Deficit hawks and the games they play
By E.J. Dionne Jr.
Thursday, February 17, 2011
For 30 years,
In other words: since Reagan. Since the demise of Keynesianism as a serious economic philosophy. Since conservatives found their identity.
conservative ideologues
Keep in mind for future reference that he is implying that being an ideologue is somehow a negative.
have played moderate deficit hawks
[null set]
for suckers.
You'd think this might endow
I’m going to snicker quietly to myself, but I’m not going to make a penis joke. That’s the high road, people.
those middle-of-the-road deficit-busters
Again, [null set].
with a touch of humility.
I’m not entirely sure what point he’s trying to make here. Is it that the right has been tricking centrists into supporting deficit reduction that they already support? And that because of this Blofeldian deceit, that the centrists should then project modesty and meekness?
Fat chance.
Don’t act like your logical contortions make sense.
They stick with their self-righteous moralism, pretending to be bipartisan and beyond ideology.
Remember when he thought that being ideological was bad? Now, apparently not being ideological is bad. Quite a swing for two sentences.
In fact, they make the problem they want to solve worse by continuing to empower the tax-cuts-in-every-season conservatives.
Finally! A fair point! Not a good point, mind you, but a fair one. Dionne believes that lowering taxes significantly decreases revenues and accordingly increases the deficit. It’s woefully simplistic, economically myopic, and completely misdiagnoses the cause of the deficit, but let’s roll with it.
It's thus satisfying to see President Obama ignore the willfully naive who are wailing over deficits.
Is the assertion here that deficits aren’t a problem, that deficits aren’t an immediate problem, or that it’s satisfying to see the country’s leader pretend a problem isn’t there?
He knows that new revenue will have to play a big role in deficit reduction.
Read: we need tax increases.
He also knows that House Republicans are pretending we can cut our way out of this mess and would demagogue any general tax increases.
Of course, you can cut your way out of any deficit. Just stop spending. This is all theoretical, of course. The point is, the theoretical construct for cutting spending to eliminate a deficit is far more sound than the theoretical construct for growing revenues to implausible percentages of GDP while maintaining strong economic growth.
So he has proposed some serious spending cuts
[null set]
and some modest revenue increases
Read: new taxes.
to keep things stable as he embarks on a long struggle to move our dysfunctional budget politics to a better place.
He’s not even sort of doing that. He’s ducking for cover and hoping the issue goes away on its own.
This annoys his deficit-obsessed critics,
Again, is the assertion that the deficit isn’t a big deal, because you just praised the President for spending cuts and revenue increases.
by which I mean just about everyone who says he should simply embrace the proposals of the Bowles-Simpson commission.
It’s a good starting point.
Obama should smile, let them rage and go about his business.
What business? This is the job. This is, quite frankly, the most important part of the job. Without financial stability, we can’t fund essential functions of the government, like national defense and basic infrastructure maintenance. (Funding for a painting of Henry Ford in cow’s blood does not qualify as essential functions of the government.) He can’t go about his business because this is his business. This is what conservatives mean when we say that he’s not up for the job. Apparently, as Dionne displays, it’s not unique to President Obama. The progressive ideology is simply not suited to address the challenges that we are currently facing.
Let's look at history.
Excellent idea.
When Ronald Reagan took office in 1981, he won big tax cuts coupled with big increases in military spending.
::Swoon::
The tax cuts and a severe recession tanked government revenue.
Mostly the recession.
Unlike today's conservatives, Reagan at least acknowledged mathematical reality and signed some tax increases.
These were largely simplifications of existing tax code.
But these were insufficient, and it fell first to George H.W. Bush - the last truly fiscally responsible Republican - and then to Bill Clinton to restore budgetary sanity.
It didn’t hurt that we had won the Cold War by that point, and that the economy went gangbusters—based on nothing related to federal policy—for about twenty years starting after the recession of the early eighties. This was accelerated by outsourcing (opposed by Democrats), and budgetary policies and welfare reform put in place by Republican congresses and erroneously credited to Clinton
But the conservatives who dug the hole
Why is it that the deficit wasn’t a big issue when GW Bush left office?
did nothing to get us out of it. On the contrary, they denounced the first President Bush for raising taxes,
First, I was six, so don’t put that on me. Second, the objection was less about the taxes and more about the blatant disregard for his word. Republicans don’t believe blindly that there should be no taxes to finance the government. Nor do we believe that reductions in taxes will always increase federal revenues (we actually understand the Laffer Curve.) Quite simply, we are a reactionary counterbalance to the certainty that liberals will promote policies that advocate tax increases on an already woefully overtaxed society.
and every Republican voted against Clinton
He had one?
For their bravery in supporting tax increases in 1993, Democrats lost control of Congress in 1994.
Which is when the policies that propelled to the boom of the late-90s were crafted. Kind of like how the Republican legislators of today are cleaning up the mess from the “brave” members who voted in favor of Obamacare.
By the end of the Clinton
Let’s not get carried away; it was a surplus, but not a particularly large or sustainable one.
In came the second President Bush who, with Republicans in Congress, declared the surplus too big.
No, they declared that taxes were too high. They were, and still are. There is a good argument to be made that the structural problems that we currently have in our economy were there in the 2000 crash, but that President Bush’s tax cuts and a policy that allowed the free market to course-correct shortened a very bad recession. Regardless, deficits always increase in recessions because revenues always dip. Spending is never as reactionary.
It was one problem they worked very hard to solve. Two tax cuts and two wars later,
We were attacked. One of these wars is universally agreed to be absolutely essential. The second was essential based on faulty intelligence. Even with that faulty intelligence, it still proved to be a good idea.
we were plunged into deficits - again. And the economic downturn that started on Bush 43's watch made everything worse, cutting revenue
Revenue is taxes, FYI.
and requiring more deficit spending to get the economy moving.
