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Dean Baker

Dean Baker

Posted: July 27, 2010 05:22 AM

The Budget Deficit Chicken Hawks

What's Your Reaction:

Most people are familiar with the concept of "chicken hawks." Chicken hawks are the politicians who are anxious to send other people to risk their lives in war, but somehow managed to avoid service when they had the opportunity to fight themselves. Former Vice-President Dick Cheney and former President George W. Bush are the leading members of the chicken hawk society.

It turns out that we have a similar story with budget policy, where there appears to be a large contingent of budget deficit chicken hawks. The deficit hawks have been filling the news lately. These are the folks who are yelling that something terrible will happen if we don't reduce the deficit. Most of them seem to have missed the fact that something terrible is now happening. We have almost 15 million people unemployed and 9 million underemployed, with several million facing the loss of their home in the next few years.

People of all ages are seeing their lives wrecked by an economic disaster that was entirely preventable, if the folks running economic policy were not too incompetent to notice an $8 trillion housing bubble. In fact, one of the reasons that this bubble did not get noticed was that even before the bubble burst -- creating large deficits -- the deficit hawks were running around yelling about the deficits. These deficit hawks were able to get far more attention for their whining than the people who were warning about the dangers posed by the housing bubble.

Now that we have seen this collapse, rather than supporting action to get the economy back on its feet, the deficit hawks are again yelling about the long-term deficit. But, what is really striking is that many of the people who whine loudest about the deficit are the most reluctant to take steps to reduce the deficit -- at least when it involves powerful interest groups.

So, in the last week, we were treated to the sight of two senators who are leading Democratic deficit hawks, Kent Conrad from North Dakota and Ben Nelson from Nebraska, both coming out for the extension of the portion of President Bush's tax cuts that went to upper income people. These two senators, who have been in a near panic about the debt that we are handing on to our children, came out firmly for more debt for our children if the alternative was higher tax payments by the wealthy.

Unfortunately, this chicken hawk approach to deficit reduction is more the rule than the exception. The surge in the deficit in the last three years was overwhelmingly due to the economic collapse. It might be reasonable therefore to look to Wall Street to pick up much of the tab for future shortfalls. My calculations indicate that a tax on financial speculation could raise in the neighborhood of 1.0 percent of GDP or $150 billion a year.

Yet, almost none of the deficit hawks will go near a financial speculation tax. In fact, when America Speaks, a group funded by Wall Street investment banker and leading deficit hawk Peter Peterson, put on a series of town halls on the deficit, their booklet told participants that a speculation tax could only raise 0.1 percent of GDP, one third of what the United Kingdom gets from taxing stock trades alone.

It is not only Wall Street that is protected by the deficit chicken hawks. The insurance and pharmaceutical industries can also count on the deficit chicken hawks. As all budget analysts know, the country's long-term budget problem is due to our broken health care system. We pay more than twice as much per person as the average in other wealthy countries.

But the deficit hawks are scared to talk about fixing the health care system. This would hurt the insurance industry, the pharmaceutical industry and other powerful interest groups. When America Speaks came to health care, they said reform was off-limits. They only wanted participants to talk about cutting Medicare and Medicaid. The elderly and the poor don't have powerful lobbies like the industry groups.

Basically, the deficit chicken hawks want deficit reduction, but they only want it to be at the expense of the elderly and the poor, hence their attacks on Social Security and Medicare. Of course the public is not anxious to go along with gutting the programs on which they and their parents depend, which is why the deficit chicken hawks prefer to do their work through commissions that hold secret meetings.

The deficit chicken hawks also don't have much commitment to honesty. When America Speaks reported its results to the public and President Obama's deficit commission, it noted that one cut to Social Security, raising the retirement age, got majority support from participants. However, it turns out that this result was based on a software error. When the error was corrected, support fell to 39 percent.

Remarkably, America Speaks did not have the integrity to publicly acknowledge and correct this mistake. It just quietly changed the number on its website. This is the sort of behavior we should expect from deficit chicken hawks who want to attack the programs on which so many ordinary working people depend, while protecting the interests of the rich and powerful.

