Obama's Terrible Deficits and Massive Spending

Yeah, not so much.

Digby:

So, how have the Republicans managed to persuade Americans to buy into the whole “Obama as big spender” narrative?

It might have something to do with the first year of the Obama presidency where the federal budget increased a whopping 17.9% —going from $2.98 trillion to $3.52 trillion. I’ll bet you think that this is the result of the Obama sponsored stimulus plan that is so frequently vilified by the conservatives…but you would be wrong.

The first year of any incoming president term is saddled—for better or for worse—with the budget set by the president whom immediately precedes the new occupant of the White House. Indeed, not only was the 2009 budget the property of George W. Bush—and passed by the 2008 Congress—it was in effect four months before Barack Obama took the oath of office.

Jon Perr at Crooks and Liars:

Credit: Perrspectives

 

As documented elsewhere with these five charts, after $2.5 trillion in reductions over the next decade already achieved since 2011, the U.S. national debt is stable in the near and mid-term. Simply put, there is no crisis to justify the additional spending cuts Republicans are now trying to extort. As it turns out, federal spending has hardly budged while deficits have plummeted since Barack Obama first took the oath of office in January 2009.

 Next time you hear some conservatard railing about Obama's spending hurting the economy, say this:

"Yes, Obama accepting republican austerity and spending cuts is exactly why people have no money, people have no jobs."

Irish to the Austerity Theves: Fuck Off and Die

This is what they fear: a critical mass of people who simply refuse to be robbed.

James Murphy at The Nation:

CAN’T PAY, WON’T PAY: March 31 marked the deadline for Irish households to register and pay a new property tax—the latest deficit-reducing initiative introduced by 
the government at the behest of its bailout partners in the European Union, European Central Bank and International Monetary Fund. But in cities like Dublin and Waterford, and across rural towns from West Cork to Donegal, a network of “Can’t Pay, Won’t Pay” groups has called on citizens to boycott this “unjust tax.” The grassroots movement was initiated by political organizations from across the left, trade unionists and residents’ associations, and the campaign has spread like wildfire. Local campaigns recently elected delegates 
to form a national steering committee.


An unemployment rate of 14 percent, swingeing cuts to local services and stalled economic growth have sown seeds of discontent. But no issue has galled the Irish people more than the continued payment 
of billions of euros to the unguaranteed bondholders of Irish banks. That the proceeds of this new household charge will go to the same faceless agencies that spec­-
ulated and lost on Irish banks—many of which are now defunct—has been enough to ignite the anger stirring beneath the surface. And the fact that the deadline falls on the same day $4 billion in government money 
is to be paid to service a fraction of the catastrophic debts of the Anglo Irish Bank—
itself disbanded and the subject of a criminal investigation—has fanned the flames. 


Town hall meetings on the issue have regularly drawn crowds of several hundred people. A recent gathering in Dublin attracted 3,000. The movement has found resonance across all sectors of Irish society, uniting financially stretched communities.


Less than a week before the deadline, 
a full 80 percent of Irish households had 
not paid the charge. Although quiet and restrained, this degree of civil disobedience is sure to be heard loud and clear in 
Dublin. And more pertinently given Ireland’s receivership status, Brussels and Frankfurt too.

Stay in your house. Move your money to a local credit union. Demand every government service that keeps this country civilized and operating. Defy the Austerity Thieves.

Yes, Repugs Are Lying - Still, Again and Always - About Deficits

First, deficits resulting from stimulus spending are not bad, but positively good. Secondly, repugs only care about deficits when a Democrat is in the White House. Thirdly, the causes of 90 percent of our current deficit are two Bush/repug catastrophes: the 2001 tax cuts for the parasitic obscenely rich, and the Monster Clusterfucks in Iraq and Afghanistan.

Brian Beutler at TPM:

Republicans have taken to describing President Obama’s budget as “deficits built to last” — a play on Obama’s call for an economy built to last. The implication: hand the government over to us, and we’ll rid the budget of this deficit scourge. Put aside for a moment that wiping out deficits too fast would be economically disastrous, leading to rocketing unemployment rates. The truth is there are plenty of budget proposals out there, including Paul Ryan’s “Path To Prosperity,” which was endorsed by nearly every Republican in Congress. And these also project significant deficits well into the future.

