Deficit spending is a non issue, a political hat and rabbit. Competent polling (here for instance), and yes it seems to have been made necessary by all the smoke being generated on the subject, disputes the conventional wisdom push poll results of Peter Peterson and the deficit hawk combine.
Americans care much less about the deficit than they do losing their jobs to China. They care less about the deficit than they do about the continued push of America toward a "knowledge worker service economy." They do not believe it has worked and are unlikely to have any more patience with waiting for it to work as they see our trading partners co-opt our hard work in technology and know-how. They want to pull manufacturing back on shore, regardless of political leaning, and they are sick of Wall Street running the government.
You'd think that would be a clear message to Washington politicians. It's out there, it's obvious and it's bipartisan, even multi-partisan. Yet the only bipartisanship there seems to be in the capitol is that deficit spending is a dire threat. The exact opposite of what non push polling reveals of what the public thinks.
"Structural unemployment" is a term that one is hearing rather too much lately. In short, we will have higher unemployment in the future because the kind of jobs produced in this country are increasingly very high skill and experience jobs. People will be displaced by technology, robotics and remote operation. The simple, repetitive, low skill jobs that many Americans used to get right out of high school are a thing of the past, and we had better get used to it. But the public seems to have a solution for this bleak future. Bring the low skill jobs back from China.
The debt burden of future generations has politicians, many of whose sincerity you might doubt, bemoaning more stimulus spending. It doesn't seem likely that a future with a good paying job and a share of high public debt will be any more onerous than a future with no job at all but a low public debt.
The "structural unemployment" argument seems to point to a future where education will be extended into post secondary education across the board. Education expenses will rise and who will pay? The burden will fall on the public either through government or personal spending, as modern business is ever reluctant to meet their own training needs. The public seems inclined to just avoid the whole conundrum of debt and "structural unemployment" by bringing basic manufacturing jobs back to the U.S.A.
As Krugman points out, the mythical "Bond Vigilantes" may wish they could punish us in some way for running higher deficits in order to keep the economy going. One wonders what their interest might be in seeing the economy not keep going. Instead of having a problem with "structural unemployment," we might be having a problem with "structural" naked short selling and derivatives there based. Or we might have a problem with corporations engineering a labor market surplus. Take your pick.
With U.S. Treasuries at historic low interest, it is hard to imagine that there are any actual "Bond Vigilantes." And will increasing the debt to GDP ratio another 10%, another 1.4 trillion dollars, make us less credit worthy? Will 20% do it. Let's not hear the threats, lets hear some analysis. At what number will the debt of the United States be so high that people will no longer buy Treasuries or that the interest required to sell them will become prohibitive?
Re-importers, not socialists, are the natural enemy of the American people right now. And the public knows it. Tax sheltering of profits from off shore manufacturing is breaking the country by creating corporate incentives to do it, and by the resulting loss of tax revenue. Re-importers, those manufacturing in China and elsewhere, avoid taxes by reselling goods to domestic shell companies at near retail. Thus the domestic profits, and then taxes, of these conglomerates is effectively zero while the wage base is eroded so much that 40% of the population pays no taxes at all. People do understand that they have not gotten a raise in ten years and know precisely where their raises went, rising corporate profit margins.
Bankers, like they were in the thirties, are the villains to more and more. Dillinger, Bonnie and Clyde and Machine Gun Kelly may make an appearance any day now. This time they will be dressed as Tea Partiers or WTO demonstrators. The populism against Wall Street and Banks runs deep and runs the gamut of political philosophy. The Libertarians fume about an unholy alliance between government and corporations that is burying their free market utopia. Traditional conservatives are annoyed that tax dollars went to bail out banks and car companies. Liberals are angry that Wall Street gets a bail out while Main Street seems to be getting the back of the government's hand.
China is the only global economy on the move and we glance across that pond and wonder why we are subsidizing them. Depending on your world view, China is either an unprecedented mutation of capitalist evil or a resurgent instantiation of communism bent on world domination through manufacturing. What both sides of the political fence have in common is fear and loathing of China and anger that nothing is being done about the trade deficit.
Illegal immigration courts reactionary fear in both Democrats and Republicans. Illegals depress wages, which the right likes, but illegals tend to socialist ideals, and anathema to the right. Democrats welcome the potential left leaning voters but hate the dilution of labor power. What both sides can agree on is that something must be done to staunch the flow. In the middle are the U.S. Chamber of commerce and, strangely, labor unions who both see ways to exploit the undocumented.
In a grass roots populist sense, America has never been more aligned in what they are concerned about. Banks and corporations, and their lobbying power, are attracting our attention like never before. The one thing that both sides of the political aisle are running from and too is corporate money. They need it to fund campaigns and yet sense that aligning with the bankers is the kiss of political death.
The libertarian is loathe to criticize business, so criticizes the systemic evil of business in combination with government that is a magical spell contrived by the evil government. If the government were smaller, then the opportunity for evil would, somehow, be smaller. The progressive sees it the opposite way exactly. The traditional conservative sees government as an impediment to profit while the traditional liberal sees government as an arbiter between profit and the public interest. Extreme views are useful politically, up to a point. That point is when the business of the nation is more urgent than the bickering.
If the past is prologue, the thirties should be predictive of the outcome of our next election, because the working public hasn't been treated so badly at any time since than they are being treated now. Democrats should sweep, traditional Democrats anyway. But something keeps Americans from crossing the divide of party in order to vote for the solutions that they have clearly apprehended. What divides is, perhaps, a mistrust of what else the opposition might do if elected to a governing majority, other than solve the problems we see in common as needing solution. What we think is that the other side is not trustworthy enough to be entrusted with the power required to do anything. So we get the gridlock of party promotion preventing the policy that the public resoundingly wants.
It becomes clear that you could not screw up a government any more than we have screwed up ours, so as to be ineffectual even in the glaring light of what the public demands of it.
Campaign funding holds politicians all prisoner and selects for the worst of all possible politicians. We get politicians that make promises to contributors that the American people can't keep. It fans the flames of division as these strutting electioneering peacocks preen and prance before the keepers of the political war chests. It has probably always been like something like this, but all the damned corporate money just makes for a bigger production that accomplishes nothing just as fast.
It is, though, a reason to be proud, that the recognition of what ails us has penetrated the electorate to the extent that we begin to know what is wrong in common. We just do not agree on who should be allowed to try and fix it. Another year or two of unnecessary suffering may lead us to a common conclusion. After all, a Republican at the back of the unemployment line is a Democrat by the time he reaches the front.