The "sequester" -- mindless, across-the-board spending cuts designed purposefully to be abhorrent to both political parties -- now seems likely to go into effect on March 1. The sequester cuts added to spending cuts and tax increases already scheduled will slow growth and cost jobs. Government austerity has already contributed to the worst recovery in post-World War II history. Why would the U.S. repeat this folly, despite warnings from the IMF and Federal Reserve officials? Every calamity has many authors -- Obama's premature turn to deficit reduction in 2009, the Tea Party zealots, a hapless and clueless Republican congressional leadership and more. One major contribution comes from the money and monomania of Pete Peterson, a Wall Street billionaire who has committed about half a billion bucks rousing hysteria about deficits and debt.
Seemingly, President Obama has moved off the deficit-hawk kick that marked his posture in 2010 when he appointed the Bowles-Simpson Commission, and 2011 when he agreed to a budget deal with massive cuts and automatic triggers adding up to about $4 trillion in deficit cuts over a decade. Seemingly, too, the corporate-led "Fix the Debt Campaign" -- millionaires and billionaires telling the rest of America to tighten its belt for the greater good -- isn't getting a great deal of traction. But despite the sheer unreality of their claims, the austerity lobby keeps winning by defining the terms of debate. Nearly everyone, right, center and left, is arguing about the economic recovery in terms of what the debt-to-GDP ratio should be in 2023. That is the wrong question. The right question is: how do we get a stronger recovery going now?
President Obama and the Democrats' willingness to accept cuts to Social Security in the form of the gimmicky "chained CPI" right after an election where no candidate for federal office campaigned on it shows that the Right's long-term project of undoing the New Deal marches on despite the electorate's wishes.