Of course, Obama’s budget is very substantively different from Paul Ryan’s Path to Prosperity. Obama’s would draw down deficits over the coming decade with a mix of proposed tax increases on high income earners and corporations, already enacted spending cuts, and additional cuts to health care spending and other programs. But it maintains the basic shape of the existing safety net over the long term. Ryan’s calls for huge cuts to the safety net, for making Medicaid a block grant program, and, after a decade, for phasing out Medicare. But he proposes significant tax cuts at the same time.

And even with all that slashing, just what does that do to the projected deficit? The chart below tells you quite starkly:



Yes, Ryan’s plan also gives you… deficits built to last! Ryan’s own numbers project annual deficits of about $400 billion under his plan by the end of the decade. Obama’s budget draws deficits down to about $600 billion over the same time frame. That’s not nothing. But it’s not what you’d expect given the GOP’s heated rhetoric.

Note, too, that Paul Ryan’s budget and the Bowles-Simpson plan based their projections on economic forecasts that grew gloomier over the past year — so their deficit projections are outdated, and perhaps a bit rosier than reality.

Rethugs "Shocked" Tax Cuts Failed to Turn Bullshit Into Steaks

C'mon, Steve: they're not really surprised and you're not really surprised that they're surprised.

SURPRISED BY THE DEGREE OF SURPRISE.... The day of President Obama's inauguration, the federal budget deficit left by the Republican administration was $1.3 trillion. After some additional economy-saving measures were added to the mix, the 2009 deficit reached $1.4 trillion. Last year, things improved slightly, and the deficit fell to $1.29 trillion.

Yesterday, the Congressional Budget Office warned lawmakers that the budget picture was poised to get worse again, projecting a $1.5 trillion deficit this year.

Summarizing the thoughts of many, Sen. Mark Kirk (R-Ill.) told Roll Call, "I think everyone is in a collective state of shock right now over the CBO numbers."

Really? Why is Congress so surprised? Frankly, I'm a little shocked by their collective state of shock.

This really isn't complicated. The deficit picture was starting to improve, but congressional Republicans insisted that Bush-era tax breaks get extended for another two years. How did Republicans propose paying for these tax cuts? They didn't -- the GOP said the price tag should just be added to the deficit.

And wouldn't you know it, that means ... I hope you're sitting down ... the deficit will go up, just as lawmakers were told it would if they cut taxes without paying for them.

SNIP

The fact that Congress is surprised only reinforces the fact that Republicans aren't paying close enough attention to reality. There's no great mystery here -- the deficit is going up because of the new round of tax cuts. That's what happens when one cuts taxes -- less revenue means higher deficits.

If Republicans didn't want a higher deficit, they shouldn't have fought so hard to make it worse. They had a choice -- expensive tax breaks or deficit reduction. They made their choice, were told what the consequences would be, and are now stunned by the realization that the rules of arithmetic haven't been suspended by the GOP's force of will.

It's unclear to me why Republicans aren't confronted with hysterical laughter when they claim credibility on fiscal issues. This is a party that inherited a massive surplus a decade ago, when we were actually paying off our debt. The GOP proceeded to squander the surplus, add $5 trillion to the debt in just eight years, and then demand Democrats clean up their mess.

When Dems did just that and the deficit picture started to improve, Republicans then demanded tax breaks that once again made the budget shortfall worse.

Deficit hawks that vote Republican are tragically confused. There's never been a more fiscally irresponsible political party.

But of course they only care about the deficit in terms of keeping it huge: as a rhetorical weapon to use against Democratic attempts to create jobs and grow the economy, and as an actual fiscal obstacle to such attempts - the starve the beast principle. And as a way to whip up votes among the ignorant and terrified.

Because the real goal is to transfer all wealth to the already obscenely wealthy.

From Perrspectives:

So it comes down to this. Republicans believe they can turn bullshit into gold. Despite the inescapable conclusion of history, theory and empirical evidence to the contrary, Mitch McConnell, Jon Kyl, John Boehner, Tom Coburn, John McCain, Kay Bailey Hutchison and other Republican alchemists continue to insist that cutting taxes increases government revenue and thereby reduces the deficit. Of course, even though the tax cut claim is laughably false, conservative ideology requires that it must true. Otherwise, the Republicans have just been giving money to rich people.

Repeat that every chance you get: the Republicans have just been giving money to rich people.

Have you talked to your Democratic neighbors today?

