Earth to Democrats: It’s Not Just the Tea-GOP Trying to Tank the Economy. Obama Believes Their Argument.
The latest example of Washington’s earned reputation for cynicism has been Democratic leaders like Chuck Schumer complaining that the Tea-GOP leaders are deliberately trying to tank the economy to improve their electoral prospects. So we’re staring at a Constitutional crisis that threatens the credit worthiness of the US unless both parties agree to slash government now and further cripple its ability to function in the future.
If al Qaeda were organizing this, it wouldn’t be just conservatives who see it as economic terrorism. I agree that’s exactly what the Tea-GOP is engaged in, but Democrats are not owning up to their own and their President’s complicity in this crisis.
Sen. Schumer et ilk are not being honest about how much he, his fellow leaders and President Obama have foolishly embraced the Tea-GOP’s anti-growth, anti-employment theories. As a result, voters are left with no opposition party to rebut the Tea-GOP’s cruel and reckless economic nonsense; there’s no party to propose economic policies that have been shown to work.
Obama’s Saturday morning talk continues not merely to repeat but to highlight the anti-growth economic gibberish that has become the core Tea-GOP talking point about the role of government in supporting the nation’s economy. Here’s Obama’s opening statement:
I ran for President because I believed in an America where ordinary folks could get ahead; where if you worked hard, you could have a better life. That’s been my focus since I came into office, and that has to be our focus now. It’s one of the reasons why we’re working to reduce our nation’s deficit. Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.
The good news is, Democrats and Republicans agree on the need to solve the problem. And over the last few weeks, the Vice President and I have gotten both parties to identify more than $1 trillion in spending cuts. That’s trillion with a ‘t.’ But after a decade in which Washington ran up the country’s credit card, we’ve got to find more savings to get out of the red. That means looking at every program and tax break in the budget – every single one – to find places to cut waste and save money. It means we’ll have to make tough decisions and scale back worthy programs. And nothing can be off limits, including spending in the tax code, particularly the loopholes that benefit very few individuals and corporations.
To be sure, Obama can claim he’s trying to argue that if you have to do deficit reduction, it has to include some revenue additions, and there are plenty of questionable “tax expenditures” that could be repealed to raise revenues. And if you buy the premise that economic growth and job creation depends on business confidence and that requires near term deficit reduction, then you can concoct an argument about how a “balanced” plan would include “scaling back worthy programs” and repealing tax expenditures — “balance” meaning a 6:1 ratio.
But the entire premise that we need deficit reduction now, never mind a decade or so from now, is looney. It’s not just a bad idea, not just a questionable premise. It’s looney. As Krugman writes, this is Barack Obama as Herbert Hoover. And President Obama is spouting this nonsense every chance he gets.
A growing list of prominent economists and budget experts, including dozens of the non-crazy who understand macroeconomics, are screaming at Washington that the dumbest thing they could be doing right now is to focus on deficit reduction. Brad DeLong has been compiling statements of various (e.g., here, here, here, here) insiders, outsiders, whatever, who are uniformly saying this.
They all say the federal government needs to be spending (and borrowing) more to increase demand and help the folks wiped out in the recession get back on their feet. And it needs to continue doing that until the recovery is more firmly established and unemployment is more convincingly and persistently falling.
Instead of giving credence to deficit hysteria, the federal government needs to help state budgets avoid layoffs and minimize spending contractions that economists know will reduce economic growth and limit job creation. It needs to spend money to help states rebuild after devastating natural disasters, and recognize we’re entering a period in which even more of that will be needed. It needs to continue supporting the unemployed families and communities that have been crushed by the recession and see few prospects for job growth. It needs to be building and repairing infrastructure now while borrowing is cheap and there’s plenty of underused, capable labor. It needs to be investing in our future, not starving it, as the Tea-GOP insists on doing.
Though Obama claims he agrees with some of this, he never fails to undercut those real priorities by first emphasizing the need to do the opposite. He’s become completely incoherent at best and complicit in the Tea-GOP strategy at worst. And for the country’s sake, not to mention their own, Democrats need to turn him around or stop following him.
But for now, Obama and the Democratic leaders who follow the President’s “lead” are helping the Tea-GOP by embracing their nutty theories and not giving voters a clear alternative argument that would help them in 2012. And a pro-growth/employment strategy has the added advantage of being the right thing for the economy and the country.