 
Most people are familiar with the concept of "chicken hawks." Chicken hawks are the politicians who are anxious to send other people to risk their lives in war, but somehow managed to avoid service wh...
Most people are familiar with the concept of "chicken hawks." Chicken hawks are the politicians who are anxious to send other people to risk their lives in war, but somehow managed to avoid service wh...
 
 
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09:48 PM on 08/01/2010
It is more than just chicken hawks. With this huge deficit why are we still giving away more money to Pakistan? Money we know they will use against our interests.

Why do we still subsidize the oil companies? When even a small oil company makes 8 billion in profits and most make that much and more in a quarter.

It goes way beyond core republicans and moderate democrats. It is truly a case of our politicians treating themselves as royalty at our expense. It is a case of our politicians having NO MORALS. The republicans and democrats are sleeping in the same bed and eating at the same table and partying with the same corporations.
07:46 PM on 08/01/2010
Really tired of the hypocritical,fear mongering born again Republican and conservative Democratic deficit hawks.These same chicken hawks got us into the economic catastrophe the country faces by supporting the two Bush tax cuts,two unfunded wars,and the unfunded Medicare drug program.Bush and the Republican Congress squandered the huge Clinton surpluses when the US was on its way to paying off the entire national debt by 2007.Now,thr right wingers want to decimate Social Security,Medicare, and Medicaid to pay for tax cuts for the rich,bailouts for Wall St,and tax subsidies for corporations like
BP.Cut the military budget by 50% over the next ten years,end the Bush tax cuts for the wealthy in December ,re-instate the Clinton tax rates for the rest of us once the economy recovers,get out of Afghanistan and Iraq ASAP,impose the Social Security tax on all incomes,not just the first $104,000, increase the tax on incomes of $750000 to $20 million plus to 45% to 65%,and include at all income levels a separate war tax to pay for any future wars our elected leaders might get us into.
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evalela
05:19 PM on 08/01/2010
The powerful interest groups are the new MONARCHY that rules America,God forbid anyone stand up and DETHRONE THEM !!!!!!!
05:00 PM on 08/01/2010
Former Vice-President Dick Cheney and former President George W. Bush are the leading members of the chicken hawk society.
Obama and Pelosi are second
plenty for banks
crumbs for americans
record 'health' spending and we still get big bills
07:33 AM on 08/01/2010
A lot of the difficult problems facing America today can attributed to the failure of the Bush administration to provide the leadership necessary to deal with the political and economic issues that required their attention. The entire Bush term in office was not devoted to governing America ,but instead was wasted on the whims of the" Decider" and his cronies. Madmen never govern in a Democratic manner ,but instead follow only their warped dreams of domination. With a leader who is never wrong and followers who rubber stamp approval of every misguided ,ill conceived plan of a leader who has no interest other than advancing his own agenda ,it is no wonder that there is little time for the needs of the people of America. Eight years wasted on the failed policies of the Bush years allowed the problems we face today to grow into deficits ,unnecessary wars and financial collapse along with the needless suffering of the American People who are most affected by a government riddled with and crippled by incompetence. The legacy of the Bush years is written in the blood of our " Brave Soldiers" ,the relentless attack on rights of our citizens and the diminishing of the "American Dream" for millions of us
01:51 PM on 07/29/2010
what most people miss is the WHY... They assume it was only greed but I believe the bigger WHY was to take a stagnant economy that was on the edge of recession and boost it into a growth mode.

this sounds good right! Except that the underlying reasons IMHO was about the government's desire to fund 2 wars and they couldn't get people to do that IF we were in a recession... Wars are expensive. This is the same thing that Johnson did during the run up with the Vietnam War. Then Nixon continued along with selling off our forests at below cost just to keep the economy going. US governments for 50 years have been increasingly borrowing from the future to fund today's spending... With no regards to consequences. And lots of rhetorical BS to justify this insanity.