Repug Budget Cuts: Everything Must Go!

Repugs are being very cagey about just how they would pay for the trillions in tax cuts for the obscenely rich. But now conservative financial news giant Bloomberg has taken a crack at figuring it out.

Brian Beutler at TPM

"With common-sense exceptions for seniors, veterans, and our troops, we will roll back government spending to pre-stimulus, pre-bailout levels, saving us at least $100 billion in the first year alone and putting us on a path to balance the budget and pay down the debt."

So reads the House Republicans' "Pledge to America" -- a supposedly deficit-reducing plan that calls for trillions of dollars' worth of specific tax cuts, but only $100 billion of non-specific spending cuts to offset that cost.

Still, $100 billion pays for a lot of things. Bloomberg took a close look at just what would take a hit under the Republican plan -- adding specificity where the Republicans offered none. Here are the top five issues that would suffer under the Pledge to America.

1. Education

President Obama has requested over $70 billion for the Department of Education next year. A cut along the lines of what the Republicans propose would necessitate a $5 billion cut to the Pell Grant program, which assists low-income students with college tuition costs.

2. Health Care

This is where Republicans really want to do damage -- to Obama's health care reform law. But their discretionary spending cut alone would mean billions in fewer resources for the Department of Health and Human Services. Perhaps most troubling, the National Institutes of Health would take a $6 billion hit. The Centers for Disease Control would also take hundreds of millions of dollars in cuts. And the National Cancer Institute, where spending has risen dramatically in the last two years, would have to pare back about $13 billion.

3. Social Services

Congress would also have to cut money for Justice Assistance Grants -- a.k.a. state and local law enforcement. Without cuts, that's $2 billion. Republicans would take $400 million from local police forces alone.

4. Housing

Everyone knows America's infrastructure is crumbling. Part of the initial response by the Administration was an increase in funding for the Departments of Transportation, and Housing and Urban Development. Returning to 2006 levels would mean over $13 billion in lost revenue for projects under the purview of that department.

5. Revenue Collection

It's probably wrong to think that the public wouldn't support cutting funds for tax collectors. But if the government is going lean, it will probably have to lay off people who collect tax dollars, and conduct audits. That sounds great to your average frustrated tax payer. But Republicans talking about closing budget shortfalls will be working against themselves. In fact, without their help, the Treasury could lose just about as much money as it saves in non-defense, non-veteran non-senior, discretionary spending.

But of course that doesn't come anywhere near to making up for the repugs' plan to mortgage the nation to the wealthy for eternity.

So what the repugs are really talking about is either monster deficits that will collapse the economy, or letting Grover Norquist finally drown the entire government in his bathtub.

Twenty-four days to Election Day. Have you made calls for your local Democratic Congressional candidate today?

Repugs Demand You Pay $3 Million to Each of the Nation's 120,000 Richest

Here's yet another chart, courtesy of Kevin Drum, illustrating the repugs' unconscionable demand that middle-class Americans hand over their last dime to the already obscenely wealthy.

Paul Krugman:

We need to pinch pennies these days. Don’t you know we have a budget deficit? For months that has been the word from Republicans and conservative Democrats, who have rejected every suggestion that we do more to avoid deep cuts in public services and help the ailing economy.

But these same politicians are eager to cut checks averaging $3 million each to the richest 120,000 people in the country.

What — you haven’t heard about this proposal? Actually, you have: I’m talking about demands that we make all of the Bush tax cuts, not just those for the middle class, permanent.

SNIP

The Obama administration wants to preserve those parts of the original tax cuts that mainly benefit the middle class — which is an expensive proposition in its own right — but to let those provisions benefiting only people with very high incomes expire on schedule. Republicans, with support from some conservative Democrats, want to keep the whole thing.

And there’s a real chance that Republicans will get what they want. That’s a demonstration, if anyone needed one, that our political culture has become not just dysfunctional but deeply corrupt.

What’s at stake here? According to the nonpartisan Tax Policy Center, making all of the Bush tax cuts permanent, as opposed to following the Obama proposal, would cost the federal government $680 billion in revenue over the next 10 years. For the sake of comparison, it took months of hard negotiations to get Congressional approval for a mere $26 billion in desperately needed aid to state and local governments.

