(photo: Marc NL)

This is related to my last post, but E.J. Dionne correctly asserts that all of the polls Democrats are sticking in people’s faces about how they’re “winning” on the politics are meaningless if they cause material harm to the economy:

The latest Pew Research Center poll released on Tuesday – the survey was carried out between July 20 and July 24 – asked respondents which economic issue worried them most. The results: 39 percent said the job situation, 29 percent said the deficit, 15 percent said rising prices and 11 percent said problems in the financial and housing markets. Pew’s report noted that even among Republicans, 34 percent cited jobs while 37 percent cited the deficit.

But the poll pointed to another aspect of the deficit obsession that is insidious from the point of view of those who favor Keynesian or progressive economics. The new survey repeated a question posed last March in which respondents were asked whether they thought cuts in federal spending would help the job situation, hurt it or not have much effect. In March, only 18 percent said cuts would help the job situation while 34 percent said they would hurt. But in the July survey, 26 percent said cuts would help the job situation, up eight points, while 27 said they would hurt, down seven points. (The proportion saying the cuts wouldn’t make much difference was virtually unchanged: 41 percent said this in March, 39 percent said it in July.)

This is learned behavior. Both parties have insistently harped on the desirability of cutting the deficit for the past six months. The public may not be tuned in, but they pick up on these broad themes, and since there has been no debate on public investment in job creation, they naturally gravitated toward the fantasy of expansionary contraction.

To those who want to say that the President is making the best of a bad situation, THIS is the problem. It changes the entire dynamic of the realm of possible economic solutions for the next decade or more. And when the economy suffers from austerity, since a Democrat basically called for it, that’s who will be blamed.

Would a clean debt limit increase have avoided spending cuts altogether, given a Republican House demanding cuts? It would have pushed the calendar, making the fight coming up in September the equivalent of the fight we had in March and April. Now there will be trillions squandered before we even get to that fight. And regardless, it’s about the locus of the debate. In a world where the debt limit was tied into the 2010 tax deal, the reaction to a dropoff in job growth in the spring would not necessarily have been a drumbeat for spending cuts. But it came in the middle of that parallel debate, so it got folded in. And people learned.

This is related to my last post, but E.J. Dionne correctly asserts that all of the polls Democrats are sticking in people’s faces about how they’re “winning” on the politics are meaningless if they cause material harm to the economy:

The latest Pew Research Center poll released on Tuesday – the survey was carried out between July 20 and July 24 – asked respondents which economic issue worried them most. The results: 39 percent said the job situation, 29 percent said the deficit, 15 percent said rising prices and 11 percent said problems in the financial and housing markets. Pew’s report noted that even among Republicans, 34 percent cited jobs while 37 percent cited the deficit.

But the poll pointed to another aspect of the deficit obsession that is insidious from the point of view of those who favor Keynesian or progressive economics. The new survey repeated a question posed last March in which respondents were asked whether they thought cuts in federal spending would help the job situation, hurt it or not have much effect. In March, only 18 percent said cuts would help the job situation while 34 percent said they would hurt. But in the July survey, 26 percent said cuts would help the job situation, up eight points, while 27 said they would hurt, down seven points. (The proportion saying the cuts wouldn’t make much difference was virtually unchanged: 41 percent said this in March, 39 percent said it in July.)

This is learned behavior. Both parties have insistently harped on the desirability of cutting the deficit for the past six months. The public may not be tuned in, but they pick up on these broad themes, and since there has been no debate on public investment in job creation, they naturally gravitated toward the fantasy of expansionary contraction.

To those who want to say that the President is making the best of a bad situation, THIS is the problem. It changes the entire dynamic of the realm of possible economic solutions for the next decade or more. And when the economy suffers from austerity, since a Democrat basically called for it, that’s who will be blamed.

Would a clean debt limit increase have avoided spending cuts altogether, given a Republican House demanding cuts? It would have pushed the calendar, making the fight coming up in September the equivalent of the fight we had in March and April. Now there will be trillions squandered before we even get to that fight. And regardless, it’s about the locus of the debate. In a world where the debt limit was tied into the 2010 tax deal, the reaction to a dropoff in job growth in the spring would not necessarily have been a drumbeat for spending cuts. But it came in the middle of that parallel debate, so it got folded in. And people learned.

David Dayen

David Dayen