So, about that deficit...
Eight years of Republican Congressional and White House control witnessed tax cuts for high earners at the same time that two wars, estimated by Nobel economist Joseph Stiglitz to cost over a trillion dollars, were opened. Taxes owed by huge corporations often went uncollected, and offshore tax havens thrived. A lax attitude toward the activities of Wall Street dreamers and schemers finally brought about the collapse of the Ponzi scheme erected at the heart of the world economy.
During the Bush Jr. years, the Grand Old Party set the table for an inevitable and unhappy reckoning with the forces of reality, which (should have) profoundly damaged their own credibility. Now, as the Party of No (Fiscal Responsibility) turns to a new mantra of “spending cuts to reduce budget deficits,” their breathtaking level of hypocrisy is on full public display.
If not for a stunning level of national forgetfulness supported by a failure of corporate media to point out fundamentally inconvenient truths, the simplistic “conservative” argument about deficits would be dead on arrival. But more important than who first kicked the deficit snowball down the hill (remember the tax cuts and unprecedented spending of self-proclaimed “war president” George W. Bush? Whose administration came up with the big bank bailout?) is the current need of our job-starved economy for some serious deficit spending.
Real economists agree the number one emergency and therefore priority today is JOBS, NOT DEFICITS. It shouldn’t take a degree in economics to imagine the long term effects of massive unemployment. In the words of Economic Policy Institute President Lawrence Mishel in testimony before the House Ways and Means Subcommittee on June 10, 2010: “When jobless workers exhaust their unemployment compensation, who will pay their rent or pay off their mortgages?” A high rate of long term unemployment is the real-world version of dominoes - as unemployment benefits run out, demand for products and services falls further, and more and more workers are laid off. In time the entire society must suffer.
But don’t take my word for it; see what some economists long considered to be “budget hawks,” have to say.
“It’s understandable to run deficits when you have a recession, a depression, or unprecedented . . . crises that we’ve had.” - David Walker, CEO of the ultra-conservative Peterson Foundation.
“It is a textbook principle of prudent fiscal policy that deficits are an appropriate response in times of war and recession.” – Greg Mankiw, former chair of Pres. George W. Bush’s Council of Economic Advisers.
The shrill and misleading calls for deficit reduction currently reverberating throughout the Republican echo chamber deceitfully equates national deficits with household spending. “What happens if a family spends more than they can afford?” the baited line is often set out. But spending more than they have is exactly what families do when they borrow to buy a car, or a house, or any other significant and worthwhile purpose. Why should government somehow be prevented from doing the same, especially when spending adjustments can - and routinely are - made further down the road?
The other red herring routinely regurgitated by Republicans hoping to gain a semblance of relevance for themselves is the bromide about “financial burdens upon our grandchildren.” But government debts are engineered through bonds, which means when payments are eventually paid on those bonds, the money comes back to the bond holders – a net gain to the economy, not the loss the voodoo economists would have us fear.
The outrageous truth is the Republicans consciously offer this tripe to benefit their base (which ominously has become that of the Democrats as well). Even though up to 74 percent of voters place more importance on continuing unemployment benefits and health coverage than on deficit reduction (The Nation magazine, 6/29/10), President Obama’s newly appointed “bipartisan deficit commission” may represent a real threat to Social Security if an obliging corporate media can stir up enough fear. If the Republicans win, their corporate buddies will be thrown the prize they’ve always longed for – control over our Social Security funds.
We should consult relevant economists as we sit down to map our future, not the same Republican idealogues whose top-down theories have brought agony to so many. EPI’s Mishel and many others are now urging we make a strong policy response to address the requirement of job creation, on the magnitude of New Deal measures that prevented the Great Depression from becoming a bigger disaster than it was.
An extension to the unemployment and health assistance extended to jobless Americans though the American Recovery and Reinvestment Act of 2009 is a must to prevent conditions from deteriorating, but does not in itself address the root problem. We must have the courage shown by an earlier generation of Americans if we are to escape a deepening chasm of nationwide poverty and hopelessness.
Dave Wheelock, a member of the Oneida Nation, is a collegiate sports administrator and coach. His history degree is from the University of New Mexico . Reach him at davewheelock (all one word) at yahoo.com. Mr. Wheelock's views do not necessarily represent those of SocorroNews, but frequently do.