And where would this $680 billion go? Nearly all of it would go to the richest 1 percent of Americans, people with incomes of more than $500,000 a year. But that’s the least of it: the policy center’s estimates say that the majority of the tax cuts would go to the richest one-tenth of 1 percent. Take a group of 1,000 randomly selected Americans, and pick the one with the highest income; he’s going to get the majority of that group’s tax break. And the average tax break for those lucky few — the poorest members of the group have annual incomes of more than $2 million, and the average member makes more than $7 million a year — would be $3 million over the course of the next decade.

SNIP

So far, the Obama administration is standing firm against this outrage. Let’s hope that it prevails in its fight. Otherwise, it will be hard not to lose all faith in America’s future.

Kevin Drum adds:

What really gets me about this whole thing is that conservatives are barely even trying to defend their position. As Krugman says, they talk a bit about the impact on small business owners, but this is so transparently flimsy you can almost sense their embarrassment when they bring it up. And then there's sort of a pro forma insistence that raising taxes a few percentage points on the wealthy would stall the economic recovery, but there's virtually no evidence for this. In fact, just the opposite. A small tax increase on the rich would probably have the smallest economic effect of practically any revenue-raising policy you can imagine. It would barely be measurable.

There really is, literally, no reason to favor extending Bush tax cuts for the rich except purely as a gift to the rich. As the Tax Policy Center chart below shows, the million-dollar crowd would get a 3.3% income boost and the ten-million-dollar crowd would get a 5.8% boost in their incomes. And the deficit would increase by the better part of a trillion dollars. That's it. That's all that would happen if the top end cuts were extended.

I sure wish there were a political movement that cared as much about the $50,000 crowd as the conservative movement does about the million-plus crowd. I wonder what we'd call it?

It's not class war anymore; it's economic class mass destruction.

"If You're Not For This Bill, You're Not For Jobs, Period."

There is one way and one way only to save the economy and incidentally maintain strong Democratic majorities in Congress this November: massive federal spending on jobs, jobs and more jobs.

David Dayen explains:

We have a $180 billion dollar jobs bill likely to get a vote this week. Very few people know about it. But labor has made it a litmus test.

SNIP

So basically, everything that’s been discussed over the last few months got mixed together into this bill. And some Democrats wanted to at least partially pay for this, so they got some tax loopholes closed:

So, what about the closing tax loopholes part? This is good. Really good.

Significant parts of the bill would be paid for by eliminating the tax incentives that encourage companies to ship American jobs overseas. The bill would prevent corporations from using current U.S. foreign tax credit rules to subsidize their foreign activities, and close a host of corporate tax loopholes that allow companies to avoid paying U.S. taxes through a variety of foreign tax credit schemes.

But here’s the best part. You know how working folks are required to pay regular income and employment taxes? Even if you are unemployed you likely have to pay the regular income tax on your unemployment insurance payments. But wealthy investment fund managers don’t. No siree. The fees they “earn” are taxed as so-called “carried interest”, a tax loophole that allows their income to be taxed at only 15 percent, as if it were capital gains.

Super-rich hedge fund managers, private equity fund managers and other high-flying Wall Street traders pay a much lower tax rate than working people do — even if you’re on unemployment! And taxpayers are left holding the bag for an estimated $2 billion a year in lost revenues due to this one loophole.

Well, they helped bring down the economy while making out like bandits — and now it’s high time they paid their fair share. This jobs bill would close their “carried interest” tax loophole.

This only partially covers the $180 billion price tag, which has made some Blue Dogs and fly-by-night fiscal conservatives nervous. But the Center for Budget and Policy Priorities says that deficit concerns should not get in the way:

Concerns that the package is too large or that it should not be enacted unless it is fully paid for are misplaced. The bill includes three important but strictly temporary measures that will stimulate additional demand for goods and services and create jobs while the recovery is still struggling to gain traction; they are not permanent measures that add to the long-term budget deficit [...]

The impact of this jobs bill on the economy is strongly positive in the near term, while the impact on our long-term fiscal problem is insignificant.

Extending UI and COBRA, along with fiscal relief for the states, are targeted, temporary measures which increase demand in the short term, and offsetting the whole bill would essentially defeat the purpose. This is about as much of a “jobs bill” as we’ll get for the rest of the year, which is why labor has jumped aboard so strongly. Richard Trumka’s statement on this is nothing short of aggressive:

If you’re not for this bill, you’re not for jobs. Period.