Spending DOES NOT get the economy moving!
Where were the moderate deficit hawks in all this?
I keep telling you, moderation is incompatible with being a deficit hawk.
They have a very bad habit. When conservatives blow up our fiscal position with their tax cuts, the deficit hawks are silent - or, at best, mumble a few words of mild reproach to have something on the record - and let the budget wreckage happen. Quite a few in their ranks (yes, including some Democrats) actually supported the Bush tax cuts.
And bless their little hearts for cowing to political pressure to do the right thing.
But when it's the progressives' turn in power,
We vote our leaders into power. It’s not a second-grade class election where everyone gets a turn by virtue of simply being there.
the deficit hawks become ferocious.
That’s more a cumulative effect. Having a national debt that is the size of our GDP is a terrible thing. We are on the precipice of having our debt rating downgraded, which will immediately increase the cost of servicing our debt by increasing the required rate for US bondholders. Our deficit has risen to roughly 10% of GDP (up from a Bush-era average just shy of 2%). The reason that there is alarm is because this is pretty goddamn scary.
They denounce liberals if they do not move immediately to address the shortfall left by conservatives.
Well to be fair, we denounce liberals for sport. It doesn’t mean we’re not right to gasp in horror at the easily predictable (and, frankly, widely expected) results of Obama’s spend-happy policies.
Thus, conservatives get to govern as they wish. Liberals are labeled as irresponsible
Can I make an editing suggestion? Let’s just keep it as “Liberals are irresponsible” and leave it at that.
unless they abandon their own agenda and devote their every moment in power to cutting the deficit.
Except that President Obama has spent precisely none of his moments in power to cutting the deficit. NONE MOMENTS!
It's a game for chumps. The conservatives play it brilliantly.
It’s not really a game. The country is broke.
By winning their tax cuts and slashing government revenue, they constrain what liberals can do whenever they get back into power.
That’s limited government, and it’s why conservatism is a movement that has always been predicated on strong presidential leadership. Liberals have unwittingly given astonishing power to the executive branch to regulate, to interpret broadly written laws, and to spend vast reams of freshly minted greenbacks We simply need a leader to wield it with the strength to dismantle the bureaucratic machine.
How do we know our difficulties stem primarily from a shortage of revenue?
We don’t. In fact, we know precisely the opposite.
Consider what would happen if we allowed all the tax cuts scheduled to expire in 2012, including the ones enacted under Bush, to go away.
Dr. Peter Venkman: This [government] is headed for a disaster of biblical proportions.
Mayor: What do you mean, "biblical"?
Dr Ray Stantz: What he means is Old Testament, Mr. Mayor, real wrath of God type stuff.
Dr. Peter Venkman: Exactly.
Dr Ray Stantz: Fire and brimstone coming down from the skies! Rivers and seas boiling!
Dr. Egon Spengler: Forty years of darkness! Earthquakes, volcanoes...
Winston Zeddemore: The dead rising from the grave!
Dr. Peter Venkman: Human sacrifice, dogs and cats living together... mass hysteria!
Mayor: All right, all right! I get the point!
Okay, that’s from Ghostbusters in case you suck as a person and couldn’t already tell.
That would produce nearly as much deficit reduction over the next decade - roughly $4 trillion - as all the maneuvers of the Bowles-Simpson commission put together.
Of course, that assumes completely unrealistic revenue projections and economic circumstances, but by all means, let’s leave the serious matter of the federal budget to nincompoops living in a fantasy world.
If you want to be serious about closing the deficit, ending the Bush tax cuts is a good place to start.
Why? If you give the government more money, they’re just going to spend it on useless programs. This happened here in Illinois
The commission's work showed just how effective conservatives have been. By saying they will never, ever, ever raise taxes,
To be fair, the commission had numerous tax increases, most of which I object to.
conservatives intimidate moderates into making concession after concession.
Is the argument here that raising taxes in a recession is a moderate position? I’m pretty sure that’s not why we had a 60+ seat swing in November.
In the end, the Senate conservatives on the commission - but not the House conservatives - supported some mild tax increases. But Bowles-Simpson proposed about twice as much in spending cuts as in revenue increases. You would think that moderates could at least hold out for a 50-50 split. But no, they'll do anything to win over a few conservatives.
Is it just me, or is it starting to get uncomfortable how stridently he’s arguing that we should give more money and power to the federal government?
As a result, any conservative who supports even the smallest tax increase is hailed as courageous.
This is completely counterintuitive to what you’ve been trying to say for about 3 pages of drivel. Conservatives that support tax increases should be roundly condemned.
Any liberal who proposes moderate spending cuts is condemned as a gutless coward unless he or she also supports slashing Social Security and Medicare. What's "moderate" or "balanced" about this?
Not sure. It’s completely un-tethered to reality, if that’s what you’re asking.
I hope Obama has the spine to keep calling the bluff of the deficit hawks until they get serious about changing the politics of deficit reduction. We can't afford another 30 years of fiscal evasion.
Are you out of your mind? We can’t afford another 2 years of fiscal evasion. We’re poised to need to raise the debt ceiling in about a month, and I have serious doubts that Republicans are going to go along without a budget that actually addresses cuts to the bloated federal bureaucracy and ever-increasing siphon of the private sector. Moody’s has been warning us about dropping our credit rating for two years, but the warnings have been fast and furious recently. Having the national debt surpass GDP is a colossal milestone—one that Greece and Ireland
If the asinine idea that we can tax our way out of debt persists, we’re going to have to move from the politics of a deficit to the politics of default.
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