All of DC is throwing a fit over deficits and, despite that fact that it’s VERY overwrought, it’s time. However, the problem isn’t as many (mostly Republicans and a few Democrats) insist spending and long term entitlements.
Aside from our stimulus spending, the actual structural deficit at this point is related almost entirely to the Great Recession. That’s the way it’s going to be when underemployment is running 17% which causes some not to pay any federal taxes, depressing severely government revenue. The common refrain from The Morons is that ‘government should tighten it’s belt just like ordinary people’. For this argument to hold up, two things would need to be true:
1) Government spending on goods and services would have to not create jobs
2) We would have to live entirely in an intellectual construct devised by Eric Cantor
To the first point, it’s simple. Boeing. Halliburton. Lockheed Martin. IBM. EVERY nursing home in America. All of these businesses employ people that would not have jobs were it not for government spending. Some of the companies would simply not be able to exist without government spending. It’s not that they’re parasites (though Halliburton is pretty close), it’s that they provide a good or a service to government (sometimes on behalf of government directly to citizens) that the nation needs. This spending by the government keeps these people employed and keeps the economy going. It’s an essential piece to the puzzle called ‘rebuilding our economy’. Government spending is an absolute necessity as the private sector deleverages because it keeps the economy going and helps build infrastructure the private sector will need for the next expansion phase. As the economy grows, debt to GDP becomes marginal and tax receipts go up, like they did in the 90’s, until we start running to surplus. Then we can worry about paying down debt.
To the second point, neither Cantor nor Paul Ryan have even the foggiest clue what they’re doing or talking about. They live in their own little world and we’d be well advised to leave them there.
Now is the most critical time to maintain spending. If we ever have any hope to return to broad prosperity, we have to give the economy the time it needs to bring unemployment down. Without higher employment, the government will never be able to support itself. Cutting spending right now well might cause a permanent adjustment downward which throw the country into an economic death spiral as everyone looks to slash spending and hoard cash.
Cutting spending was a massive factor in making the Great Depression just as bad as it was. It was also the primary reason for the recession of 1937.
While the government and Fed response to the crisis and the recession weren’t perfect, they were adequate in keeping us from a Great Depression level event. It’s taking time to recover and simply because things haven’t turned on a dime, the Republicans and now some Democrats are complaining that it didn’t work. You saw one of them, Rep. Paul Ryan, Tuesday night whining about it like a petulant child. Nothing, however, could be further from the truth. First, unemployment hasn’t gone to Great Depression levels and second, EVERYTHING THEY WANT TO DO HAS BEEN TRIED BEFORE. We can see exactly how their plans work out… it leads to soup lines and 30% unemployment. It’s what made the Great Depression as great as it was. It’s also what’s dragging the British back into recession RIGHT NOW.
For close to a decade, we had a President whose budget continuously exceeded income and caused massive deficits. During President Bush’s service, the national debt more than doubled. That was an inexcusable thing to do. It also betrays Cantor and Ryan as liars and hypocrites because both voted for those deficits and the increase in debt. Now, while their fellow Americans and constituents need help from the government they’ve supported since birth, they want to force the kind of hardship and privation worthy of a Dickens novel. And they want to do it for no other reason than to beat down the President.
If Obama said the sky was blue they’d call him a liar and a socialist. These are not serious people and it’s time to quit listening to anything they have to say.