And please, no more excuses about the budget deficit—unless and until you’re willing to make Wall Street pay its fair share to bring down the deficit. The people who are always saying “no” to jobs because of the deficit are often the same people who voted to squander our hard-earned budget surpluses so they could shower undeserved tax breaks on rich people during the Bush years. Apparently, spending money on rich people is perfectly okay, but investing in jobs for working class Americans sets off alarm bells.

Labor has basically made this bill central to their endorsement process for members of Congress.

In the midst of an unemployment crisis, measures like this are sorely needed, and we’ll see if Congress has enough sense to realize that this week.

Read the whole thing.

Then call or email your members of Congress here.

Tell them to stand up to the economy-killing deficit fearmongers, as Susie Madrak explains:

Every time the Republicans get deficit fever, our allegedly Democratic legislators fall back into the fetal position, muttering, "Please don't hurt me!" Oddly enough, this fever occurs only when there's a Democrat in the White House!

SNIP

With the national debt at its highest level in nearly 60 years, the question of whether to cut spending -- and if so, how -- is pitting liberals against conservatives, and Congress against the president. The White House has proposed a three-year freeze in programs unrelated to national security and warned House leaders Friday that it may go farther, targeting the Defense Department for cuts. Meanwhile, House leaders unable to agree on a long-term budget blueprint are considering other ways to signal fiscal toughness, including a one-year budget plan that would cut 2011 spending even more deeply than Obama's freeze.

This is so stupid as to defy belief. Instead of reassuring voters that, you know, several Nobel Prize-winning economists say we need to increase spending that stimulates the economy, our Fearless Democrats are falling right in line with the Tea Party's economic disinformation.

SNIP

Watch our brave Democrats run against the very things they've accomplished...

Read the whole thing.

Then call or email your members of Congress here.

If Teabaggers Worry About Deficits, Then There's No Reason to Worry About Deficits

I made the mistake of tuning the television to MSNBC a few minutes before Countdown started at 8 p.m., thus subjecting myself to the end of Tweety's analpunditry on the deficit. Do I really have to explain how completely fact-free and misleading it was? Here's a hint: teabaggers are worth listening to because they're worried about the deficit.

Give. Me. Strength.

First, teabaggers thought deficits were just fine and dandy when repugs were using them to turn obscenely rich people into pornographically wealthy assholes and to wage war on annoying brown people who won't hand over their oil.

Second, teabaggers have an unbroken record of being wrong about every single thing under the sun.

Third, any fifth-grader who understands supply and demand knows that in a recession, deficits - if used to fund jobs - are the best possible thing you can have.

As Digby explained back in February:

Suddenly, you can't turn around without getting a panicked lecture about the deficit. But in all the discussions about the horrifying, worse-than-terrorism, scarier-than-nuclear-war threat to everything we hold near and dear, nobody ever seems to discuss the fact that much of the deficit is due to unemployment. (Gosh, it turns out that if everyone were working, they'd be paying more taxes and the government would have more money!) We are supposed to believe that the deficit stems from profligate spending on old people and undeserving little dark children who refuse to get a job.

The Pete Peterson crew have been poised for some time to make this move. They are very slick and they are sending out massive amounts of scare literature to everyone in the chattering and ruling classes. And they are working overtime to convince the American people that fixing the deficit is imperative if they want the economy to improve. And it's working. Not the economy --- the propaganda.

Sadly, part of the reason it's working is because the president and his people keep saying that the federal budget is just like the family budget and you have to pull in your belt at times like these, when the opposite is true. It's a terrible way to discuss this issue --- unless you really do want to hamstring your administration and keep it from being able to do the things it needs to do to bring employment back.

I appreciate the administration's desire to bring the Republicans' "plans" into the light, particularly those that want to privatize social security for people under 55 and give them "vouchers" for health care to keep costs down. (Out of vouchers? No dialysis for you!)If they do a good job of exposing the Republicans' true intentions, it could reap partisan loyalty from many, many millions of people. I sincerely hope that's what they plan to do.

But in the meantime, you have Tim Geithner begging the Republicans to help with deficit reduction in a bipartisan way. Here's what I would love to know: what does the administration think a reasonable bipartisan compromise on deficit reduction would look like?

