"Reagan proved deficits don't matter," Vice President Cheney said in 2002 when pushing for a fresh round of tax cuts. With this attitude in hand, Bush passed on a budgetary nightmare to his successor. Bush came into office with an advantage few presidents have enjoyed -- a $230 billion surplus. But due to a $1.35 trillion tax cut in 2001, a $1.5 trillion tax cut in 2003, and a massive defense buildup through the Iraq and Afghanistan wars, Bush quickly blew through that surplus. The next president will "inherit a fiscal meltdown," Senate Budget Committee Chairman Kent Conrad (D-ND) warned in February 2008, as the Bush administration projected a budget deficit of $400 billion. ...Progress Report
Who knows precisely how lawmakers make up their minds? We suspect they pat their pockets first just to check on how much any particular "interest group" has contributed and then vote accordingly. We suspect they watch the polls and then vote. Either way: lousy deal.
If members of Congress cater first to lobbyists, that's bad enough. But voting according to the fleeting, media-driven opinions of The People may be even worse.
Steve Benen, quoted at length in today's Times, puts his finger on the problem. He looks at one particular question in the latest CNN poll: "Which of the following comes closer to your view of the budget deficit -- the government should run a deficit if necessary when the country is in a recession and is at war, or the government should balance the budget even when the country is in a recession and is at war?" Benen responds:
Given the precarious state of the economy and widespread concerns about unemployment, common sense suggests concerns over the deficit should wane. But the poll found that a whopping 67% of respondents want the emphasis to be on deficit reduction, while 30% see the deficit as necessary under the circumstances. Those results are very similar to those from an NBC News/Wall Street Journal poll taken a few weeks ago.
It's probably worth noting that the majority is hopelessly wrong. I'm not even sure if the majority fully understands what the deficit is, why it's large, what would be needed to make it smaller, and how it fits into the larger economic landscape. For many, it seems the "deficit" is just an amorphous concept that loosely means "bad economy."
Which is why it's important that policymakers not base policy decisions on illiteracy. Americans say they want a stronger job market and a better economic growth. They also say they want less spending, lower taxes, and an immediate focus on deficit reduction. The inherent contradictions are lost on far too many...
You can spent the rest of your life banging your head against the wall over the Republicans' success at convincing "illiterates" -- really, innumerates -- that Democrats run huge deficits while Republicans attempt nobly to rein them in. Or you can hammer home the historical fact that Republicans are the profligates and Democrats have been successful in cleaning up the mess.
Lately it's been something like this: Bush left us with a $1.3 trillion deficit and Obama has run it up to $1.4 fighting the Bush recession.
What matters is that we're asking innumerates whether and how deficits should be used. CNN gets a talking point. The nation looks terrified.
Economists believe we need -- yes, need -- to use deficit spending to fight the recession and potential depression. Not for nothing are FDR's approval numbers off the map: he did just that.
Meanwhile, also according to the Times, "New Consensus Sees Stimulus Package as Worthy Step." Maybe the truth squeaking through a narrow crack in the solid cloud of ignorance after all.
...With roughly a quarter of the stimulus money out the door after nine months, the accumulation of hard data and real-life experience has allowed more dispassionate analysts to reach a consensus that the stimulus package, messy as it is, is working.The legislation, a variety of economists say, is helping an economy in free fall a year ago to grow again and shed fewer jobs than it otherwise would. Mr. Obama’s promise to “save or create” about 3.5 million jobs by the end of 2010 is roughly on track, though far more jobs are being saved than created, especially among states and cities using their money to avoid cutting teachers, police officers and other workers.
There are criticisms, some of them understandable. It was necessary for the administration to pump up optimism and expectations early in the year. The climate of gloom was itself enough to turn recession into depression. Now many are critical -- things aren't as improved as they'd hoped. But reality overrides criticism: things are improving.
In interviews, a broad range of economists said the White House and Congress were right to structure the package as a mix of tax cuts and spending, rather than just tax cuts as Republicans prefer or just spending as many Democrats do. And it is fortuitous, many say, that the money gets doled out over two years — longer for major construction — considering the probable length of the “jobless recovery” under way as wary employers hold off on new hiring.
Many economists believe the stimulus package should have been larger and, failing that, should be repeated. They're right but they know it's a hard sell to self-styled "deficit hawks" -- ironically the very people who created the deficit. Without a second stimulus package, we may find ourselves in a second recession.
Deficits created to fund unnecessary wars and fill the pockets of private contractors and corrupt members of Congress? Bad. Deficits created to stabilize the economy and bring unemployment down? Good.
Some day the "illiterates" and "innumerates" may learn in their history classes that America should think twice before turning over management of a large and intricate economy to a Republican.
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P.S. Even Bruce Bartlett at Forbes thinks the Republicans are suffering from "deficit hypocrisy." Now it's time for conservatives to catch up with what the rest of us know. After a while self-delusion and outright lies just don't work anymore.