We are living thru a totally insane period where up is down and down is up and few know the difference.
09:10 PM on 07/28/2010
Great article. Another point is that these same people voted against aid to cities for keeping teachers and school officials in their jobs. This is going to result in MORE unemployment because the local governments cannot run deficits, so all the benefit of the federal stimulus gets cancelled out. This is pointed out carefully in a paper by Harvard Professor Linda Bilmes:
http://www.newamerica.net/publications/policy/the_fiscal_crisis_in_state_government_and_what_should_be_done_about_it
05:03 PM on 08/01/2010
1/3 of stimulous was tax cuts
nothing to keep buses running
more $$ for building new highways
Dems give the wealthy most of the $$
03:33 PM on 07/28/2010
Dean Baker has his head buried deep in the sand. And this comment is simply ridiculous: "The elderly and the poor don't have powerful lobbies like the industry groups." REALLY? Do you really flippin believe that Mr. Baker?
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RaceCondition
Nerd. Liberal. Girl.
07:21 PM on 07/28/2010
Yes, really. Having been that poor before, you are just sounding like a t.r011.

When one is reduced to a diet of ramen with an occasional treat like Kraft MacNCheese with ketchup, there is no one there to plead your case before a senator of your very own, bought and paid for. Help exists for poor people. People on the starboard side of politics think it's enough, but it isn't. Food banks are perpetually running short. Churches only give charity to their own congregation. Food stamps can be hard to get, and can be hard to use. Many places won't take them at all, and don't give me the stereotype of food stamps. We got bread, milk, cheese, peanut butter with ours. Staples.

Simply put poor people are too busy worrying about which bill is getting skipped this month to go about lobbying their congresscritters. They definitely don't have the monetary resources that big business does to buy their love. And it is most assuredly for sale.
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PapaBurgandy
09:00 AM on 08/01/2010
Oh really, where are all these well funded PAC's for the poor? REALLY?? DO YOU BELIEVE THAT??
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Renifer
Tea-Partiers are really Neo-Birchers
02:07 PM on 08/01/2010
Heh. I can see it now:
PoorAsDirt PaC. Our slogan: "We don't have two dimes to rub together, but there are a LOT of us."
03:07 PM on 07/28/2010
"Most people are familiar with the concept of "chicken hawks." Chicken hawks are the politicians who are anxious to send other people to risk their lives in war, but somehow managed to avoid service when they had the opportunity to fight themselves."

This definition would include Lincoln and FDR who, like Bush, served in non combat roles during times of war. I would add LBJ but he was (more or less accidently) subject to 10-15 minutes of combat observation. Come back when you have something significant to say.
12:16 AM on 07/29/2010
Lincoln served as a Captain in active fighting in the Black Hawk War.
08:55 AM on 07/29/2010
Re-read your history , never heard a shot fired.
07:42 AM on 08/01/2010
Bush was a draft dodger, pure and simple (I know the situation about Reserve and National Guard Service during the Vietnam war). As for the rest, simply "really" serving is enough. The military determines where you serve RRD and non-combat roles for real service are valuable and rare. Less than one percent of Americans (people that love their freedoms) bother to wear the uniform. But they love to "wrap" themselves in the flag and give a hearty "thank you for serving" to anyone they find who served. Too bad they could not get off their butts and participate in Freedom.
12:15 PM on 07/28/2010
"As everyone knows, we pay 2x for healthcare..."....Sounds like Professor Obama.....

Humm. Obamacare was going to save costs, right Dean?

This is why liberalism truly is a mental disorder....facts are not friendly and troublesome. Your liberal friends in Mass passed pre-Obamacare and whoops, it's really, really bad (one CORE tenet is ER visits will drop...not accurate...).

http://www.usatoday.com/news/opinion/forum/2010-07-28-column28_ST1_N.htm

Why don't you just say it..you want socialized, govt paid healthcare and everything will be fine!!!