If the Democrats could do one simple thing, it would be to repeatedly explain that deficits will never go down unless we put everyone in this country back to work --- it would go a long way to evening the Peterson Playing Field. As it stands, the alleged reason for the deficit is the "entitlements" which the conservative owners of America have been itching to eliminate from the moment they were conceived. If they manage to get it done at this moment of extreme insecurity, it will be one of the great propaganda and Shock Doctrine achievements of all time.

If ever people need the security of an old age pension and guaranteed medical care in their unhealthy golden years its now. It would be too ironic (and sad)if they were manipulated into giving that up under the misapprehension that the country's current woes can be fixed if they do.

(And the kids had better get that extra room ready because mom and dad are going to be moving in.)

This is seriously fucking dangerous. If President Obama and Congressional Democrats fall for the Deficit Scam and cut spending and entitlements, it'll send this country spinning at the speed of light into a bottomless pit we'll never climb out of.

Smelling Salts for the Deficit Hysterics

The deficit hysterics have made the jump from stern warnings and finger-wagging to actual threats.

Susie Madrak at Crooks and Liars nails it.

Would that be Moody's, the same rating agency that certified big steaming piles of mortgage manure as Triple AAA-rated bonds and collapsed the international economy? I guess this means that Wall Street wants us to cut the deficit, huh. Well, I'd say what's good for Wall Street is bad for America:

The United States and other top world economies need to make potentially painful government spending cuts or risk losing the high-grade credit ratings that have kept borrowing affordable, the Moody's rating agency said Monday.

Here's the problem: cutting spending in a recession/depression is like bleeding somebody who's dying from blood loss.

This is self-evident to anyone who either lived through the 1930's or passed basic macroeconomics, but because neither history nor reality has much currency among the deficit hysterics, here are some smart, sharp, simple explanations:

Economist James Galbraith in defense of deficits:

For this reason, the deficit phobia of Wall Street, the press, some economists and practically all politicians is one of the deepest dangers that we face. It's not just the old and the sick who are threatened; we all are. To cut current deficits without first rebuilding the economic engine of the private credit system is a sure path to stagnation, to a double-dip recession--even to a second Great Depression. To focus obsessively on cutting future deficits is also a path that will obstruct, not assist, what we need to do to re-establish strong growth and high employment.

Read the whole thing.

Economist Dean Baker on the fake deficit crisis:

The country faces a serious crisis in the form of a manufactured crisis over the budget deficit. This is a crisis because concerns over the size of the budget deficit are preventing the government from taking the steps needed to reduce the unemployment rate. This creates the absurd situation where we have millions of people who are unemployed, not because of their own lack of skills or unwillingness to work, but because people like Alan Greenspan and Ben Bernanke mismanaged the economy.

Read the whole thing.

Cutting spending in the name of deficits now - instead of pouring a couple of trillion into massive jobs programs to build new infrastructure - is the bank telling you that carrying a mortgage is bad for your financial health, so you either have to pay it off right now or sell your house and live on the street.

Because living on the street is so much less expensive than paying a mortgage on a house.

Deficit, Schmeficit

On Wednesday, Down with Tyranny brought us some excellent news that strains credulity: the U.S. Senate did the correct, liberal thing on the deficit.

How often does one see the Senate's leading Fascist and only Socialist join together in a highly contentious and high profile vote? If you were watching yesterday, you did. The Senate rejected Obama's somewhat squirrelly hopes for a deficit reduction commission. Needing 60 votes to avoid a filibuster, the bill only drew 53. Liberals like Bernie Sanders, Jeff Merkley, Sherrod Brown, Daniel Akaka, Sheldon Whitehouse, Chris Dodd, Roland Burris, Tom Udall, Maria Cantwell, Frank Lautenberg, Ben Cardin and Jack Reed opposed it because they knew it was a way for conservatives to gut Social Security and Medicare without leaving their bloody fingerprints at the crime scene. Meanwhile, arch obstructionists like DeMint, Sam Brownback, Jeff Sessions, Chuck Grassley, the two lunatic fringe maniacs from Oklahoma, John McCain, Jon Kyl, John Ensign, Miss McConnell and Richard Burr were afraid it might lead to higher taxes on their wealthy backers.

