debt are such bad thing, why support these tax cuts in the first place?) Or, even further, at least let the portion of those tax cuts that flow EXCLUSIVELY to the wealthiest Americans expire (the wealthiest also share in tax cuts when lower bracket rates are reduced because of the tiered structure of tax brackets, but the lower and middle classes don't enjoy the benefits of upper bracket rate cuts in kind)?
While I'm sympathetic to Keynesian arguments about holding-off on tax increases (or not allowing prior tax cuts to expire) during a recession, that argument is only persuasive if the speaker is not simultaneously calling for massive cuts in government expenditures during that same recession. Cafeteria Keynesianism doesn't fly.
The fact that the vast majority of Republican lawmakers won't countenance tax increases (even in boom times), or even allow for the inclusion of tax cuts in the revenue-neutral paygo framework, is revealing of the true lack of concern about running deficits and carrying debt. Similarly, the treatment of the gargantuan defense budget as sacrosanct and untouchable belies claims of concerns about such matters. The disconnect in rhetoric and policy recommendations is reminiscent of the constant evocations of the existential importance of the wars in Afghanistan and Iraq, but the reluctance to ask Americans to pony up the money to pay for them. Something doesn't add up.
In reality, this new-found urgency around deficits and debt is, for many GOP stalwarts, a means to assail entitlement programs that have been targets since their inception, as well as an opportunity to weaken public sector unions and otherwise gut the relatively tiny discretionary spending component of our Federal budget. As a bonus, the constant carping about spending during Democratic administrations reinforces advantageous - if erroneous - political narratives.
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