cognitive dissident

With battle lines hardening over Obama's budget, it might be worth taking a moment away from the talking heads to look at big-picture reality. Considering that the enormous deficit was unavoidable due to Bush's profligate presidency, claims about Obama's "immoral" budget are particularly disingenuous--even for chicken-little conservatives who learn their financial fallacies from Faux News. Paul Krugman observes that despite the "sudden ubiquity of deficit scare stories...there's no reason to panic about budget prospects for the next few years, or even for the next decade:"

Consider, for example, what the latest budget proposal from the Obama administration says about interest payments on federal debt; according to the projections, a decade from now they'll have risen to 3.5 percent of G.D.P. How scary is that? It's about the same as interest costs under the first President Bush.

Why, then, all the hysteria? The answer is politics.

The main difference between last summer, when we were mostly (and appropriately) taking deficits in stride, and the current sense of panic is that deficit fear-mongering has become a key part of Republican political strategy, doing double duty: it damages President Obama's image even as it cripples his policy agenda. And if the hypocrisy is breathtaking -- politicians who voted for budget-busting tax cuts posing as apostles of fiscal rectitude, politicians demonizing attempts to rein in Medicare costs one day (death panels!), then denouncing excessive government spending the next -- well, what else is new?

As noted in this NYT editorial, the "breathtaking" deficit numbers are surpassed by "the Republicans' cynical refusal to acknowledge that the country would never have gotten into so deep a hole if President George W. Bush and the Republican-led Congress had not spent years slashing taxes -- mainly on the wealthy -- and spending with far too little restraint:"

The Republican amnesia and posturing are playing well on the hustings, where Americans are deeply anxious about the economy and fearful of losing their jobs and homes. Far too many Democratic lawmakers are losing their nerve.

Americans should be anxious, for reasons including the huge deficit. But the cold economic truth is this: At a time of high unemployment and fragile growth, the last thing the government should do is to slash spending. That will only drive the economy into deeper trouble.

If the GOP succeeds in causing a double-dip recession with their deficit fear-mongering, no doubt they'll want to continue slashing the safety net for the lower and middle classes while cutting taxes for the wealthy. Those are the only economic tools they know how to use, so why learn anything else?