In the end it was a coalition of 23 mostly progressive Democrats and 23 mostly extreme right Republicans voting to kill the proposal-- for opposite reasons-- while corporate shills from both parties backed it. Obama is determined to push ahead with an advisory panel within the Executive Branch tasked with coming up with the same crappy proposals the bipartisan anti-working family Establishment is demanding. Remember, it is accepted wisdom Inside the Beltway that Republicans are allowed to run up gargantuan deficits with tax cuts for the wealthy and unfunded wars which can then be left for Democrats to clean up and get blamed for, helping elect Republicans who will run up more deficits for all the wrong reasons.

The post is accompanied by the following chart, which Matt Yglesias designed and explained back in June 2009.



Yglesias:

David Leonhardt has a nice article breaking down the sources of the growth in the budget deficit. Since Leonhardt works for The New York Times rather than USA Today, they didn’t see fit to illustrate his article with a pie chart, but I made one myself.

— “The first category — the business cycle — accounts for 37 percent of the $2 trillion swing.”

— Second, Bush-era legislation “like his tax cuts and the Medicare prescription drug benefit, [that] not only continue to cost the government but have also increased interest payments on the national debt.”

— Third, “Obama’s main contribution to the deficit is his extension of several Bush policies, like the Iraq war and tax cuts for households making less than $250,000 [...] 20 percent of the swing.”

— Fourth, “About 7 percent comes from the stimulus bill that Mr. Obama signed in February.”

— Fifth, “only 3 percent comes from Mr. Obama’s agenda on health care, education, energy and other areas.”

In other words, the very high deficits are not Obama’s fault according to any normal way of assessing political blame. That said, large deficits aren’t a moral failing that we need to hold someone accountable for. Rather, they’re a potential future practical problem that will have to be solved.

Potential future problem. You wanna know how to prevent deficits from becoming a future problem? Pass legislation that will expand the economy and create jobs: strong health care reform, massive infrastructure stimulus, massive subsidies for renewable energy, restoring Clinton-era tax rates, slashing the trillions in waste at the Pentagon.

Hey, look: all the things that will create jobs, revive the economy and eliminate the deficit are liberal policies!

No shit.

"Fiscal Conservatism" is Neither

Via Digby, a great piece on deficit stupidity by Chris Hayes:

The discussion about deficits and debt in Washington is so colossally stupid and disingenuous that even engaging it makes me despair. But today's Politico so expertly packages together every conceivable Beltway Establishment inanity about "spending" and "deficits" into one glib little piece of analysis that I can't help myself ....

There's one big maddening conceptual error at the heart of this piece (whether committed in good faith or bad I can't say) which is to confuse relatively substantial pieces of domestic legislation with a spending "binge." See, a government, like any organization, institution, or firm has expenditures and revenues. Miraculously, it can increase its expenditures, without increasing its deficit, if it also increases its revenues. This is called "deficit neutral" and it's what the current health care bill, in all its incarnations, is. It is what the cap and trade bill will also be.

SNIP

You may object to government doing the things it's doing. You may think the working poor should just suck it up when they get sick, or that we should subject Bangladesh to a horrific future in which it is plunged into the sea, but you can't say that the motivation for your objection is accounting.

This disingenuousness drives me bonkers, particularly since, as I and others have noted ad nauseum, military spending is simply never considered a relevant part of the balance sheet.

SNIP

Fiscal conservatism and deficit concern is nearly always code speak in Washington for something else: sometimes it's class warfare, or just a cheap partisan attack. Most often, when someone in Washington says they're concerned about the deficit, what they're really saying is "I would like to make sure we have a government that focuses maximally on blowing people up."

Digby adds her inimitable insight:

None of that matters. What matters is that the Villagers believe that Americans must suffer. It isn't about economics, it's about some sort of religious sacrifice. They've been leading up to this since Obama's election.

SNIP

The deficit is the bludgeon used by the wealthy bondholders to beat liberals into retreat on doing anything that might make average citizens feel that democratic government might be a better guarantor of economic security than their rich overlords (who are doing "God's Work" allegedly on their behalf.)

The press corps and the political establishment are happily doing their bidding and the fact that they are actually blabbering on about the deficit while we have more than 10% unemployment proves that we have gone down the rabbit hole -- and they are filling it in behind us.

It's class warfare. It always has been and it always will be. Those at the top who are waging it and those at the bottom who are dying from it know this. It's only we in the middle who still believe they have a chance to move up who deny the reality. But as more of us fall into the ranks of economic cannon fodder, it's just a matter of time before there's no middle left and we all take sides.