Where Are the Real Deficit Hawks?

Both politically and economically, it's absolutely idiotic for White House chief of staff Rahm Emanuel to float the idea of massive social spending cuts right now. If the Great Depression taught us anything, it is that slashing spending in the name of deficit reduction is a great way to exacerbate a bad economic situation. While Democrats may fear being tarred with the "tax and spend" label, they should fear even more being tarred with the charge that they aim to "Recreate '38."

That said, if we're going to have a debate over spending and deficits, let's at least have a debate about the real numbers. And as I point out in my new newspaper column out today, those numbers are being buried under an avalanche of misinformation.

Here we have so-called "budget hawks" screaming about a health care bill the Congressional Budget Office says will reduce the deficit by $109 billion over ten years. And here we have those same so-called "budget hawks" moving to pass a one-year $636 billion Pentagon spending bill that puts the Obama administration's first term on track to spend more on defense than any other single presidential term since World War II.

This what I've previously called classic Selective Deficit Disorder - and it's being exacerbated by Beltway journalism that distorts these numbers.

Read the column to see exactly what I'm talking about - it's really pernicious.

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Comments

[Bgorden]

So far, the stimulus has been inadequate in creating new jobs. The main effects so far have been to save jobs in education, and to keep purchasing power up through extending unemployment insurance. What is needed is more spending on infrastructure projects and on new industries, like alternative energy. If we don't become a country that actually builds things and makes things, we will remain a debtor nation, and eventually an economic colony of China.

[racetoinfinity]

The "tea partiers" manipulated by GBeck, RLimbaugh, DArmey &plenty of Republicans are at a level of identity/c­onsciousne­ss which is chauvinistic, nationalistic, ethnocentric and, in typical right-wing fashion, paranoid about our being attacked by all the not-like-us other groups. It's a low level of consciousness, and until they grow out of it, we'll have a block of reactionaries yelling and screaming and blocking change.

They also are afraid of big government (except in its defense functions), because they are confusing the pre-individual collective oppression we had under communism and fascism with the trans-individual conscious collective "we" that is democratic government that represents us, serves the large conscious "us," and is Constitutionally prohibited against transgressing our own civil rights. These unfortunate people who haven't even grown to full individuality to think for themselves are oblivious to the fact that we live in a corporate plutocracy, and the threat from that to our democracy and well-being on all fronts is much greater than their delusional "big government" fears.

The further down the chain of consciousness one lives at, the more OTHERS one fears (rendered through hatred -same thing- aversion) others unlike oneself. Islamic fundamentalists are prime examples, of course. Tea-partiers aren't many levels above that.

Politicians, including loathsome Lieberman, may have some right-wing ethnocentric, nationalistic, paranoid beliefs, but are more likely influenced by living large via contributions and other ways they benefit, funneling in filthy lucre from big healthcare, energy, and military-industrial corporations.

[Bgorden]

I agree. The tea partiers weren't heard from when Bush was running his Iraq war with loans from China and Japan, and then had to bail out the economy when the Chinese threatened to sell their U.S. government paper. The real villains here are the banks and insurance companies who loaded themselves up with risky investments, and then ran for government help when their pyramid scheme collapsed.

[peterg76]

These people don't actually care about deficits, but they care what spending causes the deficits. They're only opposed to constructive government spending.

[wldnswmmr]

One thing I don't quite understand about these "deficit" discussions is that none of the pundits ever appears to use the actual numbers printed each month by the Treasury Department in the form of a "P&L" statement. Take October, the most recent one, and the first month for the new fiscal year. The Treasury received about $135 billion in revenue, mostly taxes (including FICA). It paid out $311 billion, including $70 billion for defense. This is the P&L of a bankrupt organization. The cash flow is so completely out of whack at this point that we are fast running out of options to keep the enterprise going. Politicians are so busy defending their specific turf that they will not look at the overall picture. Some say, "cut defense!" Others say, "entitlements are too big!" To bring this budget into balance requires realism, not special pleading for one particular segment of government spending. Obama appears to be in the opening stages of starting to get that. I think that's where his hesitancy on Afghanistan and his deficit-averse approach to health care reform come from. He's looking at those numbers, which don't lie, and he's getting very, very nervous. And now there he is in Beijing, about to meet with his financiers with that P&L in tow. These are very serious times.

[Bgorden]

The Treasury figures can't be taken in isolation, as you are doing. The government is not a corporation. It needs to keep the entire economy solvent, not just the government sector. The tax income is so low because the private economy is not producing enough goods. The spending is so high because the government is attempting to stimulate the private economy into producing more. If the private economy grows, as it is apparently starting to do, the tax revenues will increase, and the spending gap will close. It's risky and worrisome. It may not work. But to deflate the economy by reducing spending would be disastrous. The tax income would plummet, and the government would have to cut spending even more, putting the entire economy into a death spiral.