Whoops, those dang facts keep getting in the way....the 60+ yr NHS is decentralizing services...I guess govt paid, decided hc isn't so great....

http://www.nytimes.com/2010/07/25/world/europe/25britain.html?_r=3&hp
02:06 PM on 07/28/2010
How long has this been an issue? Wasn't this Clinton's waterloo? You know the facts seem to really escape conservatives. You complain at a single payer, yet are just fine with Health care cost increasing 106% since Clinton. Paul Ryan offers a program that, according to OMB will cost far more than Obama's. Do conservatives have a plan? Or is it just more misdirection. Bush cut taxes and spent the country into the ground 1.3 trillion in debt and you complain about Obama. At least someone is finally trying to do something. Far better the blasts from the past... The party of NOthing.
03:10 PM on 07/28/2010
Single payer wouldn't lower the costs of health care because it isn't, contrary to "progressive" lies, insurers that have driven up the cost of health care. What's driven up the costs are expensive technological advances, people living longer and people demanding more and more care without concerns for cost because for those with coverage there's no additional costs for additional service.

As far as the debt, "progressives" will whine forever about taxpayers being allowed to keep a tiny sliver of what THEY EARN 2000-2008 and trun a blind eye to increases of debt and deficits under Obama that even the CBO is now warning us about.
03:30 PM on 07/28/2010
OMB? You mean Peter Orszag?

Here's Paul Ryan's response: http://www.freerepublic.com/focus/f-news/2443601/posts

The Dems have no plan. Paul Ryan does.
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RaceCondition
Nerd. Liberal. Girl.
07:31 PM on 07/28/2010
Goodness gracious. This must be why such a long period was required before "ObamaCare" went into effect. So they could point fingers and say "see it isn't working".

PS: I think people who call it ObamaCare are going to feel pretty silly when it goes into effectvand turns out to be popular. MediCare probably didn't start out being called that; I admit I don't know. But legacy trumps re-election, and people are going to be calling their improved health care by its snazzy new name. Thanks repubs!
QuietLightTraveler
Scientist, Teacher, Naturalist, Photographer
11:08 AM on 07/28/2010
Chicken hawks ? They sound more like chicken s _ _ t to me.
10:28 AM on 07/28/2010
http://www.usdebtclock.org/

Spending is the issue. Check the link, the largest items are Medicare/Medicad, Social Security, and defense. We already know Obamacare will increase costs to the federal government.

The government cannot tax its way out of this situation, much like a drunk can't drink themselves sober.
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chriss0114
the meanderings of a madman
12:20 PM on 07/28/2010
so cut revenue to solve a debt problem--I tell my boss to cut my paycheck to help with my mortgage--THANKS!!

the Republican way! no wonder W ranks where he does in the presidential rankings and our country is doing so well economically!
12:49 PM on 07/28/2010
Take a class on the velocity of money and you'll understand better.
Oh, and there is no correlation between your paycheck and government revenue/spending. For your paycheck, you actually did something!
05:06 PM on 07/28/2010
A more appropriate example would be to ask your boss to raise prices 50% for your goods or services in the current economy in order to raise more revenue.

How would that impact the ability to service debt and increase your paycheck?
02:16 PM on 07/28/2010
So then what is the answer? Cut medicare/medicade and Social Security? Or, maybe we should privatize the lot and “let the markets work”. How about stop being the police force of the world and concentrate on building wealth at home? The problem is conservatives think war is worth the blood and coin, just as long as it’s not their blood and coin.
03:13 PM on 07/28/2010
"The problem is conservatives think war is worth the blood and coin, just as long as it’s not their blood and coin. "

Whose "blood and coin" is Obama using in Afghanistan?

Sounds like you need to update your talking points...
04:27 AM on 08/01/2010
These wars would end if there were a draft and if taxes were raised to actually pay for these filthy death campaigns. These wars will end when people stop volunteering to join them - only to find out that they are "re-volunteered" many times over their original expectation. Bush and Obama have actually severely weakened our national security by their insane use of the military as they have done. Then they use military members and their families as props at their speeches and everybody stands and applauds and looks beatifically at the uniformed person standing there in the balcony next to Michelle or Jill or Laura or Hillary.....

It's more absurd than any novel - even "Catch-22" - could capture, yet it goes on and on and on. Many people are getting very, very rich off these "wars" which should cause a national retching, but instead: silence. We now know that it was the draft that caused the protests during Vietnam, and that is a crass, ugly fact. If there were a draft now, these wars would end. There is no draft. There are "volunteers" (in other words, America has a mercenary army) and so no is too bothered by what is going on. Put a sticker on your car "Support the Troops" and give that sticky greeting, Thank you for your service"..... and move on.

Wretched state of affairs. Country in severe decline, right under our noses. Can't you smell it? Smells like dirty money.
10:08 AM on 07/28/2010
This should not be a partisan argument. The stakes are too great. We know what we must do. The Clinton Administration and the Congress worked hard at reducing spending. Eventually, government spending was reduced to 18.4% of GDP at the end of Clinton's term. The result was budget surpluses.

We need to return to that kind of fiscal responsibility. Before Democrats took control of Congress, the deficit was $161 Billion in 2007. Now it is nearly ten times that! The U.S. can not sustain a federal government that spends 25% of GDP.
11:25 AM on 07/28/2010
My fan! You're absolutely correct. We need to get off this pin-the-deficit-on-the-party game and get back to sanity. When the repubs are in control, they justified deficits on the basis of national security and whatever else. Who wrote letters to the congress when the deficit was going out of control then? When demos are in control, they justify them based on the economy, the unemployed and whatever else. Who wrote (is writing) letters to congress as the deficits go further out of control?

I read global warming deniers and many contend that cutting back on carbon will hurt the economy. Well, it might in the short run. I read problematic-deficit deniers and they contend that cutting back on deficits will hurt the economy in the short run, and it might. Why not think long-term?

I think that Tea Party movement is good in some ways. However, where were these folks when the deficit was mounting to ten trillion dollars? Were they writing letters, protesting and making a fuss? I don't think so; a few individuals were fussing and not getting heard. We need millions and millions of individuals to get out the pen and ink and write letters to all those folks you voted for (or against) and let them know that we feel that the long-term effects of out of control spending are unknown and potentially very harmful. If wild spending doesn't stop now, when will it stop?
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chriss0114
the meanderings of a madman
12:27 PM on 07/28/2010
they NEVER "justified" anything, hence you "whatever else" comment

no-bid contracts to companies with whom they had vested interests and threatening inspectors general who brought attention to irregularities and law breaking resulting in high expenditures and a rip off of the US treasury
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chriss0114
the meanderings of a madman
12:22 PM on 07/28/2010
W's tax cuts will contribut 3 TRILLION DOLLARS to the debt if left as is
01:09 PM on 07/28/2010
It is more like 1.5 trillion over 10 years- but that assumes the economy was roaring like it was. This recession has hit the rich as well so it is more likely to be 600-800 billion. Still it is less than tarp, hc, and stimulus which were almost a trillion a piece.
10:03 AM on 07/28/2010
...something the dems would never do, to be sure
ThatsTheTheWayItIs
religion, ideology, partisanship are delusional
09:58 AM on 07/28/2010
"raising the retirement age, got majority support from participants. However, it turns out that this result was based on a software error. When the error was corrected, support fell to 39 percent."

I was a software engineer for 30 years, and I'll bet that's a lie. Things blamed on "bugs" are usually human input errors, or possibly the programmer was intentionally given a bogus method of counting.

Not that there are not a lot of bugs, there are, which is why "software error" is a convenient, believable excuse. Sure, blame the programmer :-)
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PapaBurgandy
09:20 AM on 08/01/2010
The insurance companies did it, why not a PAC right?
07:59 PM on 08/01/2010
Well in this particular case it sounds like a logic error:
"America Speaks has explained this discrepancy by identifying a technical glitch in the software that they used to count up the responses. They claim that on certain questions, participants hit the button multiple times, and that all of them counted, increasing